Legislative Assembly of Ontario

CITY OF KINGSTON ACT, 1998

CONTENTS

Wednesday 16 December 1998

City of Kingston Act, 1998, Bill Pr22, Mr Gerretsen

Mr John Gerretsen, MPP

City of Kingston

Mr Gary Bennett

Ms Glenda Scott

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

Chair / Président

Mr Toby Barrett (Norfolk PC)

Vice-Chair / Vice-Président

Mr Dave Boushy (Sarnia PC)

Mr Toby Barrett (Norfolk PC)

Mr Dave Boushy (Sarnia PC)

Mr David Caplan (Oriole L)

Mr Ernie Hardeman (Oxford PC)

Mr Gary L. Leadston (Kitchener-Wilmot PC)

Mr Tony Martin (Sault Ste Marie ND)

Mr Tony Ruprecht (Parkdale L)

Mr Derwyn Shea (High Park-Swansea PC)

Mr Frank Sheehan (Lincoln PC)

Substitutions / Membres remplaçants

Mrs Brenda Elliott (Guelph PC)

Mr Bill Vankoughnet (Frontenac-Addington PC)

Clerk / Greffière

Ms Anne Stokes

Staff / Personnel

Ms Laura Hopkins, legislative counsel

The committee met at 1003 in committee room 1.

CITY OF KINGSTON ACT, 1998

Resuming consideration of Bill Pr22, An Act respecting the City of Kingston.

The Vice-Chair (Mr Dave Boushy): : I call the meeting to order. We're dealing with Pr22, An Act respecting the city of Kingston. We have a sponsor, MPP John Gerretsen, and people on behalf of the corporation of the city of Kingston. Would you like to come forward and introduce yourselves and make some comments?

Mr John Gerretsen (Kingston and The Islands): This hearing started last week, and I understood that basically the presentation has already been made by the city, but there may be some questions now that individuals may have; I don't think there was an opportunity to do that the last time. So perhaps we could hear from the mayor again. Some things have happened in the city of Kingston with respect to this, and maybe he could just refresh the members of the committee as to what this is all about.

This is Mayor Gary Bennett of the city of Kingston.

Mr Gary Bennett: Thank you very much, Mr Chair. I am here with Dianne Corcoran, the legal counsel for the city of Kingston. I do have some comments and addresses to once again provide some additional information to the committee members, and I'll ask if that could be distributed. I won't read verbatim from it, but I will highlight some of my comments to ensure that we make excellent use of the committee's time. I appreciate the opportunity to be here on a second occasion; I understand the value of time for all of us.

I'd like to first of all thank the committee for the opportunity to speak to you again about this important bill. Several months ago, the city of Kingston undertook a study entitled The Road to Recovery, and the purpose was to simply examine the long-term health of the community. Our determination was to focus on our strengths and address our core needs.

This report, which was the focus of some discussion last week, identified in the city of Kingston a significant capital backlog. What we've tried to do as a municipality is to create some strategies and make a determination of the types of tools that we believe we need to overcome this financial challenge. Kingston city council -- we debated this issue last night -- continues to believe this bill contains important tools that would help us deal with the fiscal challenge we confront. This bill also deals with several other matters, including changes to our board of control and issues relating to the 1998 budget approval process.

We are here once again to ask you to pass this bill, which we see as a first step in our plan. Failing that, however, we are here to ask that if you cannot pass this bill today, you please defer the bill, or those sections of the bill, and allow us to work with you to find other ways of reaching our common goal, which is quite simply getting the city of Kingston back on the road to recovery.

The document that you have before you highlights and gives an overview of each one of the issues. I can speak directly to them or provide answers to questions from the committee members. There may be other interested parties here today that may want to comment on it.

The important issue for the city of Kingston, and I'll just read the conclusion for you, Mr Chair and members of the committee: I would like to once again urge you to support this bill. We recognize that you may require more time to evaluate the implications in light of other government initiatives and priorities. If so, our message is simple: Please take the time you need, but recognize the importance of this issue to our community. Municipalities today still operate under a 19th century framework, but the challenges that we face in providing and paying for services are all too modern. It is time municipalities, in my mind, had a more modern tool kit.

The ability to create limited liability corporations, as the city of Kingston has proposed, has been in the private sector for a long time. It made possible commercial arrangements that would have been otherwise unthinkable. The barriers to municipal incorporation probably made sense when they were written so long ago, but I don't believe they do today. They are just another barrier to better administration. I think it's time that we bring innovation to government and, by extension, to our ratepayers and customers.

We look forward to working with you to consider this proposal. However, should you feel it is necessary, we are more than willing to discuss different ways of achieving these goals that are embodied in our bill. Thank you.

The Vice-Chair: Thank you very much. We only have one more person here registered to speak. Glenda Scott, would you like to come forward?

Ms Glenda Scott: Thank you, Mr Chair, for allowing me to be here. My name is Glenda Scott. I'm a private citizen very interested in the future of Kingston, and involved in many ways. I want to make it known and very clear that I have no political agenda. Rather than take a lot of time and ramble, I'm going to read a letter to the editor that I sent in earlier this week.

"My intention is to support Mayor Gary Bennett, in his legal attempt to access private capital through public ventures and to use incorporated entities to do so. This gives our city an option to higher taxes and enormous city debt." I'm a taxpayer, and that interests me very much.

"It is my opinion that the city of Kingston private bill 22 does not pave the way to privatization; the city already has that power. It does not give the city unprecedented powers; the powers are neither unprecedented nor inconsistent with stated provincial policy," if anyone has been looking at the white paper. "It was not developed in secret; the Road to Recovery, a background paper on new directions for the city of Kingston, and explanations of the Kingston Infrastructure Group, KIG, have been available for some time," if the interest was there. "Bill Pr22 was introduced in August." This is December.

"I do not think that the city of Kingston private bill 22 is 'a disservice to democracy,'" which was stated in our paper. "It is the late hue and cry of local politicians" et al "that is a disservice to democracy and to our community."

I encourage the passage of this bill. "It is a step towards moving Kingston effectively into the 21st century."

I ask you not to allow the nit-picking and naysayers to stop the passing of this bill. Please give Kingston city hall this tool to get on with governing. Thank you very much.

The Vice-Chair: Thank you. Is there any other person who would like to address the committee? I would like to ask the parliamentary assistant for some comments.

Mr Ernie Hardeman (Oxford): This is going on with the comments that we made at the last meeting. We do have a couple of responses from ministries that were not entered into the record at the previous meeting.

One is an objection or a concern expressed by the Ministry of Transportation. They are not supportive of the ability of the municipality to transfer the ownership of the roads to a private corporation, although they do point out that it's not necessarily a given that the bill would do that. But it is their concern that it may appear to be able to do that and, if that is possible, they would have some grave concern with that.

Similarly, we have a response from the Ministry of Energy, Science and Technology, and it relates again to the corporation part of the bill. They are concerned that after the passing of Bill 35, which deals with the setting up of a corporation to deal with the energy issues of Ontario Hydro, the structure of this bill would create a different regime for the city of Kingston than it would for the rest of the province as it relates to hydro and gas being delivered by the corporation. So in that area they would object to the bill.

The other concern they have is the ability of the city, through the corporation process, to be able to set the budget of the utilities, which they think is inappropriate and should be, at the very least, reworded if the bill was going to be considered for passage.

