Legislative Assembly of Ontario

1995 ANNUAL REPORT, PROVINCIAL AUDITOR

ONTARIO BOARD OF PAROLE
COUNCIL OF ELIZABETH FRY SOCIETIES OF ONTARIO

AUDIT ACT AMENDMENTS
ONTARIO SEPARATE SCHOOL TRUSTEES' ASSOCIATION

ASSOCIATION OF LOCAL OFFICIAL HEALTH AGENCIES

COUNCIL OF ONTARIO UNIVERSITIES

ONTARIO HOSPITAL ASSOCIATION

ONTARIO SCHOOL BUS ASSOCIATION

CONTENTS

Monday 4 March 1996

1995 Annual Report, Provincial Auditor

Ontario Board of Parole

Council of Elizabeth Fry Societies of Ontario

Elizabeth Forestell

Audit Act Amendments

Ontario Separate School Trustees' Association

Patrick Meany, president

Patrick Daly, vice-president

Patrick Slack, executive director

John Jasenec, chartered accountant

Association of Local Official Health Agencies

Gord White, executive director

Robert Kyle, medical officer of health, Durham region health department

Council of Ontario Universities

Bonnie Patterson, president

Jim McAllister, policy analyst

Jalynn Bennett, chair, board of governors, Trent University

Ontario Hospital Association

Ron Sapsford, chief operating officer

Ontario School Bus Association

Dan Stock, president

Brian Babcock, past president

STANDING COMMITTEE ON PUBLIC ACCOUNTS

Chair / Président: McGuinty, Dalton (Ottawa South / -Sud L)

Vice-Chair / Vice-Président: Colle, Mike (Oakwood L)

*Agostino, Dominic (Hamilton East / -Est L)

Beaubien, Marcel (Lambton PC)

*Boushy, Dave (Sarnia PC)

Carr, Gary (Oakville South / -Sud PC)

Colle, Mike (Oakwood L)

*Crozier, Bruce (Essex South / -Sud L)

*Fox, Gary (Prince Edward-Lennox-South Hastings / Prince Edward-Lennox-Hastings-Sud PC)

*Gilchrist, Steve (Scarborough East / -Est PC)

*Hastings, John (Etobicoke-Rexdale PC)

*Martel, Shelley (Sudbury East / -Est ND)

*McGuinty, Dalton (Ottawa South / -Sud L)

*Pouliot, Gilles (Lake Nipigon / Lac-Nipigon ND)

*Skarica, Toni (Wentworth North / -Nord PC)

*Vankoughnet, Bill (Frontenac-Addington PC)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Curling, Alvin (Scarborough North / -Nord L) for Mr Colle

Preston, Peter (Brant-Haldimand PC) for Mr Beaubien

O'Toole, John (Durham East / -Est PC) for Mr Carr

Clerk pro tem / Greffière par intérim: Tonia Grannum

Staff / Personnel: Steve Poelking, research officer, Legislative Research Service

The committee met at 1102 in room 151.

1995 ANNUAL REPORT, PROVINCIAL AUDITOR

The Chair (Mr Dalton McGuinty): Good morning, committee members, and welcome to our continuing hearings on the matter of section 3.18 of the 1995 annual report of the Provincial Auditor, more specifically, dealing with the Ontario Board of Parole.

We're going to be doing something we were doing last week. We're going to be shifting from topic to topic today. We're going to begin with that particular topic for our first presentation, and then subsequently we're going to be dealing with amendments to the Audit Act.

ONTARIO BOARD OF PAROLE
COUNCIL OF ELIZABETH FRY SOCIETIES OF ONTARIO

The Chair: Our first presenter this morning is here on behalf of the Council of Elizabeth Fry Societies of Ontario. Good morning. Welcome to the committee. I gather it's Ms Elizabeth Forestell?

Ms Elizabeth Forestell: Yes, I'm Elizabeth Forestell and I'm the executive director of the Council of Elizabeth Fry Societies of Ontario.

The Chair: We have allowed, Ms Forestell, just so you are aware, a half-hour for your presentation. Committee members would appreciate it if you would provide us with an opportunity during that period, if at all possible, to ask questions.

Ms Forestell: I'm a fast talker.

The Chair: Great. Thank you.

Ms Forestell: Just to give you a little background, the Council of Elizabeth Fry Societies of Ontario represents eight Elizabeth Fry Societies in the province. These agencies have been working with and for women in the criminal justice system, in some cases for as long as 50 years, providing services both in the community and in federal and provincial prisons and correctional institutes.

Services include after-care programs, residential programs, addictions recovery, sexual abuse counselling, anger management, parenting, employment training and counselling, court work programs, bail supervision and parole supervision, and I've probably left out a good number. At both the provincial and local levels, we also offer expertise in consultative services to government in the areas of program and policy development.

We've been recognized nationally as a voice of authority on issues pertaining to treatment of women by the criminal justice system and the causes of women's crime. One example is that council was highly instrumental in the work, with the government of Ontario, of the women's issues task force, a study of provincially incarcerated women, the report of which was released in 1994. In Ontario and in fact across Canada, Elizabeth Fry Societies are the only organization with the specific mandate to provide programs and services to women in conflict with the law.

Today, we come to talk to you about the idea of parole, and I'll put my comments in context for you by mentioning some of the core beliefs on which they're based. First of all, we need to remember that we are talking about people who have been sentenced by the courts to serve incarceratory periods of less than two years. Whether these sentences reflect mistakes or too many breaks in the court system is not something we can deal with here. The important point is that we are dealing with people who are coming back into the community within 16 months at the most. We acknowledge that the crimes for which the sentences are imposed may be of varying seriousness, though we know that for women they are most often property crimes such as theft under $1,000. Many of the women that we see in provincial institutions are there for shoplifting or small drug crimes. These are the people who will return to our communities soon.

Second, we believe that although there are without doubt some people who must be separated from society in order to protect the community, these are a small percentage of our institutional population and that in Canada and in Ontario we tend to overincarcerate, particularly with regard to non-violent offenders.

Third, we believe a more appropriate response to crime is to look at the underlying causes, be they systemic or individual, and that the effect of crime is to create a disturbance in the whole community. It makes sense, then, to address those underlying causes of crime and to assist the individual in reconciling with and functioning responsibly within the community and to invite the community to participate in that process of reconciliation. With regard specifically to women, we believe children and family are essential to the healing and reconciliation process and that the longer a woman is kept from her children the more difficult it is likely to be for her to reintegrate successfully.

Finally, we believe that incarceration is not an effective deterrent to crime, nor does it provide an adequate environment or opportunities for rehabilitation. In our incarceratory zeal, we respond not to real need but to a clamour for retribution from a community whose only allowable participation in the criminal justice system is to bid for harsher sentencing rather than to contribute to the development of creative and meaningful solutions.

The purpose of parole, as we see it, is to reduce the actual time spent isolated from the community and to encourage people to once again take up their lives and become contributing community members, while the system provides a degree of supervision and support in the initial stages. By all accounts, including the auditor's, this strategy is generally successful. In 75% to 85% of the cases where parole is granted, the parolee completes her term successfully. Revocations are most often in response to technical violations not the occurrence of a new crime.

Because incarceratory periods are so short in the provincial system -- averaging 64 days -- early conditional release becomes even more important. Even in the federal system, I hear of cases that go before the parole board after eight years of imprisonment and are turned down due to "outstanding treatment concerns." In plain language, this means the inmate has not yet completed a course of treatment or a program that was recommended on admission, usually because he's been on a waiting list since admission. If the resources are so strained in that system, are we to believe that they are so much more readily available in our provincial system? To the contrary, it's common knowledge that in provincial correction centres, not only in Ontario but elsewhere in Canada, we are little more than warehousing short-term inmates.

In contrast, early release to the community allows ex-inmates to be connected to their families and communities and to long-term programs and treatment courses that will address their needs and provide supervision during the reintegration process. For women, this is particularly important, as we expect them to take up their roles as mothers on return. For both mother and child, this process is more successful the shorter the separation. Research has in fact led even the federal correctional system to devise a program that includes heightened contact between mother and child, and in the case of small children, the child actually living with the mother while she serves her sentence, whenever possible. In our experience, unless a woman is formally connected with an agency like the Elizabeth Fry Society or is attached to a community program as part of her release plan, she's unlikely to seek help. The supportive agencies and professionals a parolee meets on arrival in the community have the potential to provide support long after the release date. The correctional institution does not.

The system of early release through parole has to be seen essentially as supported by community resources such as halfway houses and other after-care programs. One of the serious problems we've already faced is the most recent reduction of these programs, with the result that many residents of community facilities have returned to jails through no actions of their own. We're deeply concerned with the potential effect of these decisions. We believe that by cutting such resources, we're failing seriously in our responsibility to return people to the community as better-functioning, law-abiding citizens. To go further and entirely bypass the parole process, particularly for those serving longer sentences, will eliminate all opportunity we have to closely monitor the reintegration process and head off problems at the outset. Instead, we simply wait till another crime is committed and another victim added to the list. We believe this is unacceptable.

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There is no question that for parole to work, there must be an adequate plan for each parolee. It's interesting to note that one of the first observations listed by the auditor in his 1995 report, on page 261, is that over 40% of files did not include assessments of the suitability of the release plans or recommendations for risk management. Neither the recommendation nor the board response adequately addresses this point. I would suggest that we have become so overwhelmed with the problems, we've stopped looking at solutions; that is, we put so much energy into risk assessment and on the past history of the parole applicant, we have little energy and resources left to devise a plan that actually includes steps to manage and reduce that risk. Our method for reducing risk has come down to cutting out risk entirely by simply keeping the applicant in jail. Is it somehow preferable to have the reoffence occur after sentence expiry?

In monetary terms, the cost of keeping an inmate in jail in Ontario is around $132 a day. Add to the institutional cost the consideration that in most cases of women who go to jail, there is no supportive partner to take care of the children while she serves her sentence. It's become really obvious to me in my last eight years working with women in the criminal justice system that when women go to jail, their lives disappear. Their children are very often taken on by the state, their apartments are gone, their phones are gone. They come out of jail with absolutely nothing to go back to because they generally don't have partners who maintain their lives while they're in. The cost then becomes even more prohibitive. Add further the fact that most women's crime is related to poverty; release her directly from jail into the community unsupported, and the likelihood of recidivism is increased considerably, with all the attendant costs of reoffence. Compare this to the cost of the most supported stage of gradual release -- parole to a halfway house with programs -- at about $70 a day. Surely the balance sheet belies the logic of further reductions in community corrections strategies.

The auditor's recommendation for reducing the length of time low-risk inmates spend in correctional facilities and the speedy reintegration of short-termers into the community makes sense. But this is not enough. Most of the people in this category can and should be released with minimal, if any, supervision, and access to programs as needed. The people we need to worry most about, I believe, are those serving the longer sentences. These are the people who are not only at risk of reoffending but who are most in need of support in order to live as functioning members of their families and of their communities. It is likely both the risk and the need will be as pronounced, if not more so, after serving the full incarceratory term. Again, we must build a great deal of support into the process of returning to the community for these inmates. The only way to do this is through a program of supervised early release.

Finally, a word about electronic monitoring, since it seems to keep re-emerging both in these discussions and as an alternative to halfway houses. We are deeply concerned about the use of electronic monitoring as an alternative to other forms of community support. We do not see that it's likely to be used as an alternative to incarceration but rather as a way of widening the net and perhaps being imposed as a sentencing option in a case that otherwise would not merit incarceration. As an alternative to community residential programs, we see it as completely inadequate. Electronic monitoring does not tell us how a client is doing in the community, whether she is under undue stress, about to get into trouble again, likely to fall out of a substance abuse program, depressed or suicidal, generally in need of help or intervention. In fact, it doesn't tell us anything at all about how she's doing in the community. It doesn't allow us to support or help her through potential trouble periods. It only lets us know when she's already in trouble again. It simply tells us where she is. I would suggest to you that in the vast majority of cases, this is absolutely useless. Moreover, as a release option, it's not even seen as useful by correctional administrators. In one institution that houses about 400 inmates, we've been told that only one qualifies for electronic monitoring. Electronic monitoring, aside from all the negative aspects we see associated with it, simply doesn't look like a viable, useful option.

I know that other community organizations, like the Elizabeth Fry Society of Toronto, have made some very concrete clinical, technical recommendations in response to the auditor's report, so I won't repeat them today. I ask you simply to look at your provincial parole system in the light of real cost, real need and real effect. I ask you to look at early supported release not as a reward for an inmate who doesn't deserve it or as a risk to the community, but as a positive step to reconciliation and to restoring the balance to a community that's been disrupted and damaged by crime.

The costs in both human and monetary terms of keeping people in jail longer and then dumping them back into the community unsupported is simply too great to bear. The level of community protection attained by keeping a woman in jail until the end of her sentence is negligible at best. The benefits of supported release to the community at large, to the woman and to her children far outweigh the cost of providing such support, and in most cases the associated risks need not be significant. Thank you.

Mr Gilles Pouliot (Lake Nipigon): Thank you, and good morning. Elizabeth, you're to be commended, you and your group of people, for what is under the circumstances certainly an essential service in the context of transition. You therefore see at first hand the "fruit of your labour."

I have in front of me a quote maybe you can help me with. It's from the Common Sense Revolution. Maybe you've heard about it. It's a little pamphlet of convenience that was circulated to lure people to put the X to the right of the ballot. It says, "Funding for law enforcement and justice will be guaranteed."

We listened intently to your presentation, Elizabeth, and you talked about the human dimension, the monetary and human costs. You also indicated prior to that statement that it costs $132 to keep someone incarcerated versus $70 for someone in a halfway house -- notwithstanding the human dimension, notwithstanding the supplementary associated costs, such as the children, and you spent some time explaining to us the trauma, the shortcomings associated with that. Mathematically, it doesn't seem to make a lot of sense to me.

Ms Forestell: Nor to me.

Mr Pouliot: No, it doesn't to you either.

I've heard it said that they've kneecapped the system without too much thinking. I don't want you to comment on this; I can do this. They've closed 400 beds.

You've also mentioned that the rate of recidivism was less than 20%, and if we factor in the technicalities, that you're 10 minutes overdue for reporting, it's far less than that. In your experience, in a broadly summarized form, what is the alternative to halfway houses if a regime chooses arbitrarily to eliminate them, to gut them? What's left for those women and their children waiting at home, now being raised by the state? Surely that's not what society has come to.

Ms Forestell: I guess what I see as the alternative to halfway houses and various levels of supported early release is that women and men come back into the community and generally go back to the places with which they're familiar. What I've seen in my years of working with people coming out of jail who say, "I'll never do it again," is that unless we have some very regular contact with them, they go back to the neighbourhoods where they committed their crime, or for women very often, they go back to the partner with whom they committed their crime. The next time I see them is generally in the correctional centre or in a federal prison. Generally, the next time I see them, their children are now in care. It takes them many years, if ever, to get their children back and to get their families back together. I'm sure if I stay in this kind of work for long enough, I will see their children there too.

Mr Pouliot: It appears obvious that it takes longer to heal and yet longer to reintegrate, to once again become functional and be a contributor to society.

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Before the night of the long knives, before the axe fell -- and this was systematic and deliberate. You're the expert in the field. Were you extended not only the courtesy, but there's a vacuum that has to be filled here. How often and how thoroughly were you consulted before Charlie the Chopper came in yielding the axe?

Ms Forestell: I wasn't consulted personally at all, but I have to say that I wasn't at that time in this position, so that may be why. To my knowledge, our organization was not consulted and individual Elizabeth Fry Societies were not consulted, so it did come as a little bit of a shock. I also have to say that we did not lose as many beds as the correctional system for men did, and for that we're very grateful, because it would have been absolutely tragic had we.

But we were not consulted. And we also lost, in various organizations, pretty much all our aftercare programs that include support for incest survivors, support for people recovering from addictions, and those kinds of programs are very essential to keeping women out of jail.

Mr Pouliot: Thank you kindly. Very plainly stated -- and I don't wish to catastrophize, for it's too important; we're dealing with real people -- you know people, as a result of a systematic and deliberate move by the regime, by this government, who are left twisting in the wind, filled with anxiety, filled with fear, with no place to go. They're being tossed -- those are people -- on the human junk pile deliberately. You know some of those people. You come here and you are thankful that you were not as decimated in your program as the male counterpart, but you were maimed, you were hurt big-time.

