MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS
ONTARIO REAL ESTATE ASSOCIATION
CEC SYSTEMS, ELCAN ELEVATOR, TRI-CROWN
CANADIAN AUTOMOBILE ASSOCIATION -- ONTARIO
CONTENTS
Monday 24 June 1996
Safety and Consumer Statutes Administration Act, 1996, Bill 54, Mr Sterling / Loi de 1996 sur
l'application de certaines lois traitant de sécurité et de services aux consommateurs, projet de loi 54,
M. Sterling
Ministry of Consumer and Commercial Relations
Hon Norman W. Sterling, minister
Stien Lal, deputy minister
Art Daniels, assistant deputy minister, business division
Ontario Real Estate Association
Richard Wood, president
Rose LeRoux, past president
Paramount Canada's Wonderland
Russell Flatt, vice-president, maintenance and construction
CEC Systems; Elcan Elevator; Tri-Crown
Kevin Duffy, Elcan Elevator
Ernie Cox, CEC Systems
Al Lockyer, Tri-Crown
Canadian Automobile Association--Ontario
Pauline Mitchell, manager, government and public affairs
John O'Neill, member
Consumers' Council of Canada
Joan Huzar, president
STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
Chair / Président: Martiniuk, Gerry (Cambridge PC)
Vice-Chair / Vice-Président: Johnson, Ron (Brantford PC)
*Boyd, Marion (London Centre / -Centre ND)
Chiarelli, Robert (Ottawa West / -Ouest L)
Conway, Sean G. (Renfrew North / -Nord L)
*Doyle, Ed (Wentworth East / -Est PC)
Guzzo, Garry J. (Ottawa-Rideau PC)
Hampton, Howard (Rainy River ND)
*Hudak, Tim (Niagara South / -Sud PC)
*Johnson, Ron (Brantford PC)
*Klees, Frank (York-Mackenzie PC)
*Leadston, Gary L. (Kitchener-Wilmot PC)
*Martiniuk, Gerry (Cambridge PC)
*Parker, John L. (York East / -Est PC)
*Ramsay, David (Timiskaming L)
Tilson, David (Dufferin-Peel PC)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Crozier, Bruce (Essex South / -Sud L) for Mr Conway
Flaherty, Jim (Durham Centre PC) for Mr Guzzo
Kennedy, Gerard (York South / -Sud L) for Mr Chiarelli
Kormos, Peter (Welland-Thorold ND) for Mr Hampton
Clerk / Greffière: Donna Bryce
Staff / Personnel: Susan Swift, research officer, Legislative Research Service
J-873
The committee met at 1613 in room 228.
SAFETY AND CONSUMER STATUTES ADMINISTRATION ACT, 1996 / LOI DE 1996 SUR L'APPLICATION DE CERTAINES LOIS TRAITANT DE SÉCURITÉ ET DE SERVICES AUX CONSOMMATEURS
Consideration of Bill 54, An Act to provide for the delegation of the administration of certain designated statutes to designated administrative authorities and to provide for certain limitation periods in those statutes / Projet de loi 54, Loi prévoyant la délégation de l'application de certaines lois désignées à des organismes d'application désignés et prévoyant certains délais de prescription dans ces lois.
The Chair (Mr Gerry Martiniuk): I welcome the Honourable Norman Sterling, Minister of Consumer and Commercial Relations. I also welcome Mr Crozier, critic for the loyal opposition, and Mr Kormos, critic for the third party.
The first order of business is the consideration and approval of the report of the subcommittee dated June 18, 1996. Do I have a motion for approval?
Mr Ed Doyle (Wentworth East): I move that we approve it.
The Chair: All those in favour of adoption of the subcommittee's report? All those against? Carried.
I apologize to any presenters for the delay, but the proceedings of the House do not permit us to proceed until orders of the day have arrived. We intend, unless there's an objection from any member of the committee, to hear all presenters as scheduled today, though it'll be a little later.
We will proceed with the honourable minister, who will have 20 minutes to make a presentation, and then each of the critics will have 20 minutes each.
Mr Peter Kormos (Welland-Thorold): Could I just ask, in terms of questions to the minister, is there time allotted for that?
The Chair: That's included in your 20 minutes.
MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS
Hon Norman W. Sterling (Minister of Consumer and Commercial Relations): I'll attempt to gap that and bring that down so that the witnesses can get on earlier than would be anticipated.
I appreciate this opportunity to talk about Bill 54, the Safety and Consumer Statutes Administration Act, 1996. I believe it's an exciting opportunity for our government to strike out in a new direction in dealing with these particular professions and with regard to safety in the province of Ontario.
I'd like to quickly review what the bill's purpose is in order to avoid any misunderstanding. Bill 54 will enable -- and underline "enable" -- the government to delegate powers and duties under 11 acts that my ministry currently administers to designated, non-profit -- and I underline "non-profit" -- administrative authorities. The administrative authorities will be separate and distinct from government or any other government agency, and each corporation would have a board of directors and a chief executive officer.
The boards will include representatives from industry, government, consumer groups and the general public to ensure that there's a healthy balance to these boards. This bill also gives the government the power to appoint one or more board members, provided it's a minority; in other words, not 50%. This means we can ensure that a fair and balanced representation of all interests and industry sectors is in place. All board members, under corporate law, will have an obligation to fulfil the organization's public interest mandate.
The act will allow these corporations to assume responsibilities over real estate brokers and salespeople, travel retailers and wholesalers, motor vehicle dealers and salespeople and cemetery operators.
Once we have reached self-management agreements with these sectors, they will assume responsibility for such functions as registration and accreditation of industry members, investigations of consumer and business complaints, suspension or revocation of registrations and prosecutions of violations.
While we would be moving away from direct provision of these functions, government would continue effectively as a watchdog, maintaining a role in the areas of standards setting, defining policy and monitoring industry performance and conduct.
The safety organization will be set up to administer the regulation of technical standards in the areas of boilers and pressure vessels, elevating and amusement devices, hydrocarbon fuels and equipment and, last but not least, upholstered and stuffed articles. Service delivery functions currently carried out by my ministry's technical standards division will be delegated to this new organization.
I'd like to emphasize that what we are talking about, what Bill 54 would enable, is self-management, not self-regulation, and certainly not deregulation. As most of you know, there are clear differences, as the names themselves imply.
Self-management is simply the delegation of administrative and delivery mechanisms, not the delegation of rule-making or setting of public safety standards. Complete regulatory and legislative authority will remain with the government.
Bill 54, once enacted, will cut red tape for business and provide more effective services to the public. The act will allow the government to delegate to non-government, non-profit organizations certain functions currently carried out by my ministry. For instance, safety inspections are currently performed to meet safety codes and standards, most of which have been developed by recognized national and international standards-setting agencies. These standards have been adopted by the Ontario government through regulation. Bill 54 would not give industries the flexibility to depart from these standards, and the safety organization would not have the authority to make regulatory changes.
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I'd like to assure you that our government will continue to safeguard the public interest by retaining full responsibility for safety standards through legislation and regulations. In fact, we are convinced that this approach will provide better protection for the public, which is our major goal. These new organizations will be able to respond faster to emerging issues than government ever could. They won't be mired in protocol and red tape every time immediate action is required or when the consumer is in need.
It's clear from second reading debate that some misconceptions have arisen, and I think it's especially important that I correct one in particular. We will not be setting up private sector companies that will be out to make a buck. This is simply inaccurate. The safety organization and the administrative authorities that this bill will allow us to create will be not-for-profit entities, so it should go without saying that they will not be out to make a profit. Rather we have stipulated that any surplus revenues must be reinvested in continuous business improvement and development, such as education and training programs for industry members or upgrading technology, which in turn will improve customer service.
We are also following the lead of other jurisdictions where this approach is working extremely well. In Germany and other European jurisdictions, for instance, this private sector approach has been adopted with good results. Closer to home, our federal government is in the process of delegating responsibility for its air navigation system to the private sector. Perhaps the best example of this approach in action is in Alberta, where the delegated not-for-profit organization, very similar to the one this government is proposing, has successfully assumed responsibility for the delivery of boiler and pressure vessel public safety programs and services. Alberta is also in the process of establishing a similar organization for elevator and amusement devices.
I hope it is by now perfectly clear that our government remains committed to ensuring the highest public safety standards and will continue our role of setting such standards and ensuring they are enforced. The government doesn't always need to directly deliver programs and services to guarantee that public safety standards will be met. A number of accountability mechanisms have been built into the proposed legislation and agreements. These mechanisms will ensure my ministry retains the means to address any concerns regarding an organization's performance or accountability. The government will have the authority to revoke delegated functions should marketplace or public safety standards ever fall below an acceptable level. In other words, the safety and self-management organizations will be held accountable by the government for the performance of their delegated functions.
Before concluding today, I'd like to address the important issue of customer satisfaction, which after all is key for all of us. It's something we in this government are very concerned about. I'd like to cite a consumer satisfaction study released just last week by the National Quality Institute and the Consumers' Association of Canada. Overall, it seems consumers are highly satisfied with the service they receive from most businesses, including automobile dealers, where 76% of the people rated them good or excellent, and real estate agencies, where 73% were satisfied. However, government departments don't score so well; in fact they're trailing miles behind these businesses, with a mere 40% consumer satisfaction rate.
In summary and for clarity's sake, let me say that what Bill 54 is really about is delegating the delivery of services to private sector entities. This will allow government to better focus on results rather than the delivery mechanisms and the technical processes.
Thank you very much, Mr Chairman. Before I turn it over, I'd just like to introduce the people who are sitting with me. On my left is Stien Lal, my deputy minister; on my right, John Walter, the assistant deputy minister for technical standards branch; and on my extreme right, Art Daniels, the assistant deputy minister responsible for my business division.
The Chair: Thank you, Mr Minister. Mr Crozier, Mr Kennedy, you have 20 minutes between the two of you for questions or statements, as you prefer.
Mr Bruce Crozier (Essex South): Thank you, Chair, and good afternoon, Minister. I'd like to start out by making a few comments on where our general concern is, and then in some time remaining Mr Kennedy would like to make some comments and ask some questions.
The minister has stated that the government is intent on reducing red tape, but I hope that during these two days of hearings -- and frankly that's rather limited and we've had to prepare for this rather quickly -- we're able to determine where that red tape saving is, particularly in the area of consumer safety. We certainly don't want to reduce the level of safety that's offered to our residents in the province of Ontario, and I would hope the government doesn't want to do that either. In other words, in order to maintain the same level, it will be of interest to us on this side to find out where the red tape savings are.
Public safety is something, Mr Chair and Minister, that we simply cannot compromise on, and in the area of consumer protection we feel as well that there's little area where we can reduce our vigilance. We feel that in some areas this act raises some questions. One is accountability. At the present time the government is the one that's accountable, and I think consumers and citizens alike feel some certain security in that. If we move to these not-for-profit organizations, we wonder where this accountability will be. It may be too that someone may be able to comment on where liability lies, because hand in hand with accountability is liability.
We note in section 11 of the act under crown liability that there is a standard provision limiting crown liability in several acts, one being the Energy Act, as well as the Elevating Devices Act and the Gasoline Handling Act, and that there is certain indemnification that's going to be required under that where administrative authorities are required to indemnify the crown. What this raises in my mind is the fact that these not-for-profit organizations will have to have a considerable amount of liability coverage and liability insurance, for example. I want to be assured that is available and that we won't be dealing with not-for-profit organizations who for the most part -- I don't know whether they'll have any assets other than the liability coverage or any assets that could be attacked in the case of a suit unless they do have some actual insurance liability coverage.
