The House resumed at 8 p.m.

House in committee of the whole.

LOCAL SERVICES BOARDS ACT (CONCLUDED)

Resumption of the adjourned debate on the motion for second reading of Bill 122, An Act to provide for the Establishment of Local Services Boards.

On section 24:

Mr. Wildman: Mr. Chairman I hope we will be able to complete this bill this evening. In fact, I’m certain we will. When we left off it was on a rather sour note in that the minister and members of the opposition who were mostly taking part in the debate got into a dispute over why we were taking so long over this piece of legislation.

As a matter of fact, the minister seemed to indicate one of the reasons for the delay in getting this passed was the attempt by the NDP and Liberal critics to amend certain sections of the act and protract the debate on those sections, one being section 24.

I understand in our discussion of section 24(1), the member for Nipissing (Mr. Bolan) quite rightly and certainly in a moral sense indicated there was a need to increase the funding formula from one for one to two for one. It’s unfortunate the rules of the House, as interpreted by the chair, led to the decision that his proposed amendment to subsection 1 was out of order.

I support his position on that and wish the minister would listen to the arguments made by the opposition. I hope he would see the inherent wisdom in them and come to the conclusion that it would be best for all concerned and the best way to expedite the passage of this bill if he were to himself amend the bill to change the funding formula.

I don’t have anything further to add to subsection 1, but I do have some comments on subsection 2.

Mr. Bolan: On subsection 1, very briefly.

All the pearls of wisdom we have tried to give this government over the past few weeks during the debate on this bill have fallen on deaf ears. I’m not going to repeat them again. However, I will try to elicit from you a specific answer.

What criteria are required to be met by the individual boards when they come to you for funding? You don’t spell it out in the legislation. You’re saying they may, out of funds appropriated by the Legislature, do this, this and that. Although I don’t agree with the position the government has taken, nevertheless that’s it.

It’s a money feature of the bill and there is nothing we can do about it. But that being the case, what will your policy be with respect to local services boards which apply to your ministry for funding?

Hon. Mr. Bernier: Mr. Chairman, I appreciate the desires of the members on all sides of the House to move this bill ahead. I know their enthusiasm to get it operational. We’ve come this far and we might as well complete it. As the honourable member knows, the amendment submitted by the member for Nipissing was ruled out of order by the Chairman. However, he has asked a question as to what will be the criteria for funding.

The funding is very simple. The boards can raise funds through their own efforts -- with town bazaars, fall fairs, bingos, hockey pools, anything -- by which an unorganized’ community can raise funds. Those of us who live in unorganized communities know there are a variety of ways, providing those funds are used for the operational requirements of the services they will be administering to the respective areas to which they’re providing services.

If they choose to go the other route of piggy-backing on the provincial land tax for the operational aspect of those services, then we will match dollar for dollar. There is no question about it; no problem. It’s so simple it’s pathetic. If the honourable members are going to play politics I would say make it four to one -- make it really attractive.

The local roads boards, as I said in my earlier comments, are not an autonomous body. They are advisory boards to the Ministry of Transportation and Communications. They pass on their funds to the MTC. This will be an autonomous body. They will do what they want with their funding as it relates to the improvement of the quality of life in those unorganized communities.

Mr. Chairman: Mr. Wildman moves that section 24(2) of the bill be amended by inserting after the word “two” in the third line, the word “twice.”

Are there any comments?

Mr. Wildman: I want to emphasize at the outset that, in this amendment, I am not requiring the government to spend any money. The Legislature, if it were to pass this amendment, as I hope it will, is not requiring the government to allocate money.

I anticipate the arguments that may be made, so I would like the Chairman to refer to rule 15 under the standing orders which states, “Any bill, resolution, motion or address, the passage of which would impose a tax or specifically direct the allocation of public funds, shall not be passed by the House unless recommended by a message from the Lieutenant Governor, and shall be proposed only by a minister of the crown.” I would submit, Mr. Chairman, that in this amendment we are not imposing a tax, certainly; neither are we specifically directing the allocation of public funds. We are simply giving the government the option, if they so desire at some future date, themselves to allocate public funds. But at no time are we directing them to do so.

I would emphasize that the subsection as it now reads says, “The minister may pay to the board annually out of the moneys appropriated therefor by the Legislature, an amount equal to ... ” All I am simply suggesting is a change which would give the minister the option, if he wished, to give money equal to twice the amount.

If we pass this amendment, we are at no time ordering the government to allocate funds. This would at least give the government the option of providing two for one, if they wished. We are not requiring it, we are suggesting to the minister that if he has decided that he doesn’t want the bill to state that he must give two for one, all right, we will accept that -- we accept it reluctantly, but we accept it. Certainly we want to give him the option that if he at some future date realizes it might be a good idea to give two for one for a specific service being provided by a particular board, or for that matter for all of them, if he decided that was a good thing he could then go to two for one, either on an individual basis or across the board.

Again, the decision would be the government’s. It is not something that would be decided here or is being decided here. I would hope, Mr. Chairman, that in considering this proposed amendment you would really take into account the fact this is permissive. For that matter, I would hope the minister would realize it is permissive. He has made a great deal out of this whole bill by pointing out the fact -- and we support the fact -- that the whole bill is permissive.

The minister states that one of the great advantages of this bill is it does not force the community in an unorganized area to form a local services board. This bill gives them the option to make an agreement with the government for the formation of a local services board. The bill itself doesn’t order the government or the people in the unorganized areas to form a board and to collect moneys and to spend them, or to provide services. We are simply expanding that option, that whole philosophy of the permissiveness of this bill, in proposing this amendment.

I am certain, considering the arguments that have been made by the minister previously, that he could certainly accept this amendment and I would hope that he would do so. I would hope that you will rule it in order, Mr. Chairman.

Hon. Mr. Bernier: Mr. Chairman, in the interest of time, I would like to assure members on all sides of the House that I will accept the honourable member’s amendment. I think it is presented in a very positive way and a very constructive way. Being one of those individuals who wants to do all he can for the unorganized communities, I accept it with enthusiasm.

Motion agreed to.

Section 24. as amended, agreed to.

Sections 25 to 27, inclusive agreed to.