We also have a concern expressed by the Ministry of Citizenship, Culture and Recreation, again on the issue of setting up those corporations that could in effect take over library services in the community -- again, not so much to object that the libraries could be operated by some other means than what they're presently being operated by, but to suggest that the library service could in fact become a privately owned corporation to provide a service that the ministry considers to be a municipal responsibility. They deem it inappropriate and they would object to that ability in the bill, that the municipality could just turn that over to a private corporation and no longer have responsibility for that service.

Last but not least, again there is concern from the Ministry of Municipal Affairs and Housing as it relates to the process, as to whether the public could expect to be as informed about the bill as they should be, not necessarily from the public participation but from the advertising that was done in the Ontario Gazette, whether you could reasonably expect someone to understand what the changes being made to the restructuring order meant to the individuals in the community.

As it relates to the two advertisings, the first advertising did not mention some of the changes, and in the second one, although the changes were mentioned, one would have had to have the restructuring order and the bill before them to be able to compare one or the other. When it talks about removing a section of the restructuring order, is it reasonable to expect that a citizen would be able to know what it meant, removing that part of the restructuring order? We have concerns that maybe, as we read the notation, it may not have been as informative to the individual reading the Gazette as it might have been. So we suggest that, at the very least, the public should be more informed.

Those areas of the information I think relate more to the financial changes that are being requested in the bill in the budgeting process and where the savings that were mandated in the restructuring order were to be expended. It would seem reasonable to assume that those people who were expecting those savings to be sent to a certain place would not have known from that advertisement that the proposal was to change where those savings were to go.

With that, I would suggest that we would be supportive of the mayor's suggestion that much more consultation and discussion with the people in the area would be required if and when this type of venture could be achieved, not to deal necessarily with the corporate part of the bill, but the financial part, even if it is appropriate, I think requires far more local discussion so the local people understand what the changes that are being proposed in the bill are going to accomplish for them. I would support the request for a deferral from the mayor.

The Vice-Chair: Would you like to come forward, mayor and solicitors? We discussed this at length last week. What I would like to do is have brief questions and brief answers. We'll start with the Liberal caucus, then the NDP caucus and the government caucus, if that's agreeable, for questions.

Do you have any questions either to the parliamentary assistant or to --

Mr David Caplan (Oriole): I may have some. I would like to hear some of the other comments from some of the members.

Mr Tony Martin (Sault Ste Marie): I would simply like to ask the parliamentary assistant what processes are happening out there now to restructure the way that municipalities work that are of a more comprehensive nature that perhaps this piece of business could fit into and work its way through.

Mr Hardeman: On the issue of the restructuring proposal, obviously the Municipal Act has a framework for how municipalities can propose a restructuring proposal within their own area, the exact process that the Kingston area did follow. An order was issued at the end of that consultation process in order to implement that restructuring proposal for Kingston and Frontenac county.

Upon doing their implementation process, the newly elected council for the city, along with some of the staff people, have run into what they considered some insurmountable problems in that restructuring order. This bill is requesting to change those parts of that order in order to accommodate what the system in Kingston wishes to do.

Recognizing that in all the restructuring it is a negotiated process that got them to the conclusion they came to as to how they were going to restructure their municipalities, in those orders there is give and take for how it affects some of the suburban areas and how it affects the city. They came to conclusions and compromises on those issues.

The concern the ministry has now is that in changing any of those parts of the restructuring order, it's appropriate that all those who were involved in the initial discussion that got the city to where it is today are aware of what effect these changes would have on that proposal they put together locally. This was not a top-down or ministry-forced or commission-forced restructuring. It was done at the request of the local municipalities because they came to a plan that would serve the needs of all the people of the Kingston area. But again, there was some give and take on everyone's part to make it work. We feel it's quite appropriate that all those who were part of that give and take are also part of the discussion of whether that needs to be changed.

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Mr Martin: Is there a vehicle out there right now that's involved in the question of how municipalities operate and deliver services? Just from thinking back to last week and having looked at the material and still feeling quite concerned at the very fundamental nature of the changes being requested here and the precedents that we'll set for other municipalities across the province, it seems to me that what's required, particularly given the change that we've seen over the last couple of years re what municipalities are now expected to do as opposed to what they were thought to be able to do by those folks who set them up in the first place -- I empathize with any municipality today. I certainly am following the ongoing struggle of my own community to come to terms with the new reality that they have to deal with, the different programs that they have to deliver in areas that they never thought -- I don't think some of them ever imagined that municipalities would be involved in delivery of health care and housing and a whole lot of things.

Any of us who realistically looked at what different levels of government would be expected to do thought that municipalities would look after some very basic hard services. Now we're into a whole other realm that is very expensive. It's very hard to predict from one year to the next what the cost is going to be. I empathize with the effort that communities like Kingston and my own have to make to try and make sense of all of this so they can be the responsible body they are elected to be.

My concern is, is this the way to go, each community coming forward with their own proposal and asking for a legislative mandate to do that, or is this government involved in another exercise to try and have some uniform approaches supported by legislation across the province so that municipalities can deal with the challenge that's in front of them? Is there anything that the government is doing?

I'm still concerned that this is not the proper vehicle: a private bill coming forward that gets the limited debate that we get here in the two hours we have on a Wednesday morning. It seems to me that this is a more fundamental discussion that needs to be happening at another place and would involve more people, because eventually they will have to wear whatever is decided here as precedent, and that frankly concerns me; it concerns me a lot.

I think I heard the mayor say: "Is there another vehicle? Is there another avenue?" Is there another route that's more appropriate that would be more helpful not only to Kingston but to the larger province?

Mr Hardeman: In answer to that, first of all, all municipalities are governed by the provisions of the Municipal Act. It's quite obvious from the application for this bill that what is being proposed in this bill is not something that would be allowed for all municipalities in the present Municipal Act.

We've had some consultations and we are presently still in discussions on changing and coming forward with a new Municipal Act that will help do a better job of directing municipalities as to how best to provide services to their people. One of the discussion papers that was circulated for municipal consultation made some reference to finding a way of providing municipal services, joint ventures with the private sector, and getting some comments back from the municipalities on how best that could be done.

The draft Municipal Act that is presently in circulation does not envision this part of the process, to set up private corporations in order to do that. Much of the discussion that we've had over the last number of months is from municipalities that do want us to look at finding some other avenue to be able to do that, recognizing the concerns that have been expressed in this bill and still looking for some method to be able to get the public and the private sectors jointly involved in some of the municipal services to provide them in a cost-effective and efficient manner.

As to whether the government as a whole is looking at implementing something like this, I can't say because at the present time any discussion paper we have out there is not to look at having municipalities setting up private corporations to deliver their services. But we are consulting with all the stakeholders to see whether there is a way of incorporating the public-private partnerships in a more effective way than is presently being done.

We do think at the present time that many of the things that are being requested can be done under the present Municipal Act, where the ownership may still be maintained by the municipality as opposed to setting up a completely independent corporation to do that.

The Vice-Chair: Liberal caucus, do you have any questions to the applicant or the parliamentary assistant?

Mr Tony Ruprecht (Parkdale): Yes, I have a question to the parliamentary assistant. I'm not surprised that as a result of downloading or restructuring, the municipalities are now looking for a new way to deliver services. But I am wondering whether in this case the city of Kingston is the very first that has come forward with the recommendation on public-private partnerships, or do we have other municipalities that have made recommendations to you or the ministry previously? In short, is this the only way that this recommendation has come forward, through this committee, or have you in the meantime, through your ministry, developed certain recommendations and plans of action that would help us in this procedure? Is this something totally new to you? Is this a first-time issue?