Ms Forestell: I think we were all hurt. Aside from losing beds for women, I think we're hurt by that closure as a community in general, because it leaves us in a less safe position. I don't think it would be appropriate for me to guess at the motivation that went into the decision to make those cuts, but certainly, yes, I see the people left twisting in the wind.

Mr Pouliot: Allan Rock said it best, but my time's up. Thank you, madam.

Mr John O'Toole (Durham East): Thank you very much for your presentation. It was informative. The Elizabeth Fry Society has been in existence for a number of years. How long have you been the executive director?

Ms Forestell: Of the Ontario Council of Elizabeth Fry Societies only a couple of months; however, I was the executive director of another organization from 1989, so I've been very involved with the system.

Mr O'Toole: A similar sort of function dealing with the criminal system?

Ms Forestell: Yes.

Mr O'Toole: We're always looking for sufficient ways of establishing a deterrent, and that's my question to you. Are there effective deterrents? To pick up on one thing you said, most of the people you see in the transition phase will say, "I'll never do it again." It would seem to establish that perhaps prison in itself is a deterrent. Are there other things that are effective deterrents?

Ms Forestell: But I went on to say that the next time I usually see those people is in a correctional centre or in the federal prison or in court. So no, I don't think that's a deterrent. There are several kinds of crime, and people commit crimes for different reasons, certainly. What we see in terms of women's crime is that it is very often associated with poverty, and that most of the women we see in both the federal and provincial systems -- and I've done some quite considerable study on this -- are long-time victims of physical and sexual abuse.

We need to look at that crime not just as something evil that person has done but as a symptom of something that's gone wrong in the community and that probably has been going wrong for some time, and has to be addressed both at the individual level and at that societal level.

Mr O'Toole: You suggest then it's sort of systemic. In fact, the suggestion that perhaps a broader moral decay has evolved in the past to perhaps disadvantage those young people, women in this case, so that they're victims before they're even a participant in the crimes. Would it be safe to say that the general morale in society's a partner in this?

Ms Forestell: No, that's not what I'm saying. I'm not saying it's a sign of moral decay, I'm saying that there are problems we are beginning to understand in terms of the underlying causes of crime. If you were to say that crime has increased, I think you would be wrong. I think how we define crime has changed, the kinds of crimes we incarcerate for have changed and the level of public outrage at some crimes has changed. We have discovered and revealed crimes that have gone unnoticed for many years.

Mr O'Toole: Is the rate of conviction or charges against females increasing or decreasing?

Ms Forestell: It's staying about the same, although we have noticed in the last couple of years a slight increase in violent crimes among women.

Mr O'Toole: I don't know if there are other questioners on the panel.

The Chair: Very briefly.

Mr Steve Gilchrist (Scarborough East): Sure, very briefly. Thank you, Ms Forestell, for your presentation. I should mention one of the first volunteer things I ever did was tutor at the women's pen many, many years ago, so it gave me an interesting perspective on things.

One of your closing comments was that we should not look at parole as a benefit for someone who doesn't deserve it. The problem is right now it's automatic. Can I take from that comment that you would agree with those who believe it is a flawed system, that by treating everyone the same, you lose a lot of the incentive for people to make something better of themselves, to take the programs while incarcerated or once released, to differentiate themselves from those who are just coasting their way through the system and that as it stands right now, parole does not really separate the wheat from the chaff, it lumps everybody into the same category?

Is that something we should be looking at and making sure that parole is there just for those who truly qualify and not for those who are, by their own choice, beyond --

Ms Forestell: I'd confine my comments to the provincial system --

Mr Gilchrist: Yes, please.

Ms Forestell: -- because I think that the motivations and rationales are very different.

No, I don't see it as part of a system of rewards at all, although I know that it gets used that way. I see it as a safety valve. I see it as a way -- if you have someone who's serving two years less a day, they're going to get out after two thirds of their sentence. My preference is rather than keeping them in jail for that second third, get them out into the community in a supervised way so that you can watch them and work with them and coach them and make sure they are connected instead of just dumping them back after two thirds of their sentence with no supports. That's what happens. There are no programs attached.

The Elizabeth Fry Society of Toronto used to provide several after-care programs for people who weren't necessarily on parole. They no longer do that because they don't have the funding to do it and I think they may have been one of the last to actually have that funding. I'm not making a political statement here, I'm just saying as a statement of fact: If you come out of jail and you're not on parole, there is no support. You do not qualify for any programs, and not only do you not qualify for any programs, but people are not generally motivated to go into programs. It's really something that you have to help people identify that they need.

I'm in favour of getting people out on parole as early as possible so that you can see how they're going to respond to being in the community so you have a shorter period of institutionalization, and because they are going to come out, it's not like the federal system where if they don't come out on parole, maybe they'll stay in for life and never bother you again. They are going to come out and they're going to come out soon. So let's bring them out the best way possible and make sure we watch them carefully in their first few months on the street, to make sure they don't just slide back into wherever they came from.

Mr Bruce Crozier (Essex South): Thank you, Ms Forestell. It's good to have you with us this morning. You used the words "public outrage" in one of your responses and I think certainly one of the things the public should be outraged about is the fact that it, as you have very well pointed out, costs significant money to keep individuals incarcerated, in this case women. As a matter of fact, it seems to me that the figure is even higher for youth, and yet we aren't willing, or the government isn't willing, to spend that much money on maintaining senior citizens in care through their remaining days. I know in my riding I am constantly reminded that we do spend more money per day to keep youth and others incarcerated than we're willing to spend on our senior citizens. That's another outrage that I thought I should point out. I think the alternative that you've mentioned in halfway houses, that there are alternatives that certainly cost less and perhaps they're more effective in the long run, I think we have to focus on.

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I'd like it if you could expand your comments on electronic monitoring. I guess when I first heard of electronic monitoring, it was when they would electronically monitor animals and usually it was for their welfare. It would seem that even though we're past 1984, that George Orwell visits us each time, that whether it be a criminal's privacy -- some people believe in fact they should have no privacy, but whether it be someone who has been convicted of a crime or whether it's individuals like you and I, I get just a little bit concerned that when a government starts to monitor people, when it starts to set up lines where you can call in and snitch on people --

Mr Alvin Curling (Scarborough North): Big Brother's watching.

Mr Crozier: I'm not so sure that it doesn't bother me -- in fact, I know it bothers me -- that I'm living in a society where that has to happen.

Mr Pouliot: They'll do it to you next, Bruce.

Mr Crozier: Electronic monitoring in itself bothered me when that was first brought in and you have mentioned how it may not be effective, but can you just remind us of that?

Ms Forestell: Sure. But I also want to take up another part of your question, if you don't mind, or your comment in that you mentioned snitch lines. I think one of the mistakes we make, and I did mention it briefly in my presentation, is that we allow the community and victims of crime to be a party to the criminal justice system only in so far as they can provide victim impact statements, witness to sentencing so that we can impose longer sentences, call Crime Stoppers and get paid for snitching on someone. These things, I think, are very divisive to the community and don't help at all in terms of restoring the balance that's disturbed by crime. Yes, I think that's a real problem.

I think electronic monitoring is a part of that problem as well. My concern is that it widens the net, that it's not really an alternative to anything that we do now. Even though we may mean it as an alternative, I think it will be used to increase the number of crimes or the number of times we decide to incarcerate people at some level, whether they're incarcerated in their home or not.

I have some very serious concerns about some concrete situations, particularly in the case of men on electronic monitors who are confined to their home who have some history of domestic violence. I have real concern about the family that's imprisoned with that man.

I have concerns about women who are sentenced to electronic monitoring because, as I mentioned, most of the women I see in the jails and penitentiary are victims of physical and sexual violence and so I have some real concerns about seeing them imprisoned in their homes with what may be an abusive partner.

I think there may be some situations where electronic monitoring makes sense. I can see it used to supplement a court order to stay away from someone, for instance, when someone is charged with stalking or charged with domestic violence. Maybe it would be helpful if a woman who's under threat by someone like that could know when he's within 500 metres of her house. Those kinds of things would be helpful maybe.

Mr Crozier: But this government doesn't want to worry about the women who are under threat like that, it's just, "Throw him away."

Mr Pouliot: Bully boys.

Mr Crozier: Maybe that's too harsh. Maybe that's too harsh. Maybe they are concerned --

Interjections.

Mr Gilchrist: Maybe just a little incendiary.

Mr Pouliot: You're kind and generous.

The Chair: Order.

Mr Crozier: I don't recall getting as excited when you said something.

Mr Gilchrist: We didn't say anything about the Liberals.

Mr Crozier: I just said, maybe that's too harsh. What I'm saying is though, and I think it's bearing out, that you don't mind taking funds away when it does involve women and children and you do simply want to throw people in expensive jails. You've kind of said that this is the thing to do.

Mr Curling: A quick comment, Mr Chair.

The Chair: There's less than one minute.

Mr Curling: Even less than one minute, just a little comment. I was watching on the weekend -- Cops. You know the program, Cops. If you notice, the fact is that many of these officers -- those who are most vulnerable in our society are the ones who are shown. There are poor people, cops going in there, and it becomes a movie now. I've never seen basically the upper class or middle class being invaded that way. The intrusion, as I see, on people's privacy really sometimes comes down to people who are on the lower strata for economic level, and that bothers me. I'm sure that those who are under surveillance and are being punished in our society are aware halfway homes are being closed and those were the most vulnerable. That bothers me, and I hope our government can be more sensitive in the future. Thank you very much for a wonderful presentation.

Ms Forestell: Thank you.

The Chair: Thank you very much, Ms Forestell.

AUDIT ACT AMENDMENTS
ONTARIO SEPARATE SCHOOL TRUSTEES' ASSOCIATION

The Chair: Our next presentation will be made on behalf of the Ontario Separate School Trustees' Association. Welcome to the committee, gentlemen. I'd ask that before you begin you kindly state your names, introduce yourselves. We have allowed a half-hour for your presentation. Again, we would appreciate an opportunity to ask some questions of you.

Mr Patrick Meany: Thank you, Mr Chair. My name is Patrick Meany. I am president of the Ontario Separate School Trustees' Association and a trustee of the Dufferin-Peel Roman Catholic Separate School Board. With me is Patrick Daly, our first vice-president, who is also chairman of the Hamilton-Wentworth RCSS Board; Patrick Slack, our executive director; deputy executive director, Earle McCabe; along with John Jasenec, a chartered accountant and recently retired deputy director of education and treasurer of the Metropolitan Toronto Separate School Board.

I begin under the heading, Education is our Future and our Hope. In the midst of the debate and controversy which always follow every aspect of school reform, be it in the area of governance, teacher education, curriculum, or the size of school boards, the most obvious and difficult task is to ensure that the primary purpose of our educational system, the education of our children, is never obscured.

Our association has sought therefore to respect four basic principles:

-- Whether or not the proposed reforms are beneficial to learning.

-- Whether or not, and to what extent, the reforms affect the lives of the children in our schools.

-- Whether or not the reforms correspond with the wishes of parents who have chosen a Catholic education for their children.

-- Whether or not the reforms make the most efficient use of all available human and financial resources for the education of our children.

It is within the context of these principles that we have framed our responses to various reform proposals. They are the principles we will use to guide our response to the proposed amendment to the Audit Act.

The proposed amendment would greatly expand the objective and scope from an inspection audit of accounting records to an audit that would include an evaluation and opinion on the effective use of funds. The Provincial Auditor would be given the authority to perform value-for-money audits of all provincial transfer recipients.

Under the current provisions of the Audit Act, the Provincial Auditor can conduct a value-for-money audit of the various provincial ministries' programs but can only conduct inspection audits of transfer payment recipients.

While one half of the provincial budget is transferred to several thousand agencies, it is our understanding that value-for-money audits would be applied only to the grant recipients under schedule A, namely the MUSH sector -- municipalities, colleges and universities, school boards and hospitals. The approximate annual grant to schedule A grant recipients is $25 billion. Schedule B grant recipients -- general welfare, family benefits, allowance recipients, medical practitioners, music, pharmacists, unconditional grants to municipalities etc -- are not intended to be subject to value-for-money audits, although schedule B grant recipients account for another $14 billion in annual transfer payments.

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Under the current economic and social climate, the trend is towards more accountability and assurance of efficient use of funds. We strongly believe that accountability and efficient use of funds are the norm of separate school boards and other assessment-poor boards in Ontario.

The proposed amendment to the Audit Act, which would greatly expand the authority of the Provincial Auditor, is in our opinion a further intrusion of government. Contrary to the Common Sense Revolution, it is another level of authority.

We are pleased to have the opportunity to respond to the proposed amendment to the Audit Act and to express our concerns.

There is accountability to the members of the board, and through them to the pupils, parents, ratepayers and to the community at large. In today's climate, parents, other ratepayers and the community at large do not hesitate to express their views on any aspect of a board's operation, programs and services. Delegations addressing the board on matters of concern are a common occurrence.

The three-year term of trustees gives ratepayers ample opportunity to evaluate the effectiveness of the system and the trustees. As a result of the wide discrepancies in the per-pupil cost of operation, it is difficult for ratepayers to understand the costs of education. If the province were to implement education finance reform, including provincial pooling of all non-residential taxes and the sharing of this on a per-pupil basis, equity would be assured for every student and ratepayer everywhere in Ontario.

If the Ministry of Education and Training were to proceed with the costing model as developed by the education finance reform work group, this would assure the government and ratepayers of the effective use of all funds. Accountability of school boards to both the ratepayers and the government would be further increased by the introduction of the costing model.

Annually, each board submits an audited, very detailed financial statement to the Minister of Education and Training in addition to annual estimate and revised estimate statements. These are complemented by detailed reports on an annual or occasional request basis by the ministry. For example, each board must submit an annual detailed plan for its special-education program in a format which includes prescribed data required and specified by the ministry.

Should the proposed amendment be approved, we strongly urge that an academic supervisory officer, independent of the board being audited, be part of the provincial audit team. An academic supervisory officer would provide valuable insight and greatly facilitate the understanding and implications of any conclusion that might surface during the audit. It would add the important educational component.

An examination of the per-pupil costs published annually by the Ministry of Education and Training shows substantive lower costs per pupil by assessment-poor and grant-dependent boards compared to assessment-rich and less-grant-dependent boards. In Metropolitan Toronto, for example, based on 100,000 students and relative costs per pupil, the annual operating cost for the Metropolitan Separate School Board is approximately $175 million less than its coterminous boards. This statistic applies relatively across the province for assessment-poor, grant-dependent boards in comparison to their coterminous boards.

Assessment-poor boards are efficient. Efficiency is a trademark of separate boards and other assessment-poor boards in general across this province.

Mr Patrick Daly: A value-for-money audit, although undefined at the moment, is anticipated to be quite exhaustive. We express our great concern about the demands of a value-for-money audit on the school board staff. For example, a provincial inspection audit conducted at one of our separate boards consumed over 300 hours of staff time for auditor, staff interviews and consultations. Additionally, the staff hours required to provide the various analyses and information needed by the auditors were countless. The provincial audit consumed about 3,500 hours for the provincial audit office staff. We expect that a value-for-money audit would increase the demand on scarce staff time. This is to the detriment of the board's operation.

The actions of the provincial government, in targeting central office staff for a reduction, will further erode the staff available to assist the provincial audit staff. In these times of fiscal restraint, the increased scope of the audit to include a value-for-money component will increase costs to the province and school boards. We question its value.

The annual report of the Provincial Auditor traditionally accentuates the negative. This is particularly reflected in the media reports. A value-for-money audit necessarily will focus on negative attributes no matter how insignificant. These relatively insignificant negative findings will be extrapolated from a probable single instance or two to the system at large. Positive attributes of a system or process may be largely ignored and not reported.

Findings reported out of context, whether relatively insignificant or serious, can be devastating to ratepayers, trustees and the board itself. It is therefore necessary that in a value-for-money audit, both positive and negative findings be placed in perspective. It is also imperative that board staff have a full opportunity to review the value-for-money audit report prior to its release. Board comments on the reports must be taken seriously prior to any release of any report. Again, the report should state the positive as well as the negative.

