Assemblée législative de l'Ontario

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

MINISTRY OF TRANSPORTATION

CONTENTS

Tuesday 13 February 1996

Ministry of Municipal Affairs and Housing

Hon Al Leach, Minister

Daniel Burns, deputy minister

Patti Redmond, manager, program administration, housing policy division

Dino Chiesa, assistant deputy minister (acting), housing operations division

Anne Beaumont, assistant deputy minister, housing planning and policy division

Ministry of Transportation

Hon Al Palladini, Minister

George Davies, deputy minister

Rudi Wycliffe, assistant deputy minister (acting), safety and regulation division

Dennis Galange, president and CEO, Ontario Transportation Capital Corp

Mary Proc, assistant deputy minister, corporate services

Frances Chung, director, finance, GO Transit

Carl Vervoort, assistant deputy minister, quality and standards division

David Guscott, assistant deputy minister, policy and planning division

Ian Oliver, assistant deputy minister, operations division

STANDING COMMITTEE ON ESTIMATES

Chair / Président: Curling, Alvin (Scarborough North / -Nord L)

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

*Barrett, Toby (Norfolk PC)

*Bisson, Gilles (Cochrane South / -Sud ND)

Brown, Jim (Scarborough West / -Ouest PC)

*Brown, Michael A. (Algoma-Manitoulin L)

*Cleary, John C. (Cornwall L)

Clement, Tony (Brampton South / -Sud PC)

*Cordiano, Joseph (Lawrence L)

*Curling, Alvin (Scarborough North / -Nord L)

*Kells, Morley (Etobicoke-Lakeshore PC)

*Martin, Tony (Sault Ste Marie ND)

*Rollins, E.J. Douglas (Quinte PC)

*Ross, Lillian (Hamilton West / -Ouest PC)

*Sheehan, Frank (Lincoln PC)

Wettlaufer, Wayne (Kitchener PC)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Preston, Peter (Brant-Haldimand PC) for Mr Jim Brown

Also taking part / Autre participants et participantes:

Pouliot, Gilles (Lake Nipigon / Lac Nipigon ND)

Marland, Margaret (Mississauga South / -Sud PC)

Colle, Mike (Oakwood L)

Clerk pro tem / Greffier par intérim: Decker, Todd

Staff / Personnel:

Poelking, Steve; Yeager, Lewis; Richmond, Jerry, research officers, Legislative Research Service

The committee met at 0904 in committee room 1.

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

The Chair (Mr Alvin Curling): We have remaining, of the estimates for the Ministry of Municipal Affairs and Housing, four hours and 48 minutes. It's my understanding that there was a give of an hour yesterday, reducing the time to 3 hours and 48 minutes -- if I'm wrong, clerk, let me know, if it's your understanding too -- and when the session ended yesterday the Conservatives were in their role to give their presentation or questions. Therefore, that would put us, Mr Minister, and his staff, just to caution them that they can go back to their desks and all that, somewhere around midday to 1 o'clock. In other words, if it's three hours, it's 12 o'clock. If it's 48 minutes extra, it's 12 o'clock plus 48 minutes.

Mr Peter Preston (Brant-Haldimand): I think it adds up to somewhere around 12 o'clock.

The Chair: The way I calculated it, yes, but your calculation many not be mine.

Mr E.J. Douglas Rollins (Quinte): We've known that for quite some time.

Mr Preston: I'm giving you a little suggestion is what I'm doing.

The Chair: You have done two minutes in your time already. Would you mind proceeding.

Mrs Lillian Ross (Hamilton West): Mr Chairman, may I ask a question? How many half-hour slots would we have this morning?

The Chair: That's another way to come around it, anyhow. Three hours and 48 minutes, then there are half-an-hour slots -- well, in the one hour, that's --

Mrs Ross: Two and a bit.

Mr Rollins: Why wouldn't we finish it off at 12?

The Chair: I would have to wait until the NDP is here to get unanimous consent on this. So let's move on.

Interjections.

The Chair: Would anyone like to begin? The distinguished gentleman from the NDP is coming.

Mr Rollins: Eventually they'll be here. Then when they get here, we'll make a decision at that time.

The Chair: Okay.

Mr Rollins: One of the questions, Mr Minister, that I think we need to have on the record -- again, I know you've said it on a couple of occasions, but I think when we're nearing the end of our discussions on housing -- one of the groups out there that seems to be more concerned, we hear from our riding that a lot of the seniors who read the papers and one thing and another think they're going to have to be moving out and all these kinds of things. I think we need to hear once more from you that those people don't have to worry about moving out. I'm sure that we're not going to sell stuff out from underneath them and make those people have to look for other accommodations and move in those natures at all. I would just like once more to hear from you that those are the concerns of this government and they still will remain the concerns of this government.

Hon Al Leach (Minister of Municipal Affairs and Housing): As you know, the Ontario Housing Corp is jointly owned by CMHC and the province. It's our intention to try and get out of the bricks and mortar business, but it's going to be a long process to do that and will take a considerable amount of time even to get the strategy and the policy put together. So I can assure you that anyone who's currently a senior in an OHC home doesn't have any concerns about the immediate future.

