Legislative Assembly of Ontario

ANNUAL REPORT, PROVINCIAL AUDITOR, 1992

ANNUAL REPORT, PROVINCIAL AUDITOR, 1992
MINISTRY OF COMMUNITY AND SOCIAL SERVICES

CONTENTS

Tuesday 19 January 1993

Annual report, Provincial Auditor, 1992

Ministry of Community and Social Services

Dr Charles E. Pascal, deputy minister

John Stapleton, acting director, special projects secretariat

Andre Iannuzziello, project manager, cost containment implementation

Alison Fraser, acting director, policy development and program design branch

STANDING COMMITTEE ON PUBLIC ACCOUNTS

*Chair / Président: Mancini, Remo (Essex South/-Sud L)

*Acting Chair / Président suppléant: Duignan, Noel (Halton North/-Nord ND)

*Vice-Chair / Vice-Président: Cordiano, Joseph (Lawrence L)

*Callahan, Robert V. (Brampton South/-Sud L)

Cousens, W. Donald (Markham PC)

Frankford, Robert (Scarborough East/-Est ND)

Haeck, Christel (St Catharines-Brock ND)

*Hayes, Pat (Essex-Kent ND)

Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings-Sud ND)

*O'Connor, Larry (Durham-York ND)

*Sorbara, Gregory S. (York Centre L)

Tilson, David (Dufferin-Peel PC)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Farnan, Mike (Cambridge ND) for Mr Frankford

Fletcher, Derek (Guelph ND) for Mr Johnson

Hope, Randy R. (Chatham-Kent ND) for Ms Haeck

Jackson, Cameron (Burlington South/-Sud PC) for Mr Tilson

Marland, Margaret (Mississauga South/-Sud PC) for Mr Cousens

Waters, Daniel (Muskoka-Georgian Bay ND) for Mr Frankford

Wood, Len (Cochrane North/-Nord ND) for Mr Hayes and Mr Frankford

Also taking part / Autres participants et participantes:

Peters, Erik, Provincial Auditor

Clerk / Greffière: Deller, Deborah

Staff / Personnel:

McLellan, Ray, research officer, Legislative Research Service

Smith, Cynthia M., director, Legislative Research Service

The committee met at 1011 in room 151.

ANNUAL REPORT, PROVINCIAL AUDITOR, 1992

The Chair (Mr Remo Mancini): The standing committee on public accounts is called to order.

Mr Gregory S. Sorbara (York Centre): Mr Chairman, just before we introduce those who are going to be testifying before the committee this morning pursuant to our agenda to consider the family benefits assistance program of the Ministry of Community and Social Services, might I just raise a matter with the committee that I think is of importance and of some urgency and ought properly to be raised this morning? I will, sir, at the conclusion of my remarks, put a motion before the committee for its consideration. I'm hopeful, in view of what I'm about to say, that I can get the consensus support from the members of the committee, including, of course, the members of the government caucus.

Mr Chairman, the matter that I want to speak about relates to the testimony that we heard from representatives of the Workers' Compensation Board relating to the construction or the proposed construction of a new 30-storey office building in downtown Toronto. The proposal is, as you know, to construct a building of some 30 storeys on lands owned by the Canadian Broadcasting Corp under an arrangement whereby the board would become a 70% owner of the building and, along with its partners, Cadillac Fairview and the Toronto-Dominion Bank, the chief financier of this building and also the chief tenant of the building.

What I suggest to you is that there is now new information before the public, certainly, and information which therefore has come to the attention of this committee that I think needs to be raised here. There are three things that are extremely troubling, sir, for this committee. You may have one view or another about whether or not, with the kind of glut of office space that exists in Metropolitan Toronto right now, the board should or should not be pursuing this; there can be a number of opinions on that.

The three things that I think should be troubling to this public accounts committee are as follows: first of all, the significant discrepancies between the testimony which we heard from representatives of the Workers' Compensation Board to the effect that this is a done deal, virtually all the i's have been dotted and the t's crossed, and there are just some financing matters to be worked out prior to the shovel going in the ground. That's more or less, if I'm summarizing it correctly, the testimony that we heard from the vice-chair of the board and other representatives.

As well they said, and again I'm paraphrasing, that the board might incur very significant liability in the millions and millions of dollars were the board now to attempt to extricate itself from this transaction. So that's on the one hand, sir, what the representatives of the board said.

Now it comes to our attention that the minister himself is purported to have said, and I'm quoting now from today's Globe and Mail, that "he is not comfortable with the board's plans to build a new office tower at the intersection of Front and Simcoe streets near the SkyDome at a time when all other areas of government have been forced to restrain spending." Now the minister is quoted as saying, "I would much rather, given the current economic situation, not be tied into a new building....I'd like to take another look and that may be what we're facing, depending on whether or not the financing is available."

On the one hand, therefore, we have the vice-chair saying, "We have to proceed with this building now, given the contracts that we've signed," and we have the Minister of Labour, to whom the board reports, saying, "I'd really like to take another look at this," and I suppose he is speaking for the government. Those discrepancies, for this committee, ought to be very uncomfortable indeed. We, as a committee, I think, have a public obligation to make sure that there is some sort of marrying of those two very divergent points of view.

The second matter I think the board needs to consider, again given the significance of this project, is the question of how section 64 applies to the proposal to build this building. Section 64 reads as follows: "Subject to the approval of the Lieutenant Governor in Council, the board" -- that is, the Workers' Compensation Board -- "may purchase or otherwise acquire such real property as it may consider necessary for its purposes." The section goes on to say that, similarly, it may dispose of such real property, but the issue here is the acquisition of real property.

I think it's clear from the testimony that we've heard before this committee that cabinet approval -- that is, the approval of the Lieutenant Governor in Council -- has neither been sought nor granted for the purposes of constructing this building, this 30-storey office building in downtown Toronto that the board is planning to finance and planning to occupy as its chief tenant.

There was some suggestion before us during the testimony from Mr King and others that this section does not apply because the board itself is not actually buying or owning the building; the board's investment fund is going to buy and own the building and the board will become a tenant of a building that its investment fund owns.

As a lawyer, sir, I would suggest to you that there are strong arguments that can be made that the phrase in the law which says "purchase or otherwise acquire...real property" includes becoming the principal tenant in a 30-storey office building. When I lease a small factory for my little machine shop, I acquire an interest in real property. It's not a freehold interest; it's a leasehold interest. But it's an interest in real property, as real and as enforceable and as strong and legally binding under the law as the bundle of rights that I acquire when I purchase my own home outright and own it without a mortgage.

I would submit to you that the intent and thrust of section 64 is that cabinet approval must be sought and acquired in order for the Workers' Compensation Board to enter into this transaction, notwithstanding that it is, from the testimony we've heard, trying to do indirectly what it is prohibited from doing under the laws of this province directly. There is some real issue here as to whether or not the board is bound by section 64. I think we have an obligation to clear up that matter, not only so that if the board actually concludes this transaction it does so legally and under the laws of the province, but just to avoid down the road some possibility that someone interested in that property can challenge the legal right of the Workers' Compensation Board to occupy that property and own that property because, prior to doing it, it didn't get cabinet approval.

There's one more thing that is, I guess, politically troubling here, and that is that on the one hand we have the board saying, "We don't think we have to get cabinet approval," and we have the cabinet minister who would take the matter to cabinet and speak to cabinet on behalf of this proposal were cabinet approval sought, saying, on behalf of the cabinet, "We're not sure that this building should be built." It appears to the public that the reason why the Workers' Compensation Board isn't trying to get cabinet approval to invest in and occupy this building is because it's afraid that cabinet wouldn't approve, and that is very troubling to the public.

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The final point that I think requires us to re-examine this issue in some detail is this: The investment fund of the Workers' Compensation Board is a fund that is established for the benefit of injured workers in the province of Ontario; injured workers who are currently receiving pensions and payments from the board, injured workers who are injured today on the job and might be legally entitled to a pension and the injured workers of the future, who will rely on that investment fund in order to get the pensions that they're legally entitled to under the laws of the province. So the injured workers of Ontario are the real beneficiaries of that investment fund, and their interest is that the investment fund receive the highest possible return on its investment.

On the other hand, the interest of the Workers' Compensation Board, funded by levies against businesses in Ontario, is to pay the lowest possible rent that it could in acquiring new space, whether freehold or leasehold, in Ontario. So there is a real divergence of interest between the interest of the investment fund and the people that the investment fund represents -- they want to buy a building and get the highest possible rent from whatever tenant rents it -- and the interest of the board, as tenant or as administrative organization, in paying the lowest possible rent.

If, as it turns out, we establish before this committee that those two divergent interests were not separately represented in these negotiations that culminated in the signing of this deal, there is very serious concern, at least on my part and I think on the part of the Provincial Auditor and the members of this public accounts committee, that the board did not act appropriately in dealing with itself, in funding for itself a building which it will ultimately own and occupy through two separate branches of the same organization. If this were to happen in private enterprise, it would be absolutely fundamental that those two divergent interests be separately represented, and we haven't yet found out whether that's the case.

The final point, I think, is this: This public accounts committee spends a great deal of its time reviewing what happened in the past. In a very few minutes, we're going to look, for example, at what happened over the past year and a half or so with the family benefits program of the ministry of --

Mr Mike Farnan (Cambridge): A lot longer.

Mr Noel Duignan (Halton North): A lot longer, Greg.

Mr Sorbara: No, in a very short time we're going to be looking at that.

Mr Farnan: We hope it's in a very short time.

Mr Sorbara: We're going to be looking at what happened in 1991 and 1992. Rarely does this committee get an opportunity to prevent an inappropriate expenditure of public funds. Rarely do we get to intervene in time so that the Provincial Auditor does not have to write a scathing report about ministry X, Y or Z. Rarely does this committee get an opportunity to act to avoid an expenditure that has not been properly approved, authorized or negotiated. We have that opportunity now.

We have the opportunity to bring forward to this committee the chair of the Workers' Compensation Board, who has not yet testified on this matter and I think ought to testify on this matter. We need to know whether or not he advised the Minister of Labour or proposed to the Minister of Labour that this matter be brought before cabinet, as section 64 requires, I submit, and we have an opportunity to bring before this committee the vice-chair of the board, again, and the Minister of Labour to testify before us; so the Minister of Labour, the chair of the board and the vice-chair of the board to clear up these issues before the shovel goes in the ground.

It may well be that this building is a very good investment and it's the only alternative for the Workers' Compensation Board, but everything that I've heard before this committee and everything that I've read and frankly everything that I know about the board and its operations, including my tenure as Minister of Labour, suggest that it would not hurt us in Ontario, at this point, simply to push the pause button on this building, to just push that button and bring the key players before this committee so that the government can make a fair and open decision about whether or not the taxpayers of Ontario and the employers of Ontario, who after all fund the board, ought to be proceeding with this investment.

With your indulgence, sir, I simply want to put a motion before you, and I wouldn't mind hearing from the members of the committee, all of them, including the government members, as to whether or not we could in a sort of non-partisan way proceed with this further investigation. My motion would be as follows:

In view of the fact that new information has come before the public generally and this committee in particular concerning the proposal of the Workers' Compensation Board to invest in a new office tower in downtown Toronto, this committee reopen its hearings on the matter of the construction of that building for the purpose of hearing testimony from the Minister of Labour, the Honourable Bob Mackenzie; hearing testimony from the chair of the Workers' Compensation Board, Mr Odoardo Di Santo; and seek evidence or testimony from competent legal counsel as to whether or not section 64 of the Workers' Compensation Act applies to the proposal to construct the building mentioned in this motion.

I'm sorry to tell the clerk that I do not have that motion written down, but I will write it down.

Clerk of the Committee (Mrs Deborah Deller): If you just want to give me a note now --

Mr Sorbara: I'll give you that and ensure it's in a proper form.

Mr Derek Fletcher (Guelph): You have to do your homework the night before.

Mr Sorbara: This is a late-breaking matter, I say to my friend who wants my homework done the night before.

Mr Duignan: You had time to get the story in the Globe and Mail last night.

The Chair: Order, please. Mr Sorbara, could you and the clerk take a moment and try to write your motion as quickly as possible so we could make copies for the committee members.

Mr Fletcher: Why not take a five-minute break?

The Chair: I think that might be a good suggestion. I think we're going to take a four-minute recess. We're going to adjourn and we're going to come back at 10:30 am sharp.

Mrs Margaret Marland (Mississauga South): Are you going to require that all motions be written?

The Chair: No.

Interjections.

The Chair: Order, please. The committee is adjourned and I'll address that point by Mrs Marland when we return.

The committee recessed at 1027 and resumed at 1039.

The Chair: The standing committee on public accounts is called to order. I thank the committee members for their patience. We now have the motion typed and printed and copied for all members of the committee and staff.

There are two points I'd like to deal with before we get to Mr Sorbara's motion. One is the point raised by Mrs Marland as we were adjourning in regard to her concern as to why I had insisted on the motion being written and distributed and had not accepted the motion verbally. I did so because I believe the motion is going to be contested. I did so also to assist the Chair and the clerk in reviewing past motions accepted by the committee and past decisions made by myself. I wanted the information in front of me so that I could properly address the previous matters raised and the new matters raised by Mr Sorbara.

It is not my intention to require at all times for members to have their motions written and distributed before we will have any discussion. I think it's more appropriate that we handle each individual case on its own merits, and in that way we could better facilitate the work of the committee.

That item now being dealt with, I want to make comment on Mr Sorbara's points which led to his motion. The committee will remember that approximately a week ago we had witnesses before us in regard to our review of the Workers' Compensation Board's decision to construct a new office tower in downtown Toronto. After a number of hours of debate, the committee concluded by majority vote that it was not necessary to continue with our hearings and that the original motion accepted back on November 26 by the committee, which instructed the Provincial Auditor to do an audit, was in fact sufficient for the committee.

Those matters were all dealt with approximately a week ago. On two and possibly three subsequent occasions, members have tried to revive the committee's interest in this particular matter. I have on each occasion ruled their efforts out of order because I saw no new information being brought forward, and the matter had thus been dealt with.

This morning Mr Sorbara makes the case that he has new information for the committee to consider, and during his presentation to the committee this morning he made a number of points. He referred to section 64, which I believe the committee has fully addressed and dealt with. He referred to the conflict of interest between the Workers' Compensation Board's investment fund and the Workers' Compensation Board as a tenant, which I also believe the committee has heard and dealt with.

He raised a third point, that being the discrepancies between what board officials had to say and what their lawyer had to say in regard to significant liability as compared to public statements made by the minister of the day, the Honourable Bob Mackenzie. Mr Sorbara referred to today's Globe and Mail, dated January 19, 1993, page A5, where he quoted Mr Mackenzie as saying: "I would much rather, given the current economic situation, not be tied into a new building....I'd like to take another look and that may be what we're facing, depending on whether or not the financing is available." Mr Sorbara contends that this is new information which the committee was not privy to when it made its original decision last week to conclude its hearings.

While it is unusual for a committee to revisit and consider a motion that has already been dealt with, there are instances when it becomes necessary. If new information becomes known which may affect the previous decision of the committee, the Chair may well decide that a new motion may be entertained and further debate allowed. In addition, every committee must be allowed to determine its own agenda, and to this end, the right to reconsider previous decisions with respect to agenda items must be recognized. For these reasons, I will allow the motion to stand and ask for argument to address the information not previously within the knowledge of this committee. Mr Sorbara, your motions stands. I'll allow you five minutes to make your case and then we will start a rotation.

Mr Sorbara: Thank you, Mr Chairman, and I appreciate your ruling. I think the ruling is consistent with the history of this committee and the way in which this committee has conducted its business.

I just simply reiterate the business of new information. It's the new information that has come before us, including statements by the minister himself, which obviously has to be new information because those statements were made subsequent to our concluding our hearings.

The pith and substance, the real kernel of this issue is, does the government of Ontario, not the Workers' Compensation Board, put its stamp of approval on the building of this new building, a new Taj Mahal for the Workers' Compensation Board? We heard evidence from the WCB that no building in Toronto, presumably no building in Ontario, was suitable for its needs. Their needs were special. All the office buildings that are currently vacant, all the office buildings that are currently in receivership, "Sorry, there's something wrong with every single one of them."

That may be the view of the Workers' Compensation Board but I'm sorry, that board is funded by the taxpayers through levies against employers in this province and those levies, paid by employers, come right out of the pockets of the workers in this province, because if they're going to a WCB levy, then they aren't going into the wage package of workers in this province. We should remember that when we talk about WCB levies.

There's no doubt at all that anyone looking for office space in Metropolitan Toronto right now can come down to the heart of this city, enter into a 10-year lease and get the first five years of that lease rent-free. "Just pay the expenses," the landlords will tell you, "Just pay the heat and the light and the air conditioning and we'll let you occupy the building for no rent at all," and the Workers' Compensation Board says it needs to pay to itself $26 a square foot for the space it wants to build for itself.

Well, I'll tell you something. I know about the office space that the Workers' Compensation Board occupies around the province. I was minister for two years and visited just about every office. In most places -- take Ottawa, take Thunder Bay, take Hamilton -- they occupy very classy space and I don't begrudge them that. But in the middle of this depression and in the middle of an economic cycle where we have the worst glut of unoccupied office space we have ever had in Metropolitan Toronto and hopefully we will ever have, for the board to proceed on this matter without the approval of the government, the representatives of the people, and for the Minister of Labour, who represents the board to say, "I hope we can get out of this thing," means that it's our obligation as a committee responsible for dealing with the public accounts, the public spending of the government of Ontario, to make sure that before we proceed, the Minister of Labour and, through him, the government of Ontario is singing out of the same manual that the WCB is singing out of.

The government could approve this thing; our job is to make sure that no further steps are taken, that we have pressed the pause button until the government, not the WCB, has decided whether or not it wants to build another 725,000 square feet of office space, classy office space in downtown Toronto. Thank you, sir.

The Chair: Mrs Marland, you've notified the Chair you wish to reserve your five minutes.

Mrs Marland: Thank you.

The Chair: Thank you. Mr Fletcher.

Mr Fletcher: First, let me just say I'm definitely voting against this motion. We have an agenda.

Mr Sorbara: You don't have to reopen it today.

Mr Fletcher: You've had your five minutes, Greg.

We have an agenda and we have people who are coming before this committee to make presentations. The agenda is quite full to be bringing up other items such as this. One thing that interests me, though, is that if we were to investigate anything, I'd like to investigate how the workers' comp got a numbered company in the first place when you were the minister.

I think it shows a lot of mismanagement, that the government didn't know what was going on, didn't know that this numbered company was being made and didn't have approval from your government. If there's a problem it started there, and I think if there's going to be an investigation the minister should investigate what's going to happen. The minister has made statements and they should investigate what you were doing when you were in government.

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Mr Sorbara: On a point of order, sir.

Mr Fletcher: Obviously the laissez-faire approach to government that you have isn't going to work.

The Chair: Order, please. Mr Sorbara, what is your point of order?

Mr Sorbara: On a point of order, sir: I want to put it before the committee that if it is within the orders of this committee, I am willing to step down as a committee member and testify as a witness before the committee.

The Chair: Thank you. That's not a point of order, but it's an interesting point.

Mr Fletcher: Again, we as a committee are looking at money that has been spent and the way ministries are working. Does that mean that every time a minister makes a statement about what is going to happen within his ministry we have to bring it back to this committee? A minister is allowed to say: "Hey, maybe there's something wrong with this and maybe there isn't. In the economic climate, I wish the brakes would have been put on this." That's all the minister said -- "in the economic climate." Had this been a boom time, when there would have been time for construction, perhaps the minister wouldn't have said that.

To reopen this again, as far as we can see on this side, is just political grandstanding by the member. It's something that obviously he must have known about when he was the minister. It's something that just didn't pop up out of nowhere. It came when there was mismanagement going on with the former government. Now we're paying for that mismanagement. To open up this now with the people who are coming in before us in the number of weeks that we have of committee hearings -- we have important business to discuss today on the family benefits assistance. I think we should just get on with the job of what we're supposed to be doing, as set down by the agenda, and stop going around on a witchhunt.

The Chair: Mr Farnan, about three minutes.

Mr Farnan: Pardon?

The Chair: Two and a half minutes.

Mr Farnan: A couple of contradictions: Last week, even in Mr Cordiano's motion, the opposition Liberal delegation to this committee was talking about the rent being too high, exorbitant. They were talking about $380 per square foot. Now, today, they're saying that because of the conflict of interest they're too low. It seems to me that the opposition is seeking every possible way, even in a contradictory manner, of addressing this issue.

But there are some basic items. We had the vice-chair and senior delegates from the Workers' Compensation Board. We had six hours in which to question them, and they were questioned very thoroughly. There were issues raised. In bringing a conclusion to our deliberations, the committee took some solace in the fact that indeed an inquiry from the Provincial Auditor was part of the comfort level this committee would have.

After six hours of deliberation, we then went on to say we have other work to do as a committee. We have delegates sitting before us. This delegation has been sitting before us for an hour. We have basically ignored them and not carried on the business that was designated for this day.

Mr Sorbara and other opposition MPPs argued last week at meetings of this committee, and all of the arguments, I believe, have been reiterated today. I do not believe that a statement by a minister which says, "I think I want to have a look at this" -- in fact, I would say that gives me comfort. It gives me comfort that we have a minister of the stature and integrity of Bob Mackenzie who says: "Yes, we've had some good questioning from the committee. I'm going to look at the deliberations of the committee. I'm going to have a look at this." But, believe me, what we are seeing here this morning amounts very simply and basically to political grandstanding of the most crass sort.