The letter dated January 7 from the Chair of this standing committee indicates that several thousand agencies are recipients of over half the provincial budget. The letter also indicates that the line of accountability for the expenditure of these moneys is frequently unclear.

The official reports of debates of the standing committee on public accounts, Hansard, dated February 1 and February 2, indicate that as previously mentioned in this submission, only those institutions listed in schedule A, the MUSH sector, would be subject to a value-for-money audit, and those listed on schedule B would not require or need a value-for-money audit, according to the Provincial Auditor.

Those on schedule A, the MUSH sector, account for $25 billion, or 63%, and those on schedule B for $14 billion, or 37%. We do not know the rationale for focusing on 63% and ignoring 37% of the provincial transfer payments. The above comment is more perplexing in the MUSH sector, which is already heavily accountable, has efficient systems and because of previous and current provincial reductions has effected efficiencies in human resources, program and service delivery. This is evident in our member separate school boards.

That having been stated, what level of provincial transfer payments would generate a need for a value-for-money audit? It is our opinion that if the proposed amendment is passed, the value-for-money audit should include all publicly funded bodies, whether the funding is partially by provincial grant and partially by the ratepayer or whether the body is funded fully by the ratepayer.

It would be discriminating to audit only those bodies that actually receive provincial funds and not audit those who receive little or no provincial funding. Whether funded by the provincial grant or by direct taxes, the funds come from the same ratepayers. It is therefore important that all public bodies under schedule A, regardless of funding source, be included in any value-for-money audit. It is imperative that an audit report identify not only the problem but the perceived solution to the problem.

It is important that once problems are identified, a proposed solution be included which incorporates consideration of the current funding inequities for assessment-poor school boards and the need for education finance reform.

In conclusion, our association has reviewed the proposed amendment to the Audit Act which would provide the Provincial Auditor with extended authority to conduct value-for-money audits of provincial transfer payment recipients. Our association is aware of the current trend to increased accountability and the assurance of the effective use of funds. However, our submission indicates our concerns about the proposed amendment to the Audit Act.

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The current authority for an inspection audit, in our opinion, is of sufficient scope to enable an evaluation of a school board's operation.

It is our understanding that unconditional grants would not be subject to a value-for-money audit and that only specific grant programs would be included for audit.

Specific programs are subject to sufficient scrutiny by the Ministry of Education and Training since detailed annual reports are submitted for the programs. One example would be the special-education programs provided by school boards.

In our opinion, the cost benefit of a value-for-money audit to specific grant programs is minimal. Also, it is impractical in view of the additional cost of conducting the audit by the Provincial Auditor's staff, the redirection of board staff time to assist the provincial auditors.

Our comments pertaining to accountability, efficiency, impact, eligibility for value-for-money audits and proposed solutions express our further concern regarding the proposed amendment.

We urge the standing committee on public accounts to consider our concerns carefully. We wish you well in your deliberations and look forward to your final report. The opportunity to express our opinions and concerns is greatly appreciated.

Mr Meany: That completes our presentation. We are prepared to receive questions.

Mr John Hastings (Etobicoke-Rexdale): Thank you for coming, gentlemen. I'd like to ask any of you whether the existing inspection-type audit ensures all the principles that are contained in a value-for-money audit. My second question relates to the detailed reports you reference from the Ministry of Education. Do these reports actually contain specific either anecdotal or numbers-type indicators as to ensuring accountability, efficiency, impact, eligibility for value etc that you seem to be so opposed to the auditor's proposal?

Mr Meany: I believe that the answer to both is yes, but for any detailed response I think I would ask Mr Jasenec, who knows these things very intimately.

Mr John Jasenec: With respect to the first question, whether the inspection audit was one that was sort of equal to a value-for-money audit -- was that basically it?

Mr Hastings: Yes, and if it is and the Ministry of Education also requires detailed annual reports, are all the concepts or elements of a value-for-money audit contained in those items?

Mr Jasenec: The answer to the first question: One of the reasons is that the inspection audit covers pretty well the entire gambit of the board's operation. Under the proposed amendment it would be limited to those specific grants. In our experience, the inspection audit performed at one of our boards was quite exhaustive, and I believe it was sufficient to address the concern of accountability and efficiency.

With respect to the second question on the special-ed document, I know that the Metropolitan Separate School Board submission, a document about so thick -- I don't know how many pages but it's quite considerable -- is quite detailed in terms of the board's current special-education program delivery and services, its costs and also any proposed amendments to the proposed delivery and anticipated costs. It's very detailed and very comprehensive, and I think any analysis of that particular report would give tremendous credence to accountability and efficiency.

Mr Hastings: Is it you gentlemen's considered opinion then that the auditor's proposed amendments are purely irrelevant and time-wasting? If all these items are already contained in the existing data?

Mr Meany: The job is already being done, and particularly in respect of our school boards, the very internal need for efficiency because we get less per student back from our taxes than the other boards. In order to provide the level of education that we do, we must be efficient.

The Chair: Time for one short, sharp one.

Mr O'Toole: Just a quick question, if I may, to Mr Meany. I suspect the opening part of the presentation indicated a reluctance to participate or recognize the importance of these audits. Back on page 5 you say that if they're going to have them, you recommend that all public bodies be audited.

I guess my question is very simply this: Don't you think that if you're doing a statistical check between two systems, two boards, for example, funding of busing and the proper use and efficient use of taxpayers' dollars, that that is an appropriate, indeed, necessary function that should be performed so that the people of Ontario are convinced that it's a wise use of resources?

Mr Meany: I don't connect the opening of your question with the end. You were referring to what we say on page 5 that all --

Mr O'Toole: You basically don't want the audits. You think they're redundant, but then on page 5, you say, if they have to be done, all public bodies should be done.

Mr Meany: That's right. They shouldn't be done selectively. For instance, in the transfers, some bodies get transfers, some have sufficient assessment, and we don't think it should just concentrate on those that receive the transfers.

Mr O'Toole: I guess the second part is more important. If you're going to audit a program spending, for example, busing, don't you think it's important to look at both systems and see if there's fairness?

Mr Daly: That's why specifically we outlined in our report that we're in support of the education finance reform work groups' publishing of a costing model that all school boards in the province would have to publish on an annual basis, and their local ratepayers, the provincial government, whomever, could see the various comparisons between boards, just to use the example that you mentioned, transportation. And they could question, why is one board so much higher than in others? So that is in place already.

Mr Crozier: I want to say at the outset that I share your concern about assessment-poor boards. We've had a great deal of discussion of it in Essex South and Essex county in particular. In fact, I'm constantly or at least frequently meeting with the school boards to discuss these issues. Assessment-poor boards are efficient. Maybe they're efficient because they don't have very much money.

But in any event, you've made the statement that we already get very detailed financial statements that lay out the expenditures of the board and that that's reported to the Ministry of Education and Training.

Unfortunately, from my view, and I'd like your comments, these reports, these statements, may have verification of an external auditor that essentially say that if the director of education had authority to spend money, his or her signature was on that document, or if a superintendent or a department head had authority to spend the money, their signature was on that document, and that, according to accounting principles, the books seem to be in order.

But what we're saying here is that may not just be enough, that the external auditor says, "Yes, every cent that was spent had authorized approval," or had approval. What we are saying, though, is that there should be some way that we can say, "Although authorized, we got a bang for our buck." I'm a little surprised that we're not, and you may want to comment further, you talked about the time it takes to do these value-for-money audits. Well, the point is that if you spend some time and you get a bigger bang for your buck, then it's worth the time spent. Wouldn't you agree?

One comment: It was said or even reiterated that these financial audits have the same significance as a value-for-money audit, and I beg to differ with you. I think they're two entirely different approaches to auditing.

Mr Meany: Before I ask Mr Jasenec to comment on the accountancy part of it, I just want to say that there has to be cost-efficiency also in how you examine things. For instance, if you spend more money and add another level of authority and create more bureaucracy, a steamroller to get a fly, it's probably not worthwhile. But on the more accounting details, I'll ask Mr Jasenec.

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Mr Jasenec: Yes, if I can address the last comment. I would agree that there's certainly a significant difference between an inspection audit and a value-for-money audit. But it's basically our opinion that in this particular case, particularly with separate boards and with the reporting requirements, that the effort that would be established to conduct a value-for-money, both in terms of its limited scope and its effectiveness, would be very minimal and questionable.

With respect to the question of efficiencies, I can assure you that, particularly in my last 10 or 15 years with the Metro separate school board, with expenditure control, social contract, grant reductions, I can assure you that at the budget time, every line of expenditure is gone over extremely carefully. We need, and I believe all separate boards and assessment-poor boards need, to get the biggest bang for the buck because we don't have too many bucks to get a bang out of.

So it just naturally forces efficiency and particularly in the budget process -- and not in only at the budget process time, but throughout the year when the various expenditure levels are monitored and, believe me, efficiencies are being enacted. Then it becomes a question not only of how do you spend your dollars, but also, how can you save dollars? In the past five years, for example, at the Metro separate board, we've experienced downsizing, restructuring. We've reduced our staff by approximately 600 people and all of that is just producing more efficiency, on top of the hardship, of course, on the staff.

At the Metro board, for example, we're operating at 50% of the administrative costs of the coterminous boards and that's quite significant. And as the brief mentions, also we're operating on $175 million less than our coterminous public boards in Metro Toronto for 100,000 pupils. They've got 300,000, we've got approximately 100,000, but simply based on a 100,000 pupil level, that's a $175-million efficiency in Metro alone.

Mr Pouliot: Thank you, gentlemen, as I echo my colleague's sentiment of welcome. With respect, the impression I get, and it's vivid -- the methodology, the style goes straight to the heart. You, on the one hand, do not wish to have a value-for-money audit. You feel that you are an elected body so you have to respond, you're under scrutiny. You also have inspection, financial audits there too. But you are inclined that if the sky will fall anyway, if you get beat up, that everybody should get beat up. At first you say, "Not me, not you, but the fellow behind the tree." But when your number comes up, you want all-inclusive. Then you nuance, if one is to read between the lines, and when you do that, you give yourself some latitude, you can give whatever interpretation, it's quite easy.

My first question is: Approximately what percentage of money that you get from the province is allocated to salaries and fringe benefits? Grosso modo, it does not have to be exactitude, a ballpark figure.

Mr Daly: It's 80%. If you'd look at boards throughout the province, it would be close to 80%.

Mr Curling: It's 80% of what?

Mr Daly: The question was, what was the percentage of the budget that went to salaries and benefits?

Mr Pouliot: Yes.

Mr Daly: It's 80%.

Mr Pouliot: By statutes and by the force of bargaining, these are givens, determinants where value-for-money -- and we often talk about the thin line -- would not apply here. For instance, if you pay your board of education director more money than the Premier of the province gets, under less scrutiny, but we'll let the jury --

Interjections.

Mr Pouliot: The Provincial Auditor could not, say, issue a judgement because hence you become political to say, "That is value for money." The thing is, our friends will tell us, there's only one taxpayer in the final analysis. What's wrong with a value-for-money audit? What scares you when you cannot even define the determinants, line-by-line, what is a value for money audit?

The example of the school bus was mentioned. If it's idle during July and August and there's a senior citizens' across, if you have a low-floor school bus with wider doors, why not use it? It makes sense to all of us. Why don't you rearrange your schedule to fit the public school? You know, we have two systems: public and public-separate. Why don't you rearrange your schedule by 10 minutes or 15 minutes, in some cases, so the buses that were half full or half empty will be full because you're using the some buses? It makes a lot of sense. You don't have to emanate from U of T in nuclear physics to understand that because that's what the taxes pay -- but you're already doing a lot of those things.

I want your concern on another threshold, your comments: You're getting an envelope from the taxpayers, and it seems, given the times, that each and every year there are fewer dollars. There is supposed to be a tradeoff. When you get fewer dollars, it gives you more latitude. That way you have more flexibility to reconcile the fewer dollars. In other words, you get the government out of your lives as much as possible. You feel like you're already protected, you're a legal entity. And I tend to agree with you.

Then you make the pitch for pooling, but we've been around long enough, we would be disappointed if we didn't see it here.

If the committee agrees and if the House agrees that the Audit Act will be amended, we would have to work together. I'm torn at this point. My gut feeling tells me: "Damn it. Let's do it." And then maybe sometimes the dark side of me says, "Whatever the government says, don't do it." But this is not that kind of committee, and I have to yield to say spontaneously, if it's going to be done, let's look at the terms of reference. It's not going to be under the cover of darkness and somebody's going to raid your books and, like you've mentioned, the fear that you will highlight the smallest possible thing and then it takes on extraordinary proportions and that gives us a sentiment of incompetence, therefore saps our confidence. What is it that you are afraid of if we conduct -- or are you -- a value for audit so that we, Gilles Lunch-Pail and all other taxpayers in Ontario, get better value for money?

Mr Meany: It's not a question of fear. We have nothing really to hide. It's a question of cost and the efficiency coming in to make sure that there is efficiency. You find out very early on, and it's worth underlining, that within the envelope there are two different kinds of things. There are the things over which we have discretion and those over which we do not have discretion, and it's important to keep that in mind.

Mr Daly: And I just make just one brief comment. I want to echo that it has nothing to do with fear. It's autonomy as well, and that a local board has the right, if the trustees so in their wisdom decided, to conduct a value-for-money audit in their area. And clearly, there may be cases where that's happened, and that should be left to the local board of trustees.

Mr Pouliot: I'll substitute "anxiety" for "fear" and I stand corrected. Thank you.

The Chair: Gentlemen, thank you very much. Is there a concluding remark?

Mr Patrick Slack: I wanted to make one very short remark. I appreciated the comment about you would be disappointed if we didn't mention pooling. I think if we want to look at true accountability, we will have to look at that. That is where our children are, and if we can't share the resources of this province with all the children, we are not accountable.

The Chair: Thank you very much, gentlemen. I appreciate your time. The committee stands adjourned until 2 o'clock this afternoon.

The committee recessed from 1209 to 1403.

The Chair: Good afternoon, ladies and gentlemen. Welcome to the standing committee on public accounts. This afternoon we'll be hearing from a number of presenters who are concerned with some possible amendments to the Audit Act.

ASSOCIATION OF LOCAL OFFICIAL HEALTH AGENCIES

The Chair: Our first presentation is being made on behalf of the Association of Local Official Health Agencies. Welcome to the committee, gentlemen. You have one half-hour for your presentation, and please provide us with some time, if possible, for questions.

Mr Gord White: Thank you for the invitation to speak to the proposal to amend the public Audit Act. I'm Gord White, the executive director of the Association of Local Official Health Agencies. With me today is Dr Robert Kyle, who's the medical officer of health for Durham region health department and also serves as our association's treasurer.

The purpose of our presentation today is to provide the committee with some background on the public health unit services in Ontario, our current methods of accountability and our perspective on the proposed amendment to the Audit Act. We intend to make our presentation for about 15 to 20 minutes and leave the remaining time to respond to any questions the committee may have.

Now, what is ALOHA? Well, first of all, the Association of Local Official Health Agencies -- this is apart from the Hawaiian reference -- is the collective voice of Ontario's public health units. Our membership includes medical officers of health; boards of health; the Association of Public Health Business Administrators; the Ontario Society of Nutrition Professionals in Public Health; the Ontario Association of Health Promotion Specialists in Public Health; ANDSOOHA, which is public health nursing management; the Ontario Society of Public Health Dentists; the Association of Supervisors of Public Health Inspectors of Ontario; and the Association of Public Health Epidemiologists in Ontario.

Our role as an association is to provide leadership and expertise on the management and delivery of efficient and effective public health services. We advocate for the role of public health units on public health issues that promote community wellness, and we serve to help our diverse public health units, which represent urban and rural, northern and southern communities in Ontario, reach consensus on issues affecting them.

Who is on a board of health? Well, some of you probably have been on a board of health before, but for those of you who haven't, a board of health represents the historical tie between health and local government. They are locally responsible for the delivery of public health programs in their community, and most boards of health in Ontario are comprised of provincial appointees, who are community citizens appointed by the Minister of Health, and elected municipal representatives. In nine of the regional municipalities, boards of health are made up entirely of elected representatives.