Mr Hardeman: I'm not sure one could say that anyone suggesting to set up a private corporation would be something totally new to anyone. Obviously the private corporations act is there and it's being used. In fact, many of us around the table have been involved in the private corporations act setting up a corporation in order to do business in Ontario. I don't think it's new that municipalities would be looking at that as an alternative of trying to provide services.

The point that we want to make is that the present Municipal Act does allow joint venturing with the public-private partnerships, providing the services remain in the ownership of the municipality. This is an innovative way, or at least a different way, of looking at how they can bring in private sector capital into municipal services, whether that is appropriate or whether it's inappropriate, but that is in my opinion the reason for this coming forward.

Have other municipalities ever proposed it? I'm not aware that there has been a bill before this committee to provide that opportunity to a municipality, but yes, municipalities have discussed it and talked about it many times before as to whether this was an appropriate way to deal with municipal functions.

Mr Ruprecht: I'm trying to get a sneak preview of the ministry policy as it is being developed or as you are going to be recommending it somehow. I am wondering, are you in a position today to tell us what some of the recommendations are that the ministry or minister will be making?

Mr Hardeman: No. I guess I kind of thought this morning would be appropriate to deal with the bill that's before us as opposed to discussing sneak previews of other legislation.

Mr Gerretsen: Make policy, Ernie.

Mr Caplan: To the parliamentary assistant, I understand that, for example, with research in universities the government has set up what they call these challenge funds, which are part private and also public monies to promote research, so a new way of doing business there. Is what's being proposed for the city of Kingston analogous to that kind of situation, where a function which was previously all within the public scope is now a shared type of arrangement? Is that how you see this working?

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Mr Hardeman: No, I wouldn't necessarily agree with that. From our ministry's point of view at this point in time, and dealing directly with this bill, we see that the ability of setting up a joint venture with the private sector, providing we have the municipal ownership and control, is presently available. We do not see that it's appropriate to completely segregate that service from the municipal portfolio through this structure. That's not to say that our discussions on the new proposed Municipal Act would not include some of the discussions of how this can be done and still have that municipal control and accountability to the municipal taxpayers and still be able to provide the service in the most cost-effective manner.

I do have here, if it's any help to the committee, the part of the present Municipal Act that deals with allowing this joint venturing: "The council of a municipality may enter into agreements for the provision of municipal capital facilities by any person. Agreements under subsection 2 may allow for the lease, operation or maintenance of facilities by any person, and despite any provision of this act or any other act permitting a municipality to sell or otherwise dispose of lands or buildings when they are no longer required for the purpose of a municipality, for the sale or other disposition of municipal lands or buildings that are still required for the purposes of the act."

I think the ability to work together with the private sector is in the present Municipal Act. We're just not convinced at this point in time that this bill is the right way to address the situation.

Mr Caplan: Mr Chair, I have a few questions for the deputants as well. I understand from your comments that this is really a very new year to your transition. When you originally requested the province to help you with your transition, you requested some money to fund some of the transition costs. What was the response from the province? How helpful were they to you? Can you give me some idea of how those discussions went?

Mr Bennett: Initially when the municipalities within the greater Kingston area began to talk about the issue of restructuring themselves it was done in the context, prior to the introduction of Bill 26, of the Savings and Restructuring Act. I guess in many ways we were there in the beginning, again in terms of wanting to reform the way we governed our community. Much of the discussions and the negotiations took place outside the context of Bill 26.

Certainly the discussions we had with the Ministry of Municipal Affairs were highly supportive of our initiative prior to the introduction of Bill 26 in terms of trying to reform the way we governed the greater Kingston area, and I think in many ways we were applauded for it. We were certainly assured that there would be financial assistance to assist with the transitional costs. At the end of the day, the province did provide funds to the city of Kingston that covered 51% of the transitional costs. Being a little wiser now, perhaps I might have negotiated an agreement with the province if they would have agreed to fund 100% of them.

In fairness, I think the province was fair to the municipality in the context of how they provided funding to all the municipalities in Ontario. I can't be critical of the Ministry of Municipal Affairs for not providing 100% of the funding. That funding came from a pool that was established by another ministry. It seems to me they were fair in terms of trying to accommodate our costs, but there never was an agreement that they would pay 100% of them. I'm not sure if they would have ever been agreeable to that.

As it is, the city of Kingston must finance 49% of the costs of the restructuring. We couldn't do that in year one. It was quite simply financially beyond the means of our community. It probably amounts to something in the order of $15 million in total. So we're going to amortize those costs over a period of time and we do have accounting and legal opinions that we can do that. We've sought assistance to ensure that we can in fact spread those costs over more than one year. That's an enormous front-end cost for any municipality to absorb.

The savings that we've achieved are significant. Once again, one of the issues the committee is dealing with is that there are no net savings in the 1998 budget as the money is going to offset some revenue shortfalls as a result of the provincial services realignment initiative, as well as the fact that we are trying to absorb in 1998 a significant component of the restructuring costs that were not covered by the province.

Mr Caplan: By provincial services realignment, you mean the municipal downloading that's taking place.

Mr Bennett: "Download" seems to be a shorter way of describing that provincial initiative.

Mr Caplan: The city of Kingston is short about how much, do you figure? You say that's eaten up all the savings that you anticipated from any amalgamation, from any restructuring that's taken place.

Mr Bennett: There is a summary of issues that has quite simply absorbed the net savings. They have been absorbed as a result of the fact that today there is a different fiscal relationship between the city of Kingston and the province of Ontario than there was in 1996. In addition to that fact, we've had to absorb the restructuring costs. As well, our community also had to deal with the storm of the century, the ice storm. There were significant costs, but once again the province covered them, as well as the federal government. But there were additional costs that were added into our budget.

There was a variety of unusual factors that were present in 1998. Some of those factors will continue to be present in 1999. There's no doubt that in 1998 we did achieve savings that exceeded the requirement under the restructuring order, but those savings were quite simply overwhelmed by all the other factors that changed.

Once again, had we been a little wiser in 1996 and known that the fiscal relationship that existed in 1996 between our community and the province was going to change fundamentally, we probably would have incorporated some latitude or some flexibility in the agreement that would have spoken to this. You never have a crystal ball that is as accurate as you would like it to be. In this particular case, that's the circumstance. The world has changed significantly since 1996 for municipalities and we're trying to respond to those changes by a variety of requests that are in this bill before you.

Mr Caplan: I don't think anyone could have anticipated the results of the downloading exercise and the effect that's had on municipalities. It was purported to have one kind of an effect and in fact that hasn't been true. It's had a significant negative impact on the municipal side. The province has offloaded its costs.

I'm curious as well that there were, as I understand it, municipal support grants that used to be provided. That was changed. It is now a one-time fund that will run out in 1998 and 1999. How much did Kingston receive from that one-time transitional funding? You're now going to have to be responsible for that in 1999 and subsequent years, as I understand.

Mr Bennett: That amount of money that was given to municipalities has been on a sliding scale and has now been eliminated as such. I don't want to get into a debate about the numbers because there's no doubt that when we do the math and the province does the math, sometimes the numbers don't add up. I don't know if that's a consequence of the complexities of the fiscal relationships that have existed between the province and its municipalities, but there's no doubt that the city of Kingston believes it is receiving -- in fact it knows that today it is receiving -- less money from the province in the context of the responsibilities that it has to its citizens. I think that's a fair statement.