[8:15]

On section 28:

Mr. Chairman: Hon. Mr. Bernier moves that section 28 of the bill be struck out and the following substituted therefor:

“A board may incur a debt for the purposes of the board, but shall not incur any debt, the payment of which is not provided for in the estimates for the current fiscal year of the board unless,

“(a) it is a debt owed to the crown in right of Ontario, or;

“(b) the purpose for which the debt is to be incurred and the amount thereof is approved by a majority vote of the inhabitants present and voting at a meeting called for the purpose and the approval of the minister to incurring of the debt is obtained.”

Hon. Mr. Bernier: Mr. Chairman, I think this was discussed at our last session. We reviewed the comments and the suggestions of the member for Sudbury (Mr. Germa) and the member for Algoma. The member for Nipissing also made comment on this. This will allow the boards to enter into some longer term contracts. I would have to say we think it has merit. It may lend to certain efficiencies and we would like to advance it and hope the honourable members will support it.

Mr. Martel: Might I make a few comments? I appreciate why the minister moved this amendment because I think it clarifies the points we were concerned with. It is interesting, this is going to be an all-party bill by the time the minister gets done. I hope as he travels across northern Ontario he indicates the forthright manner in which the bill was debated.

Hon. Mr. Bernier: I'll be the first one.

Mr. Martel: You will be the first one. I am waiting to see in that report, what is it called -- your publication?

Mr. Wildman: The Backgrounder.

Mr. Martel: Yes, The Backgrounder. I hope I will see that in The Backgrounder, when the next issue comes out. Usually all I see are three or four pictures of the minister.

Hon. Mr. Bernier: Refer to us as the Legislature.

Mr. Martel: No, no, I want you to be more specific than that. For a change, aside from all the pictures of the minister giving out cheques, you might consider --

Hon. Mr. Bernier: I don’t have the photographer here who can get a picture of all of us together.

Mr. Martel: That would be a good idea. It would certainly be a change. I think the bill is taking more shape as we go along. It is slowly being amended and with its acceptance, it will not have to go through a division and be voted on and whatnot.

I think this has improved what we were concerned about. Although the minister indicated what he wanted the other night, it certainly wasn’t in the bill. So having reviewed this, my colleagues and I find this much more acceptable than the original section 28. As I say, Mr. Minister, this is going to be an all-party bill by the time you are done.

Mr. Wildman: Mr. Chairman, I want to concur briefly with the comments of my colleague from Sudbury East. As the minister knows, I informed him earlier that prior to his introduction of this amendment I was going to introduce an amendment deleting section 28 altogether.

Since the minister has proposed this amendment, which really deals with the concerns raised by my colleague and myself and others in the House, although it still maintains a situation where the minister has some control over what decisions are made in terms of incurring debts I think most reasonable people would agree the ministry should be able to have some say in that sort of thing, especially since if there were to be a default, it would be a question as to who was responsible.

Again, I would concur with this and say, from my point of view as well, the amendment is acceptable.

Motion agreed to.

Section 28, as amended, agreed to.

On section 29:

Mr. Wildman: I would move an amendment to section 29(1). I apologize for the condition of it, Mr. Chairman, but I had to change it as a result of some changes that took place in other sections of the bill.

Mr. Chairman: Mr. Wildman moves that subsection 1 of section 29 of the bill be deleted and the following substituted therefor: “(1) A board shall engage an official of the ministry designated for the purpose by the minister to audit the accounts and transactions of the board and to make a report to it annually, or more often as the board requires.”

Mr. Wildman: The purpose of this amendment is simply to give the ministry a greater responsibility with regard to the annual or semi-annual public accounting of the boards’ activities. It seems to me it might be rather expensive for a board to engage a public accountant, especially when we are talking about some boards that may have a very limited income and a very limited function. It would seem to me it would be far easier for all concerned if the ministry were to make one of its officials available for the carrying out of an audit.

It has been suggested to me that one of the problems with this proposed amendment is that it would be taking away from the autonomy the minister has commented so much about during this debate that he wishes each board to have. I really can’t understand that argument because surely the audit, which would be carried out as the present section is worded by a public accountant, would be available to the ministry. It’s the ministry that’s requiring the audit and I agree with that. I think the boards’ books must be audited.

It is the ministry that is saying, however, that the audit must take place. I suppose one could argue that was somehow limiting the autonomy of the board since the ministry is imposing an obligation on the board to carry out an audit. Since the ministry is going to do that and the board, at the behest of the ministry is going to have to carry out an audit, it seems to me it would be far easier for all concerned to have the ministry provide an official to do that work for the board.

Initially, when I was looking at this section and trying to figure out how we could try to limit the cost to the board, I thought perhaps we could have some system where the ministry could tender out the audits for a number of boards across the north to be carried out by an auditor -- a number of boards at once -- which would probably lower the cost and in that way limit the expenditure required of the board. However, I frankly didn’t see how we could word that. I didn’t see how we could word an obligation under an act requiring the ministry to tender out such an auditing process. So I came to the conclusion that the ministry itself could do it.

At one point it was also suggested to me the Ministry of Intergovernmental Affairs might do it. But I shied away from that, as I know the minister would, because of the interpretation that might be put on it -- that it would be saying we’re getting the municipal affairs people involved in something and this isn’t a municipality and we don’t want it to appear to be a municipality.

It is my understanding that in terms of a local services board, where there is a requirement for audits the Ministry of Transportation and Communications does do a great deal in assisting in this process and also in assisting the local roads boards in operating in general. I would hope there is the same sort of relationship between MNA and the local services boards.

For those reasons, I would hope the members of the Legislature would consider very carefully this amendment and pass it to ensure the boards could carry out an audit annually or more often as is required and requested by the ministry, but at little or no cost to the board itself.

Mr. Bolan: I can appreciate the concerns expressed by the member for Algoma. However, I think if we are going to try to leave some autonomy with these boards we should have an independent auditor look at the books. I am not suggesting for one minute if a ministry official were to go in he would cook the books. But I have said in this House many times there must be the appearance that everything is in order. I think the only way for it to be exhibited as such is for an independent auditor to be appointed.

When we are dealing with the examination of books it should be as independent as one can possibly make it. There is a cost involved and I can appreciate that. However, I think the problems or suspicions even, which may result by not having an independent auditor far outweigh the actual costs.

I can appreciate the member’s concern. However, we will support the government on this amendment.

Mr. Martel: I understand what my colleague’s concern is about and I am sure the minister does. If one looks at the audit for the very simple funding for members of the Legislature for election expenses, I think, the audits start at about $500. That is the fee we pay under that act.