I certainly believe that we have deliberated on this long enough. We passed a motion to that effect. I think it is an absolute insult to allow this clock to go on beyond an hour while delegations that have prepared themselves come before this committee waiting to be heard and we are not listening to them.

The Chair: Mrs Marland, would you wish to use your five minutes now?

Mrs Marland: First of all, I think we should recognize that this is a very significant motion. It's significant in a number of areas, not the least of which is, this motion is being placed by a former Minister of Labour who for two years was directly responsible for the Workers' Compensation Board.

The other part of this motion that is really significant is the committee in which this motion is being made. This is the public accounts committee; this is the committee that is accountable to the public for the expenditures of the government or its agencies, boards or commissions. The auditor reports to this committee. That is self-explanatory in terms of the importance of this committee and the credibility of this committee.

Frankly, I think the NDP are the people who are doing the political grandstanding here, really almost by reverse osmosis, because by shutting down the public accountability of the public accounts committee, they are saying to the people of this province: "We don't care how money is being spent. We don't care if the WCB, with a $13-billion underfunded liability with its fund, is going to build a 30-storey office building when there's 23 million square feet of office space available in Toronto today."

It's very interesting when Mr Dweegan says that the mover of this motion was able to get this into the Globe and Mail last night. I think what the member, Mr Dweegan, is missing in this whole debate is the fact that the Globe and Mail phones people when it is concerned or its journalists are concerned about an issue that maybe has to have more public input to it, not from an opinion of the Globe and Mail but just in reporting the facts. I think if people are concerned about the media, then it should tell you something. It should tell you that the public is concerned.

I think we should be concerned as the committee. Yes, we had the WCB in front of us last week for five hours, and during that time Mr King, the vice-chair, told us they had received three or four legal opinions about whether or not the WCB could build this building -- three or four legal opinions. The next morning Mr King produced one opinion. Doesn't that tell you something? Maybe the other two or three opinions were not in support of their building this office tower.

I think in fact that there have not been enough questions raised and I think the government members of this committee are the people who are scandalous. I think you're shamefaced. I can't believe that you can go back to your individual ridings and say that you've done your job as an elected person representing the public purse. I think when we have one opinion --

Mr Randy R. Hope (Chatham-Kent): No problem, Margaret.

Mr Duignan: No problem now, Margaret.

The Chair: Order, please.

Mr Duignan: You're the one who's shameful.

Mr Hope: We've been intimidated.

The Chair: Order, please. All interjections are out of order. I'm going to give Mrs Marland another 30 seconds.

Mrs Marland: It was Mr Dweegan who asked the lawyer --

Mr Duignan: Get my name right.

Mr Larry O'Connor (Durham-York): Who is Dweegan? Can we find out who this Dweegan is?

Mrs Marland: Is this using up my time with the interjections?

The Chair: No, Mrs Marland. I'm not going to allow it to infringe upon your time. I'm adding a moment to your time.

Mrs Marland: Thank you.

Mr O'Connor: Find out who Dweegan is.

Mrs Marland: One of the NDP government members asked the lawyer for the WCB, if the WCB reneged on this contract to build this $200-million, 30-storey office building, would it be sued? He must have had some concern to ask that question, and the very fact that he was concerned about a breach of contract and how much it must cost the government -- wouldn't you think that what would follow from that question was the concern that there were questions that still had to be asked and there were answers that still had to be sought?

The fact is that on the basis of one legal opinion and one answer, this government, or the government members of this committee -- and I don't know who is directing them -- are willing to say: "We don't want to hear any more. We're going to close this whole debate down. We're going to let the public of this province spend $200 million when it isn't needed." I say simply that for this motion to be defeated, as we know it will, by the government members, is putting to shame --

Interjections.

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The Chair: Order. I can't hear a word Mrs Marland's saying and I'm going to keep adding time to her allotted time until I can hear her argument. Mrs Marland, can you please proceed?

Mrs Marland: Thank you, Mr Chairman. I think what has to be said is that this is the public accounts committee. If the government members of this committee do not wish to be accountable, then they should seek an appointment to another committee. The fact is that we do have new evidence, and that's the reason this motion is placed today. We not only have had the Treasurer say that he is concerned about this building; we now have the Minister of Labour saying he'd like to take another look at it. If the minister is so highly respected by the government members of this committee, why would they not support their minister, who said he would like to take another look at it?

The fact is that negotiations are possible to get out of this contract, negotiations that might cost the public purse some money but certainly not $200 million. This is an important motion, Mr Chairman, and I hope that with a recorded vote each of these government members will be able to show their face in their constituencies when they vote on shutting down the public process.

The public has a right to know where the money is being spent and how, and above all if the money is being spent legally. We do not as yet have anything other than one legal opinion before this committee. With respect, a lot more investigation has to take place and a lot more answers given to the public of this province before this building is built.

The Chair: Thank you, Mrs Marland. Earlier on I advised the committee members that I was going to allow five minutes per caucus for debate, in view of the fact that we have other witnesses here today whom we've asked to appear to give testimony in regard to other matters that the committee is interested in. I'm hoping the committee will agree with me that we've now concluded our five minutes per caucus and that has been enough time for debate.

Mr Cordiano: On a point, Mr Chairman.

The Chair: On a point of order, Mr Cordiano?

Mr Joseph Cordiano (Lawrence): Given the fact that this is a significant motion and that it was brought up at this point today, I think the debate has to be sufficient in order to satisfy that in fact we've covered all the aspects of this initiative or this motion. I don't believe we have yet, so I would hope that you would allow other members to have some say and perhaps we could be as expedient as possible in our remarks. But because I had the original motion, I would like to speak to this additional motion, which I think is rather significant at this point. I'm just asking, Chairman, to be allowed to speak for a few moments, notwithstanding that we have other witnesses here today. But we've chosen to go this way at this time, so I believe it's appropriate.

The Chair: The Chair is in a very difficult position, because I want to ensure that we can move forward by consensus on matters as simple as this. It appears that we have no consensus. If I were to allow additional time for debate, could I be assured that we would be hearing new information and new items and not a repeat of what we have already heard?

Mr Cordiano: Yes.

Mr Duignan: No, you can't assure that.

Mr Cordiano: I can assure you that, Mr Chairman.

Mr Hope: I don't know what you're going to say, so I can't assure it.

Mr Cordiano: I don't think it's entirely out of order.

The Chair: I'm not going to get consensus. What I would like to do then is ask for unanimous consent to give each caucus a further three minutes.

Mrs Marland: Agreed.

Interjections: No.

Mr Robert V. Callahan (Brampton South): They tried to cut it off again.

Mr O'Connor: Let's do it after 6 o'clock.

The Chair: Can I have unanimous consent for three minutes per caucus, please?

Mrs Marland: Agreed.

The Chair: Thank you. Mr Cordiano, you have three minutes.

Mr Cordiano: I want to make this point because it's of particular concern to me with respect to the way in which this committee is now conducting its business. I want to refer back and refresh members' memories about the investigation we did into the Toronto Hospital. I want to remind members that we took and exhausted every avenue open to us based on a series of allegations that were made by union representatives about the misconduct or the alleged wrongdoings of the hospital with regard to expenditures.

Interjection: Alleged.

Mr Cordiano: Alleged misconduct; I want to be clear about that.

The auditor and his staff took some 2,500 man-hours to conduct a series of investigations there. As well, this committee was open to a variety of sessions with both the union representatives and hospital officials. That was a serious matter, and likewise it is of significant value for this committee to conduct further investigations in light of the new information. I can't see why we are being inconsistent in this regard.

When there was additional information presented to the committee with respect to those other investigations, we pursued them to their fullest. So I think it's important that the committee continue in its commitment to pursue whatever avenue is open to it when further and additional facts are presented to it that are significant. This requires that, it demands that and I think it's within our mandate to do that.

The Chair: Thank you. Mr Jackson, three minutes.

Mr Cameron Jackson (Burlington South): It strikes me that if we examine the comments made in last week's Toronto Sun and in this week's Globe and Mail, it's very apparent that there is some doubt in the mind of the current Minister of Labour, Mr Mackenzie, about the propriety of this move by the WCB. Given the full scope and magnitude of this issue, that being that there is considerable vacant space in downtown Toronto, that the owners of the commercial real estate in downtown Toronto, Ontario, today is disproportionately held not by foreign interests but by several of the public pension plans in this province, and the fact that workers who have their pensions are already investing heavily in real estate in downtown Toronto and they have vacant space, it strikes me that we are now saying to an injured worker, "We'll put one of your pensions which needs a bit of a boost -- we're now going to take your WCB pension and put it at risk by acquiring the most expensive real estate possible."

Mr Callahan: And there's $52 billion out there.

Mr Jackson: Thank you, Mr Callahan. But the point I'm trying to stress here, Minister, is that today's Minister of Labour should not be considering, and I believe Bob Mackenzie is not considering, usurping or sidestepping the work of this committee. I believe that if the comments are accurately reported in today's Globe and Mail, it's clear that the minister himself is awaiting the outcome of this committee's deliberations; the minister himself is saying that there is a role for this committee to investigate this issue; the minister himself believes that workers will not be well served by this kind of move and he himself, the Minister of Labour, is saying quite frankly that it would be appropriate for this to remove it.

I don't think the minister has the time to intervene. I think he would be more than pleased if this committee finished what it started last week, did it properly and recommended to this government that the injured workers in this province would be better served by making sure that all available moneys in that fund are going to pay out workers' pensions and not to pay for expensive real estate in downtown Toronto. I believe that's the sum and substance of this concern, and frankly, again I must remind the NDP members, who've already served notice they're going to block this, to just read what their own minister's department is saying, that it has serious concerns and the matter should be reopened.

The Chair: Thank you, Mr Jackson. Mr Hope, three minutes.

Mr Hope: In light of the comments that were made by Mrs Marland I thought it was my opportunity to make some comments, because she talked about holding your head in your own constituency and being accountable. It led me into why I have to vote no as I'm a substitute on this committee and here for a reason, to deal with the Community and Social Services issue talking about what the government is doing.

When you talked about accountability, I was very shocked when I heard the comments about spending a few thousand or a million dollars to break a collective contract. I was very shocked by what I heard yesterday. On the contrary, it was a different scenario. I sit here and I say if anything is more of a public interest right now, it is the attacks on social services.

I know, Mr Chair, even in your own community you've received calls about people who are on social services and potential fraud and all this, and people are saying, "What's the government really doing?" This is the opportunity for us to move on this agenda, because I'm only here for the duration of this part and I move on to another committee, but it's an opportunity. While we have the visual aspect of television and an opportunity to sit in the living rooms of people, it gives us an opportunity to show what this government is doing for past errors and what we're going to do as a future initiative to try to correct some of the problems that exist with the social services in the FBA area.

I think the public auditor has come out with a good report, and it's an opportunity. It was an opportunity to examine what previous governments were doing, what governments are doing today, and our future direction as the New Democrat government. So if we talk about importance to the general public, I would say that whether to build -- and I haven't heard a major cry from my constituents about building a new office building, but I have heard the major cries about social services. I think this is the perfect opportunity for us as a government to move on with the agenda, quit the political games and to start addressing the issues that face the people of the province. Their concerns are returning back to a job and how the government is effectively and efficiently spending their money and helping people.

The Chair: That concludes the debate on Mr Sorbara's motion.

Mrs Marland: Recorded vote.

The Chair: Mrs Marland has asked for a recorded vote.

Mr Duignan: I request a 20-minute recess.

The Chair: Mr Duignan has requested a 20-minute recess. The committee will recess and the committee will resume at 11:32 sharp.

The committee recessed at 1112 and resumed at 1130.

The Chair: The standing committee on public accounts is called to order. I believe all committee members are now present. The standing committee on public accounts is dealing with Mr Sorbara's motion, which reads:

"Given the new information that has come before the public generally and this committee in particular concerning the proposal of the WCB to construct a new office tower in Metro Toronto, the committee reopen its hearings into that proposal for the purpose of hearing evidence from (1) the Minister of Labour, (2) the chair of the WCB, (3) the vice-chair of the WCB, and (4) evidence concerning the applicability of section 64 of the Workers' Compensation Act."

Mrs Marland has requested a recorded vote and the clerk will call out your names as the motion is being put.

All in favour of Mr Sorbara's motion please raise your hands.

Ayes

Callahan, Cordiano, Jackson, Marland, Sorbara.

The Chair: All opposed.

Nays

Duignan, Farnan, Fletcher, Hayes, Hope, O'Connor.

The Chair: The motion is defeated.

Mrs Marland: On a point of order, Mr Chairman: I wish to refer to the Hansard of Monday, January 11, 1993, which was the afternoon session of the standing committee on public accounts. We were in the process of asking Mr King, the vice-chairman of the Workers' Compensation Board, a number of questions. One of the questions which I asked was on how many legal opinions Mr King had suggested the board had received. In fairness, I will read my question first and his answer so that you can understand what the point of order is.

My question reads: "I think first of all, I want to ask you -- you told Mr Tilson, in answer to one of his questions, about why the board had decided to waive a requirement for an order in council to go ahead with this gigantic investment, and you said the board made the decision to waive that requirement based on three legal opinions. Am I correct?"

Mr King: "Yes. I said two and possibly three."

Further on, Mr Farnan, there is a point raised about whether we need to obtain these opinions from other than the WCB counsel. There was a suggestion that maybe the committee would request its own legal opinion.

On page 1635-3 of January 11, 1993, Mr Farnan said: "I'm not disagreeing, but I'm just going to move deferral of the request until such time as we get the information that's brought forward by the delegation."

I raise this as a point of order, Mr Chairman, because I believe the vice-chairman of the Workers' Compensation Board lied to this committee. I realize this is a very significant comment for me to make, but I think based on the record of Hansard, Mr King agreed to bring those opinions. There is another reference in here where you, as Chairman, have agreed that the opinions should be brought before the committee and Mr King agrees to bring the opinions before the committee. The following morning, Mr King came before the committee with one legal opinion.

My concern is, where does this committee stand with regard to the testimony of a witness before this committee who, under the direction of the Chair -- if you want me to give you your quote, it's on page 1630-3 of January 11. The Chair says:

"Well, we usually work by consensus. I don't know if there would be any -- the question Mr Tilson has -- let me put it this way: The public accounts committee has asked the board representatives to bring forward their legal opinions, which would indicate that they could not have to deal with section 64 or that they were somehow exempt from section 64 or that whatever they were doing did not fall under section 64, any one of those three. So they're going to bring forward their legal opinions."

That's a quote attributable to you as Chairman. The legal opinions, according to Mr King, were two and possibly three. The next morning, as I say, he came before this committee with one legal opinion. So I feel that this committee has not been treated respectfully by the vice-chairman of the Workers' Compensation Board. Either he was lying, that they do not have two and possibly three opinions, or for some reason, after promising that they would bring those opinions before this committee the next day, he chose only to bring one.

The Chair: Order, please.

Mr Sorbara: The other two opinions said that they couldn't do it.

The Chair: I concur with you that the point you raise is quite serious. I remember very clearly all of the quotes you have re-read into the record made by myself, Mr Farnan and yourself, and some of the words spoken by Mr King. You might have a point if the committee were in fact still dealing with the WCB matter.

The committee a week ago decided to conclude its hearings by motion and by vote. The committee again today decided that the matter was not significant enough to reopen, that we did not in fact have new information which swayed a majority of the members to reopen the matter. As far as I'm concerned, the decision of the committee of last week stands today, and that is that the committee has concluded its hearings into the WCB matter. No matter how I personally feel about it or how anyone on this committee personally feels about it, the committee's decision must stand and I'm not allowing any more discussion on the WCB matter, but I thank you for bringing that to my attention.

Mrs Marland: Mr Chairman, I have a point of privilege.

The Chair: A point of privilege.

Mrs Marland: My point of privilege is that I feel that I have been misled by the vice-chairman of the Workers' Compensation Board, and I would seek direction from the Chair as to how I might deal with that matter. The fact that this committee and the members of this committee, including myself -- my privileges have been violated by those facts I've just placed on the record. How can I deal with it?

The Chair: Order, please. Mrs Marland, I understand your concern and I know how upset you are about this. First of all, let me say that it's not a point of privilege. What you've described to the committee is your view on whether or not the board has more than one or two or three legal opinions and your view on the testimony given by Mr King. I have no way of knowing whether you're correct or whether Mr King is correct. Therefore, the Chair cannot rule on the matter. I reiterate that the matter is closed and the committee will continue its work which is listed on the agenda for Tuesday, January 19, 1993.

I thought, just for the benefit of the committee, I would take 30 seconds to remind the committee that in the past week we have in fact reviewed and called witnesses that have dealt with (1) the Workers' Compensation Board, (2) the registrar general's office, (3) the chief officials from the elevating devices branch of the Ministry of Consumer and Commercial Relations and (4) the Ombudsman. So the committee is moving right along as far as its original agenda is concerned and we've concluded a great deal of work, in my view.

Mr Jackson: A point of clarification, Mr Chairman: On that point, was there not a request to have the Minister of Housing here for the February set of hearings? I did not hear her name.

The Chair: I have a notice of motion which was given to the committee by Mr Tilson. I don't see Mr Tilson here.

Mr Jackson: Mr Tilson was required at another meeting. I wondered, in the best interests of the minister for proper notice and for the orderly progress of this committee, if we might at some point deal with that issue. If the Chair could rule on a time, I could make sure that Mr Tilson is here to argue the motion. He may not be able to vote on it, but to argue it. I just think it's not fair to the minister that, if it is the committee's wish, we don't tell the minister a few days before we need them.

Mr Cordiano: Could I help, Mr Chairman, because I was sitting in the chair at the time when this was --

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The Chair: I'm informed by the clerk that the motion has in fact been moved by Mr Tilson. Can I get the log, please?

Mr Cordiano: It was deferred to today, to be debated today at some point in time. As Mr Tilson was not able to be here today, we decided that we would deal with his motion in his absence.

Mrs Marland: That's right.

The Chair: Thank you. Mr Cordiano is correct. In my absence, Mr Cordiano assumed the chair and on January 12, during Mr Cordiano's time in the chair, he heard from Mr Tilson, who moved -- and I'm reading directly from the clerk's log -- "that the Minister of Housing shall appear before the standing committee on public accounts during its consideration of the Provincial Auditor's report on non-profit housing."

The motion was placed on our agenda to be dealt with prior to hearing from the witnesses, who have been patiently waiting for us all morning. Mr Jackson, do you wish to speak to Mr Tilson's motion? I'm going to allow five minutes' debate per caucus.

Mrs Marland: I would like to, as the critic for Housing.

The Chair: Mrs Marland, you're allowed five minutes.

Mr Jackson: You didn't want to hear from me anyway.

The Chair: Point of order, Mr Farnan.

Mr Farnan: I understand that we want to deal with this motion, but in courtesy to the delegation, surely this is something that can be left to the conclusion of the day. It is now an hour and 40 minutes that we've had senior people sitting waiting to be heard by the committee and I think the committee should demonstrate some flexibility and get on with the business that was designated for today, and that is to hear this delegation. Really, it is an insult and a great inefficiency for this committee to be going on and on while this delegation sits and waits, very patiently I might add.

The Chair: Mr Callahan, on the same point of order.

Mr Callahan: Although I disagree with my friend's logic on the point of order, I think we could at this point, Mr Chair, dismiss these people, to come back at 2 o'clock, rather than have them wait. We're going to be dealing with this, as I think you've said, for five minutes each caucus. That will be 15 minutes. That will take us to adjournment. Perhaps you could give them an extended lunch hour.

The Chair: I think that's a very good piece of advice.

Mrs Marland: On the same point, Mr Chairman, I'm quite happy to agree to have the motion deferred to a time this afternoon, with the agreement of the committee, rather than have the staff leave.

Interjections.

The Chair: Order, please. I've heard everyone's thoughtful suggestions. I appreciate the committee's help. I am going to thank the delegation for patiently waiting all morning. I'm going to ask the delegation to return at 2 pm. We're not going to get around to you this morning. I apologize on behalf of myself and the entire committee, but there was other pressing business that had to be dealt with. So we'll see the delegation this afternoon at 2 o'clock.

I'm going to start the rotation for Mr Tilson's motion, and I believe Mrs Marland wanted to make the case. Five minutes.

Mrs Marland: The significance, I think, of Mr Tilson's motion is that he placed it to be dealt with as early as possible by this committee in order to facilitate the Minister of Housing herself. Obviously, when the House isn't sitting, we respect the fact that ministers have their own schedules of appointments and commitments, and because the subject of the Ministry of Housing is coming before the public accounts committee, I think the week beginning March 8 -- am I correct, Madam Clerk?

The Chair: I believe you're close, yes.

Mrs Marland: I think it's March 8 that the Ministry of Housing is before this committee. A lot of the questions that will be raised at that time have a great deal to do with policy, and the fact is that, as with any ministry, policy areas are the responsibility directly of the minister, representing the government.

We have many examples of very serious situations in the non-profit housing business in this province. Every week we have another example of where the taxpayers' money is being totally exploited under the guise of the provision of affordable housing when in fact the only people benefiting are the people between the government and the people looking for housing, namely, the planners, consultants etc.

We also have examples that, as you know, Mr Chairman, have now been reported in the media where we have at least two non-profit housing projects in Toronto where land has been flipped within the non-profit organization and there have been benefits to people in real estate. There have been benefits to people on boards of those non-profit agencies and the whole situation of the provision of affordable housing through the non-profit building program is something the public needs some answers on that quite frankly have to be given by the minister, who is accountable in the end for what happens with Ministry of Housing programs.