Mr Rollins: I was sure of that too. I think even when those things do come to the point where we're able to get out of some that bricks and mortar, in getting out of that, there will still be some restrictions for those people we do get rid of it to to be able to accommodate some of the people who need that kind of accommodation and under the same kind of conditions that these seniors are there. I know in my riding there are a lot of seniors and a lot of phone calls in our office, "Where am I going to move to, what are you going to give me?" and all that kind of thing. I think that's the confirmation that those people want to hear from you, Mr Minister, that they are going to be able to stay there.

Hon Mr Leach: Obviously, the needs of tenants are paramount, and we're not going to take any actions that would be detrimental to them.

Mr Rollins: How long will it take us to move the rent geared to income from approximately the 24% or 25% or 26% now up towards the 30%? Is that quite a lengthy --

Hon Mr Leach: Well, that was an agreement that was made by the NDP government several years ago, to move from 25% to 30% at 1% a year. It has moved up now over the past three years to 28%, so there's 2% to go.

Mr Rollins: I see. So it would be another two years until it reaches that --

Hon Mr Leach: The whole RGI policy is under review. The current plan is to move it up to 30% in two years, but we're looking at various options for that.

Mr Rollins: One of the areas in the restructuring that will probably cost us more dollars to build and to facilitate is some of the buildings that require additional wide doorways for the handicapped people. Will we probably still be a partner in those kinds of restructurings, because the private sector is probably going to be slower to develop into that area. We'll probably drag our feet and stay in that portion of it longer, or is that the intent?

Hon Mr Leach: We're developing a policy at the present time for special-need facilities. I strongly believe there are people in our society who need government assistance -- the handicapped, disabled, for example -- and I personally would support continuing a program to provide special-need facilities. As I said, we're working on a policy now.

0910

Mr Rollins: That's good news to hear too. I'll pass on now to Lillian.

Mrs Ross: I just have one quick question. Under the Rent Control Act, the administration under that I understand was $22.5 million, and that's been reduced to $18.5 million. Is that right?

Hon Mr Leach: That's correct. That's an annual cost.

Mrs Ross: Would you expect that any program you put in place of what currently is there would cost less than the $18.5 million?

Hon Mr Leach: I would certainly expect that it would. The administration of the current rent control program is very administratively heavy; $22.5 million is a lot of money just to look after a rent control program. I know the program they have in BC, for example, functions at substantially less cost than that. I would think that any tenant protections program we established could be administered at considerably less cost.

Mrs Ross: So would you expect that any savings that are found in that could be redirected to help with rent subsidies?

Hon Mr Leach: All of the administrative savings that we're looking at, and reductions in other programs within the Ministry of Housing, are funds that we would redirect into the shelter allowance program.

Mrs Ross: Okay. Those are all the questions I have this morning.

Mr Morley Kells (Etobicoke-Lakeshore): Mr Minister, I hate to do this to you, but I'd like to come back to the islands. Through the wonderful world of the fax machine, things came in last night, and it conjures up some more problems. As I said yesterday, I take the advice of Mr Bisson that we get on with governing and not talk about the past, but at the same time it's very difficult to get on with governing if we don't look back and see just how we get into some of these difficulties.

As some of you may recall -- I'm sure the veterans like Alvin do -- the NDP, in their wisdom, appointed I believe Richard Johnston, a former MPP, to take a look at the islands situation, and that's how they came up with the plan that was put in place in what I guess we now call the infamous Bill 61, which was passed, to my utter dismay, a couple of years ago. If you'll recall -- I don't want to make this preamble too long --

Mr Michael A. Brown (Algoma-Manitoulin): Don't take any more than half an hour.

Mr Kells: It was the Toronto Star, indeed no particular friend of the government -- I think everybody could agree with that -- and a reporter called, I believe, Jack Lakey who really pointed out some of the reasons for concern down there. He talked in terms of, if I recall it, $4 million, for example, would be needed to shore up the water so you could even think of building there. I wonder where that $4 million lies in your announcement.

He also talked in terms of who was living there. I don't even want to use the word "imply." He stated categorically that it was a great number of NDP supporters. He talked in terms of people from the planning department in Toronto, people from indeed your ministry. I'm sure you and I know members from your ministry -- in this case, I'm talking about the Ministry of Municipal Affairs -- who lived on the island. And he did talk in terms that the lawyer who wrote the legislation was indeed married to a staffer. I guess that all faded away into air eventually, but it did shock many of us and it did make us wonder just exactly why the islanders were treated in such a special way in where they're going.

As I said yesterday, I welcomed your announcement, and I particularly want to know just exactly what the debt situation was, how they could spend so much money in legal fees. It was my understanding that was being challenged by the ministry at one time.

Then I got some calls and I got some faxes last night. I'll just make comment on them. You're probably up to date on them too.

One is referred to as a Trust Bulletin, which is the trust itself, and the bulletin was issued last Friday. The headline on the bulletin is, "Tories Say Yes to Island Community!" and then the head up here, and I might have to read it into the record, says, "Go Figure." I'm quoting here, it says:

"Despite our best efforts," this is the trust now, "to delay the announcement of the government decisions until we could inform the community, the ministry" -- the Ministry of Housing -- "issued a press release just moments after our meeting yesterday (it was on my desk when I arrived at work) that was somewhat inflammatory (it sure lit a fire under the Sun; those of you who saw today's headlines must still be in shock)."