Funding for our programs is 75% provincially funded and the 25% is municipal funding, except in Metro, where it is 40% provincially funded and 60% municipally funded.

What does public health do in Ontario? To understand why public health units deliver services in the way they do from their unique perspective, you've got to know a little bit about their history. So if you'll indulge me for a moment, I'll go through it.

From the outset, the goal of public health has been to reduce premature death as well as prevalence of disease and disease-producing discomfort in the population. While other health care providers receive individuals with problems and treat them in order to obtain immediate results, public health units plan and deliver services for the long-range improvement in the health of the population. Over the years, the greatest improvements in the health of the population have resulted from improved nutrition, smaller family size, the introduction of sanitation and immunizations. These improvements are consistent with the public health approach, which is focusing on the whole population and using preventive measures.

Public health units began in Ontario in the early 1800s when town councils hired physicians and inspectors to protect health in the era of early industrialization and urbanization. Those health professionals focused their attention on controlling epidemics and ensuring the safe supply of potable water and the safe removal of garbage and sewage. They applied the best scientific knowledge in a very practical fashion. They were intimately connected with the community and reported directly to town officials. Their activities reflected the societal values of the time and their programs consisted of collective social action.

The public health model of service delivery continues as a community-based movement to address public health needs. It continues to change and evolve as communities redefine their needs and priorities. In the early 1900s, public health nurses were added to provide health education to families in the community. Clinics were established to control the spread of venereal disease.

Zooming up to the 1970s, with the Lalonde report, it was recognized that lifestyles can make an important contribution to health. Public health units developed programs to encourage behavioural change. In the 1980s, we realized that unhealthy lifestyle habits do not develop in a vacuum and that the determinants of health, including income, employment, education, shelter, play an important role in lifestyle choices. Public health units developed expertise in community mobilization using their extensive partnerships in the community. At the same time, community treatment programs were advocated to reduce the cost of institutional care and home care programs were assigned at that time for the most part to public health units.

Today the greatest benefits to health continue to come from public-health-related activities. For example, within the last few years there has been a 95% reduction in hemophilus influenza B meningitis, the most common type of meningitis in youngsters. A hepatitis B immunization program has been implemented which will drastically reduce the incidence of this infection in Ontario, and the current second dose measles program will pretty much wipe out measles in Ontario. There has been a 30% reduction in age-specific cardiovascular mortality, primarily as a result of improvements in lifestyle. There have been more cancer deaths avoided in recent years due to the reduction in cigarette smoking in the population than to all the improvements in cancer treatment services throughout the province.

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Now, a public health approach includes the assessment of health status and health issues; the engagement of health policymakers and the community as partners; and services which are directed at individual, social and environmental factors. The scientific contribution to public health has increased substantially. Health professionals in public health units now include nutritionists, planners, physiotherapists, health educators and epidemiologists. Communicable disease control and environmental protection remain essential cornerstones of public health services. However, public health unit practice has expanded to include new skills in the area of advocacy for public policy, the psychology of behavioural change, biostatistics for the assessment of health problems and the evaluation of programs, community development and mobilization for partnerships as well as risk assessment, risk management and risk communication for effective response to health hazards. Present public health characteristics include a focus on the entire community, public funding and direct accountability, a preventive focus, community mobilization, a multidisciplinary approach, advocacy for healthy public policy and a recognition of the determinants of health. It's fairly complicated when you look at it all.

Public health units continue to offer the greatest potential for improving the health of the population in the future as they work with the community and apply up-to-date scientific principles to practical health problems.

So with all of that, what about standards and accountability?

The standards for public health units come from the legal authority under the terms of the Health Protection and Promotion Act, which was first put in in 1983. Part II, section 5 of the act specifies that boards of health provide or ensure the provision of a minimum level of public health programs and services covering community sanitation, control of communicable diseases, preventive dentistry, family health, nutrition and public health education. Section 7 of the act authorizes the Minister of Health to develop and publish guidelines for these programs and services.

All boards of health are required by the sections of the act to provide as a minimum the programs and services specified in these guidelines. It is expected that boards of health will deliver additional programs and services in response to local needs, as acknowledged by section 9 of the Health Protection and Promotion Act.

The standards for these mandatory programs have developed around five key principles implicit in the mission and goals of public health. They are:

That health is a positive concept with known determinants.

That there needs to be strategic planning for health and for addressing major public health problems in Ontario through established goals.

That the efficacy of actions is aimed at achieving improved health, with an emphasis on general strategies of primary prevention and on health promotion.

That there be an efficient and effective use of resources and utilization of interdisciplinary teams to gain health promotion excellence.

That there be relevance, responsiveness and accessibility of mandatory health programs for all Ontarians.

For each program standard that public health units use, the following components apply:

That there is statutory authority for the program.

That each program has a goal.

That there are objectives which specify the desired results of the program for the province of Ontario. These objectives are measurable targets and, at this time, are targets for achievement by the year 2000. In the absence of adequate baseline data, objects are directional in character. The local objectives are established by each board of health in its annual planning process and indicate movement towards or maintenance of the desired provincial outcome.

That requirements ensure that boards of health provide a service directly or in some cases see that other community agencies provide the service adequately.

That staffing emphasizes an interdisciplinary approach and consistent employee qualifications as defined by the Health Protection and Promotion Act.

That there is monitoring and evaluation which ensures that indicators for each program standard are specified prior to the implementation. These indicators are used to assess compliance with program requirements and achievement of program objectives.

The successful development and delivery of these programs and services require boards of health to engage in ongoing planning, program evaluation, priority setting and needs assessment. In monitoring the implementation of these mandatory programs, the Ministry of Health expects that boards of health be able to demonstrate community partnership, planning and evaluation.

I'll just give you an example of one public health program. This one is called Children in Need of Treatment; the acronym is CINOT. It's a dental screening program. We think it's a pretty good example of service delivery and accountability.

The CINOT program has public health unit dental staff screen odd-aged children annually in schools for dental problems. For instance, my daughter is nine years old and she had an option to be screened at school. She won't be screened again for another two years when she's 11. Its purpose is to catch each dental problem before they become serious. We know that of the school-age children screened, 8% to 10% are referred to their dentist for urgent dental care. The kids from some of these families cannot afford the care, so the CINOT program steps in and funds the dental work. This is a preventive dental health program that is cost-effective. We know that children's teeth are saved by this preventive care.

What is the value of a tooth saved? This is hard to measure exactly, but we know that a $30 filling, if not done today, will probably result in a much more expensive $83 stainless steel crown next year or perhaps something worse. We also know that children with bad teeth often make repeated trips to the family doctors and receive prescriptions for antibiotics. So it pays to have programs like this in place.

Since the CINOT program sees kids more than once, they can check on the work that was done two years ago to see that it was done, and done correctly. Apparently, after its first year of operation there were no more cases of dental fraud when local dentists knew that public health dentists were checking their work. As well, the CINOT program will not approve unnecessary dental work like, for example, filling baby molars that are probably going to fall out anyway when the child gets a little older. So almost every aspect of this program can be measured for its effectiveness. As well, some health units have started computerized staff-tracking programs which have coded sheets to track staff time. Using this information, we can see that there's an average of $3 per screened child in this program.

A little commercial here: We feel so strongly that we can deliver these programs better and cheaper than other providers that our association supported the Ontario Society of Public Health Dentists' proposal to assume responsibility for all dental screening programs offered in Ontario.

There are many public health examples of program efficiency and accountability. As our chief medical officer of health, Dr Richard Schabas, likes to say about immunization programs delivered by public health units, "Immunization doesn't cost money, it saves money." We can account for all aspects of these programs. We can measure the outcomes and we can extrapolate results and the savings to the health care system.

However, as is the nature of some public health programs, each variable in every program is not so easy to measure. While we can measure the number of participants in a bike helmet awareness program and we can probably conduct follow-up studies later to determine the number of people using helmets when they ride, further long-term information may not show up for years. This is true of many lifestyle public health programs. It's difficult to measure someone who didn't get a heart attack because we taught them to eat right and exercise more when they were young. It's hard to measure someone who didn't get lung cancer because, due to one of the programs that we offered, they didn't smoke in the first place.

Many public health programs participate in accreditation through the Ontario Council on Community Health Accreditation. The sole purpose of this organization is to improve the quality of public health programs and services in the province.

So in the end, what's our perspective on value-for-money audits? Well, our association supports the principle of value-for-money audits. Speaking on behalf of public health units, value-for-money audits are merely an extension of the type of accountability processes that are already in place. As I'm sure you're aware, the Ministry of Health already conducts program audits of its transfer agencies. Many public health units have participated in this process. Boards of health hold public health units accountable to outcome measures, and the Ministry of Health holds boards of health accountable. We have an accountability process locally and provincially.

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I guess for our opinion on independent value-for-money audit, well, we would welcome this. A trained independent auditor with a fresh perspective is always useful in any organizational analysis. Big companies hire consultants for this type of information, and we see its value too. However, there are a few qualifiers to this statement. We do have a few concerns about the process and its outcomes:

(1) Considering the magnitude of the auditing transfer agencies and our Provincial Auditor's statement that his staff is down 26% since 1991 and government expenditures have increased by 21%, how realistic is the vision of even more labour-intensive analysis?

(2) How will the Provincial Auditor, if given this new responsibility, be able to assess the scope of programs and services offered by transfer agencies? Further, how can they assess public health programs effectively? We're concerned that there may be a possibility that there could be an audit mentality that will take over that could miss the long-term nature of these programs. That's something we think we need to mention.

(3) What would the role of the Institute for Clinical Evaluative Sciences, ICES, be in this evaluation?

(4) How can the Provincial Auditor follow up on the recommendations? What are the plans in place for this? As you know, following up is just as important as the recommendations. So I suppose before we can make recommendations, these caveats need to be addressed.

To conclude, we support the principle of value-for-money audits. We see them as effective management tools to evaluate programs, outcomes and deliverables. We also believe that as a government transfer agency we are accountable to the system.

Our only concern is with the quality of the audit. Auditors must be prepared to realistically evaluate the effectiveness of real-life, long-term, relational disease-prevention programs. This may be a lot different than anything they've evaluated before. As professionals in public health, we'd be prepared to do our part and to assist in this training or this evaluation.

Again, thank you for the opportunity to voice our thoughts on this, and we're prepared to answer questions.

The Chair: Thank you very much. The committee members have about three minutes available per party. We'll begin with the Liberals.

Mr Dominic Agostino (Hamilton East): I'd like to thank the presenters. I had the pleasure of chairing a board of health for about five years. I certainly understand the value and the work, particularly in the preventive nature, of what boards of health do across this province.

There are a couple of issues that were a concern and I think still continue to be, and that is the aspect of how much emphasis the government places on short-term costs of eliminating funding or cancelling a program and the tradeoff for the long-term costs of that prevention program. You talked about smoking cessation programs, a perfect example: the $100 we may spend today on a program, and on the other hand the hundreds of thousands that will be spent if that individual takes up smoking and then the diseases and so on that come from that.

So there's always been a sense, I think, that governments, and it's not necessarily just the government today but in the past as well, have not fairly looked at those and have always kind of looked at short-term fixes and said, "We're going to save this money, so the program is gone." Tied in with that is a direction of provincial government getting out of funding programs by shifting what are the mandatory programs versus sort of the discretionary type of programs, the ones that you must carry out, so therefore there must be government cost-sharing on a 75-25 basis or whatever other formula is applied, taking those programs and making them discretionary to the local government level, where you can carry that program out, but if you do it, it's 100% local cost rather than 75%-25%.

Do you see that pattern continuing now? And if that's the case, in both those areas, do you see that as having a negative impact on the delivery of local health care programs, and particularly prevention programs?

Dr Robert Kyle: With regard to the mandatory health programs and services guidelines which set the standards for programs, I think the ministry's reach has always been beyond our grasp. In other words, they are ideals that I don't think have been fully implemented throughout the province.

I can only speak for my health department, but as a result of shortfalls in funding from the province as well as locally, we have seen an erosion in staff and therefore service delivery to the tune of about 15% of my staff over the past three or four years. I haven't seen a shift in responsibility being transferred from them being provincial standards to local standards. The problem has always been that the reach has been beyond the grasp and there has never been enough money to fully implement them, and that has been accelerated in the last few years. I don't know if that's answering your question.

Mr Agostino: Do you feel there is enough weight given to the prevention aspects and the short-term costs in regard to long-term? When a decision is made at the provincial level to cancel funding for a program or to downsize a program that a regional board of health would carry out, in the short-term costs, again, of the prevention program, do you think there's enough emphasis given to the long-term costs? Is that given enough consideration, saying, "We're going to cancel this program because it's going to save us X amount of dollars," not considering the fact that cancellation of a preventive program may cost the government 10, 20 or 30 times more in the long term as a result of prevention that may not occur and of disease?

Dr Kyle: I'm not party to discussions that occur provincially. All I can say is that the focus has been and seems to always be on treatment of illness rather than prevention of disease. I think there have been some shifts towards disease prevention and health promotion, but not great shifts, and I think that is just a fact of life that we've had to deal with forever.

The Chair: I wonder if I might turn it over to Mr Pouliot.

Mr Pouliot: It's difficult, gentlemen, because we meet, like you, many organizations and many people, to remember the Association of Local Official Health Agencies, which you want us to refer to as ALOHA. I thought you were a travel agency for a second.

I see that you defined your mandate, your area of responsibility, as a relationship both at the urban and at the not-so-urban, the rural and remote, levels with the government. I also see an emphasis on volunteers, like Harry and Jane doing it after work as a good deed, good citizens trying to help. I also see, from the point of view of the committee, hence the Provincial Auditor, hence the value for money, that we could be embarking on a complicated bazaar. Not unlike entering Vietnam, it's easier than to get out of it.

I'm just wondering, having done this -- because your relationship with the government or with the Provincial Auditor, in its initial stages at least, could differ considerably from the established relationship of the Provincial Auditor examining the workings, the direct relationship of ministries, if you wish. With ministries, we have more ability to monitor compliance. We say: "These are our findings. What are your intents?" So the next year or the next time you are benefitting from a value-for-money audit, we would not wish to see that residual or perennial item on the books again. I'm just wondering, given the many facets and the variety, of course, of the group that you represent, if we would have the same ability.

I have one question. Under "A Few Caveats," you ask if the Institute for Clinical Evaluative Studies, ICES, will be consulted. I'm trying to marry the general text, the methodology, and this particular item. Why do you ask that? What is the relationship with your group?

Dr Kyle: I think the thrust of the comment is that a part of the expertise that we require to demonstrate effectiveness of programs is in the whole area of program evaluation. ICES, which has been around for a few years, has developed a track record in conducting health services research, including tools related to program evaluation. So I think it was not a rhetorical question but a question as to, okay, if the Provincial Auditor is requiring us to show more effectiveness, for example, has any thought been given to relying on other institutions to provide us with expertise? ICES was just one example of that.

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Mr Gilchrist: Gentlemen, thank you for your presentation. I was certainly paying close attention to a number of the words you used in your talk there. I don't mean this question to be at all frivolous; I say it in the context of what this committee is in fact pursuing here, an exploration of whether or not there is a need for an arm's-length entity, in this case the Provincial Auditor, to have a means of going in and ensuring not just that the dollars are being spent and being accounted for, but that they're being spent for value.

Again, not to be frivolous, but not knowing anything about your group before you came in here today, I guess the only question that comes to mind is, in the context of the accountability you talk about and purposes such as disease prevention or advocacy or determination of public health, I wonder if you can tell me how I would reconcile the Toronto Board of Health making it a cause célèbre to undertake a boycott of a commercial enterprise purely for political reasons and whether your group has endorsed that move or whether you plan on publicly repudiating it as being inconsistent with the aims and objectives of boards of health.

Mr White: I guess I can answer that question. With regard to the city of Toronto Board of Health, that was a decision that their particular board made and that was something they felt was important to their board of health. That was an issue that was not brought to our association prior to reading about it in the paper the next day or hearing about it on the radio. As far as taking action one way or the other is concerned, supporting it or not supporting it, we have not given that any consideration at this point.

Mr Gilchrist: Do you believe it's consistent with what boards of health were set up to do?