We feel that in fairness to the minister herself, she would want the opportunity to be here and not just dump it on to her deputy or her assistant deputies to deal with the kinds of questions that need to be asked. I would bear in mind in placing this motion, of course, that these questions have been raised by the auditor. The auditor has identified problems with the non-profit housing program in this province and since the auditor's report has come out, in my position as the spokesperson for Housing for our PC caucus, I have been given a lot of information about a number of existing examples of where non-profit housing as a program is not providing affordable units to the people who need them. In the whole process the government is spending millions and millions of dollars, but it doesn't end up with units being built for the individuals who need them.

Having said that, I think the point is that the question of the scandals going on today in the non-profit housing program are of such dimension and such seriousness that it is important to have the minister here to answer those questions, not just her staff.

The Chair: Thank you, Mrs Marland. Mr Duignan, five minutes.

Mr Duignan: In response to the motion, and indeed to Ms Marland's remarks where she basically wants the minister to come to discuss policy issues, it's not the function of this committee to discuss policy issues of the government, it's to discuss the administration of those policies in the department. I want to review the role of this committee and I want to have a look, for example, at what Graham White has to say about the role of this committee. He was, I understand, the assistant clerk in the Ontario Legislature from 1978 to 1984 and he goes on on page 212 of The Ontario Legislature:

"Although they are free to attend in their capacity as members of the Legislature, ministers very rarely come to meetings of the public accounts committee. Invitations to attend are directed to deputy ministers or, in the case of agencies, boards and commissions, to chairmen or presidents. The committee calls before it the civil servants rather than the politicians in part to emphasize the bureaucrats' responsibility for administration and in part to avoid the partisanship that inevitably accompanies the appearance of a minister before a committee."

I want again to emphasize that role, and I had a look at what the Guidelines for Public Accounts Committees in Canada says on the issue. It's dated 1989 and in chapter 2.3 dealing with the non-partisan nature of a public accounts committee's tasks:

"The public accounts committee should operate in a non-partisan fashion if it is to effectively conduct a searching and rigorous scrutiny of government expenditures.

"If the PAC is to meet the growing challenges placed upon it, and achieve its full potential to improve the value for money obtained from government expenditures, it is essential that its work be conducted in a non-partisan and open atmosphere. The fact that the committee scrutinizes administration rather than policy helps to achieve this goal. As legislators, all members of the PAC are pursuing common goals: to ensure that government complied with the wishes and authorizations of the Legislature, to obtain maximum value for money from government expenditures and to ensure that government policy is implemented as effectively as possible."

Also: "This work requires the cooperation of all committee members regardless of party affiliation if the PAC is to be effective. If committee members try to bring partisan politics into the work of the PAC, it will be disruptive, and will reduce the PAC's effectiveness and credibility."

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Again, Mr Chair, this committee's basic mandate is to promote economy, efficiency and effectiveness in public spending and not to discuss the merits of government policy. So that's my argument in relation to this particular motion, and the reasons why. I feel that the witnesses who are scheduled to appear before this committee, the deputy minister etc, will be quite effective in answering any questions that any member of this committee has. Therefore, this side will not be supporting the motion.

The Chair: Thank you for your information, Mr Duignan. Mr Callahan, five minutes.

Mr Callahan: Mr Dwignan, you're operating in technicolor. I agree with you totally that the purpose of this committee is to be non-partisan. However, you people have just demonstrated by voting against Mr Sorbara's motion that you were exercising the highest degree of politics. You were flying in the face of what you suggested, the fact that this committee's objective is to ensure the government is accountable for the expenditure of moneys.

You had the WCB in here trying to spend $200 million to build accommodations for itself, a palace, in the city of Toronto where there's $52 billion worth of vacant space. I don't know how you can sit there with a straight face, Mr Dwignan, and say that, while your other colleagues off-camera are laughing because they know just how ridiculous it is, that in fact the vote that took place was one that was done on a partisan basis. Now I want to get to the question --

Mr Farnan: Mr Chair, a point of order.

The Chair: We have a point of order. I'm sorry to interrupt you, Mr Callahan.

Mr Farnan: In September 1990, Mr Duignan was elected to this assembly. There is absolutely no reason why members of both opposition parties should mispronounce his name, and if we are amused, it is because of the fact that after two years, Mr Callahan (a) refuses to pronounce, or (b) purposely mispronounces the name of the excellent whip of this committee. I would appreciate it, Mr Chair, if you would put an end to this kind of nonsense on committee.

Interjections.

The Chair: Order, please. Order, please. While not a real point of order, I understand that it is a point of concern and I share your concern, because I've been here 18 years and people still mispronounce my name. So not only do I want the committee members to pronounce Mr Duignan's name properly; I want the committee members to pronounce my name properly. Mr Callahan, please continue.

Mr Callahan: I'm sorry. I'm looking at your nameplate and I was pronouncing it as best I could. Is it Duignan?

Mr Duignan: Duignan.

Mr Callahan: Duignan. I apologize, Mr Duignan. No one should mispronounce somebody else's name.

But I still go back to the question that if you people are saying the public accounts committee is to be non-partisan, which traditionally it's supposed to be, then let's start practising non-partisanship all around this room, instead of voting against motions to bring forward the WCB, which is a very considerable issue to be decided by this committee.

The minister is saying, on the one hand, that he doesn't want it, that he thinks it's not a good idea, and yet you guys are getting your marching orders from somebody else and you have to caucus when -- I don't understand why you had to caucus.

I think it's important to have the minister in here for that very reason, because if this happens again and the minister is saying one thing in the press and you guys are saying something else in a vote and trying to silence this committee, then in fact we can ask the minister: "Well, minister, what is it? Is it your caucus? Is it the members of this committee? Have they been given different marching orders by another minister?" I think it's important to have that minister here.

I look at the things in the auditor's report. There are very significant concerns there, when you still have operations being proposed on land values that have decreased, when you see that there don't appear to be any operating agreements in place, when you read in the press about the non-profit corporations giving some of their people in their corporations a year off, a sabbatical. What's going on here? Give me a break.

The taxpayers of this province deserve better than that. If you believe truly, as members of the public accounts committee, that your responsibility is to look after government spending or overspending, well then, you'd better get with it. Don't start preaching to us from Graham White. Start acting the part. I think this committee should get back to that question. Partisanship doesn't do anything for any of the taxpayers of this province.

That's why I think the minister being here is absolutely essential. If I find that you vote against the minister being asked to come this time, then I have to conclude that it's a second partisan shot by you people, even after Mr Duignan says, "This should be a non-partisan committee." Give me a break, Mr Duignan. You'd better get in line with your colleagues and make sure that they're following the same profile that you're trying to put forward to the people of Ontario. Do you think they're stupid? They just have to look at the motion and the fact that Mr Farnan passed a motion which literally silenced this committee in looking into this issue, pursuing one of the most important issues in a time of a devastating crisis where you can't even keep half of the promises, 1% of the promises, you made to the people who elected you, because there's no money.

Mr Duignan: It's more than you did.

Mr Callahan: Thank you, Mr Chair.

Mr Jackson: Point of order, Mr Chairman: I wish to register an objection and perhaps provide the opportunity to clarify the record. When Mr Duignan read the reference to Mr White's commentary on the activities of this committee, the clear statement, and therefore the inference, was put on the record that civil servants, senior government bureaucrats, give different answers before this committee based on the presence of their minister.

I, for one, object to that and do not believe that's an appropriate commentary to be endorsed by members of this committee. I reject it wholeheartedly, and if that's the position of Mr Duignan, I wish him to withdraw it. I think it's an offence. I frankly have a little higher regard for the presence of the senior administrators who present themselves to this committee, but that was the clear inference as part of his rationale. I would hope that he would distance himself from at least that part of Mr White's diatribe.

The Chair: Thank you. Mr Callahan had one moment left, if you wish to use it, Mr Sorbara: 60 seconds.

Mr Sorbara: Thank you, Mr Chair. I'll just be very, very brief. I wish it were the case that you, sir, as the Chair, were able to make these decisions and not put them before the committee. I simply put it to the committee, which will make this decision, to put the two sides of the issue on a scale: What are the relative risks and rewards of asking the minister to attend?

On the one hand, if we do ask her to attend, it takes up some of her time, but that's not a great risk, and it puts her in a somewhat vulnerable position because she will be put on the spot politically. But, after all, as politicians that happens every single day of our lives as elected representatives. On the other hand, the risks of not calling her before the committee are that some very important information that only the minister can speak to in terms of policy and the administration of non-profit housing will not get before the committee.

On the one hand, if we ask her to come, there is some potential of political embarrassment. But on the other hand, if we ask her not to come, there is, I think, significant potential that information this committee needs to make up its mind will not be before the committee. That's why I'm asking you as NDP members to support this motion.

Mr Jackson: Call the question, Mr Chair.

Mrs Marland: Recorded vote.

The Chair: Mrs Marland has asked for a recorded vote. The clerk will call the names of the members as --

Mr Callahan: I'd ask for a brief moment to allow us to get all our members here.

The Chair: How much time do you need, Mr Callahan?

Mr Callahan: I don't know. It depends. You might get some of them over there changing their --

Mr Sorbara: Two minutes.

Mr Callahan: Two minutes if we can get --

Mr Fletcher: Take five.

Mr Callahan: Five minutes. All right.

The Chair: Why don't we all just stay in the room here, and could you find out how long it will take to get our other colleague to return? That way we're not using up precious time.

Mr Callahan: Okay, I'll see if I can find him.

The Chair: So the committee will stand adjourned, but I would ask members to please --

Mr Jackson: Stand adjourned in their place.

The Chair: Stand adjourned in their place; thank you for your help, Mr Jackson.

The committee recessed at 1159 and resumed at 1202.

The Chair: The standing committee on public accounts is called to order. The committee will be dealing with Mr Tilson's motion, moved by Mrs Marland. It reads:

"That the Minister of Housing appear before the standing committee on public accounts during its consideration of the Provincial Auditor's report on non-profit housing."

Mrs Marland has asked for a recorded vote. The clerk will call your names during the vote. All members in favour of Mr Tilson's motion, please raise your hands.

Ayes

Callahan, Cordiano, Jackson, Marland, Sorbara.

The Chair: All members opposed to Mr Tilson's motion.

Nays

Duignan, Farnan, Fletcher, Hayes, Hope, O'Connor.

The Chair: Mr Tilson's motion has been defeated. The minister will not be asked to appear.

It now being past 12 of the clock, this committee stands adjourned until 2 pm this afternoon.

The committee recessed at 1203.

AFTERNOON SITTING

The committee resumed at 1405.

ANNUAL REPORT, PROVINCIAL AUDITOR, 1992
MINISTRY OF COMMUNITY AND SOCIAL SERVICES

The Chair: The standing committee on public accounts is called to order. The committee has scheduled a number of witnesses from the Ministry of Community and Social Services. I believe the deputy minister is here, Charles Pascal. Mr Pascal, could you please take the time to introduce yourself and your colleagues? I'd like to ask you whether you have an opening statement and how long it might be.

Dr Charles E. Pascal: Okay, thank you, Mr Chair. With respect to your second question first, I do have an opening statement, which should take me about 15 to 18 minutes.

Mrs Marland: Do you have copies?

Dr Pascal: Yes, I do.

Mr Sorbara: Does it touch on the Workers' Compensation Board?

Dr Pascal: I rewrote a few of the paragraphs, Mr Sorbara.

Mr Sorbara: All he has to do, now that his predecessor --

The Chair: Order, please. Mr Pascal, you have the floor.

Dr Pascal: Thank you, Mr Chair. With respect to my colleagues present, Alison Fraser is director of the income maintenance branch, John Stapleton is director of special projects, Andre Iannuzziello is the head of our cost containment project in social assistance, Shirley Hoy is the assistant deputy minister of social assistance and employment opportunity, Margaret Gallow is the acting ADM for operations and Colin Rowe is the direct services manager of income maintenance in Toronto. The reason for the size and the breadth and quality of the delegation is simply to afford all members an opportunity to ensure that, because of the complexity of the issues, our answers are both fulsome and accurate.

The Chair: Obviously you know why you're here. Mr Pascal, you have the floor.

Dr Pascal: Thank you very much. Mr Chair, we very much welcome this opportunity to appear before you to engage in a dialogue and answer your questions about the ministry's family benefits program. The 1992 Annual Report of the Office of the Provincial Auditor was, as you know, released last month. As part of the annual auditing process, the ministry's family benefits assistance program was reviewed and the results of that audit are included in the final report. As you're all aware, the Provincial Auditor found that administration of this program was less than satisfactory, largely -- noted often in the report -- as a result of understaffing caused by escalating case loads.

As stated in our response included in the final report, we appreciate the validity of the findings of the Provincial Auditor. Since being apprised of those findings, we've been quite successful, we think, in addressing many of the shortcomings identified in the report. That process is certainly still ongoing, and we look forward to exploring some of the issues arising and remaining through the dialogue.

Before I begin an itemized response to the findings of the report, I want to thank the Provincial Auditor once again for providing our ministry with so much useful information. We very much respect the rigorous arm's-length process and function of the Provincial Auditor. At the same time, we all appreciate the spirit of cooperation that has accompanied this exercise. From the beginning, there has been a very constructive approach and partnership in terms of sharing information and working together that exemplifies the intent of the auditing process.

Following on that spirit of cooperation, I want to provide this committee with as much information as possible regarding this ministry's administration of social assistance, the challenges we face in making the changes suggested by the auditor and the steps we're taking towards those changes. As I've already indicated, Mr Chair, that's the reason why I have a delegation with me to ensure that members of the committee receive the kind of complete and detailed answers to their questions.

I'd like to start by taking a moment to describe the context in which the audit was conducted. As you all know, over the past few years Ontario has been experiencing an unprecedented growth in social assistance case loads and in the cost of providing that assistance. From 1989-90 to 1991-92, our total social assistance case load increased by 69% while total provincial expenditures during the same period increased by approximately 97%.

Over a very short period of time, we found ourselves dealing with a system so overburdened that it could not accomplish more than the minimum requirements of processing applications, issuing benefits and attempting to keep up with recipients' changing circumstances.

At the same time as we were looking at ways of making the existing system more efficient, we reaffirmed this government's commitment to reforming the welfare system by advancing efforts that had been initiated by the previous government.

As one of the first clear steps towards reform, we entered into discussions on disentanglement with the municipalities, which are ongoing, about the province assuming full funding of general welfare allowances, provided appropriate tradeoffs in other grants were agreed upon. Combining general welfare and family benefits into a single piece of legislation is obviously, and has been noted for many years, a key factor in welfare reform. It was in this dynamic climate of reform, restraint and recession that the provincial audit was conducted.

When the preliminary report of the auditor was shared with this ministry last spring, we were pleased that it reinforced some things that we had begun looking at and reinforced in great depth the seriousness of the issues. With the additional assistance of the information contained in the report, we designed a plan to address the concerns expressed by the Provincial Auditor and to increase the overall efficiency and effectiveness of the system.

We identified five key priorities on which to focus in order to improve the program's integrity and capacity:

(1) To link interested recipients to training and employment opportunities.

(2) To redirect people who are eligible for other forms of income support to ensure that social assistance in Ontario is a residual last-resort system.

(3) To improve administration.

(4) To prevent fraud.

(5) To help sole-support parents locate and obtain child support.

The plan was based on hiring additional staff who would carry out various initiatives. In May 1992, we received approval to hire 450 additional staff, at an estimated cost of $18 million.

A total of 200 staff, including front-line income maintenance staff, program review officers and parental support workers were hired by the summer of 1992, with plans to hire the remaining 250 staff by the end of this coming March.

In addition, we embarked on a separate fraud initiative by hiring 30 eligibility review officers to help prevent and identify fraud in the system.

By the time the final report was released in December, we were already beginning to realize significant savings in individual program areas and we continue to see positive results. For example, overpayment recovery from non-recipients is increasing; more cases are being terminated through intervention by eligibility review officers; more sole-support parents are receiving child support due to the efforts of parental support workers -- I think the number of additional assignments of support as a result of the intervention is about 5,000 since April; referrals to training and employment services are increasing; and more clients are reporting earnings.

Overall, income maintenance staff are spending more time with clients to focus on eligibility and employment assessments.

I'd like to take some time now to go through each area identified in the auditor's report in order to give you a better idea of what we're doing specifically to address these concerns.

With respect to staffing, the auditor's report recognized the impact that case load growth has had on the effective administration of the program. It detailed deficiencies in service that resulted from workload pressures and identified a need for additional staff.

The report concurred with a 1991 ministry staffing study that determined effective service could be provided with a case load standard of about 275 clients per case worker. It found that in visits to three local offices, in one office where case loads averaged less than 275 per case worker, administration of the program was satisfactory. In the other two, where case loads exceeded that standard, administration was unsatisfactory.

In addition to the auditor's results, our own experience revealed alarming case load situations. In areas of the province where growth in social assistance has been the greatest, many case workers were handling case loads of up to 500 clients. Parenthetically, in my trips around the province, I met at least a dozen case workers I can recall who claimed their case loads were up around 575.

Once we had the approval to hire 450 additional staff, we went ahead and hired 200 additional front-line income maintenance staff to address immediate workload issues, deploying them to the greatest case load growth offices in the province -- Barrie, Hamilton, Kingston, London, North Bay, Ottawa, Sudbury and Toronto. We chose deliberately to effect a strategy where we would try to show the kind of integrity achievements we could achieve by trying to do fewer things better rather than all things less well, ensuring that by deploying in a more limited number of sites, we could show the kinds of results that I think the Provincial Auditor envisioned.

The remaining 250 staff, who will be on the job by the end of the fiscal year, will support activities linked to training and employment opportunities, eligibility review, minimizing overpayments and pursuing other forms of income support to which recipients may be entitled.

With respect to disability benefits, the Provincial Auditor found that the ministry did not ensure that recipients collected disability benefits due to them under the Canada pension plan. The report estimated that had all these recipients been granted CPP, their monthly FBA would have been significantly reduced or eliminated altogether, meaning a savings to the program of $300 million over the past 10 years.

The audit involved a review of the files of 170 permanently unemployable and disabled recipients. It found that 15% were likely eligible for disability benefits but no application had been sent, 26% contained incomplete information and 59% were either receiving CPP or were clearly ineligible.

The report also pointed out that eligible recipients can recover up to 12 months of retroactive CPP benefits. It estimated that if all of those found likely eligible -- that is, 15% of permanently unemployable or disabled recipients -- were granted CPP at the time of the audit in January 1992, a $70-million amount would have been potentially recoverable from the federal government.

The ministry agrees there are savings to be made by helping recipients apply for CPP benefits, and we have undertaken to review the files of all permanently unemployable and disabled recipients who are not currently receiving CPP. To date, we have reviewed 30,000 cases for potential eligibility and have advised over 4,000 clients to apply for CPP. The results are being monitored and allowances adjusted as appropriate. So far, 1,014 of these clients have been granted CPP.

Because of the rules of the Canada pension plan, CPP applicants receiving social assistance are put in a slow stream for processing in terms of priorities. We're working with the Canada pension plan to find ways to process those applicants as quickly as possible.

The ministry will continue to monitor the status of these applications and will review a further 60,000 similar cases by May of this year. In addition, we are improving practices to use the assignment form, which allows for the reimbursement of retroactive payments directly to the Treasurer of Ontario.

Income maintenance front-line staff are now working closely with individuals to better ensure that people who may be eligible pursue CPP and other forms of income support.

The report also mentions that there is no financial incentive for a recipient to apply for a CPP disability benefit because the recipient's family benefits monthly allowance is reduced by an amount equal to the benefit received. I'd like to clarify that we are required by federal law to reduce social assistance allowances by 100% of the CPP allowance.

With respect to the important area of fraud prevention and detection, the auditor's report noted that efforts to prevent and detect fraud were insufficient. The report stated that despite the existence of procedures to follow up on potential fraud cases, the ministry was not aggressive in prosecuting suspects or in obtaining restitution.

As part of a province-wide initiative, the ministry has more than doubled the number of eligibility review officers it employs from 24 to 54. EROs are specialized staff who investigate and gather evidence of ongoing eligibility and overpayment, with the intent of proceeding to criminal prosecution or court where fraud is indicated. In addition, they work closely with local police and educate clients about the consequences of fraud.

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Over the next few months, an additional 36 EROs will be hired to concentrate on allegations yet to be investigated. We estimate that eligibility review officers save three times the cost of their wages and benefits. That's a difficult figure. My guess is that it's far greater than that, because once a case is terminated, the cost avoidance continues into some unknown future point where the recipient may have got off the program or have been detected later on. It's an investment that is already paying extraordinary dividends for the taxpayers of Ontario.

We collect manual data from the field to track the number of cases terminated and reduced and the resulting monthly savings. I was very concerned personally to discover, however, that information on the number of referrals to eligibility review officers and the number of prosecutions are not included in these data.

This will be remedied by an automated data system the ministry has developed which will make it possible to better assess the degree of fraud and to focus our efforts on minimizing occurrences. The system will track all case activity related to the eligibility review officers' intervention. The system will also provide us with an analysis of savings versus cost. This database system is currently being tested in Toronto, and province-wide implementation is expected in the very near future.

Before I leave the area of fraud, I'd like to mention a related initiative that has resulted in substantial savings to the program. We have been focusing efforts on increasing the number of clients whose cheques are deposited directly into a financial institution, reducing the chances of lost, stolen or fraudulent cheques and ensuring that postal delays do not slow down the delivery of payments.

Historically, the 30,000 replacement cheques the ministry issues each year have cost taxpayers $1.5 million annually. To date, about one third of all FBA recipients have opted for direct deposit.