I don’t know what it costs to get an auditor. Let us estimate it is $500. We know the budgets of many of the small local services boards aren’t going to be that high and I listened carefully to what my friend from Nipissing was saying. If they had to take, say, $500 out of an annual budget, then in some of the smaller local services board areas where there are maybe 50 or 60 families the ministry would be taking a major chunk of the budget away from them and they would not be getting any services.

I know my friend from Nipissing is aware of that, because some of those unorganized townships don’t have more than 40, 50 or 60 families in them. If they have to put out anywhere from $300 to $500 -- and, as I say, I know that under the elections expenses legislation, it is $500 to the auditor -- you could well make it nearly impossible for them to perform any functions within the local services boards you’re attempting to establish simply because of an inadequate base on which to get funding. They’re going to have to try to raise it.

Again, I’m not certain what the costs of auditors are. I only go by the election expenses legislation. My friend from Brant-Oxford-Norfolk (Mr. Nixon) has complained vigorously of the cost to us and our riding associations with respect to the audit. If they have to take $500 off the top then for these local services boards with merely a handful of people in some of them the audit could cost more than the limited funds that are available to get a street light.

I think my colleague raises a good point. I understand the concern of the member for Nipissing that it would have to be independent. None the less, if they eat up a major portion of their budget -- and I’ve seen local roads boards budgets that aren’t any more than $1,000 -- if they have to use half of it on an audit, it doesn’t really leave very much with which to bring some improvement to these small communities.

[8:30]

I don’t know whether our amendment is the answer. My colleague has said he didn’t know how to wrestle with the problem, but it is something the ministry has to grapple with because we might deter some of those small boards from even being able to proceed. They are just going to be strapped for money, as we know. It might be the ministry might provide the funding for the audit, though not on that one-for-one or possible two-for-one formula. In fact, the minister might say, “We will pay for the audit and let them hire their own independent auditor.” My colleague was stuck because of his concern and how we could do it without incurring those costs.

I would ask the minister to consider something here because I think it could be pretty devastating.

Hon. Mr. Bernier: I want to say I appreciate the honourable member’s concerns. When we discussed this question with UCANO, we went into it in great detail. UCANO was very strong in saying there had to be some check on an annual basis.

Let’s be honest. The toughest thing to control in a small community is the funds. There is always a question mark, always suspicion and always unanswered questions. They felt very strongly they should have an audit.

I have to say something in all sincerity about our doing the audit. We felt, and UCANO felt also, they wanted that autonomy. They didn’t want to be under our umbrella all the time. They felt there should be some independence. They felt the auditor should report directly to the community or to the organization, not to the minister. The local people are interested in the audit; they are the ones the auditor should answer to.

We looked at all the things that were brought forward by the communities in our discussion with them across northern Ontario. I think it is fair to say we will examine the budgets; there is no question about that. As they come in to us, we will look at their figures.

Since we are funding them, we also didn’t want to get involved in a conflict. Certainly, as the member for Nipissing made note, there is that suspicion when government does it and this type of thing.

We looked at MTC. MTC does random checks now. It doesn’t do an audit on every local roads board because it has become expensive. Whether we pay though the provincial Treasury or through the local services board for an audit, it is the same people who pay. It may be somewhere down the line, but they pay anyway.

After some very careful consideration, we felt very strongly an independent audit was the route to go. We looked at some vehicles we could use and we came up with two of them. Intergovernmental Affairs is drafting and coming forward with a very simple, uniform set of bookkeeping procedures. They will be fairly uniform right across the local services boards and as simple as possible and easy to understand.

We have examined already the possibility of encouraging some audit firms to look at those accounting procedures and become very familiar with them. Then we would try to steer the local services board. We couldn’t appoint an auditor, but we could say, “Look, here are two or three auditors who are interested in doing all the local services boards within a given area.”

We used to do this with the school boards. I was secretary-treasurer of the Hudson-Big Vermilion-Drayton-Jordan school township or whatever it was -- it was a long name anyway. At that time, I was the local assessor. I was in charge of the school. I hired and fired all the teachers. It seemed to me I did everything.

It wasn’t a very pleasant job at the time, I must admit.

At that time, as small communities, we all used one single auditor in Thunder Bay. He made it known he was very familiar with the operations of small school boards and was anxious to get their business. We sent our books down to him and he had them back to us in record time at a very nominal cost. It worked out very well.

It is that principle we would like to implement with the local services boards so that we would encourage some local auditors to become familiar with their workings. We would ask them as much as we could to be reasonable in their costs. We are going so far as to say to the local services boards, “We will pay one for one on the auditing expenses.”

Mr. Martel: Are you going to do that?

Hon. Mr. Bernier: Yes, we will share the cost on a 50-50 basis for the audit. That’s understood. That will take care of some of the extra cost to which the member referred. I appreciate his comments.

Mr. Chairman: Any further comments on the amendment?

All those in favour please say “aye.”

All those opposed please say “nay.”

In my opinion the nays have it.

Motion negatived.

Mr. Wildman: Mr. Chairman, since that amendment was lost, I should withdraw the earlier amendment I made to subsection 1, which was stacked by agreement last time.

Section 29 agreed to.

Sections 30 to 34, inclusive, agreed to.

On section 35:

Mr. Chairman: Hon. Mr. Bernier moves that the bill be amended by adding thereto the following section:

“35. Section 21 of the Provincial Land Tax Act, being chapter 370 of the Revised Statutes of Ontario, 1970, is amended by adding thereto the following subsection:

“(4) In determining for the purposes of subsection 3 the annual tax imposed under this act, no account shall be taken of any tax imposed pursuant to the Local Services Boards Act, 1979’,” and that the present sections 35 and 36 of the bill be renumbered as sections 36 and 37 respectively.

Mr. Wildman: Mr. Chairman, I thank the minister for having given this amendment to us some time ago. I would say I’m in agreement with it. However, I just want to make the point that although this is in order, it would seem to me far more tidy to have brought in an amendment to the Provincial Land Tax Act so we could have got at that bill too.

Hon. Mr. Bernier: As a matter of interest, I know people who will be reading these debates will want to know the purpose of this amendment. It is to guarantee for the province that the minimum provincial tax amount of $6 will be protected. In other words, if an individual submitted to the Ministry of Revenue, as an example, $8 when his bill was $10 with $4 being earmarked for the local services board, then $6 would go to the provincial land tax. The provincial land tax would be taken out first and then the balance would go to the local services board, which we would match. In this case, they would only give $2 instead of $4. The shortfall would come from the local services board rather than the provincial land tax.