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Overall, we realize that the public sector is downsizing, but again we wonder if, in the protection of consumers and the safety of consumers, these not-for-profit organizations can retain their same levels of inspection and review in view of the fact that if the government was going to downsize, what will these not-for-profit organizations do? Will they try and do it with fewer inspectors?
I have a feeling too, which may be able to be addressed throughout these two days, that when a presumed neutral body like the government is taken out of the game -- in other words, these organizations will be contributing to and will be, as a matter of fact, according to the minister's statement, a part of administering these regulations -- it will be seen as they are looking after their own self-interests. We want to be assured that that's not the case. We feel to some degree that self-governance as a theory makes sense, but in practice, an efficient government agency can be more neutral and better positioned to represent the broader public interest than can any self-policy body. So I would hope that would be addressed over the next several days.
Specifically with the minister's statement, I wonder if I just might refer to it briefly. On page 12, Minister, you make the statement that there has been a survey by the National Quality Institute and the consumers' association of consumer satisfaction, and you've addressed some statistics there. But you say that "government departments don't score so well," and you go on to say that "they're trailing miles behind these businesses." Can you tell us what government departments you were referring to in that statement on page 12?
Hon Mr Sterling: Hopefully not mine. I have to refer to someone there. I just take that as an overall statistic in terms of people's satisfaction with governments overall. It is probably a statistic which is not hugely accurate to draw conclusions on but it's probably the people's perception of dealing with government because you'd be talking about municipal governments, I assume, and Ontario governments and federal governments overall, so you can't make it specific to my departments or the entities we're dealing with here.
Mr Crozier: With all due respect, Minister, I'm very surprised you have it in there then.
Hon Mr Sterling: Well, I think it's a general attitude.
Mr Crozier: In view of your answer, could we just disregard that comment about government efficiency and the acceptance of it?
Hon Mr Sterling: I'll bring you a copy of the study tomorrow for your own perusal and you can draw your conclusions from it.
Mr Crozier: We appreciate that, Minister. You were asked a question in the House today and we were told that you were going to answer it here and now we ask you a question here --
Hon Mr Sterling: I wasn't asked that question.
Mr Crozier: -- and you tell us you're going to answer it tomorrow. You've had more time to prepare for these hearings than we have, Minister. Again, I'm surprised you'd make a statement like that and not have the information here to back it up, but we would in fact appreciate having it tomorrow.
I think that's all the comments and questions I have and I'll defer to Mr Kennedy.
Mr Gerard Kennedy (York South): Minister, I did raise a question in the House. You did say on May 16, in introducing the legislation, that this would be consistent with doing better for less, and yet it seems fairly clear that the individual entities will have more money than current expenditures take. In other words, this is not an efficiency of government.
You said in the House that wasn't the objective, but I think the curiosity that people have is, is this an ideological move or is this a move that's really going to promote the health of business and the health of consumers? I think some very large concern is raised unless you can provide for us today precise figures about how much it costs currently to run the real estate, motor vehicles, travel industry and cemeteries branches versus the revenues they bring in so that we know exactly what the new boards will have by way of revenues and expenditures. I think people want to be assured that this isn't being done simply for the sake of getting it done and there isn't some sloppiness here in terms of revenue going to industries which could just lead to decreased fees and so on rather than really effective confidence being built on better action in the marketplace, because I think that's what the industries and consumers share as an objective.
Can you address specifically the costs involved in the real estate, motor vehicles, travel industry and cemeteries branches versus the revenues they bring in?
Hon Mr Sterling: Mr Kennedy, I'm not against decreasing fees to any of these particular professions or services. If that can be done more efficiently, that would be a double benefit as far as I was concerned.
I can ask my deputies to give you the various figures they have, and perhaps if you want to engage in that debate now, that's fine.
Mr Kennedy: It's not a debate, sir. It's a question requesting facts, and I'm hoping they're on hand.
Mr Art Daniels: In the real estate and business brokerage section right now, the government expends $1.5 million and brings in approximately $4 million of revenue. So your question then is, there is more revenue than there is expenditure.
Mr Kennedy: Yes, and do you have the corresponding figures for motor vehicles, travel industry and cemeteries?
Mr Daniels: Yes, I do. Travel is a little closer together: It expends $287,000 a year and it brings in a revenue of $400,000. In motor vehicles, it expends approximately $600,000 a year and brings in $3 million in revenue.
Mr Kennedy: I'd like to ask then, Minister, in light of these figures, what is the intention of the government in terms of giving these fees which subsidize the other consumer protection activities and their retention, which I think the minister must be saying are very, very important, which have an effect -- why would we increase the deficit to see these industries given a bonus in this respect?
Hon Mr Sterling: First of all, I don't get these revenues. These revenues go into the CRF, the central revenue fund, and therefore, whether fees are twice or three times what we need, previous governments have seen fit, I feel, to raise these fees exorbitantly, above where they should have been raised in terms of providing the service we are providing to the consumer and to the associated industries. Therefore, I don't feel there's any shame in saying to them that they can look forward to lower fees with regard to these particular activities. The amount of money we're talking about is very, very small when you look at the overall government operations, $46 billion or $56 billion.
Our thrust in doing this was because we believe this will be better for the consumer and for the professions that are involved.
Mr Kennedy: I'm sorry, Minister. I think there is an inference here that is a discredit to good industries that I'm sure are acting in good faith that they are getting some kind of money, consideration, from the government as part of this.
Hon Mr Sterling: It's their money.
Mr Kennedy: But I think their money is in pursuit of the confidence in their industry, and I think to the extent today -- for example, when we cite the auditor's report looking at the safety side of things, and I will cite figures and perhaps the deputies could say whether or not they're accurate. But the public accounts show approximately $19 million in revenue on the different branches for the engineering, technical safety area and approximately $15.8 million in expenditure, for a net $3 million that would go extra to that agency, and yet we have criticisms in the Auditor General's report, concerns about the number of inspections that are taking place. We have similar concerns about the business practices division.
Hon Mr Sterling: That's exactly why we're doing this.
Mr Kennedy: But I think you're in a contradiction, sir. In other words, I think the public needs to know -- and I'm sorry, Minister; I will give you a chance to respond -- why you did not apply those revenues to improving consumer safety and consumer protection and why those revenues were not cited so that we could have the appearance of openness and transparency at the beginning of this process, so we could all know that this much money was being refunded to those businesses and they don't labour under this impression somehow that this money is being transferred. Because it's been very difficult to get these figures. We were told by the ministry we'd have to use the access to information act in order to get at them.
So if you could address both of those questions: Why didn't you take the opportunity to increase the services to consumers and to the businesses involved because of the revenue that's there that could be used for that purpose?
Hon Mr Sterling: Because I guess the most important function of the new safety organization is that it will not be hampered by other pressures of government for a minister to reduce his expenditures column, the expenditures side of his ministry. The safety organization will be able to keep the revenues they get from elevator inspections, from approving designs for boiler and pressure vessels etc.
What has happened over the history of this ministry has been that the number of elevator inspectors, for example, has gone anywhere from 50 down to the low 20s. There are presently about 47 or 48 elevator inspectors there now. The reason they went down, Mr Kennedy, was because the finance minister of the day said to the ministry, "You constrain." They looked back into their ministry and said, "Yes, we'll constrain in the areas of inspection and enforcement." The beauty of this particular organization is that they will not be constrained by that and will be able to react to the real safety needs of consumers because they will have their own revenue-generating organization.
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Mr Kennedy: But, Minister, the reason the number of elevator inspectors went up is because of the report of the Provincial Auditor, which will no longer apply because these will not be transfer agencies. He will not have authority any longer to scrutinize the activities. Twenty-eight inspectors were added because the Provincial Auditor was in a position to point out the non-compliance.
I would like you to explain to us how, when there is no direction from you about the application of these surplus funds -- $3 million in the case of the safety organization -- there will be increased, better standards for industry. I think it would be very helpful if you could make that clear.
Hon Mr Sterling: Under the memorandum of agreement, they will have to account to me for every penny they spend.
Mr Kennedy: Will you today undertake to ensure that the setup dollars you provide to each agency will be spent in pursuit of either consumer safety or consumer protection? In other words, will you enjoin those agencies to use those dollars for the interests of their particular industries as well as the safety of the consumer and not have those being applied to any other purpose, so that if indeed it is that important to increase our deficit, that will be part of the administrative agreements you strike with each of the associations?
Hon Mr Sterling: I can give an undertaking that every dollar will be spent to administer the acts which these people are given to administer. Those acts are there for those very purposes you mentioned.
Mr Kennedy: I think people would like to know about the accountability mechanisms. Where I think, again, the worthwhile efforts of some of the industry members may be put under an unfortunate aspersion is that accountability mechanisms all have a majority from the industry associations rather than a balance from consumers and other interested members of the public.
I wonder if you could tell us why that was made necessary, especially when it seems you're going to spend in the order of $6 million to $9 million of public dollars to see these set up in some fashion or other. Why you don't use your power to ensure there's a balance there so that the onus won't be put simply on industry to make these decisions and we won't see them slighted in how those decisions finally get made?
Hon Mr Sterling: Are you talking about the balance of the boards on these particular --
Mr Kennedy: Yes. I understand the majority will be from the industry associations and you will have only the power to appoint a minority of other groups.
Hon Mr Sterling: That's right.
Mr Kennedy: I'm wondering if you could explain why that is necessary. Given the fact that there are public dollars being used here, shouldn't those public dollars that you're allowed to transfer -- in the sense that they are fees that have been collected in the public interest.
Hon Mr Sterling: Under other provincial legislation that we have, we cannot create an agency that can collect revenue unless it has a majority on the board. In other words, we cannot create agencies out there that are self-revenue-receiving, which I want to do in these five particular instances, without giving them a majority on the board. When I'm talking about the self-management regulation -- the real estate industry, the travel industry, the cemetery operators and the automobile dealers -- when I'm talking about those particular agencies, in virtually every self-management model we have in the province of Ontario, be it the health care profession, the teaching profession on which we just passed a bill in the Legislature, the balance of the board is far more weighted towards the professions than the ones under this particular model. In terms of the restrictions I'm under under our present laws -- I believe it's the Management Board of Cabinet Act -- which previous governments have run their business by and we continue to run our business by, I am obligated to do it this way if I want to give them the right to keep their own revenue.
The Chair: Mr Kennedy, you have one more minute.
Mr Kennedy: Can I ask this very quickly then, or make this as a suggestion if the minister's response is included: that you include in the administrative agreements, on a goodwill basis, I would assume, with some of the industries, the ability to ensure that they appoint some consumer or other representation as part of their majority, and further, that there be some baseline results. I think the concern you've raised with giving $6 million to $9 million of public money means that people want to know what baseline you will hold these agencies to.
I would ask for those to be tabled, what results have been achieved by the government-run agencies and what baselines we will expect in your agreements, or as part of this legislation if necessary, because consumers need to know we're not going to simply dilute the standards which exist. We've had a terrifically difficult time and I appreciate there isn't time to answer now, but I would like to have that tabled for this committee, what standards the ministry is now meeting so that we know what baselines will be met.
Hon Mr Sterling: The interesting part of this particular legislation is that consumers are, generally speaking, not represented at all under this government or any previous governments with regard to their input as to what is occurring around these particular professions or the safety organization that we're talking about here. That's because when it's within government, it is run by employees of the government of Ontario, and traditionally the consumer groups have not been as strong as the industry representatives in terms of coming to the government. Consumer groups tend to be more disparate in terms of their focus, whereas the industries are focused on their particular industries that are there.
I think that consumer representation will be enhanced immeasurably by these particular moves with regard to the control of these professions and the safety organization. They will be a formal part of the process and the decision-making that is going to go on with regard to these particular activities of enforcing government regulation. In answer to you, I believe consumer protection will be enhanced, not only in terms of the end result but also in terms of the consumer input.