With respect to the issue of overpayment recovery, write-off and prevention, the Provincial Auditor found that efforts to collect overpayments from former recipients directly and through referral to the Ministry of Government Services central collection services were inadequate. The report recognized understaffing as one of the contributing factors.

The ministry has increased its efforts to recover overpayments from former recipients by assigning dedicated staff in each area office to ensure effective review and follow-up on closed cases with overpayments. We are working with central collection services to improve referral and collection procedures to increase the amount of debt repayment.

In addition, the new staff has minimized the amount of improper overpayments. Along with the efforts of other front-line income maintenance staff and eligibility review officers, 13 new program review officers are working to reduce overpayments and administrative errors by reviewing files for discrepancies and legislative compliance.

The auditor's report also found that overpayment balances were being written off without assessment of the former recipient's ability to pay. Overpayments previously written off were not reinstated for recovery when former recipients began receiving benefits again.

As a result of the auditor's findings, the need for a comprehensive review of overpayment write-off policies and procedures has been identified. This review will be completed and any necessary changes made by the end of March of this year.

All family benefit delivery sites have been advised that overpayment recovery on terminated cases is to be treated as a priority and to ensure that adequate resources are dedicated to overpayment recovery and write-off procedures. In this regard, staff have been assigned specific responsibility for ongoing management of the overpayment recovery process.

With respect to maintenance and child support, the auditor's report expressed concern over the lack of maintenance and child support received by sole-support parents on FBA and concern about the ministry's efforts to guide and assist them in pursuit of such support. There are approximately 146,000 sole-support parents receiving FBA, about half of whom have court orders requiring their spouses to pay support.

The ministry hired an additional 49 parental support workers by the summer of 1992 to help more sole-support parent clients to negotiate and secure support arrangements, to attend court if necessary and to follow up on cases with arrears. We will be hiring an additional 10 PSWs by the end of the fiscal year.

As you know, responsibility for enforcement of support orders lies with the Ministry of the Attorney General, which administers the family support plan. I have discussed this in detail with my colleague the Deputy Attorney General to seek his cooperation in ensuring appropriate service for social assistance clients.

With respect to eligibility verification and updating of client information, the auditor found that the information upon which benefits allowances were based was not always verified either at the time of application or during the annual updates. The report estimated that the ministry has overpaid $30 million due to a lack of proper verification of information.

The ministry considers visual verification acceptable as long as the verification is noted on file. We believe it's possible that while information is being verified, recording is indeed insufficient. Therefore, we are establishing clear guidelines to reinforce documentation requirements.

When verification cannot be produced at the time of contact, follow-up is required. Workload pressures have contributed to a lack of both follow-up and updating information on a regular basis. With the additional staff and anticipated system changes, we believe that these concerns can be successfully overcome.

With respect to overall savings, the initiatives I have mentioned are part of a package of measures announced by the minister last May as part of the ministry's strategy to save over $300 million in the social assistance system. Some of those other initiatives are also creating significant savings. For example, a new unemployment insurance assignment system will produce savings because clients will not be paid twice. These savings will be made in the area of general welfare assistance. The changes we have made to the supports to employment program, STEP, will also provide savings both in general welfare and in the family benefits programs. In addition, the deferral of the 1993 social assistance rate increase to April 1 will also result in savings.

Altogether we expect to save about $163 million in social assistance expenditures this fiscal year as a result of these measures. With the added impact of slower-than-forecast growth in the number of people receiving social assistance, we are hopeful that we can realize the $300 million in savings announced by the minister.

Because of the relationship of the almost exponential growth in participation in the system over the past several years and because of these projections, the rate-increase decrease, if I can put it that way, will be the lowest in the history of the system, going from an increase last year over this year of about 22% to 24% projected for next year to about 4%.

As a ministry, we will continue to look for ways of achieving savings that do not have a direct impact on recipients. For example, we're looking very seriously at forms of administrative streamlining that will help us to reduce costs.

In closing, I'd like to restate my ministry's commitment to addressing the concerns raised in the auditor's report and to increasing the efficiency and effectiveness of the family benefits program.

I believe that the audit process has been and continues to be an extremely positive and beneficial one to us, and we are indebted to the Provincial Auditor for the insight and the information that has been communicated to us and for the opportunity that we have been given to improve the service we provide to recipients of the program. Thank you very much, Mr Chair.

The Chair: Thank you, Mr Pascal, for your presentation to the committee this afternoon. We're going to start a 15-minute rotation this afternoon, and we'll start with the government members, then official opposition and the third party. Mr Fletcher.

Mr Fletcher: I have no questions.

The Chair: Mr Hope.

Mr Hope: I'll start off with the --

Mr Callahan: No questions. Just move on.

The Chair: No questions?

Mr Callahan: It looks that way.

Mr Hope: No, I said I'd have some questions.

Mr Callahan: Oh, sorry.

The Chair: Mr Hope, you have 15 minutes.

Mr Hope: Thank you for the presentation, Charles. You talked about the case load increase of 69% and then an estimated increase of 97% in expenditures. The report that was given to us yesterday indicated that the federal contributions have dropped somewhat dramatically from our arrangement of 50-50; it's now less than 50-50. I'm just wondering what your projected estimates would be. I guess the legal agreement would be 50-50, but I know it's less than that, and I'm just wondering about the numbers that are given to us saying that the federal government only contributed $980 million to a bill of $2.73 billion.

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Dr Pascal: In very macro terms, in the last three years the 5% cap on CAP has resulted in a net loss to the ministry of between $3 billion and $4 billion, if that's what you're getting at. I may not have -- John?

Mr John Stapleton: Also moving on in percentage terms, last year that amount, the federal portion, went down to about 28% and it's likely to be even lower this year, probably in the 26% to 27% range as opposed to the nominal 50%.

Mr Hope: One of the other areas I wanted to move on to is the CPP. I'm trying to gather more information through the legislative research end of it, dealing with the CPP where they were saying people were eligible. I'm looking at that and asking: Where was the problem? Is it just that they'll be minus the 100% of what they receive in CPP, or is the problem dealing with public information of CPP, that they may be listening to their neighbour and their neighbour says, "Oh, you don't qualify for a disability pension from the federal government," so they don't apply? The applications never even went in or the conversation has never happened with the local area office on collecting the CPP.

Out of the assessments you've been doing with the eligibility aspect -- and I notice you've made reference to some numbers in here -- what are you finding out? Is it lack of client information? Where does the problem exist? It just can't be the 100% deduction.

Dr Pascal: As I said in my opening remarks, Mr Hope, from the client perspective the consequences are neutral with respect to participating in asking for CPP support because of our legislative requirements to deduct what they would receive from the Canada pension plan, the disability benefit. With respect to the client, there's no reward, so to speak.

I would suggest it's a function of information. It's a function of what has been an overburdened system from the case worker's point of view and the fact that, as the Provincial Auditor noted, five hours per year per client doesn't always afford the opportunity to be as thorough as we need to be at the front line. A combination of all of those factors has made it, as the Provincial Auditor has pointed out, an area where administratively and in terms of information and counselling we could do a lot better. The results of our preliminary case review of 30,000 have begun to indicate that the Provincial Auditor is quite correct with respect to the need for better intervention.

Mr Hope: The other area which was brought to light -- you're talking about additional staff and administration. I notice the review that was put forward to the committee yesterday talked about cases. The cases reflected back and three years ago there were decent economic times. The case load didn't really take off until the 1990s, early 1991, and when I look at the report over three years ago -- so you start looking at that time frame. Was the staff ratio 275 or are we just still not solving a problem? All we're doing is lowering it down to 275, but the problem will still exist. I'm wondering if we're not just spending good money after bad money.

Dr Pascal: First of all, as I indicated earlier with respect to the investment of 450 new front-line workers, the majority of whom will be income maintenance officers, we decided to try to put into practice what the base review of 1991 envisioned and that is a lower case load, a better ratio. Rather than spreading the 450 front-line workers right across the province, we decided to focus on eight sites and what we're going through right now has the promise of a very successful experiment.

With respect to what the right ratio is, this is always a bit of a subjective moving target, but we do have enough information to suggest that when income maintenance officers have a lower case load, their ability to engage in opportunity planning, appropriate referrals to job training and to job opportunity, to ensure integrity around alternative sorts of sources of income is heightened, so we wanted to make sure that the new investment of staff took the ratios to a level that we know is better. We know that down is better, but going down just a few across the province we didn't think was a good investment. We wanted to try to take it down to a more reasonable level.

Now I would ask John or Alison to comment on what the kind of pre-1990 ratios might have been prior to the base review suggesting the kind of appropriate number of 275.

Mr Stapleton: Certainly. We were about 350, and the statistics we have now show that we're in the 300 to 325 range.

But rather than just putting it in terms of five hours per year that a worker can spend with a recipient, you have to think that they really are not able to do anything more than either register the client on to the system, on the one hand, or keep up with the changes in their circumstances. This is a statutory obligation within the program.

The non-statutory part of the program is the part of helping recipients get off the system, in the second place, or reducing their dependency on the system through earnings or whatever other training or education is appropriate. It was that part of the job that the worker, the income maintenance officer and the other specialty functions were not able to perform during that particular period when we saw the greatest case load increases. So you're right in the sense that yes, during that period we were just falling behind or barely keeping up.

As the deputy has pointed out to you, we've gone from about a 24% increase in expenditure and in case load increases last year down to a 4% increase. Now is our real opportunity over this next period of time to really make gains in catching up, as opposed to just keeping level with the case load.

Mr Hope: In the review of what the response was of the ministry and to the auditor's report, I know in a lot of this if you listen in our own communities, our own communities are really hammering social assistance recipients. They don't know the difference between GWA and FBA, but they're really hammering sole-support parents, and the comments about, "They're in the bingo hall," and all this are coming out in our communities.

I know that what we're trying to do is control and administrate a process, but I want to take it from the attack on the social assistance recipient to move it to, "What are you doing for the person who is on social services to get them off?" That is a major saving if you can get people off social services and into full employment opportunity.

I'd like to focus my comments dealing with sole-support parents because it seems to be an issue of child care, and I'm wondering what your ministry is doing instead of locking them in the social services, which I think previous administrations have done, kept people on social services, to look at a more proactive solution of doing assessments and getting them off. I also notice in your comments you did not make a comment about the opportunity planning initiatives that are pilot projects throughout. I'm just wondering if I could get your comments on what you are doing, because I think the people who are out there want to listen. What are you doing to get people off social services? I just wanted to address that area.

Interjections.

Mr Sorbara: It was spent in the previous administration.

Mr Callahan: Point of order -- point of privilege, actually.

The Chair: Order, please. We have a point of order.

Mr Callahan: Privilege.

The Chair: A point of privilege, Mr Callahan.

Mr Callahan: That comment that's just been made by the member that the former government tried to lock people into social services is pure tripe. You don't know what you're talking about. I suggest the member retract that statement. It's totally untrue.

Mr Hope: What's the point?

Mr Callahan: It's totally untrue. That's the point. You don't put something on the record that's totally untrue.

Mr Hope: Well, I take it that's just a matter of opinion, and I'm entitled to that.

Mr Fletcher: Point of order, Mr Chair.

The Chair: Mr Fletcher.

Mr Callahan: You show me something on the record that demonstrates that, Mr Hope. You show me something on the record that substantiates your comment.

The Chair: Mr Fletcher has the floor.

Mr Fletcher: On the point of order, I believe that we all have time to rebut, to make statements. It shouldn't be thrown back and forth across the floor as it's being thrown back and forth.

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The Chair: The Chairman has no control over when members wish to raise their points of order or points of privilege. It's not a point of privilege. Mr Hope has made statements that he wishes to stand by, from what I can see, and other members wish to challenge those statements as to their veracity.

Mr Sorbara: May I speak to the point of order, Mr Chairman?

The Chair: I have no knowledge, as Chair, as to whether they're factual or not factual, and it's not my job to decide.

Mr Sorbara: Point of order.

The Chair: Is this a new point of order?

Mr Sorbara: Yes, it is. It does relate to the comments made by Mr Hope, but it is a new point of order.

I think any fair historian of social planning and social policy in the province of Ontario will make clear and argue forcefully the following: that in the province of Ontario under Progressive Conservative administrations, there were, I think, strong and enduring efforts to move people who were temporarily on social assistance off social assistance and into gainful employment.

I think that same historian would make clear that during the five and a half years of Liberal administration in this province, the same trend continued under a number of programs, including the Transition program and the STEP program put into place by the Honourable John Sweeney and others and a very competent bureaucracy.

I think that when the end of the New Democratic Party administration comes about and that is looked at by the same historian, that historian will say that the New Democratic Party administration took significant steps to move people, particularly this large number of people who have currently ended up on social assistance, from social assistance to gainful employment and independence. I think that's what the historians will say about all three political parties during their term in office.

For Mr Hope to suggest that the policy of the previous -- one moment, sir. For Mr Hope to say that the policy of the previous administration, that is, the Liberal administration, was to keep people on social assistance is misrepresentation, is lying to this committee. That remark, although it was made as a flippant political comment, should be retracted because it misrepresents, not only before this committee and to you, sir, as Chairman -- and you served in that administration -- but to the thousands and thousands of people who are watching these committee proceedings and are hoping that they can get some clear information from the committee about the administration of Community and Social services.

The Chair: Thank you.

Mr Sorbara: Ask him to retract it.

The Chair: It's not a point of order.

Mr Hope: Mr Chair, there was a comment made about a liar. Don't you think it's appropriate that it be retracted?

Mr Callahan: Well, not if you were lying.

The Chair: Order, please. How did we get into this? There's nothing out of order. I'm adding four minutes to Mr Hope's time. Mr Hope, I believe, placed a question. Mr Hope has the floor, and you should direct all your comments to his questions through the Chair to the committee.

Dr Pascal: Mr Chair, I'm pleased to say that the promises and the spirit and the vision expressed by SARC under George Thomson's leadership are very much finding residence in the current activities. Opportunity planning, which was envisioned in the Transitions report, has found experimentation in the form of nine pilot projects which are all designed as a community development activity of cooperation to try to bring different brokers together on behalf of the social assistance recipient in bringing about more opportunities for meaningful self-sufficiency in terms of community participation, job opportunities and opportunities for further training.

We also hope that the Jobs Ontario program, which is picking up steam and now has about 4,000 employers registered and over 1,000 individuals on placement, will be part of the solution. Indeed, the investment in subsidized child care spaces is also part of the important supports to getting all recipients who are capable of participating in mainstream labour market activity to do so.

As noted by previous administrations and as the minister of the day has reinforced, that important legacy, the welfare reform initiatives of this current government, will also emphasize in major and bold ways the importance of a system which needs to be active.

I noted in an OECD article several months ago that the author and researcher was doing an evaluation of welfare systems around the world, and one of the dimensions of evaluation was the issue of active versus passive and, again as noted in Transitions and reinforced by the current government of the day, the need to take Canadian systems, including Ontario's, and ensure that they take leave of the category in which OECD placed them; namely, a fairly passive system is part of our history and certainly not part of the future.

We think that the promises of SARC are well under way, and some time in the near future the current government will add momentum and probably some additional ideas around how to deal with the important intent of Mr Hope's question.

Mr Duignan: Very briefly, I'm basically looking for some information. What type of impact will the recently announced changes to the UI payments have on the FBA system in relation to case load and cost?

Dr Pascal: Mr Chair, through you to Mr Duggan --

Mr Callahan: No, it's Duignan. Be careful now, I got scolded.

Dr Pascal: I'm sorry.

The Chair: There are some sensitivities here today, Mr Pascal.

Dr Pascal: I was here earlier and I did listen. You notice that the pronunciation was different from Mrs Marland's, but I'm sorry. What is the correct pronunciation?

Mr Duignan: It's Duignan. Why don't you just call me Noel?

Mr Jackson: Because it's impolite and unparliamentary. He's the member for Halton North.

Dr Pascal: I apologize to the member for Halton North. With respect to the recent pre-Christmas UI announcements, we make the assumption that the case load part of the question will result in an increase. We also make the assumption that there will be, as a result, additional costs to the provincial system. We're still working on our best guesstimate. I can give you a ballpark figure, but it has to be received as such. It could be in excess of $50 million to $70 million additional load. Perhaps Mr Stapleton would add some detailed analysis to my remarks.

Mr Stapleton: In terms of detail and going to your question, in terms of the FBA program, it's not likely that we will see major increases to the family benefits program since it's mostly made up of single parents and persons with disabilities or other aged and near-aged people. Where we are likely to see the effects of the UI changes is in the general welfare assistant program. We will see them there most immediately, and Mr Pascal of course is correct that this will also result in provincial expenditures because the province participates significantly in the funding of the general welfare assistance program.

We do in fact expect to see most of the case load and case cost effects on the general welfare assistance side, but at this time, even though those estimates are the estimates we have come up with, it's very early and it's difficult to tell because we have to see how the actual administration of those UI changes and exactly how the quit-fired policy will be administered on the ground. I think we will know over the next few months what the actual outcome of that will be.

The Chair: Mr Callahan and then Mr Sorbara.

Mr Callahan: Mr Sorbara has asked if he can ask the first question.

Mr Sorbara: To explain my outburst on a point of order, I want to make it clear that I consider the job of being the Minister of Community and Social Services in any government of Ontario to be the worst job in cabinet. One's constituents are the poor, the hungry, the destitute and the disabled, the least fortunate in society. I think the current minister is doing a reasonable job, and I think her predecessors, particularly John Sweeney, did an outstanding job. I just want to put it on record that I hope we will not try and score political points of the kind Mr Hope was trying to score during his question. By the way, I just tell the deputy I think the job of being Deputy Minister of Community and Social Services is the worst and most awful job in the bureaucracy.

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I have one question only. For the purposes of that question, I want the deputy to make three assumptions. The first is that Canadians, as a people, as a nation and as a society, believe fundamentally in income support. As they believe in the Charter of Rights and as they believe in a universal system of medicare, Canadians, as a matter of politics and policy, believe in income support.

The second assumption I want you to make is that currently in Canada we have a plethora or hodgepodge of income support systems, including general welfare assistance, delivered by municipalities and funded by all three levels of government; family benefits, the subject of these hearings; workers' compensation, increasingly an important income support system of general application in many provinces in Canada; Canada pension plan; unemployment insurance; the disability portion of the Canada pension plan; food banks; and the list goes on. My view of it, and I'm asking you to make this assumption, is that it's rather a hodgepodge of systems but that it all speaks to one political or public policy reality, and that is the first assumption, that we believe in income support as a society and as a nation.

The third assumption might be somewhat more difficult. Assume that you, as a deputy familiar with these programs and Canadian society, were given carte blanche to simply wipe the slate clean, eliminate what exists and replace it with something new that does respond comprehensively to Canadians' belief in an income support system.

I hate to put you on the spot, but I would like you to describe, at least in broad terms, what you think that system would look like, including who would deliver it, and, again in broad terms, how it might work.

Dr Pascal: First of all, I must for the record comment on Mr Sorbara's characterization of my position. The only thing that's unfortunate about being deputy minister of MCSS is that people keep coming up to me and telling me what a horrible job it is.

Mr Cordiano: You're enjoying your job.

Dr Pascal: That's right. That's the only major downside.

With respect to the three assumptions, the two assumptions and the challenge, I certainly agree with Mr Sorbara's two assumptions; namely, the need for us to reinforce and respect Canada's tradition and careful consideration of what we owe each other as different from other jurisdictions. I certainly agree that the current systems offer us a non-system when it comes to having a harmonized approach to providing income support.

With respect to the challenge arising from your two assumptions, you're asking me to assume in part the role of a policy committee of cabinet, of which I am a bureaucratic member not an elected member, so I don't wish to envision policy, but I certainly don't mind reinforcing some of the characteristics. I think you've already done so with respect to your assumption statements.

Obviously, any system has to have the character of activity, a proactive approach to all individuals for reattachment to the labour market as the number one characteristic; meaningful needs-based support for people who are in need, as per your first assumption, and the need is so real for so many over the past several years; a system which has as a defining principle the notion of mutual responsibility, clarity with respect to the obligations of the state and clarity with respect to the obligations of the individual and what she or he needs to do to participate in that active system.

I really feel uncomfortable going beyond that preliminary comment, simply because the government right now is in the midst of developing its reform package and for me to do too much more explicit envisioning is to play a role that I'm really not suited to play.

I want to reinforce Mr Sorbara's important assumption around the need for harmony, for cooperation at all levels of government and for delivery to be under one piece of legislation at the provincial level. With respect to issues of delivery we have inconsistency in our system, which has been noted by the Provincial Auditor and others, and regardless of how the disentanglement table turns out, I would say to Mr Sorbara, the responsibility to deliver, which will be part of the reform discussions, is one that, regardless of who delivers, the level of government that pays, I would reinforce, has to be the level of government that assures quality of delivery, standards of consistency. That doesn't mean other levels of government couldn't be contractually part of the delivery system, but there's no doubt in my mind that she or he who pays for the system ought to be the level of jurisdiction that assures the kind of standards of outcome that any system of reform needs to portray.

Mr Callahan: In the vein in which Mr Sorbara put it, not wanting to criticize but to point out and be helpful, why has the ministry not taken steps to dole out or to allocate out the collection of arrears or improper payments -- let's leave fraud aside for the moment -- to a collection agency? I recognize that they take an extraordinary amount of the money, 50%, but 50% of $50 million is better than $50 million being totally lost or written off.

I would say this to you: One of the reasons I see in the auditor's report that was given for having written off these amounts was that you couldn't find the people, there didn't appear to be any process in place to collect it when they came back on the system again, which I find absolutely astounding with our technology today, that you couldn't pick somebody up on a computer. I mean, the Attorney General's department can keep me from getting my licence plates each year if I don't pay my parking tickets, and surely to God if they can do it to keep me from my licence plates they could do it with the sophistication we're supposed to have in terms of dealing with that issue.