It goes on to say, "The press release refers to a debt of $916,000....This is a gross misrepresentation of our financial situation and did not take into the account the projected revenues that have now paid off most of those set-up and infrastructure expenditures." I don't know quite what that means. Then it goes on to say, "The `debt' has since has been paid down by islanders' lease revenue, interest income" -- I don't know where the hell they got the interest income from -- "and the repayment by the province of $327,000 of our infrastructure expenditures. The current debt of the trust is under $300,000 and is carried by the line of credit that is guaranteed by the province until June 28, 1996. Had the province allowed the trust to proceed in June with the development of the private leasehold lots and co-op as legislated, we would, of course, not be in debt at all."

I find that wonderful, because I don't know who was going to be paying for those co-ops. As you and I know there would be a heavy percentage subsidized.

Then it goes on to say, "The revenues from the sale of 20 private leasehold units will pay off the existing debt and give us some extra funds towards a loan fund to assist low-income islanders."

I wonder if you could comment on that, and I have received another letter too since then, so I just wonder if you could bring us up to date on what that means.

Hon Mr Leach: Okay. It gets to be a little bit of a numbers game. They were $916,000 in debt. They have been selling leases to the people who live on the island on an continuous basis and the sale of those leases goes to pay off the debt, so that part is correct. I think they've got their debt down to about $300,000-plus, $325,000 or whatever the number was.

The $327,000 that they refer to was infrastructure that was put in to service the co-op that was going to be built and we have reimbursed them. We cancelled the co-op and we reimbursed them for their costs; $327,000 was a minor amount compared to the millions of dollars in subsidies that would have had to go to the co-op had it continued.

The legal fees were $400,000-plus. As you know, that was an ongoing situation that went for years and years. I personally feel that those legal fees were excessive; however, they were incurred and became part of their debt and that's all part of the package now.

We're agreeing to the sale of 20 additional lots on the island. They're in-fill lots on existing streets that are already serviced, so there's no additional cost for infrastructure -- water, sewers etc are already there -- and that will pay off the remaining debt. That would eliminate any debt that the trust has, and our proposal is then to turn the island community back over to the city of Toronto where it could be looked after just like any other part of the city of Toronto community.

Mr Kells: Thank you, Minister. Just so I understand and so that anybody who might care understands, the people who are the island homeowners then, in response to purchasing a lease, are really purchasing the right to stay there with the property that they have. Of course, all the past debt that the public has incurred to keep them there is now long gone and this trust's sole revenue becomes what the public in effect gave them, and the fact is that people who happen to be homeowners there are the ones who are now trying to solidify their lease arrangement.

I think if I understand it correctly too, anybody who lives there, this is supposed to be their prime home, and I hope that's still the case.

0920

The first part of the bulletin went on to say that they were having a meeting last Sunday to go over the information in much more detail. I don't know who all gets this Trust Bulletin, but it says, "For those of you won't be able to attend, a fuller explanation will follow in a bulletin next week. But please try to come to the meeting; representatives from the province will be there as well to answer questions."

That meeting obviously took place, and I have -- and I don't know if it's got through to your desk yet. Like all these things in life it says, "Personal and Confidential," but here we are.

Hon Mr Leach: We'll have to look on the bulletin board for it.

Mr Kells: Yes. It's directed to yourself and it says:

"Dear Mr Minister:

"Your announcement on Friday about the steps to normalize the island community through changes in Bill 61, the Toronto Islands Residential Stewardship Act, was most welcome. Restricting the powers of the Toronto Islands residential community trust board is the only effective way to ensure fiscal responsibility. I congratulate and thank you."

Now comes the concerns that I'd like to get on the record, if we could:

"There is a concern, however, that the trust board did not get the message. On February 11, the board held an information meeting on Algonquin Island to present their plans, summarized as follows:

"Develop the 20 lots before the legislative changes take place so as to avoid the Planning Act." This is the trust now, trying to avoid the direction or the cabinet decision.

Here it is: "Develop the 20 lots before the legislative changes take place so as to avoid the Planning Act."

The next one is, "Conceal the location of the 20 lots, thus opening the possibility of using open public space."

And three, "Announce plans to work with the city so as to remain in charge after legislative changes."

There are three honourable points, if that's the case, the trust is hoping to pursue --

Hon Mr Leach: Sorry, could you repeat the last one?

Mr Kells: The last one is they want to make a deal with the city. If you're asking the city to take over the administrative, custodial affairs of the place, they want to "announce plans to work with the city so as to remain in charge after legislative changes." I guess it means that the trust still runs the place to some kind of satisfaction. I'll ask you in a few minutes, if I may, about the trust, who's going to run that trust.

But here's the crux, Minister: "More disturbingly" -- I'm quoting from the letter again -- "none of this was disputed by Janet Andrews or Larry Clay, members of your ministry, nor city councillor Dan Leckie, all of whom were in attendance."

The observation from the writer is, "To allow the trust board to go ahead with the intentions revealed yesterday would once again jeopardize any attempt at fiscal restraint, especially given their track record and their intent to develop some of the lots themselves."

I guess at this point maybe if you could comment it might be helpful.

Hon Mr Leach: First of all, staff that were there were there to answer questions. They were not to negotiate any kind of deal. They were just there to listen, and that's exactly what they did. I'll respond to that letter as soon as I receive it. It has not arrived on my desk as yet, nor has it arrived on the deputy's desk. Your mail is a little bit faster than ours.