Mr Kormos: If I'm a travel agent down in, let's say, Thorold, what type of red tape am I encountering now that you're speaking of that I'm going to be relieved of by virtue of this bill?
Mr Daniels: First of all, the major piece of red tape is just the licence itself, the paperwork and the processing of the business registration. It's a multiple form, and it will be electronic in the new world. You'll be able to transfer that information, not by mail but by use of a modem or the Internet. That will be a big saving to business, just on the straight bureaucratic processing of the registration and licence process.
At the beginning though, of course, the present Travel Industry Act will be the act itself. It will be the same regulations they work under today. It's not deregulation, but there will be savings, as I say, in the technical area in terms of efficiency, in terms of bureaucratic processing.
The industry compensation fund will be operated by the industry itself, which funds it, so it will be accountable to the industry which puts the money in.
Mr Kormos: Are we still on the red tape issue?
Mr Daniels: Yes.
Mr Kormos: Okay. What red tape am I encountering now that I'm going to be relieved of by virtue of this bill with respect to the compensation fund?
Mr Daniels: Again, the licensing process.
Mr Kormos: I can do that electronically?
Mr Daniels: Yes. And again, the paper processes.
Mr Kormos: Okay. Why don't we move on to motor vehicle dealers. What's the red tape? If I'm the owner of David Chev-Olds, a unionized General Motors car dealership down on Niagara Street -- where I bought my Chevy S10 last year with which I'm very happy, as well as the service from David Chev-Olds -- what kind of red tape am I encountering now that I'm going to be relieved of under this legislation?
Mr Daniels: Every two years all the sales people and the organization have to register and reregister, so there are 28,000 pieces of registration documentation that come to the ministry. That registration process takes time in terms of mail processing and all that --
Mr Kormos: Are you getting to electronic filing?
Mr Daniels: Yes.
Mr Kormos: I thought you were. Okay, so that's the red tape.
Mr Daniels: That's the primary red tape.
Mr Kormos: It will be electronic filing. Does the same apply if I'm a real estate agent?
Mr Daniels: Yes, the same thing.
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Mr Kormos: Okay, so it's electronic filing. The red tape you're talking about is the necessity of my currently having to fill out a paper form and put it in an envelope and mail it?
Hon Mr Sterling: Could I just interject here, Mr Kormos? I think too the organizations that you're talking about, be it the real estate authority or the travel authority, will know better what to require in terms of the formal process to ensure that the consumer is being protected than presently within my own bureaucracy, because they will be people who will be in the industry. They will have people within the industry who will recognize that to complain about things that aren't really that important to the consumer should be dealt with summarily, and things that are serious should be dealt with in a very dramatic way.
One of the problems we have faced, quite frankly, in the ministry has been trying to keep the focus on the right things in terms of being more interested in whether the address is correct or the name is exactly correct or whatever, rather than dealing with people who are misleading consumers, who are advertising falsely and that kind of thing.
I had an instance in my own riding where I had one real estate agent complain that on the sign of the real estate agent he had Gerry instead of Gerald, and the broker had to go through a long, involved correspondence fight with the registrar to explain why the name was Gerry rather than Gerald. My hope would be that the new organization would not tolerate that kind of foolishness.
Mr Kormos: But you reassured us that the government's going to continue to be responsible for standards through legislation and regulation.
Hon Mr Sterling: Right.
Mr Kormos: So if the misnomer, Gerald/Gerry, is not appropriate now, it won't be appropriate later. Is that not fair to say?
Hon Mr Sterling: I think what will happen is that the organization will come to me as the minister and say, "Mr Sterling, these regulations are ridiculous" --
Mr Kormos: Fair enough.
Hon Mr Sterling: -- so I will change those regulations. They will get themselves in the mode of saying: "Hey, we're running this show. We'd better make sure that this show makes some sense."
Mr Kormos: You see, what I'm questioning is the rationale for this legislation. Very much in your comments today, it seems to be based on the elimination of red tape, and the red tape that we've determined is the cumbersome task of manually filling out a form and mailing it in to the ministry. Why doesn't the ministry just get into the business of e-mail with travel agents, car dealers and real estate agents?
Hon Mr Sterling: We are. We're going through --
Mr Kormos: Then why do we need this bill and the privatized regulatory body?
Hon Mr Sterling: Because, quite frankly, it doesn't matter whether it's paper or electronic registration or whatever, I believe the end goal will be reached much quicker with this self-management group than it will be within my own ministry or within the bowels of a government. They will react quicker with regard to changing technologies, changing methods of governing their own professions.
Mr Kormos: I know Mr Daniels and he's one of the most innovative, high-tech people in your ministry. Surely he's as capable of doing that as anybody in the private sector, isn't he?
Hon Mr Sterling: Sure he is, but I want him for other things.
Mr Kormos: There's going to be little left for him to do.
You indicate they won't be mired in protocol and red tape every time immediate action is required. If the government retains responsibility for setting the standards through legislation or regulation, how is that going to change the response time when action is required?
Hon Mr Sterling: Perhaps you can ask the real estate people when they give their presentation, but you will find, I suspect, that their answer might be that they not only want to be involved in self-management but they want to have a look at how their profession is run so that it makes more sense than it does now. They will be taking a very active role in coming to me in terms of getting rid of this red tape we're talking about here by suggesting other ways of protecting the consumer, in a better way than now but with less bureaucracy.
Mr Kormos: In view of the fact that the government retains responsibility for creating the standards through legislation and regulation, and in view of the fact that you imply the government is mired in protocol and red tape every time immediate action is required, when you have any one of these self-regulatory bodies coming to you, saying, "This is impossible to enforce," or, "It's cumbersome to enforce," you've still got the protocol and red tape that you suggest is inherent in government. How does that speed up the response time?
Hon Mr Sterling: If they come to me and say, for instance, that they want some rule which I or my successor doesn't agree with, they will have to put up with whatever requirements are there at the present time. But it's my feeling that we can work together in terms of dealing with the overall management of these particular professions in a much more businesslike fashion that we presently do.
If we want to talk, for instance, about the real estate industry, we have some 50,000 registrants. In terms of applications or revocations, we're dealing with about 200 people a year, most of them being the refusal of an application because of checking out a record or something of that nature. I'd like to put that up with regard to our own profession, Mr Kormos, with regard to lawyers. Their ability and their maturity to self-manage might even be greater than ours.
Mr Kormos: Ours hasn't been very impressive.
Hon Mr Sterling: No, that's right. That's a bad example.
Mr Kormos: Self-regulation, as well as self-insurance, with lawyers has been thoroughly unimpressive. Pick another profession.
Hon Mr Sterling: How about my engineers? Anyway, my belief is that they've had a good act in the past, they've demonstrated that and they're mature enough to do this at this time.
Mr Kormos: What consultation have you had with the Ontario Public Service Employees Union about the job loss that's inherent in the self-regulation of these respective industries?
Mr Daniels: It's a very good question. The process of consultation goes back -- I was actually searching this out -- to 1991. We had a full staff consultation at CCR in 1991.
Mr Kormos: Clearly after I was gone. My term in 1991 was measured in hours, if not minutes.
Mr Daniels: In that full consultation, we called it Setting Directions for Staff, and we asked staff what direction the ministry would go. The absolute number one thing when staff were asked was, "What kind of things can we get out of it?" They said the mature industry should self-regulate and look after itself.
Mr Kormos: Was that with the Ontario Public Service Employees Union?
Mr Daniels: That's all the staff, the whole staff of the ministry.
Mr Kormos: With the union?
Mr Daniels: The union staff were there at the meeting.
Mr Kormos: No, with the union.
Mr Daniels: Oh, the paid union staff?
Mr Kormos: The union.
Mr Daniels: No, it would be the staff of the ministry, all 3,000 at that time.
Mr Kormos: What consultation has there been with the Ontario Public Service Employees Union about the job loss, the job destruction that will be generated by these self-regulatory bodies?
Mr Stien Lal: Maybe I could add to that, Mr Kormos.
Mr Kormos: Okay, I will let Mr Daniels follow you then. Go ahead.
Mr Lal: The collective agreement, as you probably know, requires us to give formal notice whenever a predicted job loss is to occur. In accordance with that, we have discussed the possibility of the impact of this legislation with the Ontario public service union. We will continue to do so. The collective agreement also requires us to make all reasonable efforts to ensure that these individuals will have an opportunity to work under the new environment, and we intend to do that too. It is an ongoing dialogue with the union and we will abide by the requirements of the collective agreement.
Mr Kormos: How many jobs of unionized workers will be destroyed as a result of the self-regulatory mechanism proposed in this bill?
Mr Lal: We do not have the exact number as yet because this is going to happen incrementally over the next 18 months and it will depend on when and how those administrative agreements are signed.
Mr Kormos: What's the model for appeal from decisions by these self-regulatory bodies, in view of the fact that CRAT, the Commercial Registration Appeal Tribunal, seems no longer to be applicable?
Mr Lal: For the present, it is still applicable.
Mr Kormos: What's the future going to hold in store then? You make it very clear that for the present CRAT is there. What does the future hold in store?
Mr Lal: That will be one of the items we will discuss with these industries, as well as with the safety organization when it's established, to determine if in the spirit of self-management they are interested in providing for a mechanism for appeal themselves or whether they wish to have CRAT continue to do this.
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Mr Kormos: You're going to let them make that determination?
Mr Lal: Hopefully, it will be through a negotiating process with those professionals.
Mr Kormos: You indicated that you don't know how many jobs are to be lost, but Mr Daniels told us very specifically what the revenue was and what the cost was for respective areas of regulation. Clearly cost includes wages, and when you're determining costs you take X number of people's wages and multiply by that number of people. How many people are employed in the four regulatory areas that we're talking about here on the issues of cemeteries, travel agents, real estate and motor vehicle dealers?
Mr Lal: We can certainly provide you with that information. You asked me about the job loss, and that would depend on the nature of the arrangement and when the transition occurs. I'm sure Art Daniels knows exactly how many people are employed in these areas in his division.
Mr Daniels: I think it's two questions: the people who are employed and then what will happen after self-management is dealt with in terms of discussions with the industry. That answer: We don't know what the full ramifications will be. There will be an oversight function. The minister said very clearly that we would still set marketplace standards, deal with business plans and set performance standards -- the question asked earlier. There would still be a residual function of government, and that has to be dealt with through discussions with our industries.
But in terms of the staff as we now have them deployed, I can give you that exactly. That comes to your red tape question too. There are 27 people employed in the ministry who deal with the Real Estate and Business Brokers Act. Of those, 20 are clerical staff. The other seven are involved in the licensing -- the actual registrar and the compliance inspectors and investigators. I think that shows you that there's a strong bureaucratic function in terms of paper function.
Mr Kormos: I've got to write this down. What group was that?
Mr Daniels: It's a total of 27 people involved in real estate.
Mr Kormos: You said 20 of them are clerical. So all of their jobs would be gone?
Mr Daniels: Not necessarily, because there will be functions for them in the self-managed industries as well.
Mr Kormos: Where?
Mr Daniels: There'll be roles in the self-managed industries for some clerical workers.
Mr Kormos: For some who may be hired on, at lower rates of pay?
Mr Daniels: That's not discussed yet. We're just beginning those discussions. That's an assumption.
Mr Kormos: So 20 jobs, though, in the OPS are going to be eliminated in the real estate from clerical.
Mr Daniels: I didn't say eliminated. That's our present strength.
Mr Kormos: You have seven investigators?