Mr White: There are 42 boards of health and the city of Toronto's was the only board of health that decided to take this action at this time. So we'll let the numbers speak for themselves, I suppose.

Mr Gilchrist: I'll take that as a "no." I believe Mr Hastings has some questions.

Mr Hastings: Mr White, with regard to the dental program for children, having served on a board of health twice as a city councillor, the chap we used as a dentist, who served on three boards of health as the actual treatment dentist for these children, came to us at least twice over those two terms pointing out the cost-ineffectiveness of your program that you spoke so glowingly about, in terms of there being no test, no eligibility. Anybody could come through the door with children and say they needed treatment. Within the prescribed types of dental treatment, he couldn't deny them. Then the moneys would run out, usually six to eight months into the fiscal year. Do you still proclaim the other side of the story, and if your story is true, why is his just the reverse of that?

Mr White: From my understanding of that issue, it's speaking to the fact of how much room the CINOT program has to go with the needs study. So as far as having records or bank statements is concerned, we don't get that kind of information to determine whether or not a family is in need. It's been said, and I've heard this said before, that some people concerned about -- you know, if somebody makes a statement that they don't have enough money, we pretty much have to take that at face value. That's the route that we have to go. The program itself is efficient. Whether or not the needs study should be stronger or allow more evidence to be accepted, that's something that I think needs to be discussed, but I've heard it said that some people think that people in our programs feel that it should have more information.

Mr Hastings: He believed that you could actually stretch the limited funds, in his instance, in the one year by two months additional if you had some kind of eligibility criteria so that the neediest folks got the dental treatment they needed.

Mr White: I think that speaks to one portion of the program -- how many people are eligible. I don't think that speaks to whether or not the program is effective, whether teeth are being saved and whether this program is preventative. But that is a concern.

The Chair: Gentlemen, thank you very much for your presentation.

COUNCIL OF ONTARIO UNIVERSITIES

The Chair: Our next presentation is being made on behalf of the Council of Ontario Universities. Good afternoon and welcome to the committee. I wonder if you might introduce everyone who's at the table with you.

Ms Bonnie Patterson: I'd be happy to. Mr Chair, members of the committee, thank you very much for having us here today. It's a pleasure to have this opportunity to share some thoughts with you. I offer apologies of the chair of the Council of Ontario Universities, Dr Ron Ianni, who is the president of the University of Windsor. The recent death of his chancellor has him unexpectedly tied up this afternoon with other alternatives. We have with us today, however, Jalynn Bennett, who is chair of Trent University's board of governors on my right, and on my left Dr Jim McAllister, who is a senior policy analyst with the Council of Ontario Universities.

With your indulgence, I'd like to spend 15 minutes or so making a statement on behalf of the universities of Ontario and then spend the rest of the time, obviously, answering your questions. In that regard, the people on my right and left would be very happy to participate as well.

At the outset, let me say that we see no issue with the Provincial Auditor in providing assurance to this committee that government funds are well spent. He is a servant of the Legislature, and to identify wasteful and less effective practices on the part of government as it goes about spending taxpayers' dollars is his job. This committee would not be well served if he were not doing his job effectively. The question is not whether he should audit government expenditures but how he goes about doing so and the scope and extent to which he conducts his audits in such a way that indeed they add real value to the work of this committee.

If we understand correctly the underlying reasons advanced by the Provincial Auditor in support of the proposed amendments, they appear to stem from two perspectives. The first appears to be that he believes that the Audit Act in its current form does not arm him sufficiently to serve his committee well. The second appears to be a lack of confidence in the abilities of the respective ministries responsible for transfer payments to administer these grants within a robust, relevant and appropriate accountability framework and to hold the recipients accountable.

His solutions appear to follow a simple logic. While we have not seen the specific wording of the proposed amendments to the Audit Act, we infer from the Provincial Auditor's presentation to this committee that to rectify the first he seeks to expand the power of his office to enable him, his successors and assigns to have total and absolute discretion over all aspects of the audit. To solve the second, he seeks to entrench what might be inferred as a one-size-fits-all accountability mechanism within legislation against which he will carry out his expanded mandate. He captures all of this under the label "value for money."

The universities of Ontario beg to differ with the Provincial Auditor. While we cannot speak for the other grant recipients who are equally affected by these proposed amendments, we believe that they are unnecessary, have no added value to this committee and, with particular reference to the governance of universities in Ontario, represent an unwarranted intrusion into the affairs of the universities.

Members of the committee know that this difference of opinion with the Provincial Auditor is not new. Members of the committee know that universities have proven time and again that within their respective governance legislation there is adequate accountability. Members of the committee also know that by any measure of value our universities are accomplished in producing graduates of high quality at among the lowest unit costs in North America. The universities of Ontario already provide excellent value, and existing mechanisms of accountability demonstrate this, which I will go into shortly.

So we believe that at a time when the government asks all segments of society to make sacrifices to fight the deficit and reduce the debt, we cannot stand by and condone these proposed amendments that would inevitably result in higher expenditures of taxpayers' money by the Provincial Auditor in carrying out, either directly or through out-sourced contracting with the external auditing community, very expensive value-for-money audits that have no incremental value sufficient to justify the expense. Not only will these high costs be incurred by the Provincial Auditor, such a value-for-money approach will result in additional costs for the universities in the province. In these fiscally difficult times for everyone, this is simply not affordable.

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Let me just turn for a moment to a bit of history as we place value-for-money auditing in the context of university governance and grant recipient accountability. In 1991, following the report of the then Provincial Auditor on the inspection audits of the University of Toronto, University of Guelph and Trent University, the committee spent considerable time discussing, not just the specific findings of the audits, but also the matter of value-for-money auditing.

Many of you may recognize the name of Dr Tom Brzustowski, president of the Natural Sciences and Engineering Research Council of Canada, and former vice-president, academic, of the university, who was at that time the deputy minister of the then Ministry of Colleges and Universities. Tom Brzustowski is a well-respected academic and public executive with years of experience on both sides of this issue. He had this to say to the committee, and I quote from Hansard:

"As far as the value-for-money auditing is concerned, I do not see universities having to be restrained from leaping headlong into that. I am not convinced that in terms of universities that it is a proven art and I say that also from the position in my former life of having been on a university audit committee for some years."

He went on to say:

"The fact is that when an institution has as visible an output in countable quantity...and we know what the inputs are and we know in comparison across university systems within this country that they are using less input, less resource to achieve the same output, then I say to myself that you would have to have a pretty cast-iron method guaranteed to give additional improvements before you spent a lot of time on it."

Later on, Dr Brzustowski elaborated further on value-for-money auditing in this way:

"If, for example, an attempt in a value-for-money audit was to decide on methodology of instruction, one method versus another, I am not sure on what body of expertise the people conducting the audit would draw unless they in fact called upon the academics themselves, and they are in the business of trying to improve things under the pressure of trying to be more productive all the time anyway, so I really wonder what significant improvements might arise from additional investment of effort."

We believe this was true then and remains even more true today when university funding from government has just been cut by 15% going into 1996-97. Indeed, the committee may well be aware of the brief that I gave early last month to the standing committee on finance and economic affairs on university funding as part of the 1996 pre-budget consultations. At that time, I highlighted the dramatic decline in government grants for each university student since the late 1970s, relative to government funding of schools, hospitals, municipalities and social assistance programs, while the number of university students increased by 40%. I also provided that committee with a comparison of our universities with those in the United States. Neither rocket science nor value-for-money auditing is necessary for anyone to conclude that the government -- indeed, Ontario taxpayers -- are already getting excellent value for money.

The committee might well ask, "If not the Provincial Auditor, to whom could we turn for the assurance that public funds are indeed well spent?" That is a very good question. The answers, in so far as universities are concerned, are already there. Let me provide the committee with the answers from two perspectives, the first from a university autonomy and governance perspective and the second from an accountability perspective.

University autonomy, legally and academically, is already understood, so I will not dwell on that today. However, what appears to escape recognition is the role and responsibility of each university's board of governors in exercising that autonomy. It is clear that the responsibility for ensuring that universities operate with due regard to economy, efficiency and effectiveness while delivering value rests entirely with the various oversight bodies, including senates and subcommittees of their respective boards of governors, but ultimately with the boards of governors themselves.

In 1991, when the external auditor for the University of Toronto discussed value-for-money auditing with the committee, Mr Geoff Clarkson, partner of Ernst and Young, said, according to Hansard:

"On...the question of comprehensive auditing or value-for-money auditing, all of the major auditing firms now have experienced staff who have been experimenting with and developing techniques for measuring criteria to measure whether money is being spent effectively. I think that this would be a group who could provide a lot of help to universities in developing standards for measuring outputs and input costs."

This view, articulated by a prominent member of the auditing community, that boards of governors of universities already have access to the expertise to help them fulfil their governance mandate and that the locus of value-for-money auditing rests at the institutional level, is further supported by the work of the Task Force on University Accountability, whose report was released by the Minister of Education and Training in May 1993. The task force was chaired by Mr William Broadhurst, retired chairman of Price Waterhouse in Canada, and I think it would be instructive to recall his interchange of views with this committee in September 1993, captured in Hansard. That interchange is particularly relevant to addressing whether the Provincial Auditor is really best positioned to conduct value-for-money audits. Members of the committee can readily refer to Hansard for the full text, but I will simply draw out some extracts to illustrate.

He stated, "Responsibility for ensuring that adequate accountability systems are in place and functioning properly rests with the governing board or council of each university." I would parenthetically add that with few exceptions, the recommendations of the task force were primarily directed at helping boards of governors strengthen their governance and accountability role.

In commenting on the task force's recommendations for a monitoring agency, he said: "I think the Provincial Auditor would find that he would have to retain somewhat similar kinds of people in any value-for-money audit approach. In a sense, the experts will have to be brought into the play, with particular reference to onsite visits." I might just clarify that Mr Broadhurst is referring here to experienced people in various parts of university activity, in a way reinforcing Dr Brzustowski's view.

In explaining the distinction between value-for-money auditing and inspection auditing, he said: "First, the inspection audit is what I might broadly call a financial audit, which is the audit that we're generally familiar with in the public sector for public companies and private companies and all kinds of institutions. It really attests to the fact that the various financial statements properly present the situations of the enterprise."

He then went on to say, "Value for money is an easy thing to say and is almost impossible to define." He further elaborated: "Value for money really requires a framework within the institution. The institution must decide how it's going to assess its own effectiveness. You can't do a value-for-money audit unless the institution itself has got a framework. Now, we're suggesting that the institutions create the framework. If the Provincial Auditor today went into some of the universities to look at the efficiency framework, he wouldn't find it, and therefore it would be rather difficult to audit it. I think there is some concern that someone coming from outside may bring different measurements to the university system that perhaps aren't applicable, measurements from other ways of doing business and that. The feeling of the task force is that it would be much better if the university system developed its own way of measuring."

In our view, it seems fair to conclude from this body of expert opinion that the responsibility for determining whether our universities deliver value for the money spent by them rests squarely on their boards of governors. They have the mandate and access to the tools from within the universities and access to their external auditors to seek that assurance. Anything else will overlay an unnecessary cost.

Let me turn now to the accountability perspective that I mentioned earlier and talk about the mechanisms that provide answers to the value question. To begin with, universities are surrounded by accountability requirements which, for discussion purposes, fall into two distinct sets.

The first, which I will simply label "preventive accountability," is the construct of all the conditions and requirements set by government to which universities must comply in order to receive funding from government. I picked the term "preventive" to capture the sentiment that until government is assured that the universities have the capacity, capability and control to meet the purposes for which funding is provided, it is not prepared to release funds, at least in part if not in whole.

The second, which again for simplicity I call "results accountability," are all those after-the-fact accounting and reporting activities that universities carry out to fulfil legislative and regulatory requirements and, in so many instances, to show their boards of governors and their various publics, including the government, how funds have been spent and what was accomplished.

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Without going into specifics, let me simply enumerate some of the preventive accountability measures. The bulk of the operating grants is allocated to universities by a government-controlled formula. Substantively, tuition fees are set by government and penalties are exacted for non-compliance when these fee levels are exceeded. New academic programs must be submitted for review by the Ontario Council on University Affairs if they are to receive government funding. Specific funding envelopes have their respective qualifying criteria for universities to fulfil before funds are released. Funds for capital projects, even after they've received ministry approval, are released only in stages, contingent upon submission of proof of satisfactory progress and performance, and each year the ministry reserves unto itself funds earmarked for universities as part of the global allocation, which it releases on a line budget review basis. These are not simple or new controls. They've been part of a long tradition of university funding.

Mechanisms for results accountability are even more numerous, and I have the pleasure today of leaving with the committee a sample of various types of public documents that are readily available. At the system level, the Council of Ontario Universities publishes documents that tell of the financial health of our universities, that tell of how well our physical facilities are utilized, that tell of the numbers of students we educate and what they study, the size of faculty we deploy and the financial resources that universities have at their disposal to carry out their missions of teaching, research and community service. We leave those with you today as examples.

We have processes for the cyclical review of academic quality of graduate programs of study carried out by the Ontario Council on Graduate Studies, OCGS. Mr Broadhurst even suggested that the procedures employed by OCGS could serve as the model for value-for-money assessment. The committee might be pleased to know that work is quite advanced in developing an audit process that would assess the ways by which universities conduct their undergraduate program reviews. It is our intention that by the end of the 1995-96 academic year this process will be in place.

For the Legislature, universities provide reports as their respective enabling legislations require, and for those without those legislative obligations, they provide them to the ministry. For the ministry, universities provide enrolment reports four times a year, each university provides annually an audited enrolment and fee revenues report, certified by external auditors, and we've brought examples for you if you haven't seen those before. They provide the ministry with audited financial statements, but more importantly, universities provide their respective boards of governors with all sorts of reports that help it provide direction to the university. Last but by no means least, we have the reports of the Provincial Auditor on the ministry as well as on the periodic inspection audits of the universities.

Taken each on its own, it may appear that the accountability they provide may not be adequate, but taken together, all of the preventive accountability measures and all of the results accountability measures represent a high degree of assurance to the taxpayers.

Before I bring my statement to a conclusion, I'd like to make a couple of observations.

My first observation is that the task force on university accountability "did not advocate a legislated accountability framework, and did not endorse the committee's recommendation to permit the Provincial Auditor to conduct value-for-money audits in Ontario universities," if I may be permitted to use the Provincial Auditor's phraseology as reported in Hansard.

The task force had good reason. Not only that, it pointed the way towards more cost-effective and more appropriate alternatives. The Council of Ontario Universities took the recommendations seriously, as did the minister of the day in his response to the universities on the recommendations. In recommendation 34, the task force recommended that the Provincial Auditor be given authority to conduct inspection audits of all funds provided by the government of Ontario for operating purposes, whether employed directly for these purposes or transferred to other accounts, and that this additional authority be granted preferably through a protocol with the institution. By making this recommendation, the task force recognized the Provincial Auditor's dissatisfaction with the limitations of his inspection audit and provided an appropriate solution. That solution is not to change the definition of an inspection audit, but to advocate a protocol that will enable him to better discharge his responsibility.

The Council of Ontario Universities embraced this recommendation fully and proceeded to develop such a protocol to meet the spirit and intent of the recommendation and submitted it to the Provincial Auditor, but regretfully he chose to reject it. I would be most pleased to provide the committee with a copy of the draft protocol if it is the committee's wish; I have one with me today.

The Council of Ontario Universities also embraced the task force's call to strengthen the ability of boards of governors to carry out their responsibilities and developed an orientation manual for members of governing bodies of Ontario universities. I leave a copy with you today in terms of the extensiveness of that guide.

My second observation is probably one that all members of the committee share. We are all caught up in a whirlwind of change, rapid change that is sweeping across the country and through this province in many ways, brought on by our fiscal situation, our demographics and our economy, to name just three, which are not only interlinked, but influenced by globalization. Government, in addressing its fiscal challenge, is also changing its funding and tuition fee policies at the same time as it announced plans through the vehicle of a discussion paper and consultation to envisage post-secondary education in the Ontario of the future.

The short-term impact of these changes is a declining shift in the balance of public funding of universities as tuition fee revenues take up a greater proportion. The net effect remains that universities will be restructuring in intensive, innovative and significant ways to continue to maintain accessibility and excellence for students.