Mr Caplan: What have you projected the impact to be on municipal taxpayers as a result of the withdrawal of provincial support for the city of Kingston?

Mr Bennett: I don't want to sit here and point fingers and blame provinces or municipalities for their ability to manage their financial affairs, but there's no doubt that in the city of Kingston there has been additional pressure on the property tax base as a result of the download, as you've referred to it. There's no question it has added additional costs to our municipality. As a result, more property tax money goes into providing services to the residents in our community than did prior to the provincial services realignment.

Mr Caplan: Hence, you were here last week and this week asking for the help of this committee and of the Legislature to deal with many of the extraordinary pressures that you find yourself in. Correct?

Mr Bennett: Surprisingly, this municipality is not here to ask for money; we're here to ask for the flexibility and the tools to, quite simply, manage our affairs in a very changing world.

The Vice-Chair: We'll move to the government caucus for questions. Anyone?

Mr Derwyn Shea (High Park-Swansea): It wouldn't have been an answer that Mr Caplan would want to hear, but I think it was a very forthright response, Mr Mayor, and I appreciate that. Obviously, we are all of us sensitive to the restructuring that governments are going through right now and I'm heartened to hear my Liberal colleagues expressing sensitivity to what they call the downloading. I hope they'll join us equally in expressing outrage on the download from the federal government: $2.4 billion just in health care alone. But let me pass on to the issues that are before us right now.

A question first of all to Mr Gerretsen. What parts of this bill particularly impress you and garner your support?

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Mr Gerretsen: Thank you very much. First of all, I would like to reiterate something I said near the end of the meeting last week. When I get a request from a municipality through its mayor that it has applied for a private member's bill, I feel it's my democratic right and responsibility to bring this matter forward.

Mr Shea: I think we all share that.

Mr Gerretsen: There was some suggestion made about how I could sponsor this bill when I was not totally in support of it. I feel it's the only way to get it before the Legislature or one of its legislative committees, and I respect that right now.

I think there are three aspects to this bill. There are the powers of the council over the board of control issue. Other than one letter that may have been received from a gentleman who was on council at the time in Kingston township, a council before the restructuring took place, there seems to be widespread support for the notion that council should be able to override board of control decisions by a simple majority rather than a two thirds majority. I certainly support that.

With respect to the corporate aspect, I think that's the area where most of the letters have been received, not only by the committee but certainly by myself. It basically revolves around two issues: (1) that the citizens of Kingston know exactly what is happening; and (2) should those powers be given.

Over the last week, I've had an opportunity to go through the various council minutes, the various decisions that have been made by council as we go along. First of all, I don't view my role as being some sort of a superlord to overlook what a council is doing. They're elected people and if they feel they want to come forward with something, then they take the responsibility and the flak that comes along with it, that happens to come that way.

Having looked at all the various resolutions, though, I concur that there has been debate about the general tenets of the bill, but there is no resolution that I've found anywhere -- and I must say I didn't receive all the various resolutions that council dealt with -- that dealt specifically with respect to the bill that's in front of you. There was a lot of general discussion about the general policy document, the general direction that the city should take. There was even some discussion in some of the resolutions about the fact that a private member's bill or a private bill would be required in order to move those initiatives along. I have not been able to detect any kind of motion that specifically deals with the bill in front of you as it relates to corporate power in specific terminology. If I'm wrong, then I'd like the mayor to correct me on that.

I think there is some real concern, particularly by the people who work for the city of Kingston. As has already been stated, we live in a changing world and there is a real fear on behalf of public servants and the general public out there about this whole mode of privatization. I think that fear is well-founded. When employees within a corporation, when people who rely on the services of a corporation all of a sudden hear that under this new act, and with the new powers, a city in effect requests the power -- whether it will exercise it or not is something else again -- to privatize whole areas, there is general concern about that.

As has already been stated, I hope that section of the bill can be referred back to the city to have further discussion and further public input from the general public, from those people who are interested in it, specifically dealing with the powers that are requested in the bill as they relate to corporate powers. There may have been general discussions about that before, no doubt -- council resolutions seem to clearly indicate that -- but certainly not the specifics of the bill. So I'm not supportive of the corporate powers that are set out in the bill at this time.

With respect to the third aspect, and that deals with the financial issues that have been raised, I think the mayor has already said it. Since the amalgamation agreement, the restructuring agreement, was entered into between the three municipalities and the province of Ontario, a lot of other changes have subsequently been brought forward; call it downloading, resurfacing, rearrangements, however you want to call it. This is another municipality -- and I don't want to get involved in the politics of this -- that has felt the real effects of the changes that have taken place and obviously feels that now they're going to be short of money as a result of that.

I can see that some of the people who were involved in negotiating that earlier restructuring agreement, such as the former reeve of Kingston township and a former councillor of Kingston township, have some concerns. These people are saying, "Why should an agreement be changed within a year after it was put into effect?" because the new city of Kingston started on January 1 of this year.

On the other hand, the city of Kingston has a real problem. Right now they are short $15 million. They have to be able to deal with that. Therefore, I do support those changes. I don't think it's the city's fault in that case at all, quite frankly. I personally happen to believe that it's as a result of the extra services that are now going to be paid for at the local level, whether we want to call it downloading or not. It has to be dealt with. They are $15 million short and either the taxpayer next year has to deal with it or it has to be done over a certain period of time by way of debenturing etc.

Basically, I support those two aspects of the bill but not the corporate aspect and I'd be more than pleased to answer any other questions that you may have of me in that regard.

Mr Shea: Your response obviously generated a number of other questions but there's only one that I want to focus on because it strikes me as a very serious allegation that you've made as you've gone through the records. You have your own experience in municipal government, so obviously you know how to raid the records. You've indicated, at least you've given me the impression in your response, that council has either avoided or obscured or misled the community in terms of the key issues that are presented.

I've heard in evidence today and in the last meeting, and I think Glenda Scott said it well, that this has been on the record at least since August, if not before. Can you respond to my concern that from your comments you have left me with that impression that council has not managed this in the public forum adequately? And I'd like the mayor to respond, in fairness.

Mr Gerretsen: Let me just read to you one portion of a resolution that was passed on July 16 by council. It states: "That a request for special legislation be submitted to the province of Ontario on an urgent basis to correct elements of the minister's order which created the new city of Kingston, some which cannot be implemented due to changes since the creation of the restructuring order. The request should also include legislative authority to clarify the city's authority to carry out all the elements of its new approach," -- which deals with this privatization matter -- "particularly the corporate integration of the Kingston Infrastructure Group and payment of interest and dividends to the city."

There are other resolutions similar to that. You, sir, can draw your own conclusions. I certainly would not accuse the city of Kingston and its council of misleading anyone. I am sure the mayor sitting here and council, in bringing this matter forward, felt that it had enough adequate public exposure. You can draw your own conclusions.

I can also completely understand some people in the community saying, "That is not as direct as you can be, by saying you want to give the city full corporate powers as laid out in the special act that's before you right now." It's not a question of misleading; it is a question of people having different interpretations as to what was passed. If there is any concern about that, being a true believer in the democratic system and being one of the reasons I got involved in this process over 25 years ago, I believe in an open and transparent approach. If there is a widespread concern in my municipality that that has not happened in a particular case, then I think it is best for council to go back and look at it, but I don't want to put myself in that position. That is basically up to the mayor and council to decide.