Mr Daniels: No, that includes the registrar's staff plus investigators and inspectors in that seven.
Mr Kormos: A total of seven. So we won't have any need for inspectors. Is that correct?
Hon Mr Sterling: The structure of this legislation is such that it may not all occur on a given day. It will depend upon the ability of the host self-management organization to take it over on that particular day or what functions it might take over on that day. Some are more ready than others and have been negotiating for a long period of time to have self-management occur. It will happen at different junctures over a period of time, and in some cases some functions may never leave the ministry. As I said in the very first part of my opening remarks, this is enabling legislation. We may never get to the situation where a particular function will be put over to the self-management group if an agreement can't be reached with the self-management group to do that.
Mr Kormos: But, Mr Sterling, please, the only red tape we've heard of is the paper filing of applications and the paper issuing of licences. We're looking at a shortfall for the government of a rough calculation of $4.9 million in the mere areas of real estate, travel and motor vehicle regulation.
Hon Mr Sterling: That's not exactly accurate.
Mr Kormos: I'm using the numbers Mr Daniels gave us.
Hon Mr Sterling: No, I don't argue with his figures, but the problem is that you're not including in there the services that are provided by the central body with regard to these particular agencies, and those central service areas, some of them, will be diminished and some of these agencies will be charged to pay for those services on a continuing basis.
Mr Kormos: The fact is that there's going to be diminished revenue as a result of getting out of the business of regulating these areas, isn't there? It's not hard to figure out.
Hon Mr Sterling: We don't know that for sure. If it is, it will be a relatively small amount of money. We may, for instance, say to these particular agencies, or one of them, "If we are to maintain an accountability mechanism to deal with your particular industry, we will require a payment to the government for undertaking that role."
Mr Kormos: You mean these businesses are going to be hit twice? Once by the government so the government can maintain the revenues it's speaking of, and the second time by the industry regulatory body so that it can finance that regulatory program?
Hon Mr Sterling: The total will probably be less than what they're paying now.
Mr Kormos: How can it be less if you're telling us that there'll be little reduction in the $4.9 million of revenues and yet the regulated industries still have to financially support their non-profit regulatory body? Surely, at the end of the day, it's got to be more. The numbers don't work like that.
Hon Mr Sterling: If you want to talk about the amounts, we cannot predict how those amounts will wash out. As I said to Mr Kennedy in the Legislature, I expect them to be revenue-neutral, or approximately revenue-neutral, when it's all said and done. I can't say within 5%, 10% or 15% whether that will be the case. Probably it will be the case that we will lose 5%, 10% or 15%.
Mr Kormos: You see, the problem is you can't have it both ways. You can't suck and blow. Either the government's going to have reduced revenues, which means that it's going to have to find that money somewhere else through increased taxes or increased user fees, what have you, or it's not. If it isn't, that means the businesses being regulated are going to be hit twice: once to maintain the current revenue level for the government and the second time to support these new industry regulatory bodies. Somebody's getting hoodwinked here, Chair. I would hope you would intervene in the interest of fairness and justice and small business. Surely this has raised your ire as well.
The Chair: Thank you very much for your submissions, Mr Kormos. Our time has elapsed for the minister's presentation. Thank you, Minister, Mr Lal, Mr Walter and Mr Daniels, for your presentation here today.
ONTARIO REAL ESTATE ASSOCIATION
The Chair: Our next presenters will be the Ontario Real Estate Association, Mr Richard Wood, president. We have 15 minutes set aside, including questions from the three caucuses. Would you proceed, Mr Wood.
Mr Richard Wood: Good afternoon, ladies and gentlemen. My name is Richard Wood and I am the 1996 president of the Ontario Real Estate Association. With me this afternoon are Rose LeRoux, immediate past president of the Ontario Real Estate Association and chair of our self-management group, and Jim Flood, OREA's director of government relations.
The Ontario Real Estate Association was founded in 1922 and currently represents more than 38,000 real estate brokers and salespeople throughout the province of Ontario. That is approximately 80% of the total number of registrants in the province. Our mandate includes working with government and politicians to improve the environment for both realtors and real estate.
Thank you for the invitation to join with you this afternoon to discuss Bill 54 and the effect it will have on both realtors and consumers. Let me begin by telling you that Bill 54 represents a major milestone in OREA's quest for self-management that began some 25 years ago.
During that quarter of a century we have held hundreds of meetings with government officials, spent tens of thousands of dollars and devoted countless hours of volunteer time to reach this point. Over that time, the principle of self-management for the real estate profession has been reviewed and endorsed by governments of all three political parties. We believe that this non-partisan support for self-management for our profession is a very significant point and one that we are pleased to remind you of today.
Now let me ask Mrs LeRoux to outline some of the reasons why the Ontario Real Estate Association supports Bill 54.
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Mrs Rose LeRoux: As Richard mentioned, we believe that Bill 54 will benefit both realtors and consumers in Ontario. First and foremost, Bill 54 provides a mechanism through which the real estate practitioners will be able to administer the day-to-day regulatory functions of our profession. We believe this type of administration is superior to the existing practice of having civil servants administer our act.
With no disrespect intended, we believe that we are in a better position to administer our activities than any outside group. We know our profession better than anyone else. In addition, we in organized real estate have a long history of administering our own activities through local, provincial and national associations.
Second, Bill 54, in creating an administrative authority, will provide another forum to address our ongoing concerns with respect to the existing Real Estate and Business Brokers Act. As you may not be aware, our legislation is approximately 75 years old and was last substantially amended in 1946. That's 50 years ago, and the legislation we live with today does not reflect current business practice, nor does it reflect current marketplace needs. It is our intention to urge the newly created administrative authority to review and make recommendations for new legislation as a top priority.
Third, we believe that the new administrative authority should be able to do more with less. In fact, we believe that the existing registration fee structure can provide enhanced levels of service to the real estate profession and still operate at a surplus. This surplus will allow the administrative authority to make further investments in member and consumer education, improve oversight functions and more. Self-management will benefit the entire real estate community, but we genuinely believe that Ontario's consumers will be the biggest winners.
Let me provide a few reasons. First, we believe that self-management will facilitate the development of enhanced educational standards throughout the profession. For example, the Ontario Real Estate Association has long urged the government to adopt new licensing criteria that would provide for some type of mandatory ongoing education for all registrants. Under self-management, we believe we can move quickly to achieve this goal. I think everyone would agree that enhanced education standards for both new and existing registrants will improve the level of service that we can offer the public.
Second, OREA will be recommending to the administrative authority the creation of a new consumer compensation fund to replace the existing bonding regime. When our recommendation is adopted, consumers can look forward to a vastly improved protection should anything go wrong in a real estate transaction.
Third, OREA will be recommending to the administrative authority that parts of our existing code of ethics and standards of business practice be included in the administrative authority's bylaws and regulations. This means that all registrants, not just OREA members, must abide by these codes and business practices.
Finally, we believe the administrative authority should move quickly to establish improved discipline and enforcement procedures. At present, the registrar of real estate takes disciplinary action against a registrant through the Commercial Registration Appeals Tribunal, otherwise known as CRAT. Unfortunately, that approach has a number of limitations. The most serious flaw in this system is the all-or-nothing approach to discipline. Simply put, CRAT may revoke a licence or let the registrant off scot-free. There is no middle ground.
OREA will be proposing to the administrative authority a completely new discipline and enforcement scheme that will provide for a range of penalties that can be imposed, including fines, licence suspensions, restitution orders and more. In this way, the administrative authority will be able to make the punishment fit the crime.
On that subject, let me point out that organized real estate has a long history of policing its members and its own activities. There are 48 real estate boards, one in virtually every major community across this province. Each one of those boards has a professional standards and discipline committee, charged with the responsibility of ensuring that its members abide by our code of ethics and standards of business practice and that they conduct themselves in an honest and ethical manner. This voluntary discipline system has benefited consumers for decades and it is proof positive that the real estate profession is harder on its own members than groups like CRAT ever were.
Finally, self-management will allow for quicker and more flexible decision-making than existing government mechanisms. As a result, when marketplace requirements change, the administrative authority will be in a position to react quickly and efficiently. This means that new trends in agencies can be addressed, new standard forms can be published and new education requirements established without the necessity of regulatory or legislative change.
Mr Wood: Ladies and gentlemen, we have read a lot of material with respect to Bill 54 and we have read some of our comments on Bill 54, as recorded in Hansard. We know about a concern among some of you that self-management will somehow lead to decreased consumer protection and that, as one individual put it, you're putting the fox in charge of the henhouse.
I don't know what we can do to lessen the fears of those whose opposition is ideologically or politically driven, but let me state the following: Next year, the Ontario Real Estate Association will celebrate its 75th anniversary. Our association was founded to lobby the provincial government to introduce legislation for the real estate business. We believed that legislation was necessary then in order to protect the public from a very few unscrupulous individuals and to provide for an efficient operation of the marketplace. Please note that it was not the government of the day that initiated that legislation and it was not introduced as a result of consumer complaints. Rather it was the industry making a proactive effort to protect consumers and to regulate the activities of the business.
Since that time, organized real estate, through its professional standards and discipline committees, has taken a far more active role in policing its own members than any government ever did. It was OREA which imposed education requirements on its own members. Government simply adopted the standards as their own, and only at our urging. We believe that our record in consumer protection is excellent and we pledge to set higher standards under self-management.
Bill 54 will be seen as good legislation in the years ahead and we urge you to pass it.
That concludes our opening remarks. We'd be pleased to attempt to answer any questions the committee may have.
The Chair: We have one minute per caucus, and we'll start off with Mr Kormos.
Mr Kormos: I want you to understand I'm not in any way ideologically or politically driven. I have no quarrel with real estate people. That's probably because I wasn't talked into buying a downtown Toronto condo in the early 1980s as an investment. But you heard the minister, here, say that there's going to be no effective reduction -- this is where people are going to jump up howling if they think I've misstated the case -- in the revenues that the province obtains as a result of it being in this business. You're one of the biggest ticket items. There are revenues, in your case, of some $2.5 million, net revenues. Norm Sterling says that's not going to be effectively impacted, yet you're talking about educational programs, you're talking about a plethora of devices, all of them very positive quite frankly, that are going to be funded as a result of your capacity to charge back to your members, your ability to raise money through licensing. Mr Sterling suggests that some poor real estate broker or agent from small-town Ontario or a big city is going to get hit twice; once to keep the public coffers maintained with some homeostasis and the other, second, to keep your programs paid for. How could it be that that wouldn't happen?
Mrs LeRoux: I'm not really sure how that can be. What we are to understand is that the revenue that is generated by the real estate profession in Ontario will remain within the industry, which is not what is happening at this point in time.
We have lobbied for many years for many changes to take place, some of the changes which I've outlined today, and we have not been successful in getting those changes enacted. We are hoping to be able to bring about some of those changes as a result of the legislation that we're talking about today. We believe that we will have the funds that are generated within our own industry with which to do that. We realize there will be a certain amount of money which will go back to the government for the quality assurance role which they will maintain, but we anticipate that the bulk of those funds will remain within the industry.
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The Chair: You have one minute, Mr Flaherty.
Mr Jim Flaherty (Durham Centre): Good afternoon. Some people with respect to this legislation --
Failure of sound system.
Mr Wood: I would tend to think that, as we established some 75 years ago with our association, our endeavours have always been there to protect the consumer and to do a good, proper job of a professional nature. In the present adminstration of the act there are some areas that do not allow for proper investigation, due to the lack of funding maybe to some degree, in our implementation of investigation of infractions. We see that that will in fact help us and we just believe that it is good business to have a respectable profession and that consumer protection is always at the forefront of our business.