There's a number of issues there and we'll deal first with the sale of the 20 lots to try and avoid the Planning Act. That cannot be done. I have a zoning order on all of the property on the island. The zoning order will stay in place until such time as the legislation changes. So there won't be anything happen in that respect.

The legislation will also control the size and makeup of the trust itself, so that will take care of that issue.

In so far as working with the city of Toronto, I would encourage that aspect. The island community is just another community in the city of Toronto and should be dealt with in that manner. So that should settle that one.

The whole attempt, of course, with the Toronto Islands is to try and resolve an issue that has been ongoing now for decades and to put an end to this very costly adventure that we've been in. There isn't any doubt about it, that this has been a sweetheart deal for the islanders. We have spent hundreds of thousands of dollars providing infrastructure, doing many things for a community far beyond what any other community in Metropolitan Toronto, or the province of Ontario for that matter, has received. But the goal is to resolve it, and I think the proposal that we have put forward at this time will do that and stop this ongoing exercise.

Mr Kells: I guess in leaving this subject once and for all, obviously whoever is sending me this material is an islander.

Hon Mr Leach: Yes. Not all the islanders are united, that's correct.

Mr Kells: It indicates that looking back at Bill 61, or looking back at the Johnston report that led to Bill 61 and the trust, obviously there are many people on the island who see through this, or saw the difficulties and also questioned the financing involved in the non-profit development.

To try and balance off how these things happen, because I do mention the NDP in this regard, it was a former Tory government and a former Premier who really got us into this mess. I recall this, being a Metro councillor -- as the controller of Etobicoke, you served on Metro in those days -- and I recall a number of us meeting with then chair Paul Godfrey to try and resolve it and to plead directly with the Premier, who did show up at the meeting. In fact, the meeting was up in the motel strip and he showed up with the deputy at that time, Ed Stewart. I recall very vividly that Stewart thought we were presumptuous to even be making any kind of overture to the Premier directly, and I don't think the Premier had any feeling for the concern that Metro had.

It obviously led to, a little later on, the Attorney General of the day, Roy McMurtry, saying that one thing we could not stand would be the thought of a bulldozer being seen on the island, bulldozing a home. Because we couldn't come to grips with that horrible picture of a bulldozer on Toronto Island, many millions of dollars and aggravation later, the rest of the people in Metro have been deprived of a public park and use of that island area.

There's not much that I expect you as the current minister to do; I just think a lesson is learned. It's far from a happy situation down there. I'm pleased with your answers. I'm sure that the personal and confidential letter, when you get it -- they'll be pleased with your answers too. I don't know what else to say --

Hon Mr Leach: Who -- well, never mind; I'll find out later.

Mr Kells: I can't even tell you who sent it to me because it's all whited out. Whoever sent it to you won't have it whited out. Anyway, I'd like to have it on the record.

The other thing, and it really relates to your responsibilities for the Ministry of Municipal Affairs: I really wonder, again a rhetorical question, how could that be? How could this thing -- it went through our legislative process. Regardless of who was the government, Bill 61 must have gone through a committee process; it didn't drop in out of the clouds. It must have been subject matter that many of my former colleagues --

Mr Michael Brown: I chaired the committee.

Mr Kells: I'm sorry, I don't mean to ask you a question, but I hope that at that time there would have been some debate on the viability of it, the fairness of it, the impact on the taxpayer. Or was it just a subject that they decided to get through the wringer and get done?

Mr Michael Brown: We can read it tomorrow from the Hansard.

Mr Kells: Well, we possibly can do that. I do recall that I didn't hear either the Conservatives or the Liberals commenting on the Toronto Star stories that brought out some of the problems in Bill 61 and also brought out the problems of who's living there. I went down and saw this with the Toronto Star reporter at the time, and he was being fed material left, right and centre as to who the incumbents of the homes on the island were and are.

If there's anything that leads the public to be suspicious and discredit the profession that you and I are in, it is activities of this nature. Whether or not you want to defend the trust or even get into the history or how it got this far, the point is who is living in those homes and how they got there and what control they had over the process that led to the legislation, which is the law of the land. That's the kind of thing that turns people off the democratic process, and indeed leads to people charging our doors out there, whether it be students or truck drivers or whoever.

0930

I don't mean to tie it all back into civil disobedience, but I'll tell you, when you have a mess like this, and even as you're trying to straighten out the mess you have the people on the trust in effect challenging the authority and the legislative power of the government, then you can see how we got to this point. With all due respect, that's the end of my sermon. I just hope that's the end of the island and it settles off nicely.

Hon Mr Leach: I hope it is. As you're aware, it's going to require changes to legislation. That legislation will be subject to review in the Legislature and probably by committee, so everybody will have another opportunity to comment on the appropriateness of the arrangements we've made. I think they're reasonable and I think this is an opportunity to resolve the situation once and for all. If we can do that and put it to bed, I think the people of Ontario will be well served to get out from underneath a boondoggle.

Mr Michael Brown: Just to help Mr Kells, there were full committee hearings and the public did attend. I remember just because I was a Chair of the standing committee on general government that heard that. The public was here, there were lots of cameras, there were lots of press people, people like Mr Stockwell were very entertaining, and all the issues were explored.

Mr Kells: The government of the day had a majority at the time.

Mr Michael Brown: Exactly. We know how that works around here. All of us do.

Just getting back to issues I think are important to some of the constituents in my riding, Minister, is there a reorganization of the housing authorities going on? In other words, a consolidation of housing authorities?