The long-term impact is best captured by Ms Bouey from the Ministry of Finance, who appeared before the committee last month, when she said, "I think it's going to be pretty clear that the transfer payment universe that we have right now may look quite a bit different in a couple of years, or three or four years' time." That direction of change may well see a much greater degree of self-regulation and diminished direct government involvement in university affairs. The Provincial Auditor has argued that the greater the public stake in transfer recipients in the form of funding, the greater the compelling argument for him to conduct value-for-money audits to discharge his accountability to the Legislature. It may be worth noting that we expect the proportion of university revenues coming from the Ontario government to decline significantly in 1996-97 to between 40% and 45%, a proportion that is a far cry from the 80% or so that the Provincial Auditor had in mind.

One should ask, again, whether the boards of governors are not already best positioned and have the appropriate means to protect the interest of all who have a stake in the universities of Ontario. Amending the Audit Act as proposed is entrenching a current paradigm in the face of an emerging but different future. This is not the time to take precipitous and premature action on this front, particularly when all the evidence suggests that universities, each in its own way, are embarked and well on their way to actualize the recommendations of the Task Force on University Accountability.

Let me close by asking, should the Provincial Auditor have the right to carry out inspection audits without question? Does the Provincial Auditor need an amendment to the Audit Act to provide the assurance that the committee needs? Definitely not.

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Accountability frameworks are developing and will continue to be developed pursuant to the task force recommendations and they should be allowed the time to come to fruition, and we have made significant progress in this regard.

Are there other alternatives? Clearly, yes, as the task force has pointed out.

Thank you, Mr Chair and members of the committee, for your indulgence. We would be pleased to answer any questions that you have and we've left some information that may further your work as you continue your deliberations.

The Chair: Thank you for your presentation. Committee members, we really have less than five minutes. I will ask for your cooperation then, please, in keeping the questions brief, beginning with Ms Martel.

Ms Shelley Martel (Sudbury East): I guess in this business, perception is everything, and it becomes the reality. Let me try and explain to you where my concern is with respect to the position the council is taking.

You said on page 3 that you felt very strongly that in carrying out an expensive value-for-money audit there may be no incremental value that would be significant to justify the expense. I would have to say on that point, has one been done and how do we know that for sure? That's the first point.

Secondly, you made mention on page 5 that universities were still continuing to provide accessibility to students, despite the decline in funding from the government, and you said at the bottom of the first paragraph, neither rocket scientists nor value-for-money audit is necessary for anyone to conclude that the government, indeed Ontario taxpayers, are getting excellent value for money. I have to say, based on what? Is it based strictly on enrolment figures, or what criteria were you using to make that a reality?

The other problem you've got I think is that at the end of the day people who are members of boards of governors are not elected, as even school trustees are, so despite whatever protocol, memorandums of understanding, guidelines and everything else they're trying to work with, at the end of the day they don't have that accountability structure that we have to deal with as MPPs and at least school trustees have to too.

So I have to say to you, based on that, what happens I think, and I can certainly feel it, is that I just get a sense that you're worried about something. There's something to hide, and that's why you don't want this to happen. I'm not accusing you of that; I'm saying as a result of going through what you've said and still being very cognizant of the fact that at least 50% of the funds to operate institutions are going to come from the taxpayers, how do you get around that? Because that's what it appears the problem is at this point, that for some reason or another, you don't feel that government, or the auditor and hence government, has the right to be more intrusive in the affairs of universities, even though some 50% of taxpayers' dollars still go to fund your institutions.

Ms Jalynn Bennett: Ms Martel, let me try and respond to that in part. You raised a number of issues. The most important thing from my perspective as chair of a board of governors -- and remember, we are volunteers, we are not elected by society at large, but we are accountable for the good management of the institution which we govern. As such, we take that job very seriously.

Certainly, fiscal accountability is very high on our agenda. We're very conscious of the fact that we're stewards not only of taxpayers' money but also anybody who donates to the entity where we're responsible for the management, and that is increasingly to alumni donations, students who donate money -- as limited as their resources are, some do -- and also to the community at large.

We're accountable in that we have a lot of different stakeholders, not only the government but other elements in our society who support these institutions, so we take this very seriously indeed.

As a chair of a board and a member of an audit and finance committee of the institution whose board I now chair, for many years, we welcome the attention of the Provincial Auditor when it comes to traditional financial accounting and auditing, and we think that as imperfect as institutions may be, over the fullness of time, increasingly, with increased professionalism on the part of university administrators, increased awareness on the part of boards and their audit and finance committees and on the part of the Provincial Auditor, but with more experience, we're getting fairly good at it.

In my view, in the end the best sense of a value-for-money audit is a student reaction, and to the extent you have students still choosing to attend Ontario universities because they believe a university education will be useful and beneficial to them, to the extent that university alumni tend to be donors to their institutions and to the system at large, on some levels I believe this indicates a broad sense of value for the money and the education they received and in terms of employers and the sense of the need of this economy to have a well-educated labour force, our universities' education and background I think has served our broader community well.

Ms Patterson: If I could add just one other comment, and I'll leave these with you. If you remember the time frame here in terms of the accountability report, what I can leave with you are examples of where universities are indeed very aware of the perception issues that you raise. What I will leave are examples of performance indicator projects that have been under way with resulting public documents from a number of the universities, that are relatively new as an approach to the universities and I would ask you and encourage you to have a look at those because they do represent a departure from what universities have traditionally done in trying to keep their publics informed.

As well, I might point out that this also is a national issue and in terms of the work that the Association of Universities and Colleges of Canada is doing, there has just been a research file put out on primary performance indicators related to research initiatives. Part of the point of my talking about perception to your question is that we are moving forward more frequently in this way than we have in the past and we realize it is an ongoing, important initiative and you will see that many universities are in fact moving in that direction in this province.

From a financial point of view, you raise the issue of, what other ways do we measure? I think my colleague may want to make a comment about some international comparators from the financial point of view.

Dr Jim McAllister: I guess your question really comes down to, how much is enough? How much control? How much reporting is sufficient? I guess we would argue that the Provincial Auditor has the right to do audits now, that every university reports to the Legislature on its financial statements every year, that the Ontario universities produce every year mounds of financial statistics on how they spend the money they receive and all kinds of other information and they've been doing that for many, many years.

It just becomes a question of how much you can do to demonstrate what in our minds is quite obvious. Our data demonstrate over and over again that Ontario universities are turning out a quality product, a good education for their students at a very low cost. We have one of the lowest levels of funding of any system in North America and whereas our students are being educated for about $10,000 a year, in some schools in the United States you're looking at tuition fees of $20,000 or $30,000 a year. If that's not value for money, I don't know what is.

Mr Toni Skarica (Wentworth North): I want to thank you for a very compelling presentation. There are two areas I'd like to ask you about. One is page 11, where you provided us with a veritable blizzard of documents and reports. How much does the University of Toronto pay for the audits that it's doing right now?

Ms Patterson: I don't have that at the tip of my tongue. I can certainly find out for the committee.

Mr Skarica: Can you give us a rough approximation, anyone?

Ms Patterson: My apologies, we have a report on that and I don't have it with me. I'll make sure you receive it.

Mr Skarica: Going to page 13, you brought up a very salient point, in my opinion, that the paradigm of funding is changing right now. Am I right in stating, or in assuming that, let's say provincial funding continues to go down and just grabbing a figure out of the air, let's say it's 20%. Would the amendment that's being proposed allow the auditor then still to go through your entire structure and your entire use of spending money, even though the government itself is only providing 20% of it?

Ms Patterson: While we haven't seen the specific draft of the amendment, it is our understanding and interpretation that would be the case.

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Mr Skarica: So say 10 years down the road the public's only providing 5% of your funding, that would allow the auditor then to go into all of your expenditures, all of what you're doing, even though they're paying virtually nothing.

Ms Patterson: That's my understanding.

Mr Skarica: All right. It seems to me to be inappropriate. Is there any mechanism you could suggest? It would seem to me that the person who pays the piper calls the tune, and if, in fact, the public's not paying the piper it shouldn't be calling any of the tune. Is there any way of dealing with the fact that the public may over time contribute less and less of your funding?

Ms Patterson: I think part of what you see in the movement of universities to provide outcomes measurement themselves for the activities that they engage in is one way of addressing multiple stakeholders and investors in the university agenda. I guess our sense is that there is a place for audits. At the end of the day, there is considerable expenditure by every institution in the province to engage qualified external auditors. That has to continue. At the same time, there are compliance reports as we engage in corporate donations or research from various parties to the research enterprise of universities, and there is a considerable reporting requirement virtually in every dollar that comes into the institution. So I think we're on the right path now, and you're seeing more that will be hitting the public eye as institutions develop their response to the accountability task force.

Mr Curling: I too want to thank you for your presentation. I'll focus just on page 12, because the Chairman is looking at me very harshly about the five-minute time frame. But there are two words that keep coming up in your presentation -- accountability and of course the question of the thing about value for money. The people who ask us those things as politicians are the people who pay the taxes, asking how accountable we are in how we distribute the money and what value they are getting for it.

Of course, I don't have to lecture you on that, but the Provincial Auditor is the one who does the spin for us to make sure that we can have the answers to give to those people -- to give to those people too, who find it almost impossible to access some of the post-secondary institutions, to respond to those people who find that we still have a high rate of functional illiteracy in our province. Although we hear we have such a high standard of education here, we still have problems with functional illiteracy, with the collision on this information highway that comes along, that people have to be more equipped and qualified in order to get a job. So post-secondary education is not a privilege or a prestigious thing any more, it is necessary in order just to survive, in order to work.

The question that would come back is the accountability and value for money. I think you have put it very well here, when we speak about the demographics of our economy and our society today, the diversity that is there, and what value there is for money. The question I would then ask, which of course is rhetorical in a way -- we do need value for money, we do need to do it very often, because those who are shut out, those business people who need qualified people in order to do the job and are not getting them -- what value are we getting for our money?

I strongly support, regardless of what structure the colleges have set -- and I come from a background of 14 years as a post-secondary institution administrator. I think they need that outside -- the government, regardless of who gives the money, whether it is a portion of the private sector that gives to the university, or the government, and if the government even gives 10% of that, that the value for money for what we are giving must be there for us to answer that question to those people who are asking, "So where is our money going?" It's really more of a comment. If you want to make some comment beyond that, it's fine.

The Chair: Any final comments?

Ms Patterson: I would just make one comment, that our greatest struggle I think now is going to be to find a balance between accessibility, which is, as you describe it, with all due respect, the need for more and more individuals to be able to compete through a higher education background. It's going to be the balance between accessibility and excellence, and I think that's what we're striving for as we move forward. At the same time, recognizing that outcomes from what we engage in as higher education institutions, it is important not just for the public but for those of us involved in the system to be able to measure and see how well we're doing. There's no dispute in that in the system.

The Chair: Thank you very much for your presentation.

ONTARIO HOSPITAL ASSOCIATION

The Chair: The next presentation is being made on behalf of the Ontario Hospital Association. Good afternoon, and welcome to the committee.

Mr Ron Sapsford: Thank you, Mr Chair. Good afternoon. My name is Ron Sapsford. I am the chief operating officer of the Ontario Hospital Association, and with me is Carolyn Shushelski, who is OHA's senior legal counsel.

The Ontario Hospital Association is pleased to present to the committee this submission as part of the public consultation process on potential amendments to the Audit Act.

We understand that the Provincial Auditor has proposed enhancing his already considerable authority, which currently enables him to perform inspection audits with respect to transfer payments to certain categories of grant recipients, including hospitals. At the outset, we must say that at no time in the previous three years or in the time of his immediate predecessor has the Provincial Auditor discussed directly with the OHA his concerns or proposals in this area of auditing transfer recipients. The first time we became directly aware of the auditor's recent proposals in this regard was when we received a letter from the clerk of this committee a few weeks ago.

The auditor has asked for the power to conduct what are called full compliance audits and value-for-money audits for recipients of funding from the government's consolidated revenue fund.

The OHA believes this would not be feasible for the Provincial Auditor to undertake and that it is unnecessary and duplicative for the hospital sector because of the high level of accountability present under existing provincial legislation and regulation and other compliance processes and mechanisms.

With respect to the role of the auditor, the Provincial Auditor currently has the authority to perform inspection audits of payments made in the form of grants from the consolidated revenue fund. As hospitals receive such grants, they are subject to these inspection audits.

The Provincial Auditor has proposed that his authority be increased so that hospitals and other grant recipients be subject to compliance audits and value-for-money audits. This would change the role of the auditor, expanding the role to permit the examination of all hospital accounts and records, including medical records.

These new types of audits would include the examination of records detailing how money was spent and whether it was used with due regard to economy and efficiency. Of necessity, this would include the review of all aspects of clinical, operational, management and policy decisions made by hospitals or by their boards. OHA believes that this enhancement of the powers of the Provincial Auditor is unnecessary for the hospital sector, for the following reasons:

It superimposes a new accountability structure on top of complex systems already in place for hospitals.

Bill 26, the Savings and Restructuring Act, recently increased the powers of the government with regard to the review of hospital operations and services.

Special expertise related to the review, extraction and analysis of data is required for the review and analysis of hospital and health records.

The role of the Provincial Auditor could more appropriately be used to improve the accountability structures used by the Ministry of Health for hospitals.

Any expenditure of new funds in expanding the role of the auditor should be directed to improving existing systems and evaluation criteria in the Ministry of Health, not the establishment of a new system.

The principle of confidentiality regarding medical and patient care information is important and access to such information must be as limited as possible. The greater the access, the greater the risk of disclosure.

I'd like to now elaborate briefly on these matters.

Management experts have described hospitals as being among the most complex organizations in existence. The operation, management and clinical activities in Ontario hospitals are already subject to many different review mechanisms designed to ensure accountability. The OHA questions the need for yet another process to review these internal and external activities.

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Under value-for-money audits, the Provincial Auditor would have the authority to examine all hospital procedures: the admission and discharge of patients, as well as operational, management and policy decisions. This power, in combination with unchecked access to any and all records, including health records, amounts to permitting the auditor to review patient care in a hospital.

This would have a direct impact on and potentially create a conflict with the duties and responsibilities of the board of directors of a hospital as set out in the Public Hospitals Act. Furthermore, outcomes evaluation in the medical setting is an emerging science, and there is no evidence that the auditor is better equipped to perform this task than, for instance, the bodies seeking to do this type of evaluation, such as the Institute for Clinical Evaluative Sciences.

The Provincial Auditor in his formal presentation to the committee in February indicated the importance of standard business practices as criteria for evaluating efficiency. We do not disagree with this view. However, hospitals differ significantly from the private sector, to the extent that salaries and benefits of employees make up approximately 80% of expenditures, which are determined to a great extent through collective bargaining.

In fact, discretionary spending in hospitals is very limited, as health care is not a business where major costs are incurred in areas where the application of normal business criteria would bring to light significant material waste and inefficiency.

We do not dispute the fact that hospitals should follow some business practices. Indeed, with the fiscal pressures and the recently announced cuts to hospital funding, it has become imperative for hospitals to operate in a cost-effective manner. However, the return on an investment in value-for-money audits in hospitals conducted by the Provincial Auditor would appear to be very limited, and it is doubtful that the process would deliver value for money for the Legislature or the public.

Hospitals budgets have been essentially flat-lined for three years, and the overall hospital allocation for the next three years will be reduced by 18%, or $1.3 billion. These fiscal imperatives have provided hospitals with incentives to find value for money through voluntary cooperation and collaboration, up to and including shared programs, services and even mergers and amalgamations.

Under the proposed revisions, the auditor would be in a position to attempt to evaluate hospital board policy decisions without having been party to any of the existing systems of review established in hospitals specifically to review and make recommendations to the board on matters relating to resource utilization, planning, operation and management.

It might be more productive for the auditor to examine accountability systems in general for the system, with the objective of strengthening and clarifying the accountability structures for hospital boards.

With respect to the access to information and records, the confidentiality of health records is a sensitive issue in the health care community and for the public. We strongly support the auditor's advice to this committee that the view of the Information and Privacy Commissioner be sought on this matter.