Mr. Wildman: Mr. Chairman, at the risk of sounding redundant, I would point out the main reason for requesting two for one is the very argument we’ve had many times that people in unorganized areas really don’t get a lot out of the provincial land tax already.

Motion agreed to.

Section 35, as amended, agreed to.

Sections 36 and 37, as renumbered, agreed to.

Bill 122, as amended, reported.

On motion by Hon. Mr. Bernier, the committee of the whole House reported one bill with amendments.

THIRD READING LOCAL SERVICES BOARDS ACT

Hon. Mr. Bernier moved third reading of Bill 122, An Act to provide for the Establishment of Local Services Boards.

Hon. Mr. Bernier: I would like to express my appreciation to all members of the House for their contribution to what I think is a very important bill for northern Ontario. I think many members who have been in this House for the last 10 or 15 years have identified a problem as it related to the unorganized communities of the north.

I think it is fair to say the Speaker of this House, the member for Lake Nipigon (Mr. Stokes), was one strong advocate of doing something for the unorganized communities. All of us on both sides of the House have tried to grapple with this rather difficult problem. I think it is fair to say Bill 102 caused a storm right across the north. It was too structured and too inflexible; it was a form of municipal government. It was obvious that the unorganized communities were not ready or willing to accept this type of structure.

As I said on a number of occasions during the debate in the House, we discussed this bill in detail with the unorganized communities association of the northeast and the northwest, and individually with the various communities.

There was the input from the members. I say that in all sincerity. I assure them I will mention as I move around northern Ontario that it was a co-operative effort. It shows when members are sincere and positive in their efforts this Legislature can come up with something the people of this province want us to do in a straightforward way to answer their specific request.

I am pleased the bill we submitted is basically intact. It is still flexible, it still gives autonomy and, above all, it will improve the quality of life in the unorganized communities of northern Ontario.

Mr. Bolan: Mr. Speaker, I would like to say one or two words on the third reading of this bill. I also would like to express gratitude to those people who worked so hard to put this bill in place. I am thinking of the people from UCANO. As the minister knows, without their input I doubt very much that the bill would have gone through in its present form.

I might also say this is not the first attempt made by any Legislature of Ontario to provide some mechanism for unorganized townships to operate and to raise funds. In fact, if memory serves me right, this is the 15th attempt made by various Legislatures, going back probably to 1882 and 1886 when the great leader of the day, Sir Oliver Mowat, made a vain attempt at introducing a bill to assist the unorganized communities.

Mr. Conway: I remember it well.

Mr. Bolan: We all remember those days, of course. Those were great days and I might say they are coming back.

I really would like to express to the minister my own gratitude for the manner in which he has presented the bill. We don’t agree with everything by any means; there has been some fairly heavy debate on various sections of the bill. I must say to the minister I am pleased to see he has shown some flexibility with respect to the two to one. I am sure it goes without saying that it is because of the wise arguments which were presented in the House that the minister and his government -- I won’t say have seen the errors of their way, but rather were led to benefit the people of the unorganized communities by this kind of funding.

Mr. Wildman: Without wanting to prolong this, Mr. Speaker, I would like to make some comments on third reading of the bill.

Mr. Acting Speaker: I would have been surprised if you hadn’t.

[8:45]

Mr. Wildman: I thought you would be.

I add my congratulations to those of my colleagues to UCANO East and UCANO West, Mr. Violette and Ms. Davis from Hurkett, in their efforts to sell this idea to the minister and to the people of the unorganized areas in northern Ontario. If the minister wishes now to embark on a tour of the north with his officials, as he did at the time he introduced the bill, I would be very willing to accompany him and to take part in any debates and discussions about the implementation of this new piece of legislation.

I think it is a tribute to the co-operation of members from all sides. It is unfortunate -- and I mean this sincerely -- that the representatives of UCANO came down so many times and yet were not here to see the passage of the bill. However, I want to emphasize that it was certainly worth it, as my colleague from Sudbury said. If we had rushed it through last time, perhaps we wouldn’t have been able to get the minister to agree to at least the two-for-one option we were able to get him to agree to this evening.

I think that’s a major step in giving more flexibility to the bill and in making it possible for small communities to get the moneys they need. I’m glad I was able to propose this kind of change and that it was acceptable to the minister.

I would say in general the bill is a step forward. I agree very sincerely with the minister, it’s an important step in that, unlike Bill 102, it also allows a local community to decide whether it wants to go this route. I hope many of the local communities will decide to take advantage of the legislation and that in the first couple of years we will have the experimentation I think is going to develop in this. Perhaps the minister will then come back to the Legislature with whatever changes his ministry officials feel are necessary to make this a bill that responds more to the needs of the small communities in northern Ontario.

I notice the minister has his officials under the gallery. I want to thank them for the co-operation they have given me, not only during our trips across northeastern Ontario, when I followed them around --

Mr. Martel: Did they invite you?

Mr. Wildman: I wouldn’t say they didn’t invite me. They were always very co-operative whenever I was at a meeting. I appreciated their help and their discussions with me when the bill was going into committee. That led to the minister bringing in an amendment which recognized the validity of the secret ballot, which I consider a major change in the bill. I’m glad we were able to convince him we should not return to the 19th century in terms of electing people for these boards.

Also, I notice there are some officials from the Ministry of Intergovernmental Affairs under the gallery.

Mr. Rotenberg: That’s for the next bill.

Mr. Wildman: I know. But I would hope that Mr. Donaldson is keeping an ear on this debate with regard to the area north of Sault Ste. Marie, which has been loosely called Sault North. Perhaps his colleague Mr. Shtern is also considering that when they are looking at changes along the north shore. People in that area have not been too receptive to a number of the suggestions made by that ministry.

I think that’s also true of the Ministry of Intergovernmental Affairs study in the Hearst area, where a number of people have said, “Thanks but no thanks.” I think Mr. Violette has been very quick to rush up there and say there’s another option. Perhaps this is an option that would be available to some of those communities the Ministry of Intergovernmental Affairs has been suggesting should go another route. Hopefully, there will be some experimentation and we will see whether this is a viable route.