I certainly would never accuse them of openly trying to mislead anyone because that's not the way we operate local government, and never have, in the Kingston area, regardless of who has led that process.

Mr Shea: Mr Gerretsen, when did you read Road to Recovery?

Mr Gerretsen: I received a copy of it some time when it came out in late summer.

Mr Shea: Would the issues that are before the committee now and the request being put forward by the mayor and the council have been appropriately reflected in that document?

Mr Gerretsen: What the mayor has put before --

Mr Shea: Yes, would that have been part of --

Mr Gerretsen: I think his presentation has dealt with the Road to Recovery. That's correct.

Mr Shea: Road to Recovery would have contained the genesis, and more than the genesis but in fact the blueprint that is outlined in the documentation today, the proposal from the mayor.

Mr Gerretsen: That's right, but not the specifics of what's requested in the --

Mr Shea: Road to Recovery did not get into specific details, in your opinion.

Mr Gerretsen: It's got a few specific details as to how things ought to be done, but it didn't specifically deal with the wording as contained in the city of Kingston bill.

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Mr Shea: Thank you. Can I go to the mayor now for the response.

Mr Bennett: It's important to realize that the city of Kingston did, in my opinion, involve the community in consultation. All the discussions were held in public. There is a chronology of events which I believe was circulated to the members which does indicate that on at least three, if not four, different occasions the council debated the issue and passed very extensive motions that went into an enormous amount of detail about what we were trying to take forward.

In fact, I took the unprecedented move, which is something I've never done in my life, and called a press conference to announce the formulation of the Road to Recovery document. It was attended by every member of the media in our community. It did not in some ways focus on the issues that are before us today. It did speak to the issue that the city of Kingston had some fiscal difficulties and the council was trying to put together a long-term fiscal strategy to attempt to deal with this. We answered all questions that were posed to us, certainly at that press conference. As well, we held two public consultation sessions with it. We posted much of this information on the Internet and it's there for the world to look at, in my opinion.

Could we have done a better job in terms of communicating the complexities or the potential of what we were proposing? Perhaps. I guess any of us can stand accused of perhaps not doing as good a job as we could have done in terms of public consultation. I think the potential to be accused of that is always there in government.

It's important to realize that within the body of all these motions we talk about creating a comprehensive, far-reaching strategy, and the important thing to recognize is that in the motions we talk about the fact that the public of the city will be consulted on components of the strategy. What we're trying to do today through this bill and through this entire exercise is nothing more than access a tool that gives us the flexibility to quite simply administer or provide services to our community in a way that in many ways is innovative, far-reaching and is a significant departure from the way services have traditionally been provided.

I think the parliamentary assistant has indicated that the Municipal Act does provide some flexibility to do some things. It also creates some barriers. I think it's fair to recognize too that you don't have the extent of flexibility that the city is seeking. I'm sure the parliamentary assistant will concur that the municipalities of Ontario are extremely creative and innovative in terms of trying to take the legislative framework we're asked to work in and find ways to make it work.

What we're saying is, we believe the Municipal Act can work better for municipalities. This is one way we believe it can work better. But in terms of the issue of public consultation, I believe we endeavoured to communicate to the best of our ability what we were attempting to do.

In terms of the corporation of the city of Kingston and its ability in terms of external communications and should we be putting more money into an external communications function, I think the difficulty in that is that then you're constantly accused by the media of trying to spin things or produce your own propaganda. We've tried to be transparent about this. We've tried to be honest about this.

One issue that the member from Kingston raised was the issue of privatization. I've said it before at this committee, I've said it publicly as many times as I can remember, that this is not an attempt to privatize the services in the city of Kingston. Without this tool, privatization in my mind is very much a viable option the city needs to look at. I'm prepared to look at privatization in the absence of this tool. With access to this tool, privatization in my mind is not necessary and is not something the city of Kingston needs to consider, but to be able to create public corporations, to be able to encourage private equity participation in the activities and the services of our community is something we think we can better achieve through the creation of stand-alone public corporations with access to share capital.

In this particular case, what we're trying to say is, we believe this provides a degree of flexibility that has ministerial concern. In fact, I'm surprised at the degree of interministerial concern. There is probably merit in some of that concern and I guess we need to have a debate that goes far beyond this room in terms of those consequences.

Mr Shea: Could I just finish off that part, because I think, Mayor, you've cut right to the chase, and I appreciate that response. I'm reassured that there has been significant public opportunity to deal with this issue, particularly through Road to Recovery. It has not just been sprung on your public in the last month or two.

You wanted a very quick response, Chairman, to this. My comment would be it is an imaginative approach that is worthy of expeditious evaluation. Considering the parliamentary assistant's caution, I think there's a need to reflect upon this middle ground that Kingston seems to have discovered. It's worthy of some very quick evaluation. I think we should defer that part of it for further consultation but not for a lengthy period of time.

We're going to have an interesting debate that may go on here, and you're right, Mr Mayor, it may go on into a broader forum, whether you go to the point of privatization, which you could do right now as of right, or to the other extreme where you say, "The state is responsible for providing all services and that's the end of that discussion." You seem to have come up with another model that is worthy of some consideration. Frankly, for this one member, I want to compliment you and your council for having had the imagination to go in that direction. It is at least leading us into an interesting area of evaluation. So I, for one, appreciate that. My questions of your sponsor were simply to ensure that there has indeed been an opportunity to consider the public in the equation, and you have. I'm reassured by that.

With that, Mr Chairman, I'll turn it over to other members.

The Vice-Chair: Could we have just one more final brief question from the government side. Otherwise we'll be here all day.

Mr Gary L. Leadston (Kitchener-Wilmot): I have a number of questions, but I'll just ask one that I think is rather important.

Is there a motion on the table to defer this, and does that set up a sense of false expectation to deputations that down the road -- there's been no direction in terms of altering any section of the bill or any direction from any of the parties in terms of what they're comfortable with or what they're not comfortable with. We've heard from the deputation. My question is, is our purpose here this morning to continue dialogue until noon and adjourn and then have it come back at a future date or do we make a determination this morning that this bill is not acceptable or are we going to defer it? What is our goal?

The Vice-Chair: I understand the parliamentary assistant had that in mind. He's going to make a motion to defer it. Does that answer your question?

Mr Leadston: Until when?

Mr Hardeman: The only reason I would propose to make a motion to defer is at the request of the mayor, who suggests that if the committee was not prepared to deal with and pass the bill because of some of your concerns, the city of Kingston would be better served by having it deferred until some later date when they could request with the clerk to have it put on the agenda for further discussion by this committee. I guess that's really the point to make.

I would not be prepared to ask for a deferral to any specific date. I would be prepared to vote one way or the other on the bill, but I think in recognition of the mayor's request that he would be prepared to look further at the options and have further discussions with their community as to some way to deal with the bill that would meet the objectives of the city and also the objectives and the concerns expressed by the different ministries, I would suggest that we give him that opportunity to go back and have further discussion in their community. If they can come up with an answer, they could come back with the bill reconfigured to deal with the concerns, but if they could not come to a consensus, they may decide not to proceed with the bill. That would be their choice.

Mr Leadston: Or the bill could be withdrawn, taken back, rewritten, incorporating the comments and suggestions.