The Provincial Auditor's statement that he would be content with seeking statistical information is unclear, because it is still not clear what questions exactly are being attempted to have answered. It is therefore difficult to determine what information would be required to answer the questions in this type of audit. The Ministry of Health publishes extensive files of hospital statistics, both operational and clinical, which are already available to the Provincial Auditor.

With respect to hospital accountability, the OHA endorses and supports the need for public accountability on the part of institutions which receive government funds for their operation. However, we believe that the Ontario hospital system already contains many mechanisms for achieving this accountability.

Hospitals have, in the course of this decade, become increasingly accountable to the Minister of Health, district health councils and the public through the annual operating plan process. These operating plans must be submitted to the minister and a district health council and each hospital must prepare both a program plan and a human resource plan, along with an operating budget which must be balanced.

In addition, comparative efficiency and performance indicators currently under development by the Ministry of Health will develop inter-hospital comparators and benchmarks for hospital efficiency. Routine monitoring of these indicators by the Ministry of Health and the Provincial Auditor provide ample evidence of the performance of the hospital system and the relative performance of individual hospitals.

All public hospitals in Ontario are subject to the requirements of the Public Hospitals Act and its regulations. The hospital management regulation requires a hospital board of directors to govern and manage the hospital and to pass bylaws that provide for its management and administration. In addition, this regulation requires a hospital board to monitor activities within the hospital for compliance with the act, regulations and the bylaws. We have also included, and I'll draw your attention to, some important information on board committees, such as the medical staff and fiscal advisory committees in hospitals, which also have to do with the clinical and financial accountability for hospitals.

Section V of the submission deals with accreditation, which is an external monitoring and review process for the clinical aspects of the operation of the hospital, and we would draw your attention to the accreditation procedures in hospitals as well.

Section VI deals with charitable donations. Hospitals benefit from charitable donations in a variety of ways. All public hospitals in Ontario are non-profit organizations and registered charities. As such, they are accountable for charitable donations under the Income Tax Act and the Charities Accounting Act. Hospital foundations fall under the same statutory accountability provisions.

Public hospitals must continue to raise private money for capital expenditures, as government funding for hospital capital projects is restrained and government usually funds only two thirds of the total costs involved in a given project. Hospitals must raise the remainder from private donations. The Provincial Auditor's mandate is the review of public funds and does not, and should not, extend to the audit of private donations.

Further, under Bill 26 amendments to the Public Hospitals Act, regulations may now provide for the financial reports and returns to be submitted to the ministry by hospitals and the accounting principles and rules that are to govern those financial reports and returns. Also, the minister may by regulation require hospital subsidiaries and hospital foundations to provide financial reports and returns to the minister and, as well, prescribe the accounting principles and rules to be followed in making those financial reports and returns and the manner in which they are to be provided. As ministry information after submission, these financial returns are also part of the record for the Provincial Auditor.

The joint policy and planning committee, between the Ministry of Health and the Ontario Hospital Association, has for several years been working on the issue of the quality of data submitted by hospitals. The data quality subcommittee has a five-year work plan which will ultimately result in the introduction of data quality audits. Preliminary surveys of hospital clinical data have illustrated a high degree of compliance with accepted reporting standards.

Under powers of the minister to investigate, there is explicit authority for the investigation of a hospital's operations under the Public Hospitals Act, which makes provision for the Lieutenant Governor in Council, on the recommendation of the Minister of Health, to appoint one or more persons to investigate and report on matters which include the quality of management and administration of a hospital, the quality of care and treatment of patients in the hospital, and any matter affecting a hospital.

In addition, the Lieutenant Governor in Council may also appoint a hospital supervisor in cases where he or she deems that to be in the best interests of the public, and I might add that the public interest criteria that have been put into the act are very broad and sweeping.

With the proclamation of the Savings and Restructuring Act as law, the Minister of Health has been given sweeping powers, including the authority to direct the board of a hospital to cease operating or to cease providing a specific service when he or she determines that this would be in the public interest. The minister may also make any other directives related to a hospital that he or she deems to be in the public interest. Clearly, if the Minister of Health decides it would be in the public interest for the Provincial Auditor to go into a hospital for any purpose, amendments to the Audit Act are unnecessary.

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In conclusion, the auditor himself acknowledges that compliance audits and value-for-money audits are very staff- and labour-intensive and should be carried out only if they add value. OHA would argue that in light of the various ways in which hospitals are currently accountable, the proposed amendments to the Audit Act would not add value for the hospital sector.

The Provincial Auditor's arguments are predicated on the need for accountability in spending. OHA supports the need for public accountability on the part of institutions which receive funds from the government for their operation. However, we believe that Ontario's hospital system has processes already in place to achieve this accountability more efficiently than through compliance audits or value-for-money audits performed by the Provincial Auditor. Furthermore, with the recent royal assent to Bill 26, the environment in which these proposed changes to the Audit Act are being made has changed considerably from the time several years ago when they were first discussed.

The OHA believes that the focus of the Provincial Auditor's work with respect to hospitals should be on ensuring that the Ministry of Health has appropriate accountability structures in place with respect to its transfer payment allocations. However, we would welcome the opening up of a process of dialogue, perhaps facilitated by this committee, with the office of the Provincial Auditor in an attempt to address the auditor's concerns about broader public sector accountability mechanisms. Thank you, Mr Chair.

The Chair: Thank you very much. Committee members, there are about four minutes available per party. We'll begin with the government members.

Mr Hastings: In your presentation, you allude to a number of ways of measuring value-for-money audits already. In your estimation and experience, which specific tool in your brief gets closest to capturing the idea of value-for-money audits? Is it the annual planning and accountability report that has to be submitted to the minister in item IV?

Mr Sapsford: It's no single document but a combination of all of them. The operating plan describes, and in some detail, the changes in operation that the hospital proposes, and that is coupled with the financial statements which show the changes in financial position the hospital is proposing. That again is coupled with the human resources plan, so that changes in staffing levels and service levels are incorporated into that. The other major tool is the work being done on the funding formula itself, where the resource use of a hospital to provide care is being incorporated into the funding decision, so there is a series of measures and benchmarks against which hospitals are now able to measure their relative performance.

Mr Hastings: Is that particular set of data readily available to the general public so that when they look at two hospitals in their city or community, or three, if they had such a set of circumstances and a larger population base, they could see that hospital A had a greater efficiency level measuring the way patients are handled etc?

Mr Sapsford: Certainly the program proposals in the operating plan and the budget and the information about funding allocations are all readily available. It's all information in the possession of the Ministry of Health, and with respect to operating plans and budgets, each district health council receives them on an annual basis.

Mr O'Toole: With regard to the minister's recent announcements on funding and the new formula respecting growth, do you think that was a wise move? It's not a policy question. Looking at the changing delivery, the technology and all the health care, the formula itself is continually under review based on some kind of value-for-money audit, if you will. In that respect, do you think growth is one of those components that should be respected and was a good decision?

Mr Sapsford: Growth due to population clearly has an impact on hospital utilization, and to the extent that funding needs to recognize changes in population, quite clearly the government had to do something with respect to growth.

Mr O'Toole: In fact, when you do a value-for-money audit, similar to what my peer here was saying, if I look at one institution, the cost for admissions in emergencies might be quantified as X and it may be some other smaller number at another hospital. Is there some value in that, in a whole variety of complex program delivery, I suppose?

Mr Sapsford: What we're undertaking and what we've been undertaking in the hospital system for a number of years is to do the detailed costing that would allow you to make those direct comparisons. You have to understand that resource use is dictated by the condition of patients, their physical condition, the seriousness of the illness and so forth. The work we've been doing is to try and match actual expenditures or resource use against the clinical condition of patients so that you can make direct comparisons.

Mr Crozier: Thank you for coming to give us your opinions today. I guess it was about a year ago that I became involved in the discussion in the public accounts committee about value-for-money audits, but I gather these discussions have been going on for some time, so it's not a new topic.

About a year ago, each of the three parties were giving their solemn oath that spending in the area of health care would not be reduced. You've certainly pointed out, and I think rightly so, that what you're now facing is a $1.3-billion reduction in spending in the area of health care, which is of concern to us. You've also pointed out in your evidence today that Bill 26, the Savings and Restructuring Act, increased the powers with regard to the review of hospital operations and in fact is quite intrusive by government, notwithstanding the fact that the government said it wanted to become less intrusive. I understand what you're having to deal with. That's why it's given me some second sober thought; as you have said, you may in fact be doing your own value-for-money audits because of these restrictions the government has placed on you, notwithstanding what they said they wouldn't do.

But at the bottom of page 3, you said, "The return on investment in value-for-money audits in hospitals would appear to be very limited." I wonder if you could comment on that. Whether it's the Provincial Auditor who conducts them, whether it's an external auditor or whether you do them internally, why would you say the return on investment is limited?

Mr Sapsford: I think we should clarify that this statement is in the context of them being done by the Provincial Auditor. As we understood the proposal, there would be perhaps one or two over a period of time. Our view is that it would probably be more productive for the auditor to spend more time on accountability structures with the Ministry of Health in a systemic way than it will be to do a sampling of perhaps one a year of a hospital to move into a fairly complex environment to try and answer questions about the care.

Our view is that the hospital system itself can be self-correcting if there are appropriate accountability mechanisms, that the auditor can assist in setting up the criteria or the framework and leave to the system the problem of implementing it over a period of time. I don't think we disagree with the principles; it's really a question of how they should be undertaken and what's the best way to get the benefit.

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Mr Crozier: I thank you for that clarification because, as I said, value-for-money audits are not new and I would hope they've proven their value in a number of areas. If we could get the ministry providing value for money, you're saying that may be a better investment than choosing one or two hospitals. If value-for-money audits were done in only one or two hospitals across the province, do you think the results of those audits may be of benefit to other hospitals, though? You can answer this in the context that you don't have to agree that they should be done in hospitals, but if they were, do you think you'd be able to benefit from it?

Mr Sapsford: Depending upon the nature of it, the kinds of questions, the area of investigation, I suppose one can look for benefit in any procedure. Our argument is simply that we believe there are better systemic ways to look at the problem, and it's the kind of work we've been doing in cooperation with the ministry for a number of years: to set up the information systems and the measurement tools to allow one to ask questions about value for money and efficiency and effectiveness.

Because of the nature of the business of hospitals and the clinical involvement in the work of hospitals, it's an increasingly difficult task to make information directly comparable to allow you to make those statements, but in the past several years we have made progress, and that work is now being used by hospitals to make the decisions they have to make in the face of the fiscal environment they live in.

Mr Crozier: I appreciate your comments.

Mr Pouliot: Thank you for a very focused presentation, inclusive of food for thought. It would have been a double pleasure -- I was to expect the opportunity to renew old friendships and acquaintances. Mr Dennis Timbrell, who's a former Progressive Conservative minister, I understand had a position of importance with the Ontario Hospital Association, but I'm not here to say that. When you see him, will you please convey my salutation, because we're here to talk about another subject, which is that of value for money.

You've mentioned that 80% of the budget is set, predetermined, often by way of collective agreement; it goes to salaries and wages. You have to pay people who provide the essential services.

Bill 26: Your comments emanate from the diplomatic corps, but I could sense that you acquiesce that it could, if the minister chooses, give the minister some unprecedented and extraordinary powers. They could scrutinize and do it and do it again. Disclosure will tell us, for the curious, who makes what, if it's $100,000 or more, so we expect the list to be consequential, given the high degree of expertise in the health field.

In yesteryear, it was maybe not customary but not unusual to have a hospital accumulate a deficit. Right or wrong?

Mr Sapsford: Correct.

Mr Pouliot: It did happen. You don't have the power to levy -- never did -- so it became part of the culture. I'm not imputing motive; there's nothing negative about this. If you accumulate a deficit and a magic wand comes along at the end of your fiscal year and picks up the pieces, under a great deal of stress and dwindling resources, would I not be invited, having this one year become a little more habitual, to respond to the need of the population -- some of them at 10 consecutive years of deficit and it was always picked up by whatever administration, right? Deficit financing and deficit at the end of the year; somebody would come in and bail them out.

If the committee would mandate our Provincial Auditor to recommend -- and I'm speculating; first you would have to find out, and you're an advocate, a lobbyist -- that the system of accounting, and there's a value-for-money element in this, be more uniform and reflect more clarity, in your opinion, would it be of consequence?

I know that the books have to be audited, but it has been a challenging exercise even among ministry; we don't have to go at arm's length. In our "relations directes," direct relationship with the different ministries we find that there is discrepancy in the methodology, in the way they compile things, in the way they present things, all very legit, but it gets to be a pain in the royal neck in terms of consistency. It takes time and it brings more questions. When it's not uniform, people even ask: "What is a deficit? How many sets of books do you have?" If you don't have answers to all these things, the lights get dimmed and people sometimes are not scared but they spook one another. Rumours take on extraordinary proportions.

The Chair: Could you ask your question or can we just deem it?

Mr Pouliot: With respect to you and all the good deeds out there, I'm concluding.

All that is asked by the committee, through a proposed amendment to the Audit Act, is to make it clearer, to make it simpler for the population that pays our wages to understand what is going on. Is that a fair assumption?

Mr Sapsford: I don't know what it's like in other ministries or other sectors, but certainly in the hospital sector there is no confusion about the reporting. The reporting of hospital expenditures is established consistently according to sets of guidelines that have common definitions. The hospital system and the ministry have worked very hard in the last several years to do just what you are suggesting, to make the reporting consistent so that there can be comparisons made from one hospital to another to another. That information is publicly available from the Ministry of Health.

So in terms of being available and clear, I believe that the work that's gone on in the past several years is really to that end. I am not really sure, at least on the accounting part of it, what additionally might be achieved by amending the Audit Act. The Provincial Auditor already has the opportunity to go in and do inspection audits in terms of the accounting, and so has the ability now to make those kinds of comments.

ONTARIO SCHOOL BUS ASSOCIATION

The Chair: The final presentation to be made today is on behalf of the Ontario School Bus Association. Welcome to the committee, gentlemen. Would you please introduce yourselves and then begin. You have a full half-hour.

Mr Dan Stock: Good afternoon. My name is Dan Stock. I'm the current president of the Ontario School Bus Association, or, as we refer to it, OSBA. I'd like to take just a moment to introduce the group that is with me today. On my far left is Richard Donaldson. He is executive director of our association. To my immediate left is Brian Babcock. He is immediate past president. To my right is Fred Thompson, the current vice-president of our association.

Before I get started on my remarks, I must first of all apologize. It was our intention to provide members of the committee with a copy of our written submission. Regrettably, upon our final review, we found some changes that needed to be made and we don't have it for you today, but we will forward it to you tomorrow.

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With the exception of Richard Donaldson, who heads up our full-time staff at the association office, we are all owner-operators of school bus companies and presently under contract to Ontario school boards. Even though we are not direct recipients of provincial grants, we wish to make a presentation to your committee.

In short, we are very encouraged by the Provincial Auditor's proposed amendments to perform full-scope compliance and value-for-money audits in the CHUMS or MUSH sectors. We have come to voice our support. In fact, we echo Dominic Agostino's words in Hansard, page 104, February 1, 1996, in reference to municipalities:

"I hope those transfer partners also realize that it is the reality and the need today, that if you're going to depend on government for such a significant amount of your budget, there's also going to have to be some accountability and some scrutiny to ensure that the money's being spent for the things it has been given for."

To your committee's deliberations on domain and latitude, given that there are provincial and municipal funds for many public services, including student transportation, we answer that there is only one level of taxpayer. It is less relevant to taxpayers than to government which level makes a claim at any given moment. We believe that every public body has an inherent responsibility to operate by values and exactitude of transparency and accountability.

There are two points we have been raising with the provincial government for nearly 10 years that we wish to reiterate to your committee today.

First, the student transportation services provided to Ontario school boards by private sector contractors is simply the safest, most secure and most cost-efficient use of tax dollars. This is no accident, but rather the result of decades-long partnering and co-operation between school board administrators and their suppliers. By the way, supporting evidence for any of the claims we make today can be submitted upon the committee's request.

Consistently, repeatedly and probably a little more loudly every year, the OSBA has been encouraging the provincial government to structure student transportation funding in such a way as to encourage maximum use of its investments, exactly what we try to achieve daily in our business.