Mr Kennedy: I'm wondering then, in the interests of that last statement, if you would comment. In fact if you look at the direct costs associated with current regulation, your industry will be getting back four times as much money as the government currently expends, and I'm wondering what assurance you can give today that that money will all be spent in the pursuit of the objectives which you've said.
Further, on the idea of having an effective majority to disinterested parties so that if this does proceed, it could proceed with public confidence because there is apparently some transfer of government dollars involved here, I'm wondering what response your association would have to that idea because it would take your concurrence because you would have the majority on the board and you would have to appoint one or more of those members. I wonder if you could address those two points for us today.
Mrs LeRoux: First of all, from a point of view of the amount of money that the government currently collects and the amount of money that is expended, I'm not at all sure that that includes all of the indirect expenses that are involved with the administration of our act. I understand that the expenses that were given here would probably be the direct expenses, but they don't perhaps take into consideration the cost of the premises and all of the other heating costs and all of those kinds of costs. The direct expenses such as the salaries and things are probably more what is referred to.
But having said that, we believe, as our association has, we have endeavoured for the last 75 years and in particular the last 50 years to improve consumer protection wherever we could at our own expense. We have been able to achieve that as a result of some of the comments the minister made with regard to the number of registrants and the number of complaints that are generated from the public. We believe there can be substantial improvements to that and we hope to effect that with those additional funds.
One of the things you may be interested in is the fact that we currently have a $5,000 bond, which is the only consumer protection in place in the current legislation in the event that a consumer has a problem as far as monetary amounts go. Now again, that is part --
The Chair: Excuse me, Ms LeRoux. Our time is up. I thank Mr Wood, Ms LeRoux and Mr Flood for attending today, for your excellent presentation.
PARAMOUNT CANADA'S WONDERLAND
The Chair: I understand that the next presenter will be out of order, Mr Flatt of Paramount Canada's Wonderland, who is to have a birthday with his daughter today, I understand.
Mr Russell Flatt: A graduation.
The Chair: Oh, graduation. Thank you to Mr Cox and Mr Duffy for their understanding in letting him go first. They'll be appearing in his slot later on. If you would proceed, Mr Flatt.
Mr Flatt: I'd also like to thank them. My daughter will appreciate it too.
Good afternoon. My name is Russell Flatt, vice-president of maintenance and construction of Paramount Canada's Wonderland. I'm here today to express Paramount Canada's Wonderland's support of Bill 54, the government's initiative to delegate the administration of certain designated statutes and in particular the Amusement Devices Act and its associated regulations to its designated administrative authority.
As background, I've sat as a member of the amusement devices advisory committee working in consultation with the technical standards division of the Ministry of Consumer and Commercial Relations in the development and implementation of amusement device regulations and I continue to participate on the amusement devices industry council.
The most important thing we do at Paramount Canada's Wonderland is provide a safe experience for our guests. A comprehensive safety program exists which includes 35 full-time mechanical-electrical maintenance staff with an annual budget of $3.5 million, implementing a program of daily, weekly, monthly and annual preventive maintenance functions and inspections. This in conjunction with the training and development of 500 seasonal ride operators establishes the foundation of a safe operation.
Third-party inspection of the rides by independent professionals recognized in the amusement industry is another cornerstone of our safety program. With the introduction of the amusement devices regulations in 1986-87 an additional layer of inspection and engineering certification was added to ensure guest safety.
Consistent with our support of the legislation and regulations in 1986, we again support legislation which provides opportunities to ensure public safety through private sector administration of existing standards and policies. We share the view that this proposal will facilitate improvements and efficiencies in the delivery of services in a cost-effective manner while providing the high standard of public safety expected in the province.
The administration of amusement devices standards and policies, whether left intact or delegated to a new authority, continues to face ongoing challenges. Annual ride inspections must remain top priority.
Emerging amusement device technologies are creating experiences which are higher, faster and more intense. Engineering review and certification of these technologies will require an increased level of technical expertise. Since all of these new technologies and in fact all rides are manufactured on the international market, harmonization of codes and standards on a national as well as international basis should be an important goal.
The highest level of public safety must be delivered in the most cost-effective manner possible and the amusement industry must remain an active participant in the ongoing business of policy-setting and standards review.
In conclusion, the current process is working well. However, the proposed legislation presents opportunities for improvement. Regardless, safety is always the most important thing we do.
The Chair: Thank you, Mr Flatt. We have approximately three minutes per caucus.
Mr John L. Parker (York East): During second reading debate, there was some concern expressed from the other side of the floor regarding the level of safety inspections that would be carried out on amusement rides. The concern was that if the industry was inspecting their own rides, we couldn't count on them to carry out the number of inspections or to be as diligent as independent government inspectors would be. Can you comment on that and tell us what you foresee if the industry is responsible for administering its own safety standards?
Mr Flatt: Sitting on the committee and going through the writing of the regulations, there was a lot of discussion about -- if you want to call it -- the bureaucracy, the technical dossiers and all the engineering parts of the regulations, but what continued to come from the amusement industry was that regulations were critical, that really if all they did was inspect, that would be enough for a lot of the members of the industry.
I believe that those members, and it is a relatively small group of owner-operators in the province, will insist on inspections. I think it is really the cornerstone of all our businesses and I think they will insist that that either remain as well as it is or hopefully improve.
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The Chair: One minute.
Mr Frank Klees (York-Mackenzie): Could I just follow up on that? When you say the industry would insist on inspections, are you looking to the industry to ensure that those inspections continue or are you still looking for the government to play some role in terms of an audit?
Mr Flatt: I believe the government's role is in setting the regulations, and it's fairly well prescribed in the things that we have to do. Basically there are manufacturers' manuals and things we have to do on a weekly, daily and annual basis. I think those inspections will continue, whether it's through government or private industry, as long as there's somebody looking to make sure that we're doing what we're saying we're doing. Again, the daily inspections, regardless of who does the yearly or annual or twice-annual inspections, will come down to how well the daily inspections are done by the people who go out each day: the maintenance mechanic and the ride operation staff who check out a ride each morning.
Mr Crozier: Very quickly, you've said that the current process is working well, and I may be paraphrasing, but you said you can see room for improvement. You've been part of an advisory committee to government. Why couldn't the improvement be made through the current system if in fact the current system is working well and you just want to make it better?
Mr Flatt: I'm not saying that it couldn't. I believe it could go either way. I believe the best way is through private sector involvement. These are relatively new regulations and we're going through the evolution process of inspections and certification of rides. We've only done this now for six or seven years. Being a three-months-a-year operation, it's not like this is an ongoing process that happens every day. We shut down for seven or eight months a year and then we start up each year. So it's a relatively new process that we've been going through and I believe it is working well. I believe there is room for improvement, but it could happen in either case. We at Canada's Wonderland just believe the private sector is the best route to do that.
Mr Crozier: Do you think Canada's Wonderland, being professional as it is and as large as it is, could operate with just self-inspection?
Mr Flatt: Currently we do not do just self-inspection. We have always done a third-party inspection and we would continue to do that regardless. So I would say the answer to that would be no. We believe it is necessary to have additional inspections to keep perspective. Sometimes it's the old forest for the trees -- you look at this every day. It's good to bring some new people in. We have three or four outside independent people whom we use who are recognized in the industry, so we would continue to do that. Regardless, we would always have more than our own internal inspection.
Mr Kennedy: I wonder if you could comment on the difference between an operation of your size and the impact this might have on smaller proprietors of amusement devices, and further, how you would characterize the tensions that must arise from time to time between the government inspectors and your operations or smaller operations and to what extent you can tell us about that interaction as it currently exists -- so two questions there.
Mr Flatt: I'll do my best. First of all, I can't answer for that small operator. I've dealt with them for many years, and for the travelling shows it's a little bit different situation. I'll make this general comment, though, on the people I've dealt with and the small operators I've come across: I believe this is their business, just as it is our business, and safety is our business. We happen to operate rides, but safety is the business. I think these people are very dedicated to doing their winter overhauls. They own the equipment, and I think as you would well know, any accident on a piece of equipment, whether it's for us or a small operator, would put them out of business. So I believe safety, without inspection of either agency, will always be at the forefront of their minds.
I believe the system is working well with the government inspectors and would continue in either case. I don't believe there's that much friction on the inspection end of the regulations.
I would comment that if there's a concern, and I don't want to speak for small business, I believe it's the engineering and the paper criteria, that technical dossier that we talk about in regulations, that they believe is onerous. I don't believe the concerns deal with the inspections of the rides, because in any case my understanding is that in the jurisdictions they were going into and municipalities they were facing inspections even prior to the regulations set out here.
Mr Kormos: Certainly a large operator, a deep-pockets operator, is motivated by self-interest in ensuring that its rides, its machinery is as safe as possible. That's why the interesting contrast between a small operator, where there may not be those same deep pockets -- I'm talking about the access to compensation for an injured person. It may not be as valid.
The minister earlier today talked about the red tape that was going to be cut by virtue of this bill, Bill 54. In your business, what kind of red tape do you contemplate being relieved of?
Mr Flatt: That's a good question. Again, I would state what I said just a few minutes ago about the small operator and the technical dossier. Back in 1985 or 1986, as we prepared for the implementation of regulations -- and again, because we have deep pockets, so to speak -- we went out and hired an engineer specifically to handle that red tape. For the small operator, obviously that could be a problem if they didn't have the financial wherewithal, possibly, to hire either a consultant or a staff member to handle the red tape. That could be some of the red tape that we would be talking about.
Mr Kormos: But how do you see the degovernmentalization of this type of regulation reducing any red tape in the instance of your industry? How's it going to be different with the proposed regulatory body in contrast to the current system in terms of red tape?
Mr Flatt: I can't answer that.
Mr Kormos: Obviously I've come from the point of view that my suspicion is that you're going to have to jump through the same hoops regardless of whether the regulatory body is government- or industry-based.
Mr Flatt: Again, in the regulations, most of this is prescribed, so that's probably true. Regardless, we will have to fill out the documentation, the certification, the technical dossiers. Hopefully that can become streamlined, especially on similar rides. Especially on an older ride, that would be simplified. But I guess that remains to be seen.
Mr Kormos: Is there any generalization as to where most of the equipment comes from in your business?
Mr Flatt: I would say the majority of the major rides, at least in our park, come from Europe. Smaller rides and some of the travelling carnival rides would come from the United States, but most of the major rides in our park come from Europe, primarily Germany and Switzerland.
Mr Kormos: The reason I ask that is because my next question is, is there any national standard that an offshore manufacturer has to meet before that product can be imported into the country and used in a commercial exercise like yours?
Mr Flatt: A national standard: There is the CSA and there are the Ontario regulations. For example, we have a ride from Japan, which meets the Japanese Industrial Standards; the German rides meet a TUV standard. Through the process of filling out this engineering technical dossier, there would be a comparison done between the standards, say the TUV standards versus the Ontario standards, and we would have a local engineer who would certify that they are comparable. I would say they do meet the national standards and do meet a number of international standards.
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Mr Kormos: Are some --
The Chair: Thank you very much, Mr Kormos. Our time is up.
Mr Kormos: The next question was just right on the tip of my tongue.
The Chair: I'm sure it'll be asked somewhere later on today. Mr Flatt, thank you very much for your presentation and congratulations on your daughter's graduation.
Mr Flatt: Thank you.
The Chair: Our next presenter is Mr David Rappaport, vice-president of Local 591, OPSEU. Is there someone here representing Local 591 of OPSEU? Well, perhaps they've been delayed.
CEC SYSTEMS, ELCAN ELEVATOR, TRI-CROWN
The Chair: We will proceed then to CEC Systems, Mr Ernie Cox, and Mr Kevin Duffy, president of Elcan Elevator. Are they present? Could you identify yourselves for the purposes of Hansard?