I want to thank UCANO for its co-operation and hard work and the ministry for its receptiveness to the suggestions we had, even though we couldn’t persuade them to go two for one all the way.

Motion agreed to.

MUNICIPAL FRANCHISES AMENDMENT ACT

Mr. Rotenberg, on behalf of Hon. Mr. Wells, moved second reading of Bill 146, An Act to amend the Municipal Franchises Act.

Mr. Conway: The man who would be mayor.

Mr. Rotenberg: At least I ran for it. It’s more than you ever did.

Mr. Speaker, this bill seeks to clarify and strengthen section 10 of the Municipal Franchises Act. Section 10 provides: “Where a franchise bylaw between a gas company and a municipality has expired, or will expire within one year, and the two parties” -- that is, the municipality and the gas company -- “are unable to agree on new terms, either party may apply to the Ontario Energy Board for an order renewing or extending the franchise.”

If the board makes such an order, section 5 provides that the order “shall be deemed to be a valid bylaw of the municipality concerned for the purposes of section 58 of the Public Utilities Act,”

Concern has been expressed that the subsection does not explicitly deem the order to be a valid bylaw for the purposes of section 3 of the Municipal Franchises Act. That provision prohibits a public utility from acquiring the right to use or occupy municipal roads, from constructing or operating a system or from supplying gas in a municipality unless a valid franchise bylaw is in force.

This bill proposes to eliminate the concern by amending section 10(5) to provide that a board order shall be deemed to be a valid bylaw of the municipality for all purposes of the Municipal Franchises Act as well as section 58 the Public Utilities Act.

This matter was drawn to our attention because a specific municipality went to the Ontario Energy Board, lost its case and accepted the decision. But, quite naturally, the municipality does not want to pass a bylaw that goes against the stand the municipality took. They’re quite content to have the Ontario Energy Board order enforced, but they do not want to pass the bylaw.

Some doubt has been cast as to whether the present franchise agreement is legal or not. That has been drawn to our attention, and the purpose of this legislation is to clarify this point -- so the order of the Ontario Energy Board will be deemed to be a bylaw, not only for the Public Utilities Act, but also for the Municipal Franchises Act.

I commend this bill to the House.

Mr. Epp: Mr. Speaker, we notice it’s been about five weeks since this bill received first reading. We notice it’s a very short bill -- about five pages in length. It’s been about five years since there has been any amendment to it; so obviously there would be those people who would have some cynicism about it, that bills have to be amended every three years, whether it is necessary or not, in order to keep some people in the business.

We notice that a certain gas company, Union Gas Company, from a particular area, made representation to have this changed, despite the fact that solicitors from all quarters of the province have indicated that the changes were necessary. However, there are those of us who think the change, whether necessary or not, is before us because of special representation being made.

The act itself, as the members will notice, deals with the Ontario Energy Board and with the consent that the municipality has to give through its bylaws. Although the amendment itself is in section 10, it’s more relevant to section 3(1). In essence, what it says is that the municipality, by bylaw, has to give consent. If the Ontario Energy Board has the opportunity, indeed the responsibility, to make a decision, then it would be deemed to be as if a bylaw were passed by the municipality itself.

I would like to ask the parliamentary assistant for the ministry to give some elaboration on the cases that have come before it with respect to the need for this bylaw. I know he briefly referred to one, but I think this House deserves a better explanation than that. To what extent has this gone before the courts? At what point is it before the courts right now? Have there been any appeals, are any appeals pending and so forth? I think this House deserves a fuller explanation of that particular point. If we are asked to pass and to support a particular act, I think it is necessary to have that explanation.

It is obvious from this bill and from other legislation that has passed that the Ontario Municipal Board are overseers, or protectors or guardians of municipalities. They wear some kind of restrictive belt, I suppose, so that municipalities don’t err in any way in their decisions. If they do err, there is always the energy board and the municipal board to oversee their decisions and to make sure, if they do err, that correction is made forthwith.

We will be supporting this bill. We have no amendments to the bill, because we think that it is simply a clarification. However, I would want the parliamentary assistant to give us a greater explanation of the question I raised just a few minutes ago.

Mr. Isaacs: Mr. Speaker, we also shall be supporting this bill. We have no particular questions to ask, having been on the other side of the operation myself and having had an instance in my own municipality where there was some very minor confusion, I suppose, about the validity of a board order extending a municipal franchise. It appears to me to be something that is necessary; it is something that has come before us because the lawyers, in their poring over this legislation, have found something that is not laid down quite as tightly as it should be.

While rising to speak on this bill, I want to make a couple of very brief remarks concerning municipal franchises for gas utilities. The bill refers to the extension of a municipal franchise in a circumstance where the municipality and the gas utility have not come to an agreement. That circumstance normally arises where there is some dispute between the municipality and the utility over the level of service provided to the municipality. It seems to me we need a better way of resolving these kinds of things than having the Ontario Energy Board involve itself.

We need a mechanism whereby municipal gas service is available to residential and industrial users who require it. We need a mechanism whereby the gas companies can respond in a better way to the needs of consumers in Ontario. While I recognize this particular bill is getting us over a problem, I hope the parliamentary assistant can give us some assurance that his government is looking at this problem in a much broader context, and that we can be assured that at some time in the future there will be mechanism whereby the gas companies can be encouraged to provide service to customers who are not currently getting gas service but who would very much like to.

Those are the kinds of disputes that are arising. I am not thinking of rural areas, where there is a different kind of problem, but of urban areas and of growing areas around our towns and cities, where new subdivisions could benefit from the kind of service provided by a gas company in this day and age, when gas is the preferred fuel for heating of homes.

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There is no mechanism at the moment whereby the gas companies can be made to provide service. I think that is a failing of our system. I am sure the parliamentary assistant realizes that some of us in this party would have a solution that goes somewhat further than I imagine his government would want to go.

I hope he can assure us the government is looking at these kinds of issues and that some time in the future there will be a mechanism whereby a person who lives in an urban area and wishes to get gas to heat his home can be provided with that service. That mechanism does not exist at present, unless the gas utility desires to provide the service to the customer.

We will be supporting this bill; we have no amendments to it, and I look forward to the response from the parliamentary assistant.