Since 1989, we have been suggesting practical ways that the Ministry of Education and Training and local school boards can deliver the same high-quality transportation service more efficiently. We are most encouraged by the solutions our government partners have adopted. Compared to just two years ago, we now transport 4,500 more students on 1,500 fewer buses, for an aggregate savings of $25 million. We have recommended over this time coterminous sharing of school board facilities and services. We have also recommended the transporting of elementary and secondary students, public and separate school students on the same bus. We have staggered times to facilitate double or triple routes by the same bus. We have extended the walking radius wherever safe and practical. We have been employing automated routing technologies and using larger buses instead of smaller ones where possible.

All of us appreciate the tremendous pressure that Ontario school boards face to control spending on student transportation. Unfortunately, it is combined with increased demands on the system, created by expanded programming like French immersion, junior kindergarten, special-needs integration and so on, it is aggravated by competition between public and separate school boards for property tax dollars and it is compounded by shrinking capital budgets which dictate building fewer schools and busing more students out of district.

As responsible suppliers, we expect to be part of the solution rather than part of the problem, especially when we know that alternative methods of delivering these services are both possible and sustainable. But candidly, some of our solutions are harder to sell to constituents than simple contract rate cuts or awarding contracts to apparent low-cost, alternative service providers.

This leads into our second point. For at least as long as we have been advocating a more efficient school bus network, we have been attempting to demonstrate that there is absolutely no comparison between municipal public transit service for student versus school buses operated by private sector contractors -- not in the quality and certainly not in the cost of services provided. We suspect that the practice of transporting students by municipal public transit rather than by the safer low-cost yellow-and-black school bus is perpetuated by a chronic lack of full-cost accounting practices which actually masks the costs borne by interministerial subsidies.

We are convinced that full-scope compliance and value-for-money audits, when applied to municipal public transit properties, must at last offer government irrefutable evidence to support our findings. Time and again it has been shown that capital and operating grants paid by the Ministry of Transportation allow municipal public transit operations to offer student tickets to local school boards without any necessity for price to equal the cost. Arguably, the practice may appear beneficial in terms of controlling student transportation expenditure, but by full-cost accounting methods it is by no means advantageous to the taxpayer.

Unfortunately, once started, the transferral of students from school buses to transit can quickly lead to significant portions of municipal public transit fleets becoming dedicated to student transportation, even though the combined capital and operating costs can actually be as much as four times higher than for standard 72-passenger school buses.

The municipal transportation policy office released a discussion paper on school bus municipal transit integration in November 1988, which is the earliest government study we know that confirms this. There have been others, including one the OSBA commissioned from Ernst and Young in April 1992. This report showed that on seven municipal transit properties studied, incremental buses dedicated to students had come to represent between 12% and 21% of the peak fleet. What is worse, on one property, renowned for high standards of performance and touted by the Ontario Urban Transit Association as a model for low operating costs, it was discovered to be 65% more costly than local private sector school bus operators when compared by full-cost accounting methods.

I repeat, because it deserves the emphasis, by full-cost accounting principles this transit service was 65% more costly than the private sector school bus service. The Ministry of Transportation operating grants lowered the cost differential to 32% more costly. Adding in Ministry of Transportation capital grants made the options appear equal. Who can fault the logic of the school boards, municipalities or transit property in such a case? Only the taxpayers, who bear the ultimate cost of such inconspicuous waste.

We shared these interesting data with the ministries of Education, Transportation, Municipal Affairs, Treasury and Economics at an interministerial meeting in June 1992. This occasion was at least in part responsible for several initiatives to examine the family of transportation services provided by the province. The original intent was to bring about a safe and equitable integration of services. How hopefully we received that news and extended our co-operation, only to witness to our astonishment immediate divergence on to pro-public transit agendas.

Involvement by private sector transportation providers in provincial reviews has been nominal at best, and not existent at worst. I and my colleagues here could spend hours acquainting your committee with our disappointment in projects like the community transportation review and the provincial Task Force on School Bus and Transit Integration. Please understand that we do not object to the goals and principles of either the CTR or the task force on integration. Our issue is with an obvious pro-transit bias that exists, unsupported by facts, that we find confusing vis-à-vis the ultimate interest of taxpayers.

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I have a few statistics to share with you which our industry finds shocking. We've brought them to the attention of the Premier and his ministers last November and we await with interest the results of their deliberations. An unreleased study conducted by the Ministry of Transportation in 1993 discovered that 70% of municipal transit properties ran school extras five days per week. Perhaps this suggests to you, as it does to us, the puzzling existence of abundance, of overcapacity in Ontario's public transit systems.

The Canadian Urban Transit Association fact book, 1993 edition, allowed us to compare the spare-vehicle ratios as well as vehicles-to-people ratios in municipal public transit with our private sector school bus operations. To our shock, we found twice as many spare vehicles, six times more operation and administrative personnel and nine times more maintenance personnel in transit operations. By our calculations, the amount of capital displaced by unused transit vehicles could represent nearly $133 million. First-year administrative and maintenance savings through restructuring overbuilt transit operations could realize between $31 million and $55 million. These figures have raised troubling questions for the OSBA about where tax dollars for student transportation ought to be directed. So far, we feel the questions remain largely unanswered, although the audits now proposed by the Provincial Auditor may one day prove an effective way of addressing such persistent inequities.

We conclude today by reassuring you of our confidence in our industry's ability to continue to satisfy safe student transportation service requirements. What's more, with a safety record 16 times better than any other road transporter, we volunteer any assistance our customers require to comply with audits. It is our conviction that the taxpayers of Ontario stand to benefit a great deal from these initiatives.

Thank you, Mr Chairman and all the members of the standing committee on public accounts, for your time and attention today. The Ontario School Bus Association believes in what you want to accomplish. If you have any questions, we'd be pleased to answer them.

Mr Crozier: Thank you, gentlemen. It's good to see you again. You've helped me in two ways with your presentation today. One, as the day closes, our time becomes a little more tight and I'm going to have to slip away to another meeting shortly.

The second way you've helped is in the way you've supported the idea of value-for-money audits. Having spoken with you before and knowing several of the private operators in Essex South as well as I do in Essex county, I appreciate what you're saying when you compare the safety, the efficiency of private operators as opposed to municipal. In Leamington that's not a big problem. In fact, if I think of all the towns in my constituency, only Leamington has public transportation, and it's only one bus. So it's not as significant in my riding as it is in others. But I appreciate your support and how you have pointed out that value-for-money audits will, you feel, support your comments today. Certainly, I appreciate you coming before the committee. I haven't any real questions, unless you have any comments to that.

Ms Martel: Let me follow up from where Mr Crozier was going, because I think we would find substantially the same thing happening in my riding, which is very much outside the city of Sudbury, where you wouldn't find students on public transit because there isn't any, or where they are going is not anywhere in relation to where high schools or elementary schools are located. In terms of the studies that you referenced and the municipal transportation systems that you were talking about, can you tell me, is that predominately in Metro? Can you give me a sense of where the biggest part of the problem has happened? Frankly, in my riding you would see most of the students being moved by private transportation systems.

Mr Brian Babcock: The evidence that we have comes from an unreleased report done by the Ministry of Transportation. In that report, they identified 70% of the properties in Ontario as having vehicles, at least in part, if not in their entirety -- am I right in this, Rick? -- dedicated to school transport. To be clear about this, without studying that report I can't answer your question directly as it pertains to Sudbury and it would be unfair to do so. But what they did indicate was that two properties had as much as 65% of the fleet dedicated to school transport. Is that an accurate figure?

Interjection.

Mr Babcock: The report was the result of a survey that was sent to transit managers across Ontario.

Ms Martel: But you had talked about a study that you had done yourself through Ernst and Young. Didn't you talk about seven properties that were looked at in that case as well, or did I make a mistake?

Mr Babcock: No, you didn't make a mistake. There's a distinction here. The study that was commissioned by us through Ernst and Young was conducted in 1992. If I can do this correctly, and I think I can do this from memory, they examined approximately seven properties in Ontario, and what they were looking for were properties that would offer information in terms of full-cost accounting. What they were looking for was a comparison of the full cost of municipal transit with school children apropos school buses. They indeed did find properties that would agree to the study.

The report can be given to you. It's public; it's our 1992 Ernst and Young report. They discovered in one property, I believe it was with 36 vehicles, that the cost per day on a full-cost accounting basis in 1992 was $1,500 per day more than the cost would have been with contracted services with school carriers. That is identified in the study and we can make it available.

Mr Pouliot: A renewed pleasure. I know the person at the ministry you're referring to in 1992-93 only too well, but since that time I too have found a quality that I didn't know I had. I see things with clarity now -- more so in the past year.

No doubt the invitation to have the Provincial Auditor come to your shop, to your boutique -- and under his mandate of value for money, this is the picture of excellence. There's no question. It would be demonstrated, then, in terms of value for money, better value for money cannot exceed those criteria with you. You have an image of perfection. But as always in life, not all is perfect.

You've been much maligned. People saw that the vehicle has always been half empty, never half full. People saw the senior citizen aside from the school board building during July and August and for too long they saw the bus not pulling the service. They even went as far as to suggest that if the public and separate entities could arrange their schedules, that as opposed to having one bus half empty, you could have one bus full because you would be avoiding duplication. But you saw that coming too.

People will say that you also get caught with competition. An audit of value for money will not be used as a vendetta to attack the school board or, in some cases, other entities who allocate contracts or who dedicate the money. The fact is that there are more people to serve. You can plead in the marketplace that you're the best, and you are. There are fewer dollars coming down the system -- we know that -- both this year and next fiscal year, money flowing from the province, and if you're the municipality you have the power to levy for school taxes, but beware if you increase taxes. You know, we pay twice, for the interim and then we pay -- so when we make those two cheques, they don't take it off our paycheque. So if you raise taxes, you do so at your own peril.

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You will continue not to be under a state of seige but, and you've said it yourself, to have the opportunity with or without a value-for-money audit, in this case, to serve people, because there's more centralization. You have to go to Harry Smith's farm to pick up the son and the daughter because the little red school is toute finie. Now they bus little Anne and little John to the big brick school, that big cement tower with glass panels.

So things will be alive and well, but you feel that value for money perhaps -- and I need your help -- would give you a better chance at the marketplace because with value for money you would have the auspices of the Provincial Auditor, and maybe you can attach your name to your business card, which would give you the halo of sanctity that we all know you have, but not everybody elsewhere knows that you do.

The Chair: I think there's a question there. Gentlemen?

Mr Babcock: Let me say this in response to Minister Pouliot's comments, and I appreciate his comments: Our industry has enjoyed partnerships with virtually everyone we have worked with over the years, and one of those partnerships we see clearly as being the Ministry of Transportation's office. When we talk about our 16-times-safer factor, it's clear to us that we are not alone in generating that kind of safety record. It's clear to us that our partners at the Ministry of Transportation have a large contribution to make to that.

Let me speak as clearly as I can about why we see ourselves being here, and I think this will answer to the minister's comments -- excuse me; to the member's comments -- if I can.

Mr Pouliot: I only wish you were right.

Mr Babcock: I apologize. I'm thinking in the past. So, Member Pouliot, this is how we see this, and we hope with clarity. We have made it our business to be neither righteous nor condescending to anyone around us, righteous about ourselves or condescending to others. We have tried to scope out with clarity what is responsible in terms of our actions and to integrate the responsibility of decisions with our partners: with the school board, with MET, and indeed with the Ministry of Transportation.

What has been a fault in the system, and this is what we wanted to speak to, and it's not a person fault but a system fault in our view, is that supply-side funding to transit is very grand indeed: 75% to capital, 50% to operating. Now, without process audit or what the committee refers to as value-for-money audit, there are no assurances of accountability or transparency. We don't come to you saying that we have the answers. We come to you only asking that the playing field be levelled.

Mr O'Toole: Thank you for an interesting presentation. It brings back old memories when I was a school trustee and the age-old dilemma of school buses. Just to clarify and just to put it on the record, the difference I guess between the municipal operation and the school board bus operation is the method of funding, and you mentioned the formula. In your case, you get kind of a ridership fee for service as opposed to direct operating and capital subsidies. Is that not true?

Mr Babcock: We as private contractors receive no direct moneys from government.

Mr O'Toole: Just in the way of so much per head per mile kind of thing?

Mr Babcock: That's pretty close, sir. Correct.

Mr O'Toole: Okay. The other part you mentioned is that you're not fully eligible for a value-for-money audit because you're not a direct-funded part of the MUSH or the other sector. I recognize that, and really it leads to my first question. Technically, would you like to tender or quote this directly and just circumvent the whole kind of -- I'm not sure what busing has to do with education anyway. I've wondered for a long time exactly what it's got to do with that, and we spend a lot of money at it.

Mr Pouliot: It brings people to school.

Mr O'Toole: No. They can get there any way they want: by train, walk. You know, there's a whole series of things.

Ms Martel: In your riding maybe.

Mr O'Toole: Oh, no. I'm very heavily involved --

Ms Martel: In the east part of my riding, hardly.

Mr O'Toole: No, your part of the riding is sort of helicopter.

Could you answer that? Would you like to quote directly to the ministry or through some regionalization of boards? Is that kind of the ideal goal for later on?

Mr Babcock: I don't mind quoting directly to that, if our president would still like me to answer this question. The only thing I would ask is, I'm not sure I'm clear on your question.

Mr O'Toole: The question is, would you like to be able to run the school bus business completely? That is to say: Here's the area. There are 500 students. Here's the schools. Get them there. And bid on it.

Mr Babcock: Thank you for the directness and the clarity of your question. Let me say this about that. The group that's in front of you are elected representatives of the Ontario school bus contractors in Ontario. Directly to your question, this group that's represented here does not have an official stand, but let me answer your question this way. There certainly are members of our industry who are satisfied to look at ways of expanding the levels of service they can provide to school boards, to expand further on contracting out. Essentially, we do contract out.

Mr O'Toole: Some of them do. Some of them --

Mr Babcock: Essentially, we do. So some members of our industry, to answer your question if I can, not from the Ontario School Bus Association's point of view, but to answer your question as truthfully as I know how with the committee, there are people in our industry who clearly can and will expand services available to school boards.

Mr O'Toole: Will that favour competition, do you think? This is the last question here. You know, you think of the big operators, the Laidlaws, and the small ones, and there's a whole formula there for that business.

Mr Babcock: Can I offer a personal opinion?

Mr O'Toole: Yes.

Mr Babcock: This is a personal opinion. I think the school board and the Ministry of Education are best positioned to protect their interests, to assess what is an appropriate level of arm's-length transaction. So when they buy services, I think they are best positioned -- this is a personal opinion and my colleagues may indeed wish to comment on this -- to decide what's an appropriate level of decision-making when they assign contracts.

Does that help you? Have I been clear enough on that or did I leave you mystified?

Mr O'Toole: I took that as a yes. I think that competition is a good thing, and that's my own belief. I think that the fewer large mega-operators, the better the price is going to be, and that's basically what I'm about.

Mr Babcock: Let me say this about that. Your question is very good. We represent approximately 350 private contractors in Ontario. We represent the principles at stake with the transportation of two thirds of the students in Ontario or more. How many do we represent?

Interjection: In terms of busing, we've got 800,000 students a day.

Mr Babcock: Within our own industry group there will be divergent opinions on levels of service or what's an appropriate size. It's a very difficult thing for us to answer from a policy point of view in a committee like this. There will be very divergent opinions.

Mr O'Toole: Do you work to standards? Your organization's purpose I suppose is to work to standards and some sort of consistent --

Mr Babcock: The principles of the organization, exactly, are to identify those issues that can best promote the common interests of the industry and to provide learning experiences for our members to assist them as they deal with change. I don't need to advise the committee we're dealing with massive amounts of change in 1995, all of us. So our principles are to represent those common interests that we can represent and to do so in a professional manner and try to be forward-looking as we address change.

The Chair: Gentlemen, thank you very much for your presentation. We appreciate it.

Committee members, I want to draw your attention to the proposed framework for draft report and summary of recommendations prepared by our research officer for Thursday's meeting. Unless there's any further business, the committee stands adjourned until Thursday morning at 10 o'clock. Thank you.

The committee adjourned at 1620.