Those two issues bother me. Our social service safety net is one that's supported by Canadians. One of the things I guess that makes Canadians special is the fact that they support them. But it is also at risk every time a government allows this kind of stuff to take place where money is just sort of ignored. UI is classic. I have to say here, $50 million is an awful lot of money. Why did you not use a private collection agency, and, again, why can you not pick up this stuff on the computer when they apply again for social services?

Dr Pascal: Thank you very much, Mr Callahan, for your question. Your concerns are important. They remain timely. They certainly reinforce the perspective of the Provincial Auditor and my own perspective.

With respect to where we're at, I think it's important to note a few things. First of all, the front-door load on the system has created a situation where our income maintenance officers quite frankly I think are heroes in terms of the conditions under which they've had to work over the past several years with loads up to and beyond 500 per case worker. So a referral behaviour, or identification behaviour, a referral behaviour in terms of follow-up has not been what it needs to be.

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The technological advancements we need to make we're beginning to make in major strides, and you're quite right, the paper-driven legacy of the average income maintenance office has got to be a part of history. It's extraordinary, and if all it takes is one visit, Mr Rowe would be pleased, as he has with me, to act as a host to see what we have been dealing with in what has been traditionally unusually paper-driven.

Mr Callahan: Can I interrupt you for a second?

Dr Pascal: Yes, please.

Mr Callahan: On your first point, your people don't do the collection, as I see it. The auditor says the collection is done through the central collection service of the Ministry of Government Services, which tells me that it's staff of another ministry that's doing it, so there's no excuse for it not being --

Dr Pascal: Yes, but when I referred to referral behaviour, I was referring to, first of all, taking ownership within my own backyard that we haven't done well enough with respect to making identification and referrals for collecting overpayments. The object of the referral has indeed been the Ministry of Government Services central collection service, which has, I will say, as a line deputy of another ministry, shown success in collecting overpayments.

The problem, as the Provincial Auditor noted, kind of begins in our backyard, and we don't think privatizing the collection is necessary. What we think needs to be done is dedicated staff totally responsible for --

Mr Callahan: Excuse me, I don't mean to interrupt, but I find that answer, with all due respect, is difficult to swallow. If $50 million is not being collected by the central collection service of the Ministry of Government Services, God knows how much is not being collected for other ministries. If that's the case, if they can't collect it through government, I don't see anything wrong with putting -- a half a loaf is better than no loaf. The taxpayers out there would like to get half a loaf. They don't want to see this kind of money thrown around.

I'd like as an adjunct to this -- perhaps the auditor can put this together for us for tomorrow or before we end with this -- to tell us just how much money is in collection before the Ministry of Government Services from various ministries. I'd like to know how much is out there referred to them and how much has been collected, because if they're doing a rotten job, then the taxpayers of this province deserve better. That's $50 million that could have been used for the additional funds you needed. I think it was for service delivery to the people. Let's put the money into service delivery and let's get it out of the question of it being dead-beat collections.

I find it absolutely incredible that any government would continue to maintain -- just write off -- $50 million of taxpayers' dollars without at least taking a crack at letting the private sector see if it can collect it, even if it charges us 50% of the cost. A half a loaf is better than none.

I'm sorry, I don't see you telling me anything that you have done that. In fact, you've just said that you see no reason why you should resort to the private sector. I'll tell you something. I, as a member of my riding, am going to certainly make all efforts I can to ensure that this internal government thing where they're the only people who can do it and it's going to cost the taxpayers of this province $50 million -- I'm going to damn well fight to see that there is a different attitude taken.

Dr Pascal: With respect to the $50 million, we're talking about what has been written off, and I don't want to argue about how much of that would be uncollectable under any system and I don't mean to suggest at all that alternatives shouldn't be explored, but what I am suggesting is that since we began to improve our technology, improve the dedication of staff and accountability at the front line for recovery overpayment and referral, in the months from April 1992 to November, for example, we have recovered $6.7 million and our year-end projection, just in part of one year, will be over $8 million.

So we're having some success, and again, what we're trying to do and what I was trying to emphasize, Mr Callahan, was really simply to focus on my own backyard in the ministry with respect to what our obligations are to ensure that we're doing a better job as per the Provincial Auditor's perspective, and ours as well, in both identifying and referring on cases of overpayment. Perhaps Mr Stapleton would also --

Mr Callahan: Well, can I just ask -- it was reported in the auditor's report that less than 3% of the outstanding overpayments have been collected. With a track record like that, if I were a businessman, there's no way I'd ever give this central collection service of the Ministry of Government Services one opportunity to collect my bad debts. That is horrendous. Those people should be fired. That's terrible. Three per cent. I could collect 3% simply by, I suppose, picking up the phone and making extraordinary arrangements with these people to repay it. I mean, 3% is ridiculous. I think the government has to look at this and has to consider outside help. They are not able to do it within the government service, and we can ill afford to throw away this kind of money each year.

I notice that that's just $50 million of overpayments. "As of March 31, 1992 such overpayments totalled approximately $140 million, with $80 million due from active recipients" -- and if they are active recipients, is there any measure made to collect some of that back from them while they're receiving it, or is that not possible? -- "and $60 million due from inactive (former) recipients." What's being done to collect that back from them? I believe that what we're doing is --

The Chair: Have you got a question?

Mr Callahan: Okay. I'd like to see that money not necessarily just go into the black hole, the consolidated revenue fund, to look after some WCB building.

The Chair: Mr Callahan, your time has expired.

Mr Callahan: What I'd like to see is more money to kids and to their families.

The Chair: Do you have a quick answer, if it's possible?

Dr Pascal: Yes. Let me answer quickly with respect to a few of the issues raised at the conclusion of Mr Callahan's comments and question.

With respect to recovery from recipients on the system, we're doing extremely well. They're on the system, and unless there are extraordinary circumstances, we assign a 5%-per-month recovery.

With respect to recipients who have been on the system and leave the system, and indeed have been written off and come back on the system, we have not done very well. We have taken steps, since this was well pointed out in the Provincial Auditor's report, to develop a system for, again, identifying recipients who have gone off and come on again and, even if they have been written off, the opportunity for us to seek repayment.

All of this has to be put in the context of the Findlay case before the Supreme Court, which I believe will be heard on January 28, around the issue of the constitutionality of recovery from social assistance recipients. But that's not meant to at all negate the concern you raise.

Interjections.

Mr Callahan: Is the Supreme Court going to tell us we can't recover it?

The Chair: Order, please. Thank you. Mr Jackson.

Mr Jackson: I guess at the outset, as we conduct an inquiry into the auditor's specific concerns, the concerns of an independent body charged with the responsibility of ensuring that there's some accountability with this, the largest single-panel expenditure of your ministry and one of the largest single-panel expenditures of this provincial government, I'm reminded of the statement that every time you give something to someone who doesn't need it, there's that much less to give to those who truly do. I believe it's in that context that the concern has to be raised that social assistance recipients did not get the kind of increase that this economy and these times require. That was recently announced by your ministry, and I guess there's no more compelling argument for the government to pursue elements of fraud, because it's within that context, that there are recoverables which could then in turn be given to those who truly do need it.

I think on this point all three political parties can agree. Where we are going to disagree is around the issue of how the government diligently pursues the various forms of fraud, which leads me into my first question.

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Dr Pascal, I read the auditor's report and I also conducted hearings during estimates regarding this whole issue of fraud. The auditor has advised us that he made no subjective commentary about the levels of fraud in this province with respect to welfare fraud other than to cite for us a six-year-old study and a percentage figure. Yet your government, through its minister, has indicated on several occasions that the auditor concurred that welfare fraud was limited in this province to 2% to 3%. Would you briefly attempt to correct the record that in fact you do not have statistics with respect to the total level of fraud in this province and that the last known basis for any public commentary by the government or the civil service is a six-year-old study of specific fraud, the percentage of payment which is fraud-based?

Dr Pascal: Given the nature of fraud and given the load on this system, as with any system, the intent of Mr Jackson's question is an important one. The short answer is, I can't sit here and tell you what the level of fraud in the system is currently. What I can tell you is that the Provincial Auditor, through his sampling techniques and through his data, saw no reason to depart from the research that was done during the SARC activity. I think what is important to note is that by definition, fraud, some of which in any system, whether it's the tax system at large or that has to do with --

Mr Jackson: Before we get into a recitation of the definition of fraud, you cite a Social Assistance Review Committee substudy which indicated that fraudulently misrepresented information which caused dollars to flow to a social assistance recipient is around 3% to 4%. Is that the level of all forms of fraud, or, to reverse the context, do you have a handle on the total amount of potential recoverables?

I'll give it to you in another way: public funds that are flowing unnecessarily or inappropriately. I'm talking about the total here, whether it's innocent misrepresentation, funds that can be obtained from the federal government, all forms of potential recoverables. In your estimation as the deputy minister responsible for this department, what percentage do you think is the potential recoverables in this province?

Dr Pascal: Mr Jackson, in trying to answer the first question, I wasn't intent upon giving recitation. What I was intent upon doing was saying quite clearly that, because of the nature of fraud and because of the load on the system, it is impossible for me to sit here and conjecture, as it would be with the federal tax system and fraud on that system, as it would be with other systems that have extraordinary load. What is important for us in the ministry to focus on is what we are doing in a committed and dedicated way to --

Mr Jackson: I have your report on that, Dr Pascal. What I asked you was, do you have current statistics, do you keep statistics? You said no, you don't. I asked you if you had a handle on the full extent of the total recoverables. I'm still waiting for your answer. Do you not have a handle on that? We got a figure from the auditor yesterday. I'm just wondering if, since previously you indicated that through the measuring tool of the auditor he had confirmed a certain percentile and I now have a new percentile to share with you, you're aware of it.

I'll ask you the question again: Are you aware of what percentile of the total potential recoverables from FBA is available to you and your government? Those are the sum total, as a percentage, of public funds that are flowing unnecessarily or inappropriately to FBA recipients. Do you have an idea of how extensive that is?

Dr Pascal: I have no idea with respect to what you may have been told yesterday by individuals who have tabled some new assumptions and some new information. What I can tell you is that the fraud detection and case information that we're gathering and we think making some significant strides with are now finding their way into a central data collection and analysis, and for me to conjecture with respect to fraud yet detected and overpayments yet detected and what percentage that forms in terms of some predictive validity is conjecture that I'm --

Mr Jackson: There are various investigative conclusions arrived at by the auditor. Some were funds that were sent to FBA recipients who should have been on CPP; there are people who defrauded the system and were discovered and not recovered; there is fraud that is not discovered and therefore not reported, therefore is not known specifically; there are the single-parent, mother-led families where there's the non-payment of support when, if they rush to the Attorney General's office, they can get the support order reinforced, a wage garnishment.

I am simply saying to you that the auditor -- maybe it's because they're auditors -- was able to very clearly delineate in the auditor's report each of these categories of recoverables. It's an accounting term, and I'm sure you're not having difficulty with it; public funds that are flowing unnecessarily or inappropriately. They are recoverable. The auditor has been able to share with this committee that they represent a quantum of potential moneys. You have chosen to focus in terms of your action plan. I'm not asking you about that at the moment.

I'm asking, since you don't keep statistics -- we will get into when you're going to start keeping statistics -- if you've got a handle on each of these categories which the auditor examined and reported to the public and to this committee. They've shared with us their best estimate of what that number is. I'm just asking if you've got a handle on it or if you're loading this into your computer to analyse but haven't linked it all together.

Dr Pascal: I now understand the nature of the question.

Mr Jackson: Wonderful.

Dr Pascal: I very much appreciate your persistence. You're looking for an aggregate percentage based on all the individual --

Mr Jackson: That's a big word. What does that mean?

Dr Pascal: A collection; bringing them all together in one single percentage.

Mr Jackson: That's exactly what I'm looking for, Dr Pascal.

Dr Pascal: I appreciate, again, your persistence. The short answer is I don't have that statistic, but --

The Chair: Can you obtain the information?

Dr Pascal: Sure.

Mr Jackson: You can ask the same question of the auditor that I did yesterday.

Mr Stapleton: One thing I think one has to immediately do is to break the assumptions first from fraud figures, which is an unknown, from the figures of the recoverables through the family benefits program. Those recoverables would go from various resources that we would see as possibly being available, such as child support, spousal support, that sort of thing, to hard income sources like Canada pension plan, unemployment insurance and that sort of thing.

On the one hand, in the case of the fraud statistics -- I'm very familiar with that report, going back to 1987, the Peat Marwick study that was done for SARC. It pointed out around 2.5% to 3.5%. That particular report was based on the spouse in the house rule, which was extant at that time, as still being in place. If that was taken out, in fact the amount of fraud that would have been predicted by that report or would have been in conclusion by default would be probably somewhere more in the range of 1.5% to 2% of fraud in the whole program. The people who worked for Peat Marwick at that time --

Mr Jackson: Mr Stapleton, I'm sorry. I'm familiar with the study. I'm really trying to move to what Mr Pascal called the aggregate of it all, and you're focusing back on fraud. I'm trying to get our discussion into the whole issue of the recoverables. I think the public's been done a disservice, because all they're focused on is fraud. We heard Mr Hope say: "These poor social assistance recipients. Everybody thinks they're out frauding the system." What we're here to try and help is to iron out what clearly the auditor has found is a mess within the Ministry of Community and Social Services, FBA administration, and we as an all-party system are trying to get some hard answers to what specifically you're doing about it.

If I may, Mr Pascal -- I'm sorry. Mr Iannuzziello, you wished to say something.

Mr Andre Iannuzziello: I was just going to add to what Mr Stapleton was saying. I think it does tie in with the total recoverable amount, because if you're dealing with a major fraud initiative within the ministry and you're hiring a number of eligibility review officers who are going out doing investigations, inevitably they will be terminating cases, which in fact is what has happened over the past few months. So we would expect that the amount of collectible overpayment would increase, which would be higher than what was initially tabled with the Provincial Auditor last spring, and we do know what that amount is.

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Mr Jackson: Then why don't you keep me out of suspense and tell me what that figure might be.

Mr Iannuzziello: With the inactive cases, people who have been suspended, the total recoverable overpayment, which includes again the cases that have been investigated -- and they were fraud -- plus any other cases that have been terminated for other reasons, very legitimate reasons, the total amount is $72 million.

Mr Jackson: Is the $72 million additional that you might --

Mr Iannuzziello: No, that's the total amount that's collectible from inactive cases that have been terminated.

Mr Jackson: Okay. If I can go back to Dr Pascal, when the information was shared with your ministry prior to the public's receiving the auditor's report, and that's customary, I found it interesting that your number one initiative was to pursue the Canada pension plan option. In other words, to prioritize your actions, that seemed to be the one that kicked in first. It seems strange, and only for purposes of my comment, that we spent more taxpayer dollars to hire civil servants to see if they could get the money from another pocket of government, which is another pocket of the taxpayer. I understand the position that it puts the Ontario government in but frankly I think the spirit of the auditor's report was that those people who were receiving -- this is not an eligibility question; it is that the wrong arm of government was paying them.

What I think the public is most outraged at is the number of people who are defrauding the system. That seems to be the area that isn't as strong a priority or is easier for you to tackle in the front end of this problem.

Dr Pascal: I don't want to disagree with Mr Jackson's characterization of the CPP initiative as the number one, overriding priority, because in fact it's an important initiative. But as Mr Jackson has correctly pointed out, there are other areas of integrity diminution in the program which really require a frontal attack. He mentioned fraud identification, action and the speed with which we hired and more than doubled the number of eligibility review officers.

The short-term yield as a result of their efforts indicates that we got on that particular issue as quickly as we did any other. I couldn't agree more that we're trying at one level to ensure that our program is a residual program, therefore we want to look at other payers first in terms of the family support and CPP. But by the same token, you're quite correct. We want to ensure overpayment recovery and fraud identification and action around recovery and prosecution where necessary.

I spent several hours just before Christmas with our eligibility review team in the Toronto area office and listened to descriptions of their activity around cases of fraud and I'm pleased to say that the activity is of high quality and high yield in terms of results for the taxpayers in Ontario.

Mr Jackson: Dr Pascal, my basis on which --

The Acting Chair (Mr Noel Duignan): This round of questioning is now over so we'll move into a second round of questioning again and 20 minutes each side. We'll begin again on the government side.

Mr Pat Hayes (Essex-Kent): Thank you, Dr Pascal. We're talking about the fraud quite a bit here today. What I want to know is, how will the direct deposit really make a difference? Also, I would like you to be specific on what steps the ministry has taken in this regard to encourage people to get into direct deposit to eliminate writing extra cheques, for example. If you could elaborate, I'd certainly appreciate it.

Dr Pascal: As we've pointed out, it's a very important question and our activity in this area is important. The number of duplicate cheques that are written and duplicate cheques that are cashed, intentionally and otherwise, has been a major problem. I'm pleased to say that one third of our clients are now on direct deposit and the number is increasing and we hope to move our efforts in terms of counselling. Again, with a better staff ratio, we're able to provide the kind of counselling necessary. We hope our financial institutions will continue to be cooperative in terms of our clients and their services. We've been averaging about 5,000 clients per month going on direct deposit and probably we'll be up to 20,000 or 30,000 per month in the near future.

I must also say, Mr Chair, through you to Mr Hayes, that we're also considering making direct deposit mandatory eventually. If we did go to that kind of approach, if the government of the day wished to implement a mandatory direct deposit, of course we would have guidelines to ensure that there is flexibility for clients for whom direct deposit would create difficulties. But we have every reason to believe that voluntary participation is in the right direction. Given the financial consequences to be gained by direct deposit, we think this is something we need to take extremely seriously, as we began to do a while back.

With respect to the service to the client, direct deposit has a concomitant understanding with the postal service that through a system that's called the postal walk, a pre-sorting technique, the mailing of cheques in the interim is something that's -- until all participants in the system are on direct deposit, they are getting their mailed cheques in a timely way. But with respect to direct deposit, we think in terms of preventing overpayment and preventing fraud, it's an initiative that's bearing fruit quite nicely.

Mr Iannuzziello: What's interesting is that last April we had approximately 80,000 clients on direct deposit. Once we got to new staff and really started marketing the program in our offices, we found that the numbers had increased to 109,000 as of last month. So there have been pretty dramatic changes over the past few months.

Mr Hayes: Sounds very good. If I may, Mr Chair, on the audit report: They pointed out that it is possible to recover benefits retroactively under the Canada pension plan rules, and in May 1992, of course, the minister announced plans to identify income from other sources and to assist in recovering these funds. Could any one of the witnesses please comment on the progress to date as to how we are really addressing that problem dealing with the CPP?

Mr Stapleton: What we have done is to undertake two what we call blitzes. The first one looked at 30,000 clients approximately who are on our program and either listed as permanently unemployable or disabled persons. One of our historic problems has been having the amount of previous employment history that we require on their file. In fact, because people do not need that sort of information on application in order to be qualified for social assistance -- it's done on the medical basis of their disability -- that had been one of the impediments in the past and part of the problem in collecting that money.

We made significant inroads in that first blitz, although not to the extent that we would have liked to see. But what we have done in each case is to try to get the application in as fast as possible, because where that particular postal date exists going into the Canada pension program, then that's going to have a bearing on how much money that client gets back.

What we've also undertaken is a second blitz after Bill C-57 was passed, which actually provides a larger window of opportunity for eligible CPP clients. That's a federal bill and we had to wait until its royal assent. That's why we then undertook the second wave of activity in order to secure more CPP eligibility for the clients on the program.

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But that significant rule change, which is part of what you're alluding to, allows us to be able to get a larger period of eligibility. Some clients who are on assistance would in fact go through their whole period of eligibility and then find that when they applied for CPP, even though they would have been otherwise eligible with respect to their work history, they weren't in fact eligible for the program because they had passed their eligibility period.

Certainly, with this new bill in place, it'll make it much easier for us in terms of program planning in order to secure CPP eligibility. But again, to recap, the whole idea behind it is to try to get that postmark in at the time so that we're able to secure the most amount of recovery to the program.

Mr Fletcher: Thank you for being here today. How long is it going to take for us to clean up the mess that the Liberals gave us? I wonder about that. Let me just get your report. On page 29: "With the added impact of slower-than-forecast growth in the number of people receiving social assistance, we are hopeful we can realize the $300 million in savings announced by the minister." That is in part with the initiatives that are being taken.

What do you mean by "slower-than-forecast growth"? What is it? Are we forecasting fewer people on social assistance? Where do you get the figures? What is the rationale?

Mr Stapleton: If I'm referring to the correct figures, over the past few years, we've found very high growth in both the family benefits and general welfare programs in the order --

Mr Fletcher: I have trouble hearing you.

Mr Stapleton: If I've understood the member's question correctly, the rate of growth in the program, both family benefits and general welfare assistance, over the past few years has been very high growth, certainly double-digit, in the neighbourhood of 20% to 40%. We've found in the last year that our rate of growth in the program, in terms of both those expenditures and case load, has significantly slowed.

Mr Fletcher: So with the initiatives and the slower-than-forecast growth, the $300-million savings to Comsoc is achieved?

Mr Stapleton: Yes, you have to put both of them together to realize that saving. In many instances, it's almost impossible for us to calibrate the exact components in terms of how much of the expenditures and the savings is attributable back to the initiatives that we've taken and how much of it is attributable to other macroeconomic factors in the economy as a whole.

Mr Fletcher: What effect will federal policies, such as the cap on CAP, have? What effect did that have as far as expenditures?