Mr. Rotenberg: Mr. Speaker, the Ontario Energy Board, like the Ontario Municipal Board, is in this case the arbiter when a municipality and a private utility cannot agree. Partly in response to the member for Wentworth (Mr. Isaacs), I say that the whole purpose of having the energy board is where a municipality for some reason doesn’t want to have the utility in there or the gas company wants exorbitant terms to put the utility in there. Then the energy board’s function is really to step in the middle, to be the arbitrator -- compulsory arbitration -- and to set forth the terms and conditions under which the utility will be put forward in the municipality.

The member for Waterloo North (Mr. Epp) asked about the number of cases before the courts and so on. This is really the first time this matter has been drawn to the attention of the ministry. The matter has not yet been before the courts, and the purpose of this legislation is so that the matter will not go before the courts. The courts are crowded enough; they have enough to do, without having these kinds of matters go before them when they can be settled for this case and all future cases by a very simple clarification of the legislation.

There has not yet been any litigation. The fear is, if this act is not passed, and if unfortunately there were an accident in the township where the dispute has arisen, there might be some question of liability. There is a question whether, when a franchise expires, those gas pipes are still legally within the municipality.

There is some question in the mind of the utility, if it doesn’t get this legislation, whether it will continue to supply gas. It may be deemed to be there illegally by a court in future, and this might have quite an effect on the liability concerned, So the concern of the ministry is simply not to wait until there is a court case, not to wait until there is a real problem. In effect, this is preventive legislation and for clarification so there will not be a court case in the future.

The member for Wentworth has asked some very interesting questions. However, I would say he is getting into the whole problem of energy policy, which is really a matter for the Ministry of Energy. I would hope he and his colleagues would raise the matter in that ministry’s estimates if they are not too pleased with the form of ownership of the present utility companies. I wish they would, at some appropriate time, discuss with the Minister of Energy the long-term policy of public utilities -- and that, of course, is their right. But, with respect, I would suggest long-term energy policy, and the ways in which public utilities -- particularly natural gas -- are distributed, really are not relevant to the discussion of this bill tonight.

I thank the two opposition critics for their support of this bill, and I would commend it to the House.

Motion agreed to.

Ordered for third reading.

LOCAL IMPROVEMENT AMENDMENT ACT

Mr. Rotenberg, on behalf of Hon. Mr. Wells, moved second reading of Bill 147, An Act to amend the Local Improvement Act.

Mr. Rotenberg: Mr. Speaker, this is another situation where a matter has come to our attention. It is a matter that has come before the courts. This bill is a matter of clarifying the present legislation.

The purpose of this bill is to make clear that a majority of the members of a court of revision constitute a quorum and that a quorum is and always has been sufficient to exercise all the powers and duties of a court of revision. This amendment has been requested by the city of Chatham because of its concern about a court case that is expected to cast into doubt the validity of a decision made by the municipality’s court of revision where a majority, but not all of its members, conducted the hearing. Several million dollars in special assessments are involved in this municipality alone.

If allowed to stand, such a court decision could have some very serious financial consequences for Chatham and for many other municipalities in Ontario. What this bill is really saying is that a majority, that is, two out of three or three out of five, of the court of revision sitting on assessment reviews will be deemed to be a quorum of the court and will always have been deemed to be a quorum of the court. As such, I would recommend this bill to the House.

Mr. Epp: Mr. Speaker, I might say from the outset that we intend to support the bill. It is a coincidence that this particular court case arises from a decision of a Chatham council. As we know, we just dealt with Bill 146, which had to do with a company that comes from Chatham. There seems to be a lot of legislation emanating from that part of the country all of a sudden, almost more with assessment and so forth than there was only two years ago, when they seemed to have more direct representation in the executive council of this province.

Nevertheless, the bill does clarify the fact that if, for instance, three of five members of a particular court of revision are present to deal with special assessment appeals, then they have a quorum to deal with that and, if two out of those three members happen to make a decision, then that legitimizes that decision. We have no argument with that. We think that’s a right and proper way to go.

We will support this bill, and we have no amendments to it.

Mr. Isaacs: Mr. Speaker, we support this extension of a fairly normal democratic principle to courts of revision considering local improvements. If I make some remarks about local improvements in general, I know the member for Wilson Heights (Mr. Rotenberg) will respond that it’s not connected with this bill. Therefore, I will resist the temptation to do that and simply indicate we are supporting the bill.

Motion agreed to.

Ordered for third reading.

MUNICIPALITY OF METROPOLITAN TORONTO AMENDMENT ACT

Mr. Rotenberg, on behalf of Hon. Mr. Wells, moved second reading of Bill 172, An Act to amend the Municipality of Metropolitan Toronto Act.

Mr. Rotenberg: Mr. Speaker, this bill contains five amendments to the Municipality of Metropolitan Toronto Act, including certain changes requested by the council of the municipality of Metropolitan Toronto.

The bill proposes to permit Metropolitan Toronto to impose a sewer service charge on those persons having a private waterworks system and discharging waste water into the Metropolitan Toronto sanitary sewer system. Another change requested by the Metropolitan Toronto council would enable the Metropolitan Toronto corporation and any of the area municipalities to enter into an agreement for the purpose of participating in a joint group liability insurance plan and joint funding of the deductible amounts of such a plan.

The bill also includes an amendment to provide for the name of the board of education of the city of North York in recognition of the erection of the city of North York on February 14, 1979. When that happened last February, we changed the name of the council of North York, but we did not change the name of the board of education for the city of North York.

Another amendment affecting the financing of permanent improvements by school boards is being made to complement the government’s proposal for providing front-end grants towards the cost of school board capital projects. That is, Metro at the present time can spend two mills out of current revenues for capital projects, and this bill will make it clear that they can spend two mills out of current revenues after the front-end payments by the provincial government.

Finally, the bill contains a similar change as in Bill 152, which we passed several weeks ago, to enable the Metropolitan Toronto corporation to enter into long-term contracts for the purchase or rental of machinery.

These five simple amendments to the Metropolitan Toronto Act are before you, Mr. Speaker, and I would ask the support of the House for this bill.

Mr. Epp: Mr. Speaker, we will support this bill in principle and indicate we are glad the government of the day finally recognized earlier this year that some of the boroughs in the Metropolitan Toronto area wanted to have city status. It is a move this party has recommended for some years; indeed, we put forth a private member’s bill. It was unfortunate that at that time there was an oversight and the change did not apply to the board of education of North York. This obviously will be corrected by this particular bill.