Hon Mr Leach: Yes, the chairman of OHC is undertaking a review of the local housing authority organizations. There hasn't been any finalization of that review; as a matter of fact, it has just got under way.

Mr Michael Brown: What's the mandate of the review, do you know?

Hon Mr Leach: Just to see how the local housing authority function is working, whether there are ways and means of improving the organization, to streamline it and make it more efficient. I think it's appropriate on occasion to review organizational structure to make sure that it's working in the best interests of the citizens of Ontario. That's what going on now.

Mr Michael Brown: So it's an efficiency, value-for-money review.

Hon Mr Leach: Yes, a complete review of the structure. Right now, the local housing authorities -- I believe there are 53 of them -- are independent organizations that hire and fire their own staff, are responsible for their financing etc. We just want to review it to ensure that's the most efficient way to do business.

Mr Michael Brown: The boards, I believe -- are they 50% appointed by the federal government and 50% by the provincial?

Hon Mr Leach: It's one third, one third, one third. They all require an order in council, they all require approval by the Ontario government, but representatives are nominated by the federal government, by the municipal government and by the province.

Mr Michael Brown: I just want to flag that issue. I've heard from one of our local housing authorities, the Manitoulin-Espanola housing authority, and there's been some concern expressed that, in an amalgamation perhaps with a larger board, Sudbury or something along that way, local input would really be eliminated. They may have a voice or two but, compared to the issues in a place like Sudbury versus a place like Espanola or Little Current or wherever, they may be relegated to obscurity almost. I just want to bring to your attention that there is concern in many of the smaller communities across the province that they may have some difficulty in coping and they believe would probably provide less service to tenants and to the community than can be done by a community board that's more aware of what's going on in the area.

Hon Mr Leach: The boards are all voluntary, as you know. They don't get paid anything for their services. So when you have a voluntary board that's working providing the services at no cost, they are obviously people who are dedicated to the system. We'll ensure that there is a mechanism so organizations like that can be heard. As I said, there haven't been any decisions made on the final structure that's going to be there, if indeed there is any change.

Mr Michael Brown: If after the review it is felt there is a need for change, and I suspect at least in some places there will be, does that require the federal government to be involved in the decision-making?

Hon Mr Leach: No, it's just the province that approves the appointments. The federal government and the municipal government nominate people to us.

Mr Michael Brown: I wasn't worried about the appointments per se, but if you're changing the way the authorities are organized, does that require --

Hon Mr Leach: No, it's strictly a function of the province. It doesn't require any approvals from the municipal government or the federal government, although they obviously will be consulted while we're undertaking the review.

Mr Michael Brown: I would also raise a concern I've had from at least some tenants who are in what we would think of as seniors' buildings in my area. There has been a concern that in some of those buildings there are people other than seniors being placed in units. In other words, there are younger people, not seniors, being put in the units because there is a need for housing. I wonder what the minister's view of that policy is. It does at times raise concerns with the seniors.

Hon Mr Leach: I think what we strive to do is to provide shelter for as many as we possibly can that are in need. If there is a vacancy in a building that is predominantly for seniors, I would prefer to see somebody make use of that accommodation rather than have it stay vacant.

Mr Michael Brown: I think we all would agree that the concern is sometimes that there are also seniors on the list; it's just that someone may have more need who is not a senior. On the points system, there may be someone who has more need than the senior for housing, and there doesn't seem to be a substantial preference for seniors.

Hon Mr Leach: Actually, the points system is being revised and we've gone to a system, I think effective January 29, that is on a first-come, first-served basis, with consideration being given to special needs.

Mr Michael Brown: Could you try that one on me again?

Hon Mr Leach: When you register, we'll take people off the waiting list in order of seniority, so to speak, with special consideration being given to those with special needs. The problem we were facing is that with the points system, we were finding people who were on the waiting list forever. They would get almost to the point where they were the next on the list to get subsidized accommodation, and three or four more would arrive with one more point, for example, and down they would go to the bottom again. We felt that for fairness and equity the length of time you've been on the list should be taken into consideration as well.

Mr Michael Brown: On another issue, going back, yesterday we were talking about goals and targets -- at least I was; I guess you weren't. But I'm interested to know what role you believe your ministry has in promoting private housing. We all know if we've wandered around Toronto that where there is residential construction, I would suggest most of it has been in the condominium area. There have been some units built, not as many as anybody would want, but there have been some condominiums built over the last few years, and I see there are some being built now. That has obviously affected the rental sector. There is also the private home, single-family dwelling that is being built, not as many as we want by far.

0940

What do you see your role in the ministry as doing to encourage, if that's what you wish to do, the construction of the private, single-family home, the condominium, which I think is one of the reasons that seniors are now being accommodated in ways they weren't 20 years ago?

Hon Mr Leach: Obviously, it's a major role and responsibility of the Ministry of Housing to ensure that both public and private housing are looked after. A number of the changes that we're making to the Planning Act at the present time, in fact in the committee room right next door, will go a long way to encouraging and assisting the private sector in getting on with the provision of private homes by making it easier to get developments approved, by streamlining the operation, by getting rid of the red tape etc, speeding up the process in which developments can get through to the OMB for review, for example. All of those functions go towards encouraging the development of private houses.