Mr Kevin Duffy: I'm Kevin Duffy from Elcan Elevator. With me is Ernie Cox from CEC and Mr Al Lockyer of Tri-Crown.
The Chair: Please proceed.
Mr Duffy: Good afternoon, Mr Chairman, ladies and gentlemen. Thank you for the opportunity to appear in front of you. I would like to commence by reading from the Policies and Procedures: Elevating Devices Mechanic Licensing Program, a copy of which is attached to my presentation.
"A. Introduction:
"The policies and procedures have been developed and adopted by the Elevating Device Mechanic Board operating under the authority of the director under the Elevating Devices Act.
"The policies and procedures pertaining to the elevating device mechanic licensing program and the method of their application and administration are set out on the following pages. The intent is to provide a set of reference points and guidelines for the training delivery organizations, examination bodies and/or administrators involved in the training and certification process.
"The policies and procedures must be followed by all training delivery organizations wishing to have their programs recognized by the board.
The policies and procedures are subject to change and enhancement as required.
"Training administrators shall not alter any of the policies and procedures set out in this document without the knowledge and prior approval of the Elevating Device Mechanic Board and the Ministry of Consumer and Commercial Relations -- Technical Standards Division."
It is very obvious from the preceding that this interim board has been granted a great deal of power to implement control over the elevator industry.
The major problem is that the union sector is heavily represented whereas the non-union sector may possibly have one and only one vote due to the fact that the CECA organization represents both union and non-union companies. The majority of the non-union companies in Ontario are not represented by any organization.
The first knowledge any of the non-union companies had of what was transpiring at the interim board level was disclosed at a meeting held on June 6, 1996, by CECA, to which many companies were invited as guests of CECA. It was at this meeting that the non-union companies discovered who was on the interim board. We, the non-union companies, feel that this board will not act in the best interests of our companies.
The board has the power to approve or disapprove of our instructors, our education programs, as well as any changes we wish to implement in an administrative capacity regarding the elevating devices mechanic licensing act.
The ultimate power granted to this board could lead to the demise of the non-union companies in a short period of time because the union and the unionized companies are overwhelmingly represented, whereas non-union companies may have at present only one vote. We feel that the non-union companies deserve equal representation on the elevating mechanic board.
It is also our opinion that the grandfather clause, presently set at five to 14 years' related experience, should be changed to between seven and eight years. All present mechanics between five and seven years' experience should have to write the government-supervised exam, with no exceptions. The government must certify all elevator mechanics in the five- to seven-year category.
In closing, I would urge this committee to delay the passing of Bill 54 until the concerns of 30% of the elevator industry have been addressed in a fair and just manner.
I have attached on the back the voting list of this present interim board and also my introductory. Thank you. Mr Cox will speak next.
Mr Ernie Cox: Good afternoon, ladies and gentlemen. My name is Ernie Cox, owner and operator of CEC Systems which, again, is an unaffiliated elevator company.
The implementation of Bill 54 will disfranchise a large section of the elevator industry. The threat comes not only from the act but from the selection of representatives chosen from industry to implement Bill 54.
Independent elevator contractors have just become aware that their interests, throughout the negotiation process, have not been represented.
Independent elevator contractors represent a significant portion of the labour employed by industry in Ontario, either directly or through local suppliers and subcontractors dependent on us for their livelihood. Approximately 30% of the work done in the elevator industry is performed by the independent contractor. We are currently organizing an association to represent our interests. A committee representing independent elevator contractors has been appointed to address the impact of Bill 54.
We urge you, the administration of justice committee, to listen to our concerns and recommendations. The Ministry of Consumer and Commercial Relations has until now administered the Elevating Devices Act and the codes adopted under the act in a fair and impartial manner. There has always been recourse to resolve disputes over the interpretation of the codes. There has always been equal treatment for all contractors, those affiliated with the union and those who are independent. This was accomplished by assuring that the administration of the act was by a third party, government, which made decisions for the betterment of the entire elevator industry. Bill 54 changes that process.
We, as independent contractors, have no assurances that we will continue to have equal representation under the law. We are asking for an amendment stating that whenever there is representation from the industry, the representation must include equal representatives from both union-affiliated and independent contractors, that representatives from labour include equal representation from union employees and independent elevator contractor employees. Respective representatives should be chosen by a consensus of the contractors and not appointed by a board of committee representing either government or industry.
The second item concerns certification of mechanics. Presently, the term "mechanic" is defined under the Elevating Devices Act. There's a page there.
The necessary reorganization of boards and committees preparatory to the implementation of Bill 54 has permitted views and representations to be made which do not reflect attitudes of most independent contractors. In regard to certification, Bill 54 changed the direction of a committee we thought was established to define curriculum and recommend implementation procedures for industry approval into what appeared to be a self-serving tribunal setting standards and judging the qualifications and training of existing mechanics. We feel that equal representation would have promoted a balanced view.
The development of a curriculum for training new entrants into the industry is now completed. However, there are no regulations governing the process of implementation of certification. Under Bill 54, we are requesting an amendment so the process of certification of mechanics does not come under the Elevating Devices Act. Existing government regulations can ensure a fair, equitable transition process for certification. The Trades Qualification and Apprenticeship Act at present contains all of the necessary elements to ensure both the union-affiliated and independent interests are addressed. Again, we are seeking fair representation.
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The third page has a list of the affiliated contractors which represents 28 of the 500 listed.
Page 4 is an overview.
Page 5 is a system already set up -- Trades Qualification and Apprenticeship Act -- which is OTAB.
Page 6 is the Elevating Devices Act.
We have section 12 and we're already regulated by B44 code, CSA.
I'll pass it on to Al Lockyer.
Mr Al Lockyer: No, it's okay. I'm ready for questions.
Mr Crozier: Welcome, gentlemen. I want to emphasize and just get your confirmation, but 30% of the work done in the elevator industry is performed by independent contractors, a pretty significant portion of the work. I did look at some information a few days ago where the grandfathering clause was not applied equally to non-union mechanics the same as it was applied to union mechanics. In other words, it was more difficult to qualify under the grandfathering for a non-union mechanic. Correct?
Mr Cox: Correct.
Mr Crozier: What you've suggested today then is a solution to that problem, and that is to take the certification right out of Bill 54. Could you confirm for me that the Trades Qualification and Apprenticeship Act, as it presently applies, would treat both groups equally?
Mr Cox: Yes, they would.
Mr Crozier: That's fairly simple. How long do we have, by the way?
The Chair: You've got about 30 seconds to go.
Mr Crozier: I don't think there's much more we can solve in the 30 seconds, but I felt after having read that information a few days ago I have no idea whether it was the government's intention to treat one group, one class, differently than another or not, but perhaps we can find that out when it comes to proposing some amendments to this legislation.
Mr Duffy: The way it's presently set up is the people who have been in the trade five to 14 years -- if you're a non-union mechanic you would have to write a government exam but the union member would not because he has gone through some classes in the unionized school. My contention in my brief was that if the non-union sector has to write a government exam although the union companies have been through some schooling process, they should still have to write a government exam. If we all have to be approved by government, let's all be approved by government.
The Chair: Mr Kormos. You've got about three minutes.
Mr Kormos: I tried. The government's been touting Bill 54 as saying that it's going to cut red tape for business. Now, in the elevator area, what red tape would you anticipate being cut, if any?
Mr Duffy: The way it's generating profits right now, I don't anticipate any red tape being cut.
Mr Kormos: Where is the red tape now?
Mr Duffy: If you want to change anything on an elevator, you have to submit at least the minor B alteration, and along with that minor B alteration, for every alteration you want to make and fill in, it costs you $65. The wait for the return confirmation, "Yes, you can go ahead with that work," is substantial. Plus, if you're a small company, you ought to hire an engineer to approve your work and to submit it to the government. The red tape is quite substantial, and for the safety to the general public I think this system will have to continue. We're a very heavily regulated industry with inspections and I wouldn't like to see that stopped.
Mr Kormos: So nobody at the end of the day is going to be saving any money as far as you can tell now.
Mr Duffy: No, I think earlier, a few years back, yes, we were short of inspectors in the industry. That's been corrected and I think the Ontario public can be well protected by what's going on right now. But my argument is not with the bill itself. My argument is with the representation that we as a company do not have, and I think that's what we are after here.
Mr Kormos: I saw the addenda, the appendix of that list to the Elcan submission. That list is the voting list out now. What was their input, as far as you're aware, to the legislation?
Mr Duffy: When it comes to the Elevating Devices Act, this interim board has laid everything out for us, but we as a group had no idea what was going on behind closed doors. A few people did know what was going on.
Mr Kormos: Neither did the Tory caucus.
Mr Duffy: Neither did we, and now when we look at it, if the union and the non-union companies were to get together, they could actually put us out of business. They control the education program. If they didn't want our education program to be accepted, they could refuse it. Therefore, in a number of years down the road, we would have no mechanics. The union companies would take back our contracts. The union's labour force would increase because our workers wouldn't be allowed to work. This is our main concern. We would like to have equal representation on that board to control our own industry and have an input and a say about the industry. Right now we do not have it.
Mr Flaherty: I understand that the concern about the union domination arises out of the interim advisory board that was dealing with mandatory training and certification. Bill 54 has nothing in it about mandatory training or certification, but I understand the concern, where it comes from, because of the history of the board. The interim training board of course is temporary, not permanent.
In Bill 54 there are a couple of specific provisions. One provides that the minister may appoint a minority of members of the board and the other is, perhaps more importantly, the development of the business plan as part of the administrative agreement with the particular group, in this case the elevator section. Can you work with those provisions in terms of developing a fair business plan that would represent the independent contractors as well as the unionized forces?
Mr Lockyer: I'd like to answer that. The way this whole process has come about in the elevator section -- we realize this is only a small section in Bill 54, the elevator section. However, the pyramid to Bill 54 is being built from the bottom up in the elevator industry, and the interim board that has been set up by the association I'm a member of was set up as an advisory board to come up with an education plan for the elevator industry, which it did. However, that board now has been set in the power position of becoming the so-called board. As we can see, the director of that board will become the director answering to the Bill 54 committee when it is involved.
The problem we see is that with the speed this bill is being pushed through, we have no way of stopping this board from being empowered, because by the end of August this board will have every possibility of being empowered by the minister or the different people who become in control of that circumstance.
The splitting of the industry, the splitting of the union for safety -- this Bill 54 is all to do with public safety, and yet the splitting of the union would indicate that somehow or other the non-union section has been recognized as being the unsafe section, and yet if you look at the four major accidents that have happened in the last six years -- two in Ottawa, one in Hamilton and the one in Toronto -- all four of those were directly attributed to the union section.
We don't have the information as to what companies are the most unsafe companies, but I suspect it is the union section. The non-union section, because we are owner-operator, is probably more aware of safety because it can take us out of business and thereby lose our homes and everything else.
Mr Flaherty: The concern is fair representation on the administrative agency.
Mr Lockyer: Yes.
The Chair: Gentlemen, thank you very much for your presentation.
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CANADIAN AUTOMOBILE ASSOCIATION -- ONTARIO
The Chair: The next presenter is the Canadian Automobile Association, Ms Mitchell. Welcome to the committee.
Ms Pauline Mitchell: My appearance here will be even briefer than I had originally intended. We came here this afternoon to raise our concerns about a very significant portion of the Travel Industry Act that we understood was going to be repealed under Bill 54. A few of my colleagues sitting in the audience helped make me aware this afternoon that section 28 of the Travel Industry Act is in fact different than regulation 28 in the same act. Our intervention today was intended to defend the rights of the consumer by objecting to a repeal of that section alone.