Dr Pascal: It doesn't have an effect on that particular initiative. It doesn't have an effect on case load, but it has an effect on the provincial ability to pay for the system. With respect to the UI decisions to which we referred to earlier, that will have an impact on case load.

Mr Hope: Mr Pascal, around the issue of the training aspect, I agree with you about appropriately training people before taking the jobs on so they do them adequately. With your description of job training, are you doing previous job training that has caused us this problem or do we have new initiatives of training our staff?

I want to ask a question around training because if I talk about the report, the report reflects on years ago. I'm saying we're supposed to embark and we're spending money on new staff, we're spending money on new programs and administration to try to get the fraud issue and to try to get people in other areas. Are we doing our staff training differently in order to provide that mechanism or are we using old standards that have created this problem?

Dr Pascal: Let me just be positive about what we are doing right now. I'll ask Mr Iannuzziello to comment on our approaches to training. We are ensuring that the training is timely and relevant to the initiatives we have just undertaken. I'm not here for kudos, but I am here to catch people in my own ministry doing things right. To be able to bring on stream 200 new employees by when we received the money in May and to have them trained and in the workforce yielding the kind of results to which I alluded earlier within weeks not months is a testament to the quality of training and to the new approaches to training we're taking. But Andre perhaps would want to expand and provide a little more detail.

Mr Iannuzziello: That's it, Charles. The challenge over the past summer and the challenge at the moment is, how do we train staff and bring them on board quickly and ensure that they are effective in meeting the financial targets that have been established? There is a comprehensive training package, training that each staff member goes through in each of the area offices across the province. In addition to that, we are updating all our various manuals -- for example, the manuals we have for the eligibility review officers, for parental support workers -- ensuring that they're updated. That is incorporated into the training program. How you coordinate all those activities in a relatively short time frame so that our objectives can be met is the challenge.

Mr Hope: That's why I'm asking about staff, because I'm looking at a number of areas that are really of concern to the general public. I listen to my own constituency office. I receive calls that people think people are defrauding the system. It's a general perception. When taxes get higher and people get frustrated, they look for some other avenue.

When I look at the defrauding aspect, what went through there, I disagree with Mr Jackson where he makes a comment, "It doesn't matter which pocket it comes from, whether it comes from the federal or provincial pocket; it comes still from the taxpayer." Let's put responsibility where responsibility is for government administration. I started adding. Say, for instance, they started contributing their 50% contribution; we correct the problem in CPP. We look at fixing a problem and it estimates anywhere between $70 million to $100 million per year. They were saying that equals $2.73 billion. I look at all the wrongdoings or improper administration by previous governments provincially. We could reduce the deficit just by controlling and getting our appropriate funds, probably reducing it by about $3 billion -- if not, a little bit less, $2.5 billion.

But that's why I was wondering about the staff training, because it's important for us to adapt to the changing times we face. When we're talking about staff, I want to talk about these review officers, because I've been hearing it come out of the community as welfare cops. I'm a little disappointed because I think you have good and you have bad with that. But I'm wondering about the people who are doing the investigation of a potential complaint, because as I read here, there were four complaints given. Are we just going to just receive a complaint, somebody calling anonymously? How are we going to act with the complaint mechanism, with the training you're providing for new staff?

Dr Pascal: Let me begin. Then I'll ask Ms Fraser to continue. First of all, the eligibility review officer role is one that is being played out, to the best of my knowledge, with the best of intent in terms of ensuring the integrity of the system for the overwhelming number of clients who need and deserve benefits. In terms of the population at large, there is not a more concerned constituency in terms of welfare fraud than the welfare recipient herself or himself about the need for that system to have the kind of integrity the people of Ontario want and deserve.

The eligibility officers with whom I have met go about their jobs with the intent of ensuring that irregularities are followed up on, whether it's something that comes from a case review, a referral from an income maintenance officer or a lead from outside the ministry from the public at large. Perhaps Alison and Andre would in turn describe a little bit about the process.

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Ms Alison Fraser: In terms of the proactivity, if you will, of the eligibility review function, we're certainly encouraging our staff to be proactive. So not only would they respond to the kinds of complaints the deputy has mentioned, but they would also look at cases which may be brought to their attention by the income maintenance officers themselves where something seems to be amiss.

It can sometimes be the kind of thing one could identify through some computer analysis. For instance, the recipient may be showing extremely high shelter costs and yet a fairly low family benefits allowance and no other income. That causes one to ask a question -- not to reach a conclusion, but to ask a question. So we're certainly assisting those officers to be proactive as well as reactive.

If I may touch for a moment on the issue of training, to which you were referring earlier, Mr Hope, we have not only, as my colleague Mr Iannuzziello has mentioned, the training packages for these specific functions in terms of eligibility review function; we've also completely revised the program support material, the manual to which they refer as part of their daily activity, their reference book. That is available to them and was made available to them just before Christmas. That's another activity we've undertaken within the last year to ensure they have the tools they need to do the job.

Dr Pascal: And we've instituted again a provincial information-sharing process so that the patterns that show up in local offices -- among and between the eligibility review officers in a local office -- of identification and case studies that are pursued are shared, so that the ongoing professional development that takes place among and between 15 EROs in Toronto is shared with their peers around the province and vice versa. That's again something that was lacking and is part of the need for centralized monitoring of how well this particular activity is going.

The Acting Chair: Mr O'Connor, time for a quick question. You have about two minutes.

Mr O'Connor: Two minutes. It'll be a very quick question. I guess I'll just be able to touch on it and maybe over the course of the week we'll deal a little bit more in depth with some of it.

Coming into this recession, we've been able to see that the numbers collecting assistance just seem to climb steadily by the month. I know in parts of the region of York that I represent, we've seen the numbers climb dramatically and put an awful strain on the workload for the employees trying to administer the program and what not.

I was just wondering if perhaps you could comment on whether you felt some of the misappropriated payments to some of these people could be the fact that with that added case load, maybe the social workers haven't had an opportunity to spend enough time with the clients. It amazes me, hearing from constituents, especially during the recession, that they feel fraud is much higher than the 3%, 3.5%. But the time spent with individuals -- is that part of the problem?

Dr Pascal: As the Provincial Auditor and the ministry both have noted -- and Mr Stapleton referred to it earlier -- with the almost exponential increase on the system, the most important legislative imperative of the system is to ensure that in an open entitlement program, those in need, legally in need and deserving of that, are served. Everything else takes a back seat, so we've had up until recently, in the eight offices where we've made this short-term investment, people who are supposed to be playing the role of an eligibility review officer, and other peers in the system have all gone to the front door to ensure that the crowd at the front door was well served during this extraordinary time of economic upheaval.

As a result of that, the amount of time case workers have had to provide counselling; front-door screening in terms of ensuring the system is a residual system, that the system we're talking about today is the last payor; fraud identification and detection and all the activities that are part of the kind of proactive labour-market-oriented system that everybody envisions and the kind of counselling supports that are required, just has not been as fulsome and as effective as it needs to be. Everybody knows that. It simply requires a visit to an income maintenance office, as I am wont to do from time to time, to talk to income maintenance officers and to listen to the story as they tell it.

We've seen some extraordinary success in a very short time in terms of the kind of reinvestment that we're trying to make in terms of changing the ratio and changing the mix of the different roles including parental support workers, program review officers and eligibility review officers. Your point is very important and well noted by the Provincial Auditor.

The Acting Chair: Mr Callahan for 20 minutes.

Mr Callahan: I'd like to start off by saying that I wouldn't want anyone to presume from the things I said earlier that I want to play the role of the Grinch and take money from these people. My major concern, and I think it should be the concern of all governments, is twofold. First of all, it is to ensure that the integrity of the system is such that you can't have people out there saying, "Do away with it." I can tell you, even the finest-minded people out there are finding things so tough that they're going to be saying that soon, and that's going to augur very badly for those people who truly need the safety net systems we put in place. Every time we allow that system to become loosey-goosey and throw away $50 million in uncollected benefits and $70 million on fraud, that system becomes that much weaker and we start to lose the benefits of those social safety nets. So everything I've said and all the comments I've made with reference to the comments the auditor has made is directly related to ensuring that the system which I think all Canadians of whatever political stripe believe is the hallmark of being a Canadian -- that we do care about the people who are less fortunate than we are.

Having said that, I still have to say that I have directly asked our research officer to get for us the information as to how many ministries refer collections to the central collection services of the Ministry of Government Services. I want to know how much in total dollars is referred to them and then I want to find out how much they collect, because if they're collecting 3% or 6%, I think they all deserve to be reallocated to another ministry and perhaps we should put this out to private collection agencies to collect money to ensure the integrity of all the things I've just said.

I understand we will have that tomorrow and I'm reserving any questions on that for then, and you may want to do your own homework. I'm giving you fair warning that it's going to be a very deliberate question by myself or one of my colleagues, I'm sure.

The second thing I'd like to know about is this: You say you have to replace 30,000 cheques each year at a cost to taxpayers of $1.5 million annually. You say that you're going to make it mandatory that there be direct deposit. I know policy is not your bailiwick, it's your minister's to make those policies, but I would certainly think that everybody out there in the great province of Ontario would certainly be in favour of direct deposit if it's going to save us $1.5 million to inject into the system.

But I want specifically to zero in on asking you, what does it cost a recipient of social assistance to cash his or her cheque at the so-called cheque-cashing places that are open 24 hours a day? I'll tell you why I'm worried about that -- twofold: My colleague brought a private member's bill before the House to eliminate that, specifically with reference to social assistance cheques, because it means it's money out of the pocket of those people that they need badly.

Second of all, I'm really concerned, because when I look at the casino mentality -- and I'm sorry; I recognize public accounts is non-partisan, but I have to say the casino mentality that seems to prevail at the present time -- and hear some of the stories of what's happening out west where the casinos are already in place and down east, that husbands are not getting home or wives are not getting home with that cheque in their hand without cashing it at these 24-hour, "Cash Your Cheque," big light-up things and putting it into the video gambling machines and perhaps into the slots and the blackjack tables.

I guess I want to know, what does it cost the recipient -- you must know -- to cash that cheque, thereby depriving that recipient of that much money? Can you tell us on an individual basis what it costs?

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Dr Pascal: What I have heard, because I don't cash my cheques in those neighbourhood venues --

Mr Jackson: You may be if you get a casino --

Mr Callahan: Too many zeroes.

Dr Pascal: I don't think one would be located in my particular neighbourhood, but it's about 3% to 5% depending on the --

Mr Callahan: What does that work out to in dollars, let's say for the average --

Dr Pascal: It depends on the --

Mr Stapleton: I would say on a $1,000 cheque, you'd be looking at about $30 to $50, I suppose.

Dr Pascal: On a $1,000 cheque, you would be looking at $30 to $50.

Mr Callahan: So $30 to $50 is being paid, in essence, indirectly by the province of Ontario out of the moneys that should be feeding kids and feeding the family.

Mr Hope: These are the private entrepreneurs you were talking about earlier.

Dr Pascal: Mr Chairman, if I might, just a bit of an addendum to my response -- there are a couple of policy issues at play and one policy issue I don't wish to comment on one side or the other, but the issue of the recipient and what she or he can or can't do with the cheque is a fairly important policy piece. The issue, whether the state should do something that determines how and when they can cash a cheque -- I've mentioned, obviously. earlier that direct deposit is the mandatory consideration, and you've reinforced this is under consideration and I'm not sure what the final decision will be.

I think it's also important that with respect to characterizing the welfare recipient population, I certainly am not going to engage in reinforcing assumptions about them as being any different from the normal population at large with respect to their habits around gambling, participation in bingo parlours or cashing cheques in, you know, various types of --

Mr Callahan: I wasn't suggesting that at all, but I can tell you that in the House, the arguments given in this regard were that these people -- and it may be the case that I don't like to characterize any one group as being in that category totally, but because the banks are so -- I was going to use the word "constipated," but that would probably be the wrong word to use -- but because they require three pieces of identification to open an account, these people are not able to effectively deal with it that way.

What I'd like to know is, have there been any discussions and have they been successful, with the chartered banks to allow people on social assistance to open an account without the necessity of producing all this identification?

Interjection.

Mr Callahan: Or a residence, that's the other thing.

In the alternative, if that's not going to be the case, then I suggest we move to direct deposit immediately to save $30 or $50 to feed the children as opposed to feeding these cheque-cashing outlets. My friend says that's free enterprise. Yes, it is, but I have some very real concerns about whether they're required to deal with people on social assistance. Let them cash the cheques of those off social assistance, and they can operate quite nicely there. If they have to depend upon the money of taxpayers of this province and taking money from the people to whom that money is important, I don't agree with that. In any event, I think I've got an idea of where you're heading and I hope it is mandatory direct deposit.

The federal government has initiated changes to the Unemployment Insurance Act as of April 1, which I think were very ill advised, because I think they've literally turned people into slaves. Employers, as I understand the legislation, could basically fire you or keep you under the threat of being fired and if you didn't continue to work for them the way they wanted to, they could literally cut you off from UI.

I also see that it has the detrimental effect of people perhaps even being laid off. I guess that's the only way you can collect UI under those provisions, if you're laid off. So you literally become -- and I thought Lincoln freed the slaves, but I guess he didn't under these UI benefits. What impact is that going to have, number one, on the case load? Number two, is the increase of the 200 workers you have gotten thus far and the 250 -- or maybe I've got it backwards -- who are coming on stream in March going to be enough to cover the impact of what I think is going to be a holocaust in terms of people coming for social assistance?

Dr Pascal: As I said earlier, we think the macro financial impact to the province is going to be about $50 million to $70 million. Again, we're still working on trying to refine that base sense of assumptions. With respect to how that breaks down, Mr Callahan, in terms of the participation in our system, perhaps Mr Stapleton can add that.

Mr Stapleton: On the family benefits system, which we're specifically here to discuss today and this week, we see very little impact on the family benefits system. Therefore, as a corollary to that, we would see not that much of an impact in terms of the additional staffing you're mentioning.

The reason for that is the first line in terms of social assistance programs when someone, for example, exhausts his unemployment insurance or is in fact not eligible in the first place, the general welfare assistance program, which is administered by municipalities and first nations. What this means is that somebody who does not have other resources and is not eligible for UI would go to that program first. With regard to the family benefits program, its two largest components are single parents, mostly female, and persons with disabilities, with also some people who are near-aged and aged immigrants who are not eligible for old age security.

Mr Callahan: I'm sorry. I don't want to interrupt, but my time is running. We have 20 minutes, by the way, Mr Chairman, in case you weren't --

The Chair: Your time expires at 4:06, Mr Callahan.

Mr Callahan: At 4:06. All right. I don't want to interrupt you, but surely we're looking at the single parent who is now employed who just can't handle it any more with the job and quits. Surely there are going to be a lot of them. I think this legislation is so ill conceived, this UI -- I mean, it's an effort to stamp out a fly with an elephant. It's got to have a major impact and I would hope that you're really looking into the projected figures of what you can anticipate.

Dr Pascal: We're just pointing out that the eventual effect on FBA is that there'll be a time lapse simply because the first impact will be at the municipal level with GWA.

Mr Callahan: But it may not be because the province is talking about, as SARC recommended, the province picking up 100% of the dollars.

Dr Pascal: That's being discussed at the disentanglement table and the possibility of that --

Mr Callahan: You won't do it until well after April 1, I would hope. I shouldn't say that. I'll probably get heck from my regional chairman. I understand, but you're preparing for that, you're looking at that.

Dr Pascal: Very much so.

Mr Callahan: The question of fraud bothers me. I agree that it's unfortunate that everybody seems to think everybody out there on social assistance is committing fraudulent claims. The auditor himself says it's at a maximum of between 2.59% to 3.66%, but it translates into a lot of --

Mr Jackson: On a point of order, Mr Chair: The auditor confirmed that there was a study done but that his audit limited him from being able to confirm any other figure. That's a world of difference from the auditor saying that fraud in Ontario is limited to 3% or 4%. I specifically asked the auditor that question yesterday. I've put it on the record and I just want to make sure that's clear on the record. We do not know the extent of the fraud in this province. That is the sole point. I'm sorry, Mr Callahan. I'm being careful with the semantics, but the whole purpose of this week's meetings is to get a handle on this issue.

Mr Callahan: That's right.

Mr Jackson: I don't wish to impute something that the auditor clearly was careful not to say in his report.

Mr Callahan: I guess the best we've got and I appreciate your comment, is the information that was given to the SARC, 2.59% to 3.66%. But quite apart from that, that translates, if you apply it to the percentages of family benefits payments of $2.73 billion, that's a loss of between $70 to $100 million, which would go a long way towards covering the cost of perhaps the UI effects.

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But I'm looking at the specific case that the auditor referred to, a case where a sole-support parent lived with a common-law spouse for over five years. The recipient was charged and convicted of fraud. In 1987 the court ordered restitution of $26,000, and then it says: "The common-law spouse also signed a promissory note to reimburse the ministry. Nothing has been collected to date and the ministry has not enforced the writ." Now I have to assume that if they were convicted of fraud and the court made her an order of restitution, there must have been a probation order, and I can't believe that there weren't steps taken to enforce that probation order.

As tragic as it may seem, if people are going to defraud the system, I think they have to be dealt with very firmly. It's a position of trust. This analogy may be inappropriate, but it's kind of like the approach that people take in the prison system. If somebody screws up on parole, they'd find that very difficult to handle because it makes it that much more difficult for those people to get out on parole.

Similarly, when fraud is established and found -- and it's got to be beyond a reasonable doubt, so it's got to be pretty blatant -- if there isn't a hard-nosed approach taken to it, all you're doing is encouraging fraud and you're weakening the system that's there for those good people who require it, the people who can't help themselves because of the economic circumstances.

I would certainly urge -- I'm not going to ask for a comment -- the ministry to look at that very seriously and that that approach be taken, because the very integrity of the system, for those people we mean it to be available for, is jeopardized.

Finally, I guess because I'm sure my time is running down, is the issue of -- I had another point here and I can't put my finger on it at the moment, but bear with me. Here it is. The Transitions report, which was the present government's report, talked about unifying the systems. Now I find it incredible that the Attorney General's department enforces support payments for children, and I might say, although I don't want to be overly critical, certainly not very successfully. This, of course, is a very important component of what you people have to pay out. It's also important to those kids who are not being fed as a result of support payments not being made.

But why is there not an integration? Surely we've had computers around for a long time, and although I know nothing about them personally, surely we should have had an integrated computer system that would have allowed not just for the collection of parking fines and speeding tickets, but it should have been there for the important things, the support payments of children, the payout of social benefits. Why can they not be intertwined so that you get a cohesive record of what's going on so that you can ensure that people are being paid what they deserve but not getting more than they deserve?

Mr Stapleton: It can be and it will be. We have been --

Mr Callahan: When will that be?

Mr Stapleton: I'm expecting by May this year that we'll have on-line access to the family support plan's megasystem. In fact, we've put a detailed work plan into place in late November to do exactly that.

Mr Callahan: Can I be assured that we will get a memo from the Attorney General that that is in fact what is going to take place? Because that concerns me very much. You know, we live in this compartment, you live in that compartment, and never the twain shall meet. In the meantime, the system is losing money with all those dangers to the integrity of the system. Think of all that money that would be available to children's aid societies that are suffering, for school boards that are getting minimal amounts, for the deficit which is burgeoning out of control. That, to me, makes a lot of sense, that we spend dollars wisely, that we not just throw them around like they're not important.

I think a lot of those things have to be looked at, and if they're not, we'll go on and five years from now somebody else will be sitting in my place and maybe asking the same questions. I don't think you people want that to happen. I would certainly hope not.

Dr Pascal: We agree entirely, which is why, on many fronts, database matching and harmonizing information is proceeding. We agree that it has indeed been a problem. No doubt about it.

Mr Callahan: It wasn't in collecting speeding fines. For the last 10 years they've been able to suspend somebody's licence when he or she didn't pay their fine, or they couldn't get their licence plates. I find that the priorities seem to be out of whack. Rather than trying to take somebody's driving privileges away, the priorities should be directed towards ensuring that the services that we want to provide are provided with the optimum cheapness or parsimoniousness of the taxpayer's dollar, to ensure that other services can be equally enhanced.

Mr Stapleton: There is no question that we've gone through the usual growing pains of having two entirely different computer systems developed at different points in time, but we have found ways technologically, just over the last few months, that we can link the two systems together. I think you have to keep in mind that our side of the business is to get the award in pay in the first place and to get a full filing package to the people at the Attorney General's ministry, and then they undertake the enforcement of that. So we do have considerable interplay back and forth between the two ministries, and the on-line access will certainly take a quantum leap towards making this efficient.

Mr Callahan: You would also --

The Chair: I'm sorry, Mr Callahan, your time has expired. Mr Jackson, 20 minutes.

Mrs Marland: I think, Mr Chairman, I was going to start.

The Chair: Okay, Mrs Marland, that's fine.

Mrs Marland: Mr Pascal, we've had a lot of discussion evolving around the subject of fraud and fraudulent claims, and we've also had a lot of discussion around the fact that you have hired additional staff. I notice from your statement of the beginning of this afternoon that in one year you will have hired 450 additional staff. Among those, you particularly make a point of saying that you have "embarked on a separate fraud initiative by hiring 30 eligibility review officers to help prevent and identify fraud in the system."

What I want to ask you is, why bother? Because, frankly, when I read the auditor's report, first of all he identifies the problem on a number of pages, but particularly he identifies under "fraud," obviously, the types: "allegations investigated most commonly include undisclosed earnings, cashing of duplicate cheques, ineligible dependents, undisclosed assets or an unreported spouse." But the auditor actually gives you, or gives us in his report, a very blatant, terrible example. He says: "The ministry discovered that a recipient and spouse had worked full-time for over three years and had not reported all their income. This alleged fraud cost the ministry $25,000. Neither a civil nor criminal case was pursued. We were advised by the ministry office responsible that it did not prosecute frauds of this nature."