There are a number of other issues that are being undertaken right at the present time. We're reviewing the Development Charges Act, for example, and several other pieces of legislation that will encourage it.

Mr Michael Brown: What it seems to be you're attempting to do -- and I don't think anyone argues with the attempt to streamline processes and make them work better. That just makes sense. We get a little concerned, though, about what streamlining might be a code for sometimes in terms of whether the public really will be heard on changes to zoning and those kinds of issues and whether the environment will be protected. Everybody knows the process as it stands today is pretty difficult for anybody to get through, and that costs money. At the same time, I at least am concerned that in that rush to streamline, we're going to forget about some of the other values that make our cities and towns and villages good places to live.

Hon Mr Leach: That's why we put out the policy statement for public consultation in January. It's still out with the public. We expect responses back in March on the policies of the province to ensure that there is strong protection for the environment, for example. Bill 20 is before committee at the present time, and the committee will be travelling around the province to ensure that all interested groups have an opportunity to comment and provide input into the legislation before it's finalized.

Mr Michael Brown: Your approach appears to be, at least from what I see, that a reduction in barriers will mean a boom in rental accommodation, a boom in single-family accommodation, a boom in condominiums by reducing the barriers; the problem in Ontario has strictly been barriers. Is that the view of the ministry?

Hon Mr Leach: It's certainly one of the major problems. The ability to get an approval for a project could often take years and cost a substantial amount of money while developers would be sitting on high-priced land, for example, paying high interest charges and taking two and three years in getting it through.

Mr Michael Brown: I understand that.

Hon Mr Leach: That all drives up the price of accommodation, whether it's a condominium or a rental unit or a single-family home. If you can reduce those barriers, if you can streamline that process while still ensuring that the public interests are protected and the environment is protected, I think that's the direction we should go.

Mr Michael Brown: We're not arguing about that.

Hon Mr Leach: Yes, I know.

Mr Michael Brown: But I'm wondering if there is a proactive housing policy. In other words, what are you doing to interest the private sector in providing these buildings that in many cases government will no longer provide?

I'm pretty puzzled when I sit here and listen to any government, whether it's yours or whether it was ours or the former government, talk about the private sector providing new rental accommodation for low-income people. The price of units, regardless, ends up being pretty high. I don't know how you're going to get around that.

Hon Mr Leach: There are a number of issues that can be addressed to reduce the cost -- if you're talking about rental accommodation -- to reduce the cost of building. Changes in the tax laws, for example, should be reviewed. Right now, as I mentioned, on an apartment complex you pay 7% and if you're building a condo you pay 4% on materials. That doesn't make any sense to me, but that drives the cost of rental accommodation up.

Mr Michael Brown: But you and I both know, when we talk about taxes, that what's unfair to one, certainly somebody else believes is more than fair. So if you're transferring the burden from someone, it goes to someone else. It's not as if it just goes off and escapes into Never-never Land. If you take taxes from apartments, that money then has to be found in some other sector, whether it's residential or commercial or industrial assessment. The money's got to come from somewhere.

Hon Mr Leach: What you want to do is ensure that there's a level playing field, so that when developers are looking at the type of accommodation that they're going to invest in, all types can be dealt with on an equal basis. If there are price advantages and tax advantages to building private residential homes vis-à-vis condos or apartment buildings, then obviously those that are investing the money are going to choose the option which is most beneficial to them. What we would like -- or what I would like to do, at least, is to ensure that the playing field is as level as we can possibly make it.

Mr Michael Brown: We could all say, as politicians, that it should be level, it should be equal, the market should make its choice, but the reality is, and you're about to jump into it, and we all know, with market value assessment, actual value assessment, whatever you want -- the fact is somebody's going to pay more and somebody's going to pay less. The reality of that in this business is always interesting, to say the least. Usually you find the people who are going to pay more find it most unfair and the people who are going to pay less will find it extraordinarily fair.

Hon Mr Leach: It's amazing how you very seldom hear from those people who pay less. But I think if you talked to the vast majority of citizens in the province of Ontario, everybody is willing to pay their fair share. If you talked to individual homeowners and say, "We want to put in a system that's fair and equitable to everyone and this may cause an adjustment in your taxes, but I can assure you that it's a fair and equitable system and everybody will be paying accordingly," the vast majority don't have any problems with that.

I know in discussions around the GTA on taxes, people get concerned, obviously, about increases in taxes, and change always causes concern. Everyone I have talked to says, "I don't mind paying my fair share." That's what the process is all about, trying to level the playing field, trying to make it fairer and equitable.

Mr Michael Brown: Could the ministry tell us what the projection is for new housing starts in Ontario over the next years? Does the CMHC do that or do you do that yourselves?

Mr Daniel Burns: Do you mean in 1996?

Mr Michael Brown: Yes.

Mr Burns: What we do is collect the forecasts of the principle organizations that forecast housing starts and work with the Ministry of Finance in Ontario to produce a consensus outlook, which the Ministry of Finance then uses as an ingredient in its building of a general model of performance for the Ontario economy. So typically in an Ontario budget there is a discussion about the outlook for residential construction. We don't do a separate piece of analytical work ourselves, we rely on those other pieces. They include --

Mr Michael Brown: Is that a state secret or do we know?

Mr Burns: -- the Canada Mortgage and Housing Corp and a couple of the banks. Those are not secret. I don't know whether we have them with us today. If we don't, we'd certainly be happy to prepare a letter for the minister to send you which contains the outlook of the principle forecasters who operate in the housing market, like Canada Mortgage and Housing and a couple of the major banks.