Mr Hardeman: To my understanding, the question is that when the committee has the bill before it, whether it then still is the opportunity or the ability of the applicant partway through the hearing to just say, "I withdraw," it would seem more appropriate to use the approach that we would defer the decision and let them take the bill -- recognizing it would not come back on the agenda unless they requested it to be back on the agenda.

Mr Gerretsen: I would just say that I think there seems to be agreement with respect to the corporate powers, but is there any reason why this committee can't deal with sections 1 to 4 and section 8 which specifically deal with the powers of the board of control and the ability of the city to deal with the financial problems that it currently has as a result of restructuring? It has to deal with a $15-million problem. How else is it going to deal with that?

Mr Hardeman: Again, I can't address how the committee would vote, but if one were to divide the sections up as Mr Gerretsen suggests, I would be voting against the other sections also. I would suggest, if my view is the view of the majority of committee members, that a deferral of the total bill may be more appropriate than going through and voting some sections down, which of course would then disappear and no longer provide the city of Kingston further debate on those issues, and if that included all the bill then it would be identical to voting the bill completely out of existence.

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The Vice-Chair: I want to go back to the NDP caucus.

Mr Martin: Rather than leave the city of Kingston twisting in the wind with a deferred bill here and given the very strong concern you've raised, Parliamentary Assistant, about all of this -- my view is that we're here discussing this today because the city of Kingston, like every other city across this province, is having a heck of a time sorting out the mess that's been put on their table re the whole process of downloading. It's just been a disaster from the get-go. You have municipalities now desperately trying to find ways to deal with this mess and that's what we're dealing with here.

I first of all disagree with the process. I don't think this is the place to be discussing it. I think you're right, Parliamentary Assistant, that there's further discussion needed here, because this is fundamentally different legislation than what's in place now under the Municipal Act and it gives municipalities powers that other municipalities then will obviously want. I think the question is, do we want to set that kind of precedent here? Do we want to deal with this very difficult circumstance in this very haphazard way?

The other thing is, and I want it on the record and people here to know, that I am totally opposed to dealing with the mess the provincial government has created in this fashion, heading down a road that will see public money used to buy private sector services to deliver programs that I think the public, and rightfully so, expected the government they elected would be delivering, and be responsible and accountable, ultimately, for the quality of that delivery and the expenditure of the money on that delivery.

I'm totally opposed to the direction that is indicated by way of this bill as well. I will be in support of any move here this morning to vote on this bill and I will be opposing it for those reasons, including the comments you've put on the table this morning, Parliamentary Assistant, raising the very sincere and I think important concerns that you have.

The Vice-Chair: Mayor Bennett?

Mr Bennett: Just a couple of comments. First of all, I'm comforted by the words of some of the committee members that this issue of incorporation needs a wider airing, but it's an airing the government recognizes and it's willing to work in partnership with the city of Kingston and other municipalities in Ontario to improve the way municipalities govern their communities. If that requires a wider debate and a more extensive consideration of those sections of the bill before you, which are 5, 6 and 7, then I would certainly support withdrawing it or deferring the decision on it.

The other two issues are the board of control and the budget. I'll just take two more minutes of the committee's time and then you can make your decisions as such.

The issue of the board of control and its ability to have a two thirds effective veto over decisions of council is something that was discussed extensively through the restructuring. The only sort of evidence I can provide to the committee is that there was extensive coverage in our media on the issue of what a board of control is. For our community, I think there was a lot of misunderstanding of just what a board of control is. It was something new to our community.

This particular article that appeared in the Whig-Standard one month before the election states: "Was the board of control supposed to be as powerful as it appears to be? The answer is no." It goes on to say: "Area politicians proposed a board that could be overruled by a majority council vote, as in the case of London, Ontario. Provincial and local politicians are now considering ways to weaken the board's power."

I think it's a question of what your understanding was of what we negotiated at the time in 1996. It was a highly complex agreement that we debated and came to an agreement on. I think the issue for my council is that we want a council of equals. We want a council that operates a board of control similar to the only other one in existence, which is in London, Ontario. We were as surprised as anyone to find that the only board of control that was in existence at the time, which is the board of control in London, Ontario, operates contrary to the provisions of the Municipal Act.

I guess it's a question of whose interpretation of the agreement. The only opposition to the city of Kingston's request for amendments to the board of control that I'm aware of, that my office has received any correspondence or interest in, is in a letter I was shown that was sent to Mr Gerretsen's office opposing this. I've received no phone calls in the community and I've received no letters opposing that the board of control powers be quite simply changed and made in conformity with what we believe we negotiated. If on the weight of a single letter the committee is going to suggest that it doesn't want to support a virtually unanimous motion -- I believe there were one or two members opposed -- on that issue, I guess I'd like to know why.

The other issue is the budget. The only evidence, once again, I can present to the committee is a letter signed by the commissioner of finance, who was the former treasurer of Kingston township. In the letter he makes the statement that "the city of Kingston has met its legislative requirement under all the budgeting provisions of the restructuring order. The council is confident we've met the restructuring order's requirements legislatively. Our legal counsel agrees we've met them in terms of statutory responsibilities," and the commissioner of finance of the city of Kingston, in this letter to this committee, says that the city of Kingston has met its legislative requirement.

Do we need to publish this letter? Do we need to go back to the community and explain to the community that fact? That may be the case. I don't think there's any other evidence I can provide this committee that can convince them that the city of Kingston has complied with not only the spirit of the agreement but, in this particular instance, we have complied with it to the letter, to the best of our ability, given the changing financial circumstances.

I agree these are three independent issues. Should they have been presented as three separate, independent bills? I guess life continues to be a learning process for me, and in the future I may very well ensure that there's only one issue of any substance dealt with in any future private bills that the city of Kingston will present to this committee and government in future years.

I appreciate the opportunity of being here. I've learned much in the last six months.

Mr Gerretsen: We've all learned a lot, Mayor Bennett.

The Vice-Chair: Mr Mayor, are you in favour of deferring this bill totally or is this your final --

Mr Bennett: The difficulty for me is that I can't prejudge the final decision of the committee. But if the committee is not prepared to support any of the provisions in there, I would ask that you defer it so we have a further opportunity to satisfy the government and the committee that it is appropriate to support all the sections of this bill.

I understand the contention around the issues of incorporation. There's no question the issues go far beyond this room. But I don't believe the issue of the board of control or the issue of the budget extends to the same degree beyond this room. I think the city of Kingston has worked hard to make the restructuring order work.

It's important to recognize that I would hope the authors and the people who helped negotiate that agreement don't believe that that agreement has some kind of divine constitutional status. It's not a constitutional straitjacket for our community. It represents an agreement between parties at the time that a partnership was created between the city of Kingston and its member municipalities. In future years, future councils are going to look at the restructuring order and view it, as I do, as a living document that must change and reflect, in my mind, the will of the community and its council.

To suggest that it is a constitutional straitjacket is unfair. It's a question of who governs the city of Kingston: the restructuring order or the council elected by the community. That's the issue in my mind. There are many components within that restructuring order that I will always honour and support while I'm the mayor of the city of Kingston, but once I've left office I think the will of the community is expressed in its local government and it has the authority and the ability to do what it wants with that restructuring order. I can only take responsibility for it while I'm there and I'm trying to do it in a way which reflects compromise and community will.

The Vice-Chair: Does the Liberal caucus have any more questions?