So I simply say to you, what's the point? What's the point of hiring 30 eligibility review officers if, when you have a case as blatant as this, no criminal case is pursued?

Dr Pascal: The specific case I'll ask one of my colleagues to respond to, but the answer to the question "Why bother?" is that, as Mr Callahan and others have said, in the context of a system which has had breaches of integrity because of overloading, the priorities require redressing. As you quite correctly have pointed out, there are serious cases where the ministry and front-line staff, in terms of the competing priorities, either through omission or commission, didn't proceed. Sometimes -- again, I'll yield to one of my colleagues with the specifics of this particular case -- it's a question of perception that recovery is going to be impossible, either from what's known about the case or because of the competing priorities of a local police station.

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I think what's important now, the short answer to the "Why bother?" is that we're now averaging about $100,000 a month in terms of yield in terminations, and $15,000 to $20,000 a month in terms of reduction as a result of the investment of the eligibility review officers.

Mrs Marland: I don't need to know the details of this individual case. The point I'm making is the absurdity of a report that is identified by your ministry through the auditor's office. There's another one here, an example of an overpayment of $38,000 which arose in 1988 because a former recipient was not living as a sole-support parent. These are examples that are in the auditor's report to this committee. I'm simply saying to you, somewhat facetiously, I suppose, why bother?

Nobody's more concerned about fraud in any form than I am, certainly in the case of the family benefits assistance where money is needed for legitimate claims and legitimate people in difficulty and people are walking away with these kinds of dollars in their pocket, spent, misused because it was misappropriated in the first place, and it doesn't even go to trial. Are you saying that the police would not lay charges on your behalf? You mentioned something about individual police --

Dr Pascal: I'm suggesting to Mrs Marland that there are, depending on the specific case -- this is why looking at case by case is important. There are perceptions, subjective or otherwise, that in some cases there has been a "Why bother?" question raised in the minds of a local office simply because of competing priorities, a perception that it wouldn't lead to anything because of a particular relationship with a police department that may itself, depending on the nature of the fraud, be so encumbered with its own pressures that the likelihood of success -- those are value judgements, subjective judgements that you and I would like to see concluded.

You and I would like to see a system whereby, at every opportunity to identify and detect fraud and to act on it, every reasonable case is followed up on in a timely and successful fashion. There are always judgements made and there will always be judgements made in any system about the amount of investment put into a particular case and the potential for return on investment given the particulars, but --

Mrs Marland: Excuse me for interrupting, but your statement about a particular police department needs a little elaboration, I think, on your part. Police forces in this province are taking people to court for stealing the proverbial loaf of bread. I'm using that as an exaggeration. But we have petty crimes going to trial in this province and I would suggest to you that $25,000 of fraudulent claim or award, whichever it was in which case, and $38,000 in another, of government money are not things that we can sit back and condone. Are you saying that a particular police department is overloaded and isn't able to process your charge? Is that what you're saying?

Dr Pascal: Mrs Marland, I'll ask Mr Iannuzziello, who's provided leadership to local officers, to characterize situations in local offices around priority-setting, because I think that's the important intent of your question. But in short form, yes, I have had eligibility review officers and income maintenance officers and those who supervise them tell me that in the past, historically, decisions are sometimes made, given the load, the priorities on that particular office --

Mrs Marland: Police office?

Dr Pascal: No -- the income maintenance office as well as the police priorities of the local detectives, that on occasion a subjective decision, whether it's the right decision to have made historically or not, to not proceed has been part of the history. You and I both agree entirely that this should be part of history, but it's important that Andre give a closer-to-the-front-line response to I think a very important question by Mrs Marland.

Mr Iannuzziello: I want to start off by assuring the member that we do take the cases identified in the auditor's report very, very seriously. We have ensured that there's been follow-up on each of those cases and action has been taken on each one. In answer to your question --

Mrs Marland: That isn't what it says in the auditor's report.

Mr Iannuzziello: No, I appreciate that. This is in follow-up to the auditor's report in each of those individual cases.

Mr Jackson: A point of clarification.

Mr Iannuzziello: Yes.

Mr Jackson: Are you talking about the cases where you had examined and found a potential case for fraud but failed to collect, or are you talking about cases that were unknown to you, so how could you report them to the police? You're about to give an explanation and I'd like to know what cases we're dealing with here.

Dr Pascal: I think Andre wants to simply put on the record that the cases to which Mrs Marland is referring, noted in the report by the Provincial Auditor, we have obviously followed up on all, but I think --

Mr Jackson: You still haven't told me which ones they are.

Mr Iannuzziello: The cases the member had referred to --

Mrs Marland: How about the $25,000 one on page 5 of the auditor's report and the $38,000 one on page 6 of the auditor's report?

Mr Jackson: That's what I thought Mrs Marland was referring to.

Mrs Marland: I'm referring to both of them and I hope your answer isn't that since it's been in the auditor's report, you're now pursuing it. That's not your answer, is it?

Mr Iannuzziello: No, it isn't. In the one case we are recovering money from the client.

Mrs Marland: Pardon?

Mr Iannuzziello: We are recovering money from the --

Mrs Marland: It says here, "Neither a civil nor a criminal case was pursued."

Dr Pascal: But, Mr Chair, the answer to Mrs Marland's question is, generally yes, we can go through individual cases noted by the Provincial Auditor, but yes, we --

Mrs Marland: It also says --

The Chair: Order, please.

Mrs Marland: -- "We were advised by the district office" --

The Chair: Mrs Marland, maybe I could help a little bit. I think the questions are pretty straightforward. Is there any possible way to give straightforward, succinct answers so we can accommodate the members who have a lot of questions? I keep getting notations from members that --

Mr Hope: What about succinct questions?

The Chair: Order, please. The question was very succinct.

Mr Hope: These diatribes --

The Chair: Order, please. I have been getting notes all day long from members who have not had time to get their questions on. We have had a series of questions from Mrs Marland and Mr Jackson which I believe to be very straightforward and succinct. With all due respect to the witnesses before us, there's great consternation from some of the members about the length of the answers and they're not getting answers to the questions they've been asking. I'm politely asking the witnesses to try to give succinct, direct answers to the questions that have been posed.

Mrs Marland: Can I just help with what the auditor is saying here, "We were advised by the ministry office responsible that it did not prosecute frauds of this nature," after just talking about a $25,000 fraud. So my question is, why are you not prosecuting frauds of this nature?

Mr Stapleton: Let me try it. The simple answer is that it's not our policy not to collect on $25,000 frauds. Maybe someone said that in a particular office, but I think in terms of all of our policy manuals, all of our practices and all of our policies, it is the case that we do pursue those.

In looking at the particular cases and trying to match them -- and I'm not absolutely sure I have the right cases in looking at them, but in one case, in the $38,000 case, we were not able to find an address for the person so we're still looking for the person. Once the person is in fact found -- the person's not on the case load any more --

Mrs Marland: You must have an address when they received the $38,000.

Mr Stapleton: Oh, absolutely, absolutely. In a number of cases we --

Mrs Marland: In other words, while they received $38,000 of the public purse, their eligibility was not confirmed. That's what we're talking about. We're talking about somebody receiving $38,000 and nobody confirming whether they were eligible or not.

Mr Stapleton: No, no. Their eligibility would be confirmed through, first of all, the original eligibility process on application, and on the signed statutory declarations the person verifies that the information they put on that form is true.

Secondly, each year, and hopefully this was done each year in these cases, they would go through what we call a client information update report where we would verify and continue to verify the information on that file. In the particular --

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Mrs Marland: There's one case here that the auditor identified where they had not interviewed the client "for almost five years." They hadn't seen the client for five years. They'd been shelling out the money for five years.

Mr Stapleton: That's absolutely the case. In some cases --

Mrs Marland: No wonder the public is so cynical about the whole system of welfare.

Dr Pascal: Again, I'll try to be to the point. We have agreed entirely with the Provincial Auditor's conclusion that the administration of this program has problems. Mr Stapleton has just reminded us that we have policies in place that have imperfect implementation. Part of the reason, and a large part of that reason, has been noted by the Provincial Auditor, and we agree, and is the load on the system and the load on the staff in local offices.

With respect to your important and direct question with respect to these cases, we have followed up on the cases noted by the Provincial Auditor. We all agree that we can't wait for a provincial audit to determine individual cases, but we're following up on the individual cases noted by the auditor, not just to deal with these cases, as you would want us to do --

Mrs Marland: How about the cases he hasn't found?

Dr Pascal: -- but to deal with having the administration of the system tightened up through proper redeployment and training of new staff to ensure that cases like that, for which the Provincial Auditor cases act as proxies, are also identified and followed up on.

Mrs Marland: What about your statement about police departments? I want to hear that answer, please.

Dr Pascal: Let me ask Mr Iannuzziello to comment further. I simply wanted to note that we're not the only system that has had an extraordinary load. Stated positively, I'm pleased to say that the eligibility review officers with whom I've met recently are enjoying good relationships with, in one case, the Metropolitan Toronto area, local police stations where the relationship between the detective and the EROs is extremely important. But detectives have extraordinary loads on them which go beyond the theft of a loaf of bread, and that has traditionally been a problem in some parts of the system provincially -- not all relationships, but we have a full appreciation of the load on some local police departments, which has made follow-up in some cases difficult.

The Chair: Mr Jackson, you have until 4:28.

Mr Jackson: Dr Pascal, when you come back tomorrow before this committee, could you set out in memo form in each of the identified areas to which the auditor had alluded those areas which you are now for the first time keeping statistical data on and share with this committee the data you are now collecting? You're familiar with the area, I believe. At least four areas have been identified where the lack of statistics being retained by your ministry was not helpful to the process of accountability. If you could bring that with you tomorrow, it would be appreciated.

If I might ask you, earlier, in your presentation you referenced an $8-million savings. What was that regarding? I didn't catch it.

Dr Pascal: I think I was referring from overpayment recovery when I made reference to expected recovery by year-end.

Mr Jackson: Which type of overpayment?

Dr Pascal: From non-recipients.

Mr Jackson: Can you please share with me if you are keeping statistics on your costs in excess of program guidelines; in other words, the statistics. You're keeping stats on your total payout, but you're not keeping the stats on that which is an inappropriate payout, in all instances. How is it that your minister can tell the media and the public and this committee, for that matter, that she anticipates a $300-million savings with the additional employment of review officers?

Mr Stapleton: The way one can do that is that we do know how much the program costs and we do know how much different types of cases cost. What we are unable to do is to be able to speculate with you on an unknown amount, and that is the amount that might be inappropriately paid out, either through fraud or because someone isn't collecting a certain amount of dollars.

Mr Jackson: My limited university statistics tells me that if you have an incomplete basis, how can you come out with a fine number? How do you arrive at $300 million in savings when you don't know yet how much impact the additional staff will have on the system, because you're just now determining that you were pleasantly surprised at the increased amount of recoverables you were running into as a result of your first examination of the new work by the new employees?

Mr Stapleton: First of all, we'd have to take it one by one, but in the case, for example, of our unemployment insurance assignment system -- and advisedly this is a general welfare assistance example -- we know we were paying out a certain amount that duplicated the amount that the Unemployment Insurance Commission paid out. We now know that through the assignment system and the money coming back to our account as opposed to going to the individual client account. That's an amount of money that we can count fairly carefully.

In the case of support payments, we know from the family support plan that in those cases that relate to our account, to the family benefits or to general welfare, they can advise us of the amount of child support that they collect on our behalf and we can identify the amounts that we're reducing particular cheques so those amounts are fairly easy and straightforward to count. What we simply do is extrapolate from that.

We also know the amounts of money through our overpayment recovery system, both for non-recipients and recipients. We can compare the amounts we collected last year and we can identify the amounts we've collected over the last few months and we can see not only the amounts we've actually collected, but we can also extrapolate from that and say that there's a trend from that and say, for example, by the end of March, which is the end of the fiscal year, that we're able to collect a certain amount of money.

It's less clear in other areas. When we say that we've noticed in the past, that it's our experience that an eligibility review officer can generate, in terms of savings, in terms of reduced cheques and through clients who go off the system, a certain amount of money that's three times their value -- of course there's always going to be diminishing returns at a certain point, but I think at this stage with the amount we have in the system that in fact we're able to extrapolate those amounts, so we're reasonably clear on those.

Mr Jackson: Perhaps I may leave you with a request for additional information then for tomorrow's meeting. Could you indicate to this committee in your deliberations if you have uncovered any impediments to investigation? Dr Pascal has made reference three times to his interest in, and his considerable time with, field review officers. Can you list for us any identified impediments to investigation and what, if any, changes the government is considering, or your department is considering to implement, to assist investigation officers?

When I hear Ms Marland's case that she brings forward, which is the auditor's case, that they couldn't find an address, that tells me there's an impediment to our ability to investigate somewhere. People can't disappear that well in this province, so if you could perhaps share that in a memo form, it would be the basis for some discussion with the committee during the course of the week.

Dr Pascal: I would be pleased to do so, Mr Chair.

The Acting Chair: Begin another round of questioning, 20 minutes on each side. Unless it's the wish of the committee to do something different, we'll begin again with Mr Hayes.

Mr Hayes: Thank you, Mr Chair.

Mr Callahan: Perhaps I could just interrupt; sorry Mr Hayes. We have about half an hour left. I wonder if it might be 10 minutes for each caucus. That way we would finish right on time assuming the answers are --

The Acting Chair: Mr Callahan, I understand that the committee meets until six if --

Mr Callahan: Oh, fine. I didn't realize. That's fine. I'm easy.

The Acting Chair: If it's the wish of the committee to meet to six, it's fine with the Chair. If it's the wish of the committee to adjourn earlier, it's also fine with the Chair as well, but I will leave that entirely up to the --

Mr Callahan: Well, that's fine. I have no difficulty. I thought we were sitting until five. That's why I suggested -- I'm sorry, Mr Hayes, for interrupting you.

The Acting Chair: Maybe we will go a 10-minute round and when 5 o'clock rolls around, then maybe we will see what the wish of the committee is.

Mr Callahan: That's agreeable.

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The Acting Chair: Ten minutes for each party, beginning with Mr Hayes.

Mr Hayes: I'll be very brief. Mr Chair, I always believed in a good day's work for a good wage, so I don't mind being here till six o'clock.

Mr Jackson: Why are we MPPs then, Pat?

Mr Hayes: To Dr Pascal or others who want to answer the question, we keep talking about the alleged fraud in the auditor's report. In a lot of these cases, some of them are stated that they started back in 1987 and I don't know how long before, and I know that of course this was certainly highlighted in the auditor's report. Really, what I want to know from the ministry is specifically what has the ministry done since the auditor's report to deal with this particular issue of fraud, overpayment or whatever? We'll stick to the prevention and detection of fraud and just what has been specifically done since the auditor's report.

Dr Pascal: Again, I'll start off and then ask Alison Fraser to continue.

The first thing we did was to increase the number of eligibility review officers by more than doubling their participation and, importantly, not spreading them out over the whole province but putting them where the case loads were the highest.

The comment we made earlier about direct deposit is also part of the piece. The focus on program review officers as well, on the kind of breaches of integrity that were implied by cases referred to earlier and the focus on their activity, is also important to note. I would ask Alison to continue with kind of summarizing very briefly the five or six other initiatives that are all part of the welfare fraud detection and outcomes.

Ms Fraser: I will just to itemize them very quickly, and I'd be pleased to go into any of them if it would be helpful.

We've mentioned the staff a number of times and I won't go into that. We've mentioned a bit the training and program support materials, particularly for those eligibility review officers, making that more available to them in more up-to-date form.

In terms of data collection, the auditor quite accurately pointed out that we didn't have a system for collecting data about the activity of those workers, nor the outcome of that activity. We now have in place a manual data collection. We are trying out an automated system in two locations at the moment and we hope to have that system province-wide by the end of March. That will permit the kind of rollup of the kind of information that would be very helpful, certainly to the ministry and to others who are interested in this area.

The deputy has mentioned direct deposit. In terms of information-sharing, one of the issues here is being able to either locate individuals or being able to locate other sources of income for those individuals, and we're working on a couple of fronts there. Mr Stapleton's already referred to the computer links with the family support plan. We're looking at other potential linkages in other areas. The unemployment insurance plan is one. We've mentioned, I think, briefly the assignment of benefits to make sure that we get that working. We are on the verge of signing an information-sharing agreement with the unemployment insurance authorities which will help us stay in touch with people who might perhaps be taking advantage of two systems and failing to report it.

We are looking at information-sharing with neighbouring provinces, specifically Quebec, and investigating the possibility of doing some computer matching there to identify anyone who might be taking advantage of the two systems again. We are considering other possibilities along that line, including the possibility of tax information, all the time keeping in mind the requirements of the Freedom of Information and Protection of Privacy Act and the other side of that issue.

I think the other element I'd mention to you is our technology system. We are working on the data system we mentioned earlier. We also know quite well that the mainframe technology that supports delivery of family benefits right now, which is known as CIMS, is a mainframe system that's really based on 10-year-old technology. We know that we need to rebuild that system. We've got to the point now where we have defined some user requirements. We're working with some partners to start building what we call the front end of that system, which is the part that the workers use.

Our intent in that is twofold: One is to make the workers more efficient so they can spend the time with the clients, and the second is to ensure that the automated information is easily accessible to the worker right there at the moment. We're piloting that in two sites as we speak, and it will take this calendar year, I think, to get it moving further, but we are well on that road.

Mr Hayes: There's one issue here that I think people felt was a positive step by the ministry, but we haven't heard too much about it. What I'd like from you is an update on the opportunity planning project, how successful that is and how it's actually working at this time.

Dr Pascal: We've got nine projects approved and running. The projects reflect the kind of variety the minister wanted to see to ensure that we had projects that had different types of community brokers working with social assistance recipients. We're investing the kind of upfront evaluation design that will allow us to really exploit the experience of these nine projects. We're quite hopeful they will give us a tremendous yield in terms of the kinds of permanent vehicles we need to embed into the reform system of the future.

One or more of my colleagues may wish to comment on an individual project by way of example. There are members around the table who live in parts of Ontario where there are projects extant and ongoing. We'd be pleased to provide the committee with a specific update of all nine projects, because it's an important and exciting endeavour.

Mr Callahan: Maybe that could be done in writing.

Mr Jackson: Mr Chairman, on a point of clarification: Are you referencing the reductions in STEP offset by the opportunity planning, or are you looking at all of that as one package here? I understand that recently there have been some changes in eligibility.

Mr O'Connor: Are we going in rotation?

The Acting Chair: It's a point of clarification.

Mr Jackson: I was discussing it through the Chair. You did recognize me.

The Acting Chair: Yes, on a point of clarification.

Mr Jackson: What did I do wrong, Mr Chairman?

The Acting Chair: Nothing wrong, Mr Jackson.

Mr Jackson: I was still in the middle of my question, Mr Chairman. Did you not want to recognize me?

The Acting Chair: I'm just calling order in the committee. Could Mr Jackson reach his point of clarification quickly, please.

Mr Jackson: I just wondered if that presentation was to include the recent changes in STEP, where I understand there have been some changes in eligibility and total dollars expended. It seems to be part of the concept of assisting people to move towards employment as opposed to staying on social assistance. I just wondered if that could form part of what I think someone recommended be in writing and presented to the committee.

Dr Pascal: We would be pleased to do whatever the committee decides in terms of written information. Just in very general terms, STEP and opportunity planning are related to the general thrust of having a system which rewards people for being in the mainstream labour market and actively participating.

STEP -- the recent decisions to which Mr Jackson refers -- and the opportunity planning projects are totally separate initiatives but could form a part of --

Mr Jackson: One's an addition and one's a reduction. That's why I wanted to get a better handle on it for the committee.

Mr Callahan: Perhaps we could get that in writing, Mr Chairman. It would be helpful to the committee.

The Acting Chair: Yes. To be fair to everybody, I will add an extra minute and a half on this side over here.

Mr Hope: It seems that the focus of conversation this afternoon is around fraud. I'd like to know, does anybody in any jurisdiction know what the level of fraud is?

Mr Jackson: They do in Quebec.

Mr Hope: They might talk about fraud in social services, but what is fraud? I'd love to live in a perfect world of 0%, where 100% is 100% and we come out with zero. You're getting people with the idea that we're going to live in a perfect world -- I only wish we could -- to correct the problems indicated in this report, which are years ago. They're not current administrative problems, they're previous administrative problems. Does anybody have any type of numbers on what the fraud level is, in any jurisdiction?

Mr Jackson: On a point of order, Mr Chairman: Mr Hope is leading the deputants. I would ask if Dr Pascal agrees that this is not his current problem, that it's a previous set of bureaucrats' problem and not his. That's what you just said.

Mr Hope: Quit putting words in my mouth. I'm sure the deputants who are here understand what I'm saying. I know you like to twist things.

Mr Jackson: Check Hansard.

Interjections.

The Acting Chair: Order, please. It may not be a point of order, Mr Jackson, but it's certainly a point of information. Please continue.

Dr Pascal: The identification of fraud and action arising from fraud is something I own. I am the deputy minister under whom the program operates, and it is my responsibility to do everything. In a non-defensive way, we are pleased to explore and put on the table problems, both historical and present, to learn and, most importantly, to act, because the people of Ontario expect nothing less.