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Hon Mr Leach: They publish that on a regular basis.

Mr Michael Brown: I'm interested in that answer because I'm seeing a minister who tells me about shelter subsidies and the fact that there's going to be more private sector involvement building rental accommodation, there are going to be all these wonderful things happen because the private sector's going to jump right in there and do all these things. We know that residential housing in Ontario has been dreadful, the number of starts we've had over the past four or five years, maybe even six years.

So in all this you're trying to wrap your head around how are we going to accommodate the people of the province of Ontario in a way that is cost-effective to government, because what we don't have to be involved in we shouldn't be, but there are still people who need us. How this is all going to happen, I just don't quite understand when you tell me that there really isn't going to be much more money put into the shelter subsidy program because you're not going to have it. You're not going to save much more money from the non-profit or co-op. You told me that yesterday.

Hon Mr Leach: Obviously, with 100,000 people on a waiting list for assistance, you're not going to resolve that overnight, and what we're planning to do is develop shelter allowance programs that we will be able to apply to those most in need, low-income families and seniors to begin with, and redirect savings as we incur them in various programs. But, obviously, I agree with you, it just can't be resolved overnight. It's been a situation that's existed for many, many years, as we all know, through all levels of government and all parties. I think what we're trying to do is to strive to provide as much assistance to as many of those in need as we possibly can.

Mr John C. Cleary (Cornwall): I guess the question I would have that I've had many letters and many conversations about -- architects and design people who wanted to get involved in designing these complexes -- and the government had a list of only a few people they would approve the project. They had a list and they were the only ones eligible to design the project.

Hon Mr Leach: I'm not aware of any list like that. The assignment of work to an architect or a builder or whatever would be the responsibility of the sponsor group for the condominium project, not of the provincial government. The only thing we would want to ensure is that they were qualified and professionals.

Mr Cleary: So it was the local group, not the provincial government then.

Hon Mr Leach: Yes. The agreement with the architect, the tender for the building, for example, is all under control of the local condominium sponsor group.

Mr Cleary: Because some of them have asked me how they would get on that list.

Hon Mr Leach: They would have to talk to the sponsor groups of the condominium projects and make sure that they had an opportunity to present their qualifications.

Mr Cleary: That's what I wanted you to say, because we've been getting the runaround, you know.

Hon Mr Leach: It's obviously in the best interests of anybody who's undertaking either a non-profit or a condo development to ensure that they get the best price they possibly could, at least we hope they would. We know in some instances they didn't. But they should try and attract the most qualified professional people to undertake the work for them.

Mr Cleary: Another question: It would be rural Ontario more so than places like Toronto, but is the government going to insist on both services available for a housing complex to go ahead?

Hon Mr Leach: Water and sewer, are you talking --

Mr Cleary: Yes.

Hon Mr Leach: Certainly it's desirable, if you're undertaking any sizeable development, that water and sewer be available. There are exceptions to that, obviously. If you're building a certain size of development it can be done with another system, or if it's a single dwelling and all of the conditions on the site allow for it, you can do it with local well and septic.

Mr Cleary: Yes, like, speaking of our area, one service could be available. But we were of the understanding -- rumours we heard around here in the past four or five years -- that it was going to be almost impossible to develop a development without both services.

Hon Mr Leach: Well, it's desirable to have both services and I would think that if it's any sizeable type of development it would be in the community's best interest to ensure that both services were available. The Planning Act, which is being debated next door before a committee, is addressing a number of those issues and you may want to take the opportunity to ask them questions in that committee on that act.

Mr Cleary: I was sitting in on part of that yesterday, listening in the back, but it didn't happen at that time.

In these housing units, is it still the 25% -- I don't know what the percentage could be -- available for disabled people?

Hon Mr Leach: No. Well, actually, we're not building any more condominiums, but the percentage of rent geared to income and so forth is specific to each co-op, and it's in the agreement I think that so many units have to be supplied to rent geared to income, and different types of co-ops have different regulations or different conditions as to the individuals or class of individuals who are in the units.

Mr Cleary: But in the seniors' there are disabled people under the age of 55. Are there any thoughts of any changes there?

Hon Mr Leach: No, that would depend on the agreement that exists with each co-op unit.

Mr Burns: In most communities we have more units that have been retrofitted to accommodate the physically disabled than we have people waiting for units that have been redesigned for the physically disabled. In many communities we have one or two projects that sort of specialize in helping those particular households.

Mr Cleary: In our particular area, there are seniors' buildings that have the elevators, so that there are quite a few disabled people in there, and I'm just wondering if any change is going to happen there.

Hon Mr Leach: No, there are no changes proposed.

Mr Cleary: The other thing: Who is responsible for hiring the administrator at the present time?

Hon Mr Leach: It's the board of the co-op.

Mr Cleary: It's the board. Well, it wasn't always like that. In our particular area they were appointed right from the province when a project started. I'm talking about senior citizens' buildings.

Mr Burns: In senior citizens' buildings that are run by the local housing authority as part of the Ontario Housing Corp, at the moment the administrator would be appointed by the local housing authority. But there was a period in time when the local housing authorities didn't exist and the whole system was run directly from Toronto.

Mr Cleary: That's right.