I've been assured here this afternoon that regulation 28 will stay, and that a repeal of section 28 -- it's pretty confusing when you're reading the act -- is merely a housekeeping matter and we're now satisfied that the travel consumers will retain their protections as originally agreed to in the Travel Industry Act.
I won't take any more of your time unless you have questions. I can't imagine what they might be, but if you have some I'll try to answer them.
The Chair: Possibly we might find one for you.
Mr Kormos: What are the red tape hurdles you have to wind your way around?
Ms Mitchell: I can tell you of a couple here this afternoon. There's a lot of red tape in the numbering of sections and regulations.
Mr Kormos: Trust me, that's never going to change.
Ms Mitchell: That's about the only red tape I have encountered here this afternoon.
I have a colleague here with me today, who I think stepped into the hall, who's been involved with the travel industry for a much longer time than I have, and if I could send someone out to drag him in, I'm sure he could give you an example of some red tape.
Mr Kormos: What's his name?
Ms Mitchell: Mr John O'Neill.
Mr Kormos: What are we talking about in terms of the burdensome red tape you face in the travel agency business? I'm trying to get a handle on what kind of red tape is going to be eliminated by virtue of Bill 54. What kind of red tape obstacles do you find in the travel industry?
Mr John O'Neill: At the present time -- I wasn't aware of what section we were talking about originally.
Ms Mitchell: Oh, no. We're now on to just plain red tape.
Mr O'Neill: I don't believe that there is a lot of red tape. We file once a year and we have to go to pay our bill for the compensation fund. That's it. There's not a lot of red tape.
Mr Kormos: So in your case the purpose of privatized regulation surely can't be in the interest of eliminating red tape because you saying there ain't none.
Mr O'Neill: Yes.
Mr Kormos: Okay. You know that the government makes money, generate some net profits in the regulation of these various industries. You know that, don't you?
Mr O'Neill: I was not aware of that; sorry.
Mr Kormos: Heck, in the case of your industry some people swallowed their bubble gum to learn that the government spends $287,000 a year, but brings in $400,000 a year from your industry in terms of various licensing fees, I presume, and annual costs. So that's a net profit. Nowhere near as much as it makes on real estate or motor vehicles.
The minister today told us that he didn't expect to see any substantial drop in the net revenues for the province. He did.
Mr O'Neill: Okay, I believe you.
Mr Kormos: You're going to be expected to fully fund, as an industry, this new regulatory body that's industry based. You're aware of that?
Mr O'Neill: Right.
Mr Kormos: The government doesn't expect to pump any money into it?
Mr O'Neill: Okay.
Ms Mitchell: I would say, if I can answer on Mr O'Neill's behalf, we are aware and we're members of associations that are involved with consultation in the move towards self-regulation. I think those associations are still on the journey in terms of determining how all of this will unfold, and I think at this stage of the game, Mr O'Neill is pretty much on the front line of service to our members and to other consumers; I don't think he's had that level of involvement in the discussions to this stage.
Mr Kormos: I suppose I'm merely indicating that every indication today is that your industry, like the other regulated industries that are the subject matter of Bill 54, is going to end up at the end of the day paying more, not less, because the government indicated quite clearly that it expected to maintain the current net revenues and at the same time to call upon you to fully finance, admittedly on a not-for-profit basis, yet a new regulatory body, this time privatized.
There's something here that simply doesn't add up. You and the people in your industry better be pretty concerned about the flimflammery and the game that's being played out right now, because you can't have it both ways. The government can't maintain these revenues unless it charges you the same sort of fees or bleeds out of you the same sort of cash flow that it has been. It can't at the same time maintain revenues without doing that, and if you're going to fund your own regulatory agency, you're going to have to pay for it. It's going to come out of your chequing accounts, your current accounts and your various businesses, so you guys are going to get hammered twice. So caveat emptor, as they say.
Ms Mitchell: I think our entire interpretation is that in defence of consumers -- travel agencies are consumers of travel products themselves -- we'll have to be very aware of all of the new developments and --
Mr Kormos: I'm trying to get a handle on -- the big fundamental question is, why? Why would the government want to get out of the business of regulating the travel industry? Because it is important to consumers, isn't it?
Ms Mitchell: It's a very big industry where people count on service, reliability and --
Mr Kormos: Integrity.
Ms Mitchell: -- integrity.
Mr Kormos: It's one of the big ticket purchases by most individuals or families, isn't it? First the house, then the car and I suspect travel may well come third in terms of laying out money all at one time, isn't it?
Mr O'Neill: It's one of the top ones, yes.
Mr Flaherty: Mr O'Neill, with respect to the motor vehicle dealers and red tape, I gather you're aware that every motor vehicle dealer and the salespeople have to register every two years. It's about 28,000 registrations every two years. We heard that from the assistant deputy minister.
Interjections.
Mr Flaherty: There's something I wanted to ask you about on the motor vehicle dealer's side, if I can ask you that since we're talking about the Canadian Automobile Association. There is an organization called the Canadian Motor Vehicle Arbitration Panel. Is that right? Are you familiar with that?
Ms Mitchell: I'm not familiar with that. I'm sure that there are people within our organization who are. Quite honestly, when we read Bill 54, we found it fairly confusing despite some very good cooperation from the communications branch in supplying us with a great deal of background information. We read nice things about the vision and all the rest of it, but we didn't get too much in terms of very specific information about the 25 different things that were being affected by this bill.
Mr Flaherty: The concept is that with respect to mature industries like motor vehicle dealers, the administration and delivery systems are taken from public servants and moved into the industries themselves because they're fully capable, given their maturity of managing their own affairs, while government maintains its consumer protection and public safety obligations by maintaining the right to legislate and to regulate. It's just moving administrative and delivery systems and not moving the traditional government powers, the important public safety aspects of it.
That's why I was going to ask you about the arbitration panel because I understand it's a self-management tool that has been very successful for consumers, not only in Ontario but across Canada. I know from my own experience in my previous legal days that people having that sort of dispute with respect to automobile, new cars, can go through that arbitration panel rather than use the court system to their benefit, not only with respect to cost but with respect to expediency, getting a speedy resolution. Are you familiar with that system?
Ms Mitchell: We're more familiar, being with CAA, with some of our own CAA programs. They're very similar to that and are performed for our members by our own association. We have, for example, our auto-approved garages and an arbitration system that would be handled by those elements of our club on behalf of our members. Those are the areas we'd be more familiar with.
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Mr Klees: The minister in his comments earlier indicated that there was a national quality survey that was done and that generally speaking people rated the service from private industry, the private sector, fairly high. About 73% were satisfied compared to about 39.8% consumer satisfaction with government service. Based on your personal experience, would you feel that it's fairly consistent, and has that been your general experience?
Ms Mitchell: We measure the satisfaction rates of our members as they relate to us; we don't ask them to compare it to how satisfied they are with government.
Mr Klees: But I'm speaking generally. Would you say that the kind of service that's delivered by government in general is below that in terms of quality of delivery?
Ms Mitchell: I would say that successful businesses that continue for many years have done so because of the level of service they provide, and there's not a turnover rate of every three or four years.
Mr Klees: Would it not follow then that if we shift responsibility for delivering service into the industry itself, which has a vested interest in terms of how well it performs, the industry would as a result benefit from that shift away from government providing that service to the industry?
Ms Mitchell: I think it's a progressive move, that mature industries are moving in the direction of self-regulation. I think it's probably a symptom of the times that this is a necessary direction for mature industries to be moving in.
Mr Kennedy: What do you think of the concept that for the consumers' confidence, because a great number of your members are consumers -- you have a large base, a large membership -- consumer-like organizations or other non-industry interest groups, in the sense of not having self-interest, should be an effective majority on these new boards, so that there be some public confidence that there is that arm's length which is intended, if we understand the government correctly? What do you think of that as an idea?
Ms Mitchell: I think anything that enhances the reputation, the credibility, the reliability of the travel industry is certainly a benefit to all consumers as well as to the industry itself.
Mr Kennedy: Thank you for that. Do you have any comment on developments in the United States? We're seeing states like California and other states re-regulate after having diminished regulation in recent times because of some failures of different kinds of travel endeavours. How has your organization assessed the tradeoff between the confidence that government oversight can bring and that when the industry's looking after its own? I wonder if you could comment.
Ms Mitchell: I think all consumers would like to see it done right the first time, not to have something that comes in and doesn't work and has to be retooled. I think you take the necessary time in advance to setting up the self-regulation. You try to anticipate what the consumers' needs are and the response, and you try to get it right, right from the beginning.
Mr Kennedy: I know you had some trouble getting the right information on this, but are you in a position to comment on whether you think consumers are adequately protected? For example, the majority of the boards --
Ms Mitchell: I think there's a great deal of confusion for consumers. I'm not the only one experiencing difficulty figuring out some of the new developments. When I read this legislation, it then was necessary to go and find the other legislation it referred to. Even with that, I checked with other people in the travel industry to see if I was reading this incorrectly. They picked up the act and said, "Oh, my heavens, if you are, so am I." There were a lot of people within the travel industry who didn't know how to interpret what they were reading. I think it's very dangerous when people don't understand what the changes are and what the changes mean to them.
I leave here today satisfied that regulation 28, which does protect consumers, will remain in place. I arrived here today fearing that it would not.
Mr Kennedy: I'm wondering too, in terms of a more general consideration -- I don't know if it's your concern -- that in place of elected government oversight, and through that means, do you think there is sufficient protection for consumers in the rest of the bill, or are you not in a position to comment?
Ms Mitchell: I'm not in a position to comment on that, sir.
The Chair: Thank you, Ms Mitchell and Mr O'Neill, for your presentation.
CONSUMERS' COUNCIL OF CANADA
The Chair: Our last presenter of the day is the Consumers' Council of Canada, Joan Huzar. Welcome. Thank you for your patience. It's been a long day for us too.
Ms Joan Huzar: Oh well, eventually I'll get home. It's been interesting. Thank you very much for finding time for me. I appreciate that.
I understand that the committee members have before you our brief, which I faxed this morning to the Clerk's office, so rather than just read through the whole thing, which you can do at your leisure, I'd just like to highlight a few points -- some of them emphasize what's been said before -- ignoring totally the plain language thing, which you'll read about and I get into a tiny rage about that's unbelievable.
Consumer representation: For our association it's a firm belief, and I think it's come out in the discussions around this room, that any organization, any group will function better if all the people who are involved are there at the table -- on the board of directors, developing the regulations, whatever. We would argue very strongly that consumers -- because consumers are the end users of all these services -- should be there. We would like the legislation stronger, that the minister "shall appoint," as opposed to "may," but that may just be my own particular paranoia.
From a personal perspective, I sit as one of two consumer representatives on a 15-member board. We get voted down on occasion; not very often. It's better than nothing. I'd like to see it larger, I'd like it to be a majority, but that ain't going to happen, so I'm prepared to be assured that there will be substantial consumer public interest representation. I guess I have to believe the minister and the ministry when they say that will happen. I look forward to participating in that kind of a process.
Along with that goes the idea of a balanced board, because consumers aren't the only people who are there besides the industry. There are others. There's government, there are perhaps municipalities, banks, there are all sorts of other groups that can be involved in a particular industry. A balanced board, taking into effect all those industries, will do better for that particular industry.