Mr Caplan: No.

Mr Bill Vankoughnet (Frontenac-Addington): Just one small point. I'm very concerned about the question to defer this. I would rather see the committee decide one way or the other whether this bill should go forward. It's already been deferred from last week. There's no time frame here as to when it might come back again.

I think there are a lot of unanswered questions. The questions that I get, representing Kingston west and a major portion of Kingston east, are that there should be more consultation. We can argue at length whether or not there has been enough, but certainly what I'm getting from constituents is that they have many more questions.

As a representative of a major portion of the city of Kingston I have not been consulted, so I can appreciate the many other people in the community who feel they have not been adequately consulted. I would certainly be on record as wanting to vote against this particular bill and not defer it.

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Mr Hardeman: A couple of comments: Earlier there was some question as to whether corporations had ever been created by municipalities, and I neglected to mention that there are a number of instances where by legislation municipalities create private corporations such as what is being directed in Bill 35 through the delivery of electricity. There are instances. The housing regime in local government is done through the private Corporations Act. There is the ability in the Municipal Act for communities to set up community economic development corporations. Again, they set up the corporation owning all the shares and then they provide it in a businesslike manner.

There is no instance I'm aware of where it can be done through the present Municipal Act for any municipal services, but there are a number of instances where it happens through special legislation that applies to all municipalities. I just wanted to clear that up.

The other thing is in response to Mr Martin's comments about how the reason for this bill and the parts of this bill coming forward are related to the realignment of provincial-municipal services. I would point out that there are no parts of the bill that deal with that. They deal with the Kingston restructuring order, they deal with the structuring of local government and they deal with how a municipality, the city of Kingston, can deliver services in a different manner.

The services that are being discussed, incidentally, are not those services that relate to the realignment of services. The ones about which concern has been expressed have always been under the authority of local government, up to and including the delivery of public health. It was mentioned by Mr Martin that this was somehow a big part of this bill. I can assure you that the delivery of local public health has been done very ably by local government for many years. Though the funding structure has changed somewhat, the delivery model of that has not changed in the last year or two in order to deal with the provincial realignment.

It's important that the committee stay focused on what the bill is intended to do and what purpose the people of Kingston are here for, as opposed to the overall, general picture we've had some time discussing that does not necessarily relate to this bill but to a different regime altogether. I ask the committee to consider that.

Recognizing the comments made by some of the members, Mr Chair, I would move a deferral of the whole bill, and ask that you open the debate for that, to such time as the city wishes to bring it back. I would also point out that with such a deferral the end result, the only difference between a deferral and a denial, is that they have the ability to bring the same bill back at a future time, as opposed to having to do the same thing all over again, to rewrite a bill.

From the committee discussion, all those in the room would be aware that the bill in its present form would, at least in my opinion, from what I've heard, not be likely to be passed by this committee. So I suggest I make the deferral to facilitate their ability to look at other options. I put that motion on the floor.

The Vice-Chair: We have a motion to defer and I think we could again go around: the Liberal caucus, the NDP caucus and final comments from the government caucus. Then we'll have a vote on that.

Mr Caplan: It's a little bit -- how should I say? -- unfair to try to piece off the different portions of this bill and say that it has to be treated as a whole and that it is solely a matter of what's in this bill. It is within the context of what's happening within the city of Kingston. It is the will of the city of Kingston and the belief, as I understand what the mayor has said, that they understood when they were restructuring that their democratic structure was going to be of a certain form. They have subsequently discovered that it is different than what their belief was.

I don't for the life of me understand why this committee can't deal with that today, especially if that is the unanimous or near-unanimous decision of the city of Kingston. That is one aspect that I think we could appropriately deal with at this committee today.

In regard to the financial powers, obviously when the restructuring was taking place it happened in the context of the time that the city of Kingston said to the surrounding townships, and there were some discussions taking place, "We feel this is a good idea, that it will benefit the ratepayers, it will benefit the citizens of our communities," in the context of 1996.

Here it is 1998, and the context of the time is entirely different. There are a number of factors. I know the city of Kingston could not have foreseen the tremendous weather condition that occurred last year that has had significant impact on the city and still does, and perhaps the full extent of it. They could not have foreseen the exercise of downloading. I must admit I've heard one of the government members, Mr Shea, and I've heard others whine about this federal government business which they knew well in advance about. I hear them whine like the previous government was whining and yet the city of Kingston was hit, as other municipalities were, really out of the blue on this whole exercise. They could not foresee that happening to them. It has eaten up their savings. It has put a tremendous strain on their --

Mr Vankoughnet: Mr Chair, we have a motion on the floor. Could we not deal with that rather than this rambling?

Mr Caplan: Mr Chair, it has given us a process and we're going to talk about the process.

Mr Leadston: We're not talking about this.

Mr Caplan: OK, we're not talking about the process but we're going to deal with the process and talk until everything has been said.

I think it's quite important for the city of Kingston to be able to deal with the matters that they find themselves in financially, and to be able to debenture their costs is something this committee could deal with today. There's no reason that that subject area of the bill, sections 3 and 4, could not appropriately be dealt with today and supported. I haven't heard any good rationale of why that could not be, as with the board of control.

As for sections 5, 6 and 7, the mayor has indicated, as have others on this committee, that there needs to be a broader discussion. I also happen to believe that it is not appropriate for this committee to be setting what would be new policy. We had this discussion last week on a different bill, that a precedent of that nature is not appropriate for a private bill. It should come out of direct government policy, whether or not that is the will of the province of Ontario through its various engines. That was my position on a different bill. It remains my position on this kind of bill as well.

I believe that sections 5, 6 and 7 are inappropriate for this committee to be deciding on. A deferral, while that may delay things, quite rightly should be discussed at the cabinet table, with a decision whether it's an appropriate avenue to follow. It sounds to me as though the city of Kingston has tried to come up with an innovative solution to some of the situations and some of the problems that they've been placed in. Unfortunately, many of them are not of their making and they're having to grapple, as all municipalities and councils are having to grapple, with the actions of different tiers of government.

I certainly urge this committee to support today sections 1, 2, 3, 4 and 8 of this bill and not deal with 5, 6 and 7.

Mr Leadston: On a point of order, Mr Chairman: We're not debating sections of the bill. I understand, and I stand to be corrected, very clearly that the parliamentary assistant, Mr Hardeman, has put on the table a motion to defer.

The Vice-Chair: He is, in other words, speaking against the motion. Finished?

Mr Caplan: Yes.

The Vice-Chair: OK. We'll move to the NDP caucus.

Mr Martin: I'll be voting against the motion to defer too for a couple of reasons. One, I don't think it's fair to leave the city of Kingston twisting in the wind for God knows how long, thinking they can come back here and maybe push this through at another time.

I was a little disappointed this morning that the dividing of the bill wasn't done and that we didn't have that piece of the bill in front of us in another form that we could actually debate and perhaps have a vote on. That seems to be more acceptable to some and perhaps not to others.

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I'll be, hopefully, wanting to vote on the whole bill and to vote against it, because I think first of all the process is wrong. This is a fundamental change in the way municipalities operate and the powers they have. Having said that, I understand the dilemma that municipalities find themselves in. The province has created just an unimaginable mess, a challenge for municipalities to have to deal with.