The school board financing of permanent improvements, which are upfront grants, will afford the municipalities another opportunity to finance those grants; in fact, by having the two mills applied and getting the grants up front, in actual fact they will have more money initially to pay off the various permanent improvements. We obviously endorse this particular move and feel it is a step in the right direction.

There are a number of municipalities that have asked for the opportunity to have joint liability insurance plans and to fund jointly the deductible amounts of the plan. These requests have been made by some municipalities in Toronto, but they have also been made by other municipalities, and I presume those amendments will be made to the proper bills in the near future.

This is obviously another move which shows municipalities are becoming more mature, and that they are being recognized as being more mature and constantly being given more responsibility in exercising the various powers under their jurisdiction.

We therefore support this particular bill, and we have no amendments to make to it.

Mr. Isaacs: Mr. Speaker, we too will be supporting this bill, but I have a few brief comments.

With respect to the extension of the user-pay principle to the use of sewer services, if one goes along with the user-pay principle for sewer services -- in other words, a sewer levy on top of the water rate -- then it’s only fair that this be put in place.

However, I would like to hear a response from the ministry as to whether it is their view that a user-pay system for sewer services should become the norm in the future and, if so, whether other municipalities will be given this same power that Metropolitan Toronto now is being given.

My understanding is that this is the first time this particular section has come before the House in dealing either with a regional municipality or with a municipality of the lower tier which is responsible for its own sewer services. I would be very interested to hear whether this kind of thing will be extended right across the province and whether it is regarded as a principle that municipalities might move towards.

With regard to the board of education name, I really have very little comment, although I think the parliamentary assistant might be interested to learn that when this matter was dealt with by our caucus, and given the hearings that were held this summer before the justice committee on Bill 19, there was a suggestion made that we ought to be changing the name of that board of education to something far less flattering than the proposal that is put forward in this bill.

[9:15]

With regard to the controlled expenditures for permanent improvements, we have no objection to that section. It is a logical extension of the normal understanding of capital financing -- that is, that permanent improvements and major expenditures and upgrading of physical plant are considered as capital expenditures rather than as operating expenditures.

On the other hand, this is in a sense violating the principle of local autonomy. It is suggesting to school boards, and ultimately to municipalities, the maximum amount that should be put on the mill rate for any one purpose. While we have no objection to the extension as it is proposed in this bill, that is something we would hate to see brought in in other areas. It is a component of the total package of the new funding of school capital works that is being dealt with under a separate bill which we will be discussing here, I assume before Christmas. I want to go into that at greater length at that time. But with regard to the single item that is contained in this bill, it is not inappropriate; but it may not be, as a concept, the right direction to go in the long run.

With regard to the final matter, on agreements for insurance, I would like the parliamentary assistant to advise us why he feels it necessary to make the Metropolitan Toronto corporation always one of the parties to such an insurance agreement. That is the wording contained in this bill. Would he also advise us whether his minister might not be prepared to consider a circumstance where any two or more municipalities could co-operate for the purpose of obtaining insurance?

I would hate to see this matter limited to Metropolitan Toronto. There are sometimes major savings to be gained in the bulk buying of insurance contracts. It seems a little strange to me that in this bill the wording is such that the Metropolitan Toronto corporation and one or more area municipalities may enter into an agreement. It would seem to me it would have been more appropriate to suggest that two or more municipalities might enter into an agreement and leave it completely at the discretion of the municipalities concerned.

In that regard, too, the parliamentary assistant is already aware of the objection we have brought forward with regard to obtaining insurance for the protection against liability suits of elected and appointed municipal officials. We continue to have that objection, and we note -- with some pride, I guess -- that some of the municipal officers now are beginning to echo some of the concerns we have previously brought before this House.

However, we can’t see a mechanism by which the section that is before us at the moment could appropriately be amended to deal with those concerns. Therefore, we will let the comments rest as they are. We have no amendments, and we will be supporting this bill in total.

Mr. Warner: Mr. Speaker, my colleague from Wentworth has very quickly established himself as a knowledgeable critic in this field in the House. He has put forward most of the points to be covered.

I have one item on which I would like some clarification from the parliamentary assistant who is carrying the bill. That is, regarding the change of the name for the board of education. In so doing, he has made it retroactive to February 14. Will that pose any problems for any legal transactions they may have had which did occur between February 14 and this date -- any bills which were owing and were paid, or any suits which were brought against the board, or any other transactions?

I am always concerned about retroactivity. It brings to mind that there may have been some legal ramifications which we are not aware of. I would just like to know, before we pass this bill, whether the minister could clarify the legal status of the transactions between February 14 and today.

Mr. Swart: Mr. Speaker, I want to comment very briefly on section 4 in support of what was said by my colleague from Wentworth. He has dealt very briefly and concisely with the whole bill, but I share his concern with regard to section 4, with the limitation that is placed on the amount of money the boards of education may spend with regard to capital expenditure in any given year.

It seems to me this change is an improvement, because formerly they could spend up to the amount of equal to two mills. Now they can spend up to the amount that two mills will give them, plus the contribution from the provincial government.

I want to point out to the member, and I hope he will comment on it, that I still think that limitation is too great. I don’t really know that there needs to be any limitation there at all. I think we can trust the municipality and the school boards to set what they feel to be reasonable levies.

Mr. Speaker, with your background with educational boards and municipalities, I know you would agree with that. It seems to me at this time, when interest rates are so high, if a board decides it would rather raise a bit more money and spend it at this time instead of paying the high interest rates over the years, it should have the right to do so.

I would like to ask the parliamentary assistant if he would express his views on that matter and explain why we are setting these limitations. I know that kind of limitation is general throughout the educational system, but we are making some slightly innovative moves in other fields; let’s try this here with regard to the Metropolitan Toronto corporation and see if it won’t work. Then maybe we could remove this limitation, this straitjacket, that we have on other municipalities and school boards.

Mr. Rotenberg: Mr. Speaker, I thank the members opposite for their support of this bill.

To comment briefly on the matters raised by the members opposite: First, the member for Waterloo North (Mr. Epp) in discussing the joint insurance plan has indicated that other municipalities have expressed interest in a similar type of legislation. To the best of my knowledge no such request as yet has come to the ministry. When they do they will be considered and I’m sure this matter for Metropolitan Toronto will be considered as a precedent. If we have other requests, and if it seems to be appropriate, this may shortly find its way into general legislation.