Consumer education I can't talk enough about, because I think that's critical to the way anything is going to work. Consumers have to understand. They have to know how to use products safety. They have to know how to ask the right questions of their travel agent, whatever. It's an ongoing process. It takes forever. If anyone had found out how to do consumer education, we would have solved the problems of the world and nobody has yet. It costs a lot of money; you have to do it all the time. I was really pleased when I thought I heard the minister say that these agencies will have their own dollars and I hope a lot of those dollars would be put into consumer education. There were references to industry education and I'm hoping that consumer education -- even in the safety aspects, there are a whole lot of consumer aspects of that as well that need to happen. I see the potential for more consumer education there and I hope that will happen.
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The whole area of accountability is one that concerns us as an association because I think consumers want to feel that whatever organization is organizing the business they're dealing with, there is some accountability. I'm not sure government is always wildly accountable, but what can we say? I've seen instances where governments have ducked very nicely by passing it off to somebody else.
We made a passing reference in here to CRAT carrying on as an area of appeal. We didn't see that there was an appeal mechanism there. CRAT may not be the answer; something like that. I was interested that one of the other groups -- the real estate people, I think -- made reference that it had a suggestion. We put forward CRAT because it's there. It has problems, but it works and it's accessible to consumers. To say, "Go to court," is simply not for consumers. We would like this whole thing to be as independent from government as possible, so that an agency doesn't get tied up with the politics of the day. That's not the way to make this thing work.
I'll let you read. I could go on forever, but I'll stop and answer questions; I will do my best.
Mr Flaherty: In terms of examples of self-management, I gather you're familiar with the Ontario New Home Warranty Program; in fact you sit on it.
Ms Huzar: Yes, I'm the vice-chair.
Mr Flaherty: That's an independent agency.
Ms Huzar: Yes.
Mr Flaherty: It's a good example of self-management. You mentioned education also. How do you find the Ontario New Home Warranty Program has worked in terms of its education function and as a self-managed operation?
Ms Huzar: I think it works very well. Actually, it's an interesting example, because as you may or may not know, there aren't very many houses being built in Ontario these days, so there isn't a whole lot of money to run that organization. That's one of those little concerns I have: that in the boom times there's lots of money for an industry to run itself; in the bad times, there isn't lots of money. The industry, my experience is, tends not to want to raise fees. So what do they cut? They cut those things that they perceive to be expendable, and consumer education is right up there at the top. We've just gone through, with home warranty now, a downsizing process. I hope consumer education isn't gone, but it's a concern that it's one of the first things that's going to go.
Mr Flaherty: Right, but that is one of the functions ONHWP took on.
Ms Huzar: Absolutely, yes.
Mr Klees: Thank you for your presentation today. I certainly agree with you in your reference to the need for plain language. As one who has to read these things all the time --
Ms Huzar: My sympathy.
Mr Klees: -- I certainly hope that message gets through to the various ministries at all levels.
I also want to express my agreement with the point that you made in terms of the need for the industry self-management bodies to take very seriously the issue of consumer education. What is important in this bill is that there will be the fee retention within the industry. I think probably no one knows better the kind of education that's required than the people who have used it. Certainly our expectation is that a good portion of those retained fees would be used for the benefit of consumer education, which we believe also will then benefit the industry.
Ms Huzar: Absolutely.
Mr Klees: As you made reference to in your brief, consumer confidence has a great deal to do with the success of any industry. We believe that by transferring that responsibility back to the industry and allowing it to invest its own dollars back in, it will be a win-win situation, both for the consumer as well as for the industry. I'd be interested in your comments.
Ms Huzar: I agree. I read between the lines and I think that's what is intended. Our recommendation is: Please, can we say this in the act? Please, can we not leave this as something that can be in or not in any regulations or bylaws that might happen to be made by an independent body? Please, can we make this one of the upfront, really important things? Because it's hard to change an act. I know.
Mr Klees: You'd be satisfied if at least that were in the regulations or the business plan that ultimately then would guide the industry?
Ms Huzar: Yes.
The Chair: Thank you, Mr Klees. Mr Parker, there really --
Mr Parker: Is there any time at all?
The Chair: Well, 30 seconds.
Mr Parker: I just wanted to register my comment in support of what Mr Klees said, thanking you for your comments with respect to plain language. It's well taken here, and I hope it is a message that gets through not only to the ministries but to legislative counsel. The previous government had an experience where they had to hire a consultant to read one of their own reports to them, and we've got to get away from that sort of confusing language in government.
The Chair: Thank you, Mr Parker. As a lawyer, I've always felt that statutes are written in plain language, but anyway, Mr Kennedy.
Mr Kennedy: I think I'll leave that alone, but my silence is not to indicate concurrence with that idea.
I wonder if I could ask a little bit about the Consumers' Council of Canada. You mentioned that on your board consumers were a minority?
Ms Huzar: No, no. I sit on the Ontario New Home Warranty board as one of the two consumer representatives on a 15-member board.
Mr Kennedy: Could you tell us a little bit about your organization?
Ms Huzar: We're a new organization. We're two and a half years old. We're the classic incorporated, not-for-profit, independent consumer group. We're looking to be selective in the issues that we tackle, issues that are going to improve the marketplace, and trying to do it in a collaborative way, because we don't think you improve the marketplace by just yelling and screaming; you have to get out there and find the areas where things can be done and work with government, work with industry, to try to make it better.
Mr Kennedy: What number of membership do you have, and where does the funding for your organization come from?
Ms Huzar: We are self-funded. We gave up trying to get money out of government -- I mean, I gave up trying to get money out of government -- a long time ago. That's a whole other story. We do projects, basically, for whomever, working with groups to give a consumer opinion, to government projects if we can scrounge them up, business projects, business joint ventures.
We have a very small membership, and that's the bane of consumer organizations anywhere in the world: Consumerism ain't sexy. It's not like environmentalism.
Mr Kennedy: What number of members? What would that number be?
Ms Huzar: We've probably got 50 members right now, which was my expectation when we started the organization. We've got probably 600 volunteers that we go out to in our volunteer network whom we survey and ask questions of.
Mr Kennedy: I wonder what concerns, on behalf of your members, you have around the financial arrangements concerning this bill. You mentioned approval for education. I don't know if you were here for the part of the bill where it was explained that the real estate industry would receive back something in the order of four times as much money as is currently used to regulate that industry, the motor vehicle industry would get back five times as much money currently used to regulate that industry, and the travel industry would receive back about 50% in addition, on top of what is currently used. Are you concerned about the impact that will have on overall consumer protection and safety? Sorry -- the safety organization gets back about $3 million. Because that money will have to be made up in the ministry somewhere else, either by cancellation of services or by some other means, I'm wondering what your perspective and your organization's perspective would be on those arrangements.
Ms Huzar: This is an impression, this is not based on statistics or any other thing, but my impression is that government is doing less these days, period, and has been for quite a while, certainly in the consumer protection area. There used to be consumer offices around the province, and if consumers had complaints they could go to them and may or may not have gotten help. That was a bunch of years ago. So from a consumer perspective there hasn't been a whole lot happening.
My hope would be that these organizations would absolutely see it in their self-interest to do those things that ought to be done and would use the dollars coming in to them to set up the liability, to fund the compensation funds, do all those sorts of things that provide the consumer protection we need. If a travel agent goes under, I want my money back, thank you very much just the same.
Mr Kennedy: Do you think that these dollars, about $9 million of public funds that are flowing towards the industry groups being created, should be guaranteed to be used for consumer protection?
Ms Huzar: That would be dreaming in Technicolor if it could all be used for that. The trick of this whole exercise I think is going to be in the regulations, in the actual setting up of the individual groups. The trick, if you'll pardon the expression, would be to ensure that the dollars are spent I guess "appropriately" is the better word, and part of that appropriateness is consumer protection, consumer education, consumer safety, as well as all the regulatory things that have to go on.
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Mr Kormos: You indicated you contract work with the government.
Ms Huzar: We have done, yes.
Mr Kormos: Provincially and federally?
Ms Huzar: I don't think we've had any provincial work, just federal. We've done a couple of surveys with the federal government.
Mr Kormos: Do you participate at all in contract work with manufacturers or retailers?
Ms Huzar: We've done some work with retail council. We've done some work with some insurance agents, the insurance companies, and some work with some financial institutions. We pick and choose.
Mr Kormos: Again, that's on a contract basis?
Ms Huzar: That's right.
Mr Kormos: I appreciate your confidence in the industries that are being regulated here, but do you think there's a public perception of evenhanded regulation if you don't have an arm's-length relationship between the regulatory body and the industry it regulates?
Ms Huzar: I guess the reason I have confidence is because I use home warranty as the model where the model that has been set up is an arm's-length group. I grant you the builders form the majority on the board, but having said that, the warranty program does a lot of things that builders don't particularly like and the builders would argue that they are a whole lot harder on them than the builders' association is. So my confidence in the ability of an industry to discipline itself, regulate itself, comes from that experience where the body that's set up becomes a separate entity, and even though the industry in question has input into the board of directors, it's a separate thing out there and it gets its own aura and its own big stick and its -- again, I use the example of home warranty, and the builders I talk to, they're scared as hell of it because it's got the power to yank their ticket.
Mr Kormos: What about the red tape angle? That's being used by the government to create some spin around this, saying, "Oh, this will eliminate red tape." How do you see that happening?
Ms Huzar: From a consumer perspective, you have to fill out forms, and I don't know whether that's going to change. The reading I did around this, I didn't see elimination of red tape as one of the stated objectives. I'm thinking back. I don't have it here in front of me, the little beige pamphlet that came out where they talked about -- I don't know; it's gone from my head. Red tape wasn't one of them. From a consumer perspective, I'm going to have to fill out forms. I would hope that whoever is organizing the forms can make them as simple and as clear as possible, in plain language.
Mr Kormos: Does the regulatory body have to be a private sector one, albeit non-profit, in order for it to be more effective? Ms Huzar: I don't think by definition. I think perhaps -- I don't know the answer to that question. I don't think there is an answer. I don't know whether there have been studies done that would show that there's an answer to that one or not. I don't know. By definition, I'm not sure, no.
Mr Kormos: So there's nothing you're aware of that would permit us to conclude that the process of self-regulation would in itself provide more effective services to the public?
Ms Huzar: Oh, I think it would.
Mr Kormos: Okay. Explain that.
Ms Huzar: Because as a consumer I'm paying dollars for my, I don't know -- use travel. Pick one of those industries. The dollars that industry pays to get its licence and do all those things are then going to be put into this. As I understand the way this thing is going to work, all those dollars are going to go to that regulatory body, whatever we call it, that is then going to make sure that the things I think are important -- that my travel agent isn't going to go under or, if they do go under, there's going to be a compensation fund that's going to pay me. They're going to work to make sure that the forms are simple, that I don't have to fill them out in triplicate if once will do, that those kinds of things will happen, and there will be dollars there to do education etc, whereas now, again if I understand the numbers right, it all goes into general revenue.
Mr Kormos: Well, there are profits being made by the government in the regulation of these industries --
Ms Huzar: Then it goes into general revenue and disappears into this vast hole for hospitals or whatever; I don't know.
Mr Kormos: The minister earlier today insisted that those net revenues, the profits being generated, weren't going to be affected in a major way.
Ms Huzar: I have no knowledge of that. I can't speak to that. My assumption is -- and that's the way I read the legislation, and I could be wrong, but I'm going into it -- that the dollars that any particular industry raises in fees or whatever will be for that industry then to use in the process of its regulation. That would make sense.
The Chair: Thank you, Ms Huzar, for the presentation on behalf of your association.
I am advised by Mr Flaherty that the government hopes to have any amendments they are going to propose in the hands of the clerk by 12 o'clock tomorrow and those will be distributed. I don't imagine the opposition or the third party could do that, but if you can, that would be appreciated, if there are any proposed amendments.
There are no other matters today. We are adjourned till 3:30 tomorrow afternoon.
The committee adjourned at 1837.