With respect to the level of fraud, as I said earlier, it is very, very difficult for me to give a precise figure. Even though SARC came out with something that had a precision to it, the research around the issue talked about other jurisdictions' difficulty to establish a level of fraud, as is the case with other systems; I alluded earlier to our own tax system. All we have are sampling techniques which are imperfect. We make extrapolations based on that, but that's based on the results of highly intense efforts to identify specific cases from a subsample and then to extrapolate.

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The levels of resources required to answer the question are so enormous that what we're left with is the here and now of ensuring that we put better resources into it, that we take policies that have been in place and implement them and make them a priority, and that we hold individuals accountable for implementing those policies, which we haven't done well enough. And we welcome the important line of questioning.

John Stapleton has certainly been part of efforts to deal with this interjurisdictionally and would like to make a few brief remarks.

Mr Stapleton: As part of the SARC process going back to 1987, it seems that there was one report that was very well known, which was the Peat Marwick report, that did give the estimation of 3%. At the same time, another report was done which was an exhaustive research through various library documents to see what levels of fraud had been predicted in other jurisdictions. We could certainly provide that document to you. Its overall general conclusion was that although various different jurisdictions both in Canada and the United States and throughout the western world had various predictions of what the fraud rate was in their social programs, there were none that really accurately could say with complete certainty what the number was.

Mr Callahan: That's why it's called fraud.

Mr Stapleton: Exactly. There are other jurisdictions that have put more work into it than we have, and certainly others that have put less into it. At the same time, the predictions in that document generally went from the 2% to 8% to 10% range, usually not higher and usually not lower. So one could, I suppose, take the average of the predictions made in that document and say that it's somewhere in the range that the other document predicted. But it's an imprecise science, to predict an unknown.

The Chair: Thank you. Mr Callahan, you have 10 minutes.

Mr Hayes: In all fairness, they took about four minutes of our time.

Mr Callahan: Who did? I didn't take any.

The Chair: Mr Hayes, I'm being fair to every side, and I did add two minutes to your side.

Mr Callahan: Eminently fair, Mr Chairman.

I'd like to go back to the issue which is in the auditor's report, and I want to read it to you:

"The ministry's collection program relied on voluntary repayment. Legal remedies were not pursued; and

"We found that delinquent accounts were rarely referred to the central collection service of the Ministry of Government Services as required by ministry policy. The central collection service has a better collection record than the ministry. For example, an overpayment of $38,000 arose in 1988 because a former recipient was not living as a sole-support parent. Computer-generated monthly statements were sent to the recipient until August 1991, when the statements came back undelivered. No further action was taken and nothing has been collected to date. Even though the case has been delinquent for three years, it has not been referred to the central collection service."

Having said that, I take issue with the statement, with all due respect to the auditor, that the central collection service has a better collection record than the ministry, because I've been provided with information -- I should tell you first of all what the central collection service is.

It's defined in a document called the Annual Report of the Ministry of Government Services. It helps client ministries collect overdue accounts. "During 1991-92, $10.9 million was collected and transferred to the consolidated revenue fund through this mandatory program servicing 99 government programs." That sounds pretty good, eh? Well, I have to tell you, the information I've got is that as of today, the total portfolio of MGS collection services is between $138 million and $140 million, and you want to know how much they've collected? You want to know? They've collected $14.292 million. That's about 10%, and that is absolutely astounding.

I have figures here that in 1989-90 their actual collections were $10 million. I don't know how much was referred to them at that time; I have to presume, if their track record is up to par, it was probably 10% of whatever that amount was. In 1990-91 it was $8.96 million; they were getting a little slacker during that year; maybe there wasn't as much referred to them. We'll know that tomorrow, we'll get that information tomorrow. In 1991-92 the interim was $9.6 million, and I've given you the figures for 1992-93.

Having said that, it seems to me that if 99 service programs refer bad debts to them and if you people referred $70 million to them, you people made up almost half of the outstanding collections -- the ones that were referred, and we're told by the auditor not all of them were referred. That concerns me so much that I'm serving notice of motion on this committee that:

"The auditor, under section 17 of the Audit Act, conduct a special audit of the Ministry of Government Services central collections division with specific reference to the annual budget, number of employees, amount of collections referred to it, specifying the ministries and the amounts referred and the total received for the years 1989 through 1992-93, with the amounts successfully collected and any other relevant facts."

I'm serving notice, Mr Chair, at this time.

That's astounding. As I said before, if you sent this out to the worst collection agency in the world, the most avaricious -- I shouldn't call it avaricious -- the collection agency that took 50% or 75%, even if they took 75% of those bad debts, we're still ahead of the game. Instead, what do we do? We send it to a branch, an arm of the Ministry of Government Services, which has to have employees, obviously, which is costing us, has to have offices, has to have computers, has to have telephones, the fax machines, the whole bit -- and I'd love to know what the cost of that is -- and we're collecting 10%. I mean, that is absolutely looney tunes. If anybody in business carried on their business that way, they'd have a deficit like we do and they'd be out of business.

I certainly implore the members of the government that when this comes to a vote for this special audit by the auditor they will support it and not vote en masse with their majority to defeat it. Let me tell you, this is serious stuff.

Interjection.

Mr Callahan: Maybe it'll even show that the Conservatives and the Liberals did the same thing. I don't care who did it. It's got to stop. It's looney tunes. The taxpayers out there can't afford to have that kind of nonsense. So when the motion is dealt with tomorrow, I would trust that the government members, all fair-minded government members would support that motion, because that's the very essence of the public accounts committee. We have an obligation to be the watchdogs of the taxpayer's dollar, particularly in this time of economic downturn when programs are being nickel-and-dimed. I don't say that disparagingly, because the economic climate and the deficit have to have that happen.

But if we can collect some more money here, we can use that money for things like children's aid societies. We might even consider Peel. Peel, which has a very large population, does not receive a fair share of the moneys it should receive. My colleagues, I'm sure, will speak to this at the appropriate time. Those moneys could be made available to the region of Peel, which is the fastest-growing region in the province, and yet we get a minimal amount of --

Mr O'Connor: York is growing faster.

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Mr Callahan: Well, all right, but York is in the same boat actually. York doesn't get its fair share either. You're quite right. If these moneys could be collected instead of putting it through this agency -- with all due respect to them, they've got a very poor record. I can't see where they do anything perhaps but call them up. If you went out and collected the stuff, you'd surely get more than that. You'd get that much just by falling out of bed in the morning.

I want to hope, and I hope everybody out there watching will watch all of their members on this committee support that motion tomorrow, because if you don't support it, then in fact we might as well disband the public accounts committee because it's not doing the job which it was responsible to do. So I urge you to do that.

One final thing, Mr Chair. I have a letter here, which is something that's always boggled my mind, from a person -- he doesn't sign it -- who wrote to the then assistant auditor and he was talking about the drug benefits that people get under social assistance. A doctor had given him a prescription which was 15 pills times 10 refills and it was $9.95 for each refill; that was the dispensing fee, and he was told he could only get one. So for a supply of drugs that would have cost the social assistance plan $26, instead it cost $85 and this man or woman, whoever it is -- I can't tell -- makes a very salient point and says, "So just who is ripping off the welfare system?"

When you have to add those additional costs -- I can understand why you wouldn't give seniors overly large amounts of pills but if a person has had them prescribed to him, surely to heaven he has a right to ask for the full amount so that he doesn't pay a dispensing fee times 10. That to me is looney tunes.

When I think back to the large amounts of money that were being spent by government in terms of looking after the prescription drugs for people particularly -- if you want to do it privately that's fine, but when you're doing it within a budget of moneys that are shrinking every day, and with the demand going up as we've heard this afternoon, then I think every nickel has to be looked at, every nickel has to be accounted for.

We have to have programs in place that make sense and not have them four or five, 10 and 20 all over this fine province, either here in Toronto or in places outside. This government is not in the business of creating jobs internally. We should be in the position of trying to shrink government so that in fact we're getting the maximum bang for our buck, and the taxpayers expect that of us.

I'm really looking forward to tomorrow, when the vote takes place on this, and I'm sure there are good members over there on the government side who will surely support this application to have a special audit done by the auditor so he can determine just what kind of office they have up there at collection services, how many staff, what kind of budget and what's going on over there that they can only collect 10%.

The Acting Chair: Thank you, Mr Callahan. I understand the auditor has a point of clarification.

Mr Erik Peters: Actually a number of points. First, I would like to thank Mr Callahan for putting us on notice on this. There are two points of clarification that I'd like to put on the table. We made the statement, as you read off yourself, that the central collection service has collected 10%. If you look at our report, we note that the ministry had collected 3%, and that's why we came to the conclusion that its record was indeed better. You have proven our point. I really appreciate that.

Mr Callahan: By 7%.

Mr Peters: The second point is that we will do a file search, because my staff advises me that this office has conducted an audit of the central collection service in the recent past. We'd be happy to bring that to the meeting so you can take a look at that as to what is happening on that.

Mr Callahan: That would be fine.

Mr Hope: Defeated motion.

Mr Peters: It may or may not be. I just want to advise you of the fact that it is there.

Mr Callahan: Can that be made available tomorrow, Mr Auditor? Do you think maybe tomorrow?

Mr Peters: It was part of one of our annual reports. I don't remember the exact date.

Mr Callahan: Perhaps you can use your best efforts to get that for us tomorrow so that we can see if it needs an updating. I notice I don't have any figures here beyond 1989-90, so that report may have been made prior to that, I don't know. But I can't believe that a public accounts committee of the day would not have gone through the roof when it say that the auditor was reporting that 10% of outstanding debts was being collected ranging in the neighbourhood of $140 million. That's not loose change.

Mr Jackson: Could I make a request? Could all members of the committee have some of the statistics that Mr Callahan was referring to? I don't know if they were circulated or if he had made a specific request. I'm advised by Mr Callahan that was a special request to the legislative researcher. But if it's possible, I would like to get a copy of that tonight before committee expires in order to read up on it before tomorrow's meeting.

The Acting Chair: Is that possible?

Mr Jackson: Perhaps the clerk can get a copy.

Mr Ray McLellan: I'll speak with Mr Jackson right after the meeting to transfer the information.

Mr Jackson: Get me a copy. You don't have to speak to me.

The Acting Chair: We've got 10 minutes equally divided between Mrs Marland and --

Mr Jackson: Okay, I'll go first this time.

Mr Hope: Excuse me, Mr Chair, after that lengthy speech, I'm sure the ministry would like to maybe make some comments. You talked about 10 minutes.

The Acting Chair: He made a statement, I believe. There wasn't a question.

Mr Hope: Here's an opportunity --

The Acting Chair: Order, please. Mrs Marland, did you want to go first?

Mrs Marland: I think in the age of fairness, since I went first the last time, I will share this with Mr Jackson.

Mr Jackson: I think it's because she took 26 minutes of my 28 minutes, that's why.

My question is to Dr Pascal. On page 6 of your presentation you reference as one of the first clear steps towards reform, "We entered into discussions on disentanglement with municipalities." You'll recall when you were before the estimates committee two and a half months ago that the process of disentanglement had not begun. Could you bring this committee up to date on the specific meetings involving which municipalities you've entered into discussions on disentanglement with?

Dr Pascal: Mr Chair, the disentanglement process, as Mr Jackson knows, is a central table of negotiations, represented on one side, municipalities and regional jurisdictions, by AMO and on the other by provincial members. It's certainly public domain that phase 1 of those negotiations has at its centre the tradeoff of 100% GWA support by the province in exchange, in a fiscally neutral way, with a series of tradeoffs in the other direction. Those discussions are ongoing. They're meeting later this week and both sides have certainly been publicly hopeful of a resolution to the tradeoff in the very near future.

Mr Jackson: I was really looking for a specific answer, because when I asked the minister if she could point to a specific date when representatives from AMO were meeting with your government, she had indicated as of October 13 -- and you'll check the Hansard record perhaps -- that in fact only interministerial discussions had been entertained at that point with respect to the issues around disentanglement.

Dr Pascal: No, there have been approximately four or five meetings of the central negotiating table, the provincial table, with AMO and provincial officials of the government. There've been many meetings, through you, Mr Chair, to Mr Jackson, of interministerial discussions to inform one side of the table, namely, the provincial government, as I'm sure there have been discussions on the municipal side. But the discussions since we were in a room not too far from here during estimates debates -- there've been about four or five central negotiating meetings of the committee and their next one is this Thursday evening.

Mr Jackson: During your presentation you referenced the Social Assistance Review Committee's recommendations, and there were a substantive number. Could you furnish this committee with a current update? I think the last one that was requested was at the estimates time, so I don't think updating it would be too difficult.

Could you table with this committee the status -- and the one report which I appreciated the most was the one that indicated whether or not a recommendation has been dropped, whether it's been implemented, whether it has been scheduled for implementation. Treating it in that fashion is extremely helpful.

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Following that request, I'll ask you this today and you can ponder it and maybe respond to it over the course of the next few days: To what extent have you been able to measure the impact of no longer requiring home visits for FBA eligibility, and what has been the impact on that with respect to the response from your investigation officers, which was a request I made earlier?

There was the widening access to student welfare which comes in varying forms. It can either be on FBA or on GWA, but there has been improved access, and several of us have received concerns from school boards in particular about the increased access.

Then the third area, and these are just three that I take from the top of my head, but I know there are others in the process of liberalizing social assistance in this province, the issue of not having to have a residence in order to be eligible for FBA or GWA in this province.

I realize that the auditor's review was with respect to FBA, but this committee's review isn't necessarily limited in scope to FBA. I invite you to prepare something for us, and we'd have a more meaningful discussion at that time.

Dr Pascal: Okay. Mr Chair, we'd certainly be pleased to provide the kind of tracking information to which Mr Jackson referred on Transitions, to provide an update according to the categories you alluded to, and we appreciate the notice, dialogue and those other issues arising.

Mr Jackson: One final question, requesting information that has to do with those communities in Ontario where the processing of GWA and FBA are done in a combined --

Interjection.

Mr Jackson: -- yes, the integrated programs. If you could assist us with statistics. I had requested this of our legislative researcher yesterday, and of course if it was a priority for you, we'd get it much quicker.

I'd like to know the communities involved, the kinds of case loads, and if in fact those municipalities are maintaining crossover accountability statistics, in particular cases of fraud, tracking, reporting of non-payment, the processing of recoverables. It strikes me that they're -- and this is not by way of an unfair comparison, but it is by way of inviting a comparison of what you could achieve under a model where all the investigations could be done within one department for FBA and GWA.

Since we have inappropriately placed people on both systems in any given jurisdiction, these municipalities, it would strike me, have a better chance of resolving some of that, since they are one and the same, whereas that isn't the case in most of Ontario. So I'd like to have the information, have a window on that, so we can analyse it as a committee and discuss it as well.

I think that concludes the series of questions I had, which I think would be best to share with the deputants, as opposed to pursuing any further questions.

The Acting Chair: Thank you, Mr Jackson. Mrs Marland, you've got three minutes.

Mrs Marland: I have a heavy-duty question which will take more than two minutes, so I will save that one for the next round. However, I do have some short questions, and Dr Pascal, I would like to apologize. Earlier I referred to you as Mr and I like to be correct. I'm sorry I was incorrect and I'm apologizing.

Dr Pascal: I understand you're married to a real doctor. Mr is just fine.

Mrs Marland: No, I'm not married to a real doctor; I'm married to a dentist.

Mr Callahan: It's like pulling teeth to get anything out of her.

Mrs Marland: Anyway, the questions that I have, I'm just going to give them to you and I'm wondering if it's possible to have this information today. Today is Tuesday and we have the pleasure of being together, I think, tomorrow and Thursday. I'm wondering if any or all of this information might be available by Thursday afternoon. It's not information that I will have further questions on at this time. If Thursday afternoon isn't enough time, you could give me a time frame when I can have it.

I'm wondering, first of all, if you could provide a list of FBA and GWA case loads by municipality, broken down by the size of family, the type of case -- for example, single parent; I can give you a copy of these if you like -- and the age of the head of each household, for each month beginning January 1990 to the present time. The other one is, would you provide a detailed list or chart of social assistance rates, both FBA and GWA, from 1990 to now? Could you explain in detail how social assistance rates are determined and provide a list of provincial FBA and GWA case loads for each month from 1990 to present? Is this too formidable?

Dr Pascal: Mr Chair, I'm sure we can provide this by Thursday. I'm not sure it'll be this Thursday, but we'll make sure it's available on a Thursday. We will do everything we can. About three quarters of what Mrs Marland has requested is on the shelf and readily available.

Mrs Marland: That's what I thought.

Dr Pascal: There are some parts to it which will require a little bit of work, but we'll do our very best to provide it by this Thursday.

Mrs Marland: All right. I have one final one. In October, during estimates, we asked for the ministry's most recent projection for social assistance costs for this fiscal year. At that time, the ministry indicated in response that projected social assistance costs for 1992-93 were not yet available. Are they available now, and if so, what is the most recent projection? I'll give you a copy of this.

Dr Pascal: The total load for us is projected at $6.2 billion for this fiscal year.

The Acting Chair: That's for general welfare assistance and --

Dr Pascal: All of it.

The Acting Chair: The committee has asked me to point out when it's after 5 o'clock. We went around again.

Mr Hope: To save some people some work, there is ample information that's already been provided by legislative research in our package. I guess it's the determination as to what legislative research has already done in order for the ministry to provide the information. We have about the benefits and we have the provincial --

Mrs Marland: I think you'll find the questions I've asked are not in that package. Thank you very much, Mr Hope.

The Acting Chair: Thank you for that point of clarification. Is it the wish of the committee to continue until 6 o'clock?

Mr Jackson: I would like to keep talking. I personally didn't take up a lot of time, I thought, this morning on the WCB. As I recall, it was three minutes.

Mrs Marland: I have more questions, Mr Chairman.

The Acting Chair: Is it the wish of the committee to continue till 6?

Mr Jackson: Is there more time? We could probably do a few more minutes.

Mr Hope: Either we go to 6 or we don't, that's the question.

The Acting Chair: I wish to point out that the same witnesses are back here again tomorrow and Thursday morning. I think members of the committee have asked the witnesses to collect quite an amount of information to provide to the committee by tomorrow morning. Maybe the witnesses may need that time to talk to staff and collect that particular amount of information for committee members.

Mr Jackson: If I might, by way of suggestion, as one who sits in the chair from time to time, if there are any other members who have requests for information, it could be helpful to the process. We have some additional requests for information. We have those in writing and we're prepared to share them. We don't benefit from putting them on the public record. There's no sense tabling requests for information on Thursday afternoon when we're finished. We just won't get the information.

The Acting Chair: Is there any further request for information from the witnesses?

Mrs Marland: Yes. When Comsoc was up before the standing committee on estimates, the minister announced her intention to introduce new welfare legislation before the House in 1993. Will this legislation be introduced in the spring or the fall?

Will the disentanglement issues surrounding welfare legislation be sorted out before the legislation is introduced?

What is the minister's response to Time for Action, the most recent report of the advisory group on new social assistance legislation?

The auditor found that only 11 of the ministry's 40 local family benefits assistance offices had a case load at or below the ideal 275 clients per case worker. Do GWA offices meet the ideal of 275 clients per case worker?

The auditor found ministry FBA fraud prevention and detection inadequate. The minister, in response, announced her intention to hire 35 additional eligibility review officers. A new policy and procedures manual has also been drafted -- I don't know if we're correct about this. How many GWA eligibility review officers are there and does the ministry plan to draft a new GWA manual as well?

I think that's probably it. The rest of my questions are rather lengthy and refer back to the auditor's report in particular, so I don't know if Dr Pascal would like to answer those questions today or tomorrow morning, but --

The Acting Chair: On a point of clarification, Mrs Marland, are you requesting information on GWA rates or FBA rates? The focus of the auditor's report is on the family benefits.

Mrs Marland: On both. My previous question was on both, in order that there can be some comparisons drawn in relation to the auditor's report to this committee on the FBA. So it is important to have the information we're talking about.

Dr Pascal: Mr Chair, I'd be pleased to answer some of the questions or all of the questions. It's up to you and the committee, obviously.

With respect to the first three questions -- well, they're all very straightforward questions. With respect to legislation, I would obviously have to check with an office that I don't normally walk into in terms of legislative traffic, but the intent is to introduce in this calendar year. If I had to hazard a guess, I would suggest it's more likely to be the fall than earlier.

With respect to the disentanglement process and your question around whether it has to be resolved to proceed drafting the legislation, the answer is unequivocally "maybe." It is quite likely that the legislation can be disentanglement-neutral; it depends on the nature of the final legislation. The government has announced that it is going to act on the advice of every previous review, from Transitions to Time for Action and the PMSSR report, that a single piece of legislation getting rid of the two tiers is important. So the legislation process will yield some results, hopefully, in this calendar year. Disentanglement doesn't necessarily have to be resolved for that to happen.

Finally, with respect to the third question, which I believe was the minister's response to Time for Action, she's made it quite clear, when she tabled it on behalf of Professor Moscovitch and his committee, that she was looking forward to receiving responses to it, which she is. It will be taken into very serious consideration in terms of the government's welfare reform package, which will be available, hopefully, some time in this calendar year.

With respect to the other questions, I guess, Mr Chair, I would need some guidance. If you'd like us to answer either in written form or verbally very quickly at the outset tomorrow morning, I'd be very pleased to do it in either fashion.

Mrs Marland: I'd be quite happy to have the written form, because I have other questions that I know that you and I can ask and answer verbally on other matters.

The Acting Chair: Okay. The request was for information which for tomorrow, and certainly by Thursday, should be in written form for all committee members.

Are there any further requests for information? Hearing none, the committee then stands adjourned till 10 o'clock tomorrow morning.

The committee adjourned at 1715.