The parliamentary assistant mentioned the issue of overseeing the operation of health units and the delivery of ambulance services, and if he suggests for a minute that they were vehicles of municipal council, he's dead wrong. I don't know where he's coming from or why he doesn't understand that health units operated independently from municipal councils were funded primarily by the province and operated under guidelines and standards that were set by the province. I don't know what municipality at this point delivers ambulance services or did deliver ambulance services, but that's a new piece that municipalities have to pick up and run with. It creates for them some really difficult challenges.

I don't think this is the process for them to use to respond to that and to somehow creatively deal with it. I think there has to be a fuller discussion on a wider level around the whole question of what do municipalities do, what should they be doing and what can they realistically afford to do? What should the province be doing? What is it that the province has a responsibility for? And in the context of that, I suppose in another venue, what is it that the federal government has a responsibility for and what should they be doing?

This is a fundamental change in the relationship between municipalities and the province and a fundamental change in the powers that municipalities have to change the way they deliver services. I am absolutely and totally opposed to the privatization of the delivery of government services. I think it takes away responsibility and it takes away accountability. It also hives off a chunk of the money that we collectively put into a pool to buy services for ourselves to be delivered by professionals and turns over a chunk of that money to the private sector by way of profit that I think could be better used to buy even more services and to make sure that the people who are delivering those services are adequately compensated and looked after so they can do their jobs in a professional manner.

I'll be voting against the deferral, hopefully to the end that we will then get a chance to vote on the bill, which I'll be voting against as well.

Mr Shea: Just before I respond to Mr Martin's ill-tempered outburst, I presume driven more by ideology, although I am confused now because I don't know which of the opposition parties now speaks for CUPE or the various unions, but we'll resolve that somewhere else -- a question to the parliamentary assistant.

Mr Hardeman, would you indicate for me -- the motion before us right now is to defer, and that is to defer the entire bill. I am persuaded by the mayor that there is more than a little merit to get him out of the conundrum he faces in terms of the Municipal Act in terms of the board of control. I think the mayor is absolutely right on in that regard. Can you assist me? Would we be creating any awkwardness for your ministry if we were to separate out the deferral motion and at least deal with the board of control to allow it to be in conformity with the other board of control that currently exists in London, I think? Frankly, I'm a supporter of boards of control. Is there a way for us to bring that into conformity without creating awkwardness for the ministry but deal with the other part of it at least on a pro tem basis?

Mr Hardeman: I'm not sure I can say whether it would create a difficulty for the ministry and I'm not sure that should be a concern of this committee. We have, at least in my opinion, some procedural concerns as we deal with this. I would point out to the committee that if the committee is inclined to deal with one section, the deferral option is not available on any other section. We cannot deal with one section and defer a decision on other sections. We can deal with one section and then one must deal with all the other sections, whether you would approve or not approve those sections.

Mr Shea: All right. I respect that response.

Mr Hardeman: I think in a procedural approach there is some concern.

I would also, Mr Shea, point out the concern that I personally would have with the board of control issue. It deals with the issue that has been pointed out on some, if not all, of the other sections of the bill: whether the people are aware of what impact passing that section or that part of the bill will be to them.

Again, not to suggest that the mayor did not suggest that this was in the best interests of all those people and will be helpful to all the people who today are at the table, my understanding in some of the discussions I've had with individuals from the Kingston area is that some of the suburban people realized that the board of control would require two thirds of council to overturn a board of control decision, recognizing that the board of control makes all financial decisions.

The suburban areas had some concern about their voice being heard at the new city council table. They felt that one of the pluses was to have a requirement that it would take two thirds of city council to overturn a board of control decision. For the people I've heard from it is not as simple as just saying: "We didn't understand. We think the 50%-plus-one vote is appropriate for overturning board of control decisions." I think that, along with some other parts of the bill, requires slightly more input from the people who are going to be impacted by such a decision.

Mr Shea: Would it be your undertaking to ensure that there is staff deployed to assist the mayor in terms of resolving some of the concerns, if it's possible, with the various ministries and to do that in an expeditious fashion?

Mr Hardeman: The ministry is always at the disposal of all the municipalities in helping them to achieve their common goal and to improve the effective and efficient operation of their municipalities. I can assure you that our ministry will be available to assist in any way they can in trying to address these concerns by the city of Kingston.

Mr Shea: I want to conclude my comments by complimenting the mayor. I think you've handled this in a very even-handed way and I, for one, understand the awkward situation that you find yourself in. In some ways it's not of anyone's making; it's all of us trying to work our way through some new waters. I must say that I personally applaud you and your council for trying to develop new models to give us some new directions. This is not a partisan comment; I'll get partisan in a minute. This is regardless of what party is in power. That's where we're at.

Now let me get partisan for just a moment, Mr Mayor, and having thanked you, move on to comments made just a little earlier. Mr Martin particularly, although echoed to a much lighter sense from his Liberal colleagues, made some comments as though all of this is a result of some of the restructuring of the last year or so. It would have helped me had they read Road to Recovery, had they recognized that the city of Kingston itself has indicated very clearly historic difficulties that have been accumulating over some time. The person sitting to your right, Mr Gerretsen, would recognize some of them as not just having been dated since 1995. They go back some distance.

You pointed out the demographic changes. You pointed out the economic changes. You pointed out the decline in jobs. You pointed out the average unemployment circumstances, which are not enviable anywhere and that you want to deal with. You pointed out the public sector restructuring, the pressure on social infrastructure. You pointed out the fact of over $200 million in deferred costs of capital, which is not just in the last five months or year or whatever.

Had some read the report, it would have been very helpful, I would think, to say that much of this is a cumulative weight that bears upon not just your municipality but many others, as it bears upon the province of Ontario or even the federal government. It is something all governments are trying to wrestle with.

Getting this now out of the partisan nonsense that somehow gets here, I want to say thank you for bringing it forward. You will indeed have my support in helping in any way I can to bring this to a speedy resolution. I think there is some merit in what you are bringing forward. I think it's worth some discussion. I agree, although I strain myself to do this, with others who have suggested we need to have a much broader debate on this. I agree with that totally. You've walked into some areas here that we should look at in terms of municipal affairs and I hope they'll deal with it very quickly.

The Vice-Chair: Could we have, Mr Gerretsen, just one very brief comment and then I'll call for a vote.

Mr Gerretsen: Yes. I'm sure that the mayor would be more than prepared to withdraw those sections dealing with the restructuring agreement if the province would pay the $15 million that we're short right now.

The Vice-Chair: Can we have a vote on the motion to defer Bill Pr22, An Act respecting the City of Kingston? All in favour of the motion to defer? The motion is defeated.

Now I understand the procedure calls for voting on the bill section by section.

Shall section 1 carry? Defeated.

Shall section 2 carry? Defeated.

Shall section 3 carry? Defeated.

Shall section 4 carry? Defeated.

Shall section 5 carry? Defeated.

Shall section 6 carry? Defeated.

Shall section 7 carry? Defeated.

Shall section 8 carry? Defeated.

Shall section 9 carry? Defeated.

Shall section 10 carry? Defeated.

Shall the preamble carry? Defeated.

Shall the title carry? Defeated.

Shall the bill carry? Defeated.

Mr Ruprecht: Could we get the vote on the preamble, please? I heard one member say yes and three say no.

Mr Hardeman: That's still enough, Tony.

The Vice-Chair: Shall the bill be not reported? Agreed.

Thank you very much, everyone, and the meeting is adjourned.

The committee adjourned at 1133.