The member for Wentworth (Mr. Isaacs) was discussing the sewer services and the user-pay concept. I think he is aware that this applies only to those in Metropolitan Toronto who do not pay water rates. There are a number of industries and businesses which draw their water directly from the lake, which do not take their water through the Metropolitan Toronto system and which, therefore, do not pay water rates.

In the case of everyone in Metropolitan Toronto who pays water rates, part of the charge on the water rate is deemed to be a charge for the sewer services; this applies to Metropolitan Toronto and many other municipalities across the provinces. But those who draw water directly from the lake do not pay anything to the sewer services, as do the vast majority of water users. This simply gives Metropolitan Toronto the permissive legislation to charge those people who draw their water directly from the lake, and discharge it through their sewer system, the amount for the sewer part of the water rates that are charged to those who pay their water rates through Metropolitan Toronto.

There has been discussion, by both the member for Wentworth and the member for Welland-Thorold (Mr. Swart), about the problem of the two-mill maximum. The purpose of this legislation is simply to clarify that the government grant now will be an upfront grant rather than part of the annual amount towards per capita cost; the upfront grant will not be considered to be part of the two-mill levy, because the upfront grant will be more than two mills. So the municipality of Metropolitan Toronto now can raise and spend two mills of their own money, over and above the grant that is given by the province of Ontario.

Both the member for Wentworth and the member for Welland-Thorold seemed to be raising the point that possibly we should be reconsidering that two-mill grant. Possibly Metropolitan Toronto or some other municipality should have this ceiling lifted and have a free rein to spend as much as it wants out of current and as much as it wants out of capital. I think there would be considerable flak from the municipal councils if we, in effect, gave the school boards free rein to spend a lot more capital out of current and, therefore, raise the mill rate every year.

However, the point the two members raised is one of interest. I will say to the members opposite that in considering this amendment we didn’t consider the overall philosophy of the two-mill limitation. It was simply to make sure the two-mill limitation still applied after the provincial grant rather than before. When we get into a general review of this, we will take into account the points raised by the members of the New Democratic Party.

The member for Wentworth also raised the matter of the joint insurance reserve fund and asked why two municipalities in Metro couldn’t do this on their own without Metro’s participating. This is really a response to a request from Metropolitan Toronto and its six area municipalities. If I may, I will read from the request that came to us, which is a report adopted by the Metropolitan Toronto council on August 10, 1979. Members will note it has taken us no more than three months to respond to a request from Metropolitan Toronto.

Part of this report reads: “Several meetings have been held with the area municipalities’ treasurers and the insurance consultant engaged for this purpose. It has been agreed that the most effective method of administering such a group liability insurance plan is through an insurance reserve fund maintained to meet self-insurance and applicable claims-adjusting costs on behalf of all participating municipalities, including Metro.”

In effect, the Metropolitan Toronto officials and the officials of the six area municipalities got together and decided this was the way they wanted it; they wanted the joint plan and they wanted it to include Metro and basically, to be administered by Metro. That is why the legislation is here in this form, which is in the form requested by the municipality of Metropolitan Toronto as endorsed by its area municipalities.

I think I have covered the matters raised by the members opposite. I want to thank them for their support of this bill, and I commend it to the House.

Motion agreed to.

Ordered for third reading.

SECURITIES AMENDMENT ACT (CONCLUDED)

Resumption of the adjourned debate on the motion for second reading of Bill 156, An Act to amend the Securities Act, 1978.

Hon. Mr. Drea: Mr. Speaker, I didn’t adjourn the debate. The member who adjourned the debate isn’t here.

Mr. Speaker: Is there any member who wishes to speak on Bill 156 on second reading?

Mr. Breithaupt: I believe my colleague the member for Rainy River (Mr. T. P. Reid) had adjourned the debate to give other members the opportunity to speak. I am certainly content that the debate continue.

Motion agreed to.

Ordered for committee of the whole House.

CERTIFICATION OF TITLES ACT

Hon. Mr. Drea moved second reading of Bill 148, An Act to revise the Certification of Titles Act.

Mr. Breithaupt: Mr. Speaker, I was not aware we were going to proceed immediately with these three bills and I don’t have my files with me. There is nothing I can do about that, unless some other member wishes to speak on the bill. Then I can obtain my information and speak to it.

[9:30]

Mr. Speaker: I think it only fair, since we’re embarking upon a legislative program this evening and weren’t given notice, that we provide the honourable member with an opportunity to get his notes.

Do you have an opening statement?

Hon. Mr. Drea: Mr. Speaker, I already gave an opening statement. It was my understanding that relatively recently there was an expression that these three bills could go on tonight. I certainly apologize to the member for Kitchener (Mr. Breithaupt), the critic of the ministry, in that he wasn’t consulted. I assure you, Mr. Speaker, that was beyond my control, or I wouldn’t have moved second reading of the bill.

When these bills were introduced, I pointed out they were housekeeping in nature. Bill 148, An Act to revise the Certification of Titles Act, has to be taken in context with Bill 149, An Act to amend the Land Titles Act, and Bill 150, An Act to amend the Registry Act, because they are complementary in many respects. The prime function was one of housekeeping. It was to remove certain archaic sections as well as to streamline those acts for the introduction of an automated system, more commonly known as Polaris. While the amendments may be of a housekeeping variety, nonetheless there were certain sections that have been removed.

It is my understanding that, because of the lateness of the hour, the parties opposite would prefer to proceed on another night. I am agreeable to an adjournment of the debate. It really isn’t anybody’s fault. It was an attempt to arrange something to fit the business of the House tonight. Apparently, the signals just didn’t work. I want to assure the members opposite that I understand the position and am perfectly prepared to go on another night.

Mr. Roy: Mr. Speaker, while we’re waiting for my colleague, I have certain questions to the minister on the legislation.

Hon. Mr. Gregory: I think it’s a problem that was nobody’s fault, but it was a case that we hadn’t planned enough legislation for tonight.

Mr. Speaker: Does either the honourable minister or the member for Kitchener wish to move the adjournment of the debate?

Mr. Breithaupt: I’ll move the adjournment, if that’s what’s wanted.

Mr. Speaker: We have to dispose of this question one way or another before we move the adjournment of the House.

Hon. Mr. Drea: Mr. Speaker, if I recall correctly, a moment ago I offered to move the adjournment of the debate.

On motion by Hon. Mr. Drea, the debate was adjourned.

The House adjourned at 9:34 p.m.