Mr Burns: Minister Bennett, about 15 years ago, put the local housing authorities in place. Before he moved to create the local authorities, the administrator would have been appointed by the crown corporation itself, meaning the regional office or even the head office. That doesn't happen any more.

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Hon Mr Leach: You're too young to remember.

Mr Cleary: Well, I remember.

Anyway, getting back, I don't know in most areas, but in our area they're housing at 150 points right now, 155. I understand you're not going to change that, that if you have those points you could be eligible anywhere in Ontario? If some people from Toronto moved into our area, say, and they were the highest points, they're eligible automatically, right off the bat?

Mr Burns: I believe, and I'm going to look to see if I misspeak myself, that you can apply anywhere in the province for units anywhere in the public housing system. In the normal course of events, people want to stay in their own communities, so they apply and typically, actually, what they do is they identify the areas in their own community that they're interested in. But it is a provincial crown corporation, and if someone in Brockville who perhaps grew up in Cornwall wanted to apply and be on the list in Cornwall, they can do that.

Mr Cleary: I know, and I agree that it's the right way to go, but we get on the firing line lots of times when outsiders come in and take their place. I mean, I think it's a fair way the way it is now. It wasn't always like that, because I can remember when it was the other way too, and it wasn't fair.

The other thing is, you tell me that you're getting out of the business. Right now, the mortgages on those units should be helping the provincial government quite a bit, with lower mortgage rates. Am I correct?

Hon Mr Leach: It's been our stated goal to try and get out of the bricks and mortar business. I'm sorry, I missed part of the question.

Mr Cleary: Maybe I could start again.

Mr Burns: I can comment on the second part. Yes, we are benefiting, because over the last two or three years interest rates have dropped. It is reducing the cost of maintaining the program.

Mr Cleary: When we were opening those over the last 20 or so years, they had said a mortgage for X number of years? Are you locked into the rate there?

Mr Burns: In the non-profit and cooperative program it's 35-year mortgages for the new buildings and typically 25 years for purchase and rehabilitation, but they are on three- to five-year renewals. So we have a very important program where we try and manage our costs and risks in that particular area, and we've been doing very well in the last few years.

In public housing, it was financed in a different way. The public housing, run by the local housing authority, was financed by 50-year debentures issued by Canada Mortgage and Housing Corp. They don't roll every three to five years, but three years ago we said to CMHC that the high-interest-rate debentures -- either they lowered their interest rate or we would refinance it, because it was too much, and they agreed to refinance everything that was above the interest rate of that day. We saved and continue to save about $5 million a year in Ontario Housing Corp from that transaction alone. So we do have a very aggressive program of managing our exposure in real estate debt.

Mr Cleary: That's what I hoped you'd say, because I get collared about things like that occasionally. If that's the case, that's good.

The Chair: Thank you, Mr Cleary. You have expended your time; I will consider you in the next round.

Let me just make some points here now. As I said when I started, it's four hours and 48 minutes. We gave up an hour yesterday; it's three hours and 48 minutes. Is it agreed that we could end the Housing estimates by midday? That's the good news. The bad news is that there will be no breaks; I'm used to no breaks, actually. The Conservatives have agreed to give up their time, and in giving up their time the consideration is that we will give that time up in completion of the estimates too.

Mr Gilles Bisson (Cochrane South): I take it we have unanimous consent for that.

The Chair: I'm sorry. Do we have unanimous consent on this?

Mr Bisson: All right, so we'll split the time between us and the Liberal opposition for the remainder?

The Chair: You may regret it.

Mr Bisson: Good morning, minister.

Hon Mr Leach: Good morning. How are you this morning?

Mr Bisson: Doing quite fine. I hope you had a good night's sleep.

Hon Mr Leach: Oh, yes. I have a clear conscience.

Mr Bisson: There are a couple of questions I want to get to, now that you've said that. I guess there are a couple of things I'd like to get into. Let's go back to the non-profit issue. At this point, just so that we understand not exactly, but in the general direction of where you're going, the move of the government to try to privatize or to sell off some of the Ontario housing stock would strictly be in the Ontario Housing and non-profits, if possible?

Hon Mr Leach: Yes, I think we indicated that the 84,000 units in OHC are the group we're looking at.

Mr Bisson: Are you looking at the private non-profits at all? I'm wondering how that would be done.

Hon Mr Leach: They belong to the sponsor groups, actually; they don't belong to the Ontario government. I mean, you can't sell something you don't own.

Mr Bisson: Yes. I only ask that to clarify the record, because at one point I saw a media report where one of the government members had mentioned privatizing or selling off some of the non-profits. I take it that was a mixup in terms.

Hon Mr Leach: Yes, I think often the terms get intermingled by people and they get confused between co-ops and non-profits and OHC units etc.

Mr Bisson: In the attempt on the part of the government in your estimates to be able to live next year within the means of a smaller budget, I take it, like every other ministry, you as minister are going to have to offer up some money to the Finance minister. It means to say that you've got to save somewhere. I understand that process; I've been there before. How do you intend on dealing with the subsidy that you pay, let's say, with the non-profits or the co-ops at this point in regard to their operating subsidies? Do you have any idea that you'll be reducing that? Can you give us information on that?

Hon Mr Leach: Yes, we're proposing to work with the co-ops and the non-profits to try and streamline their operating procedures to ensure that they work as efficiently as they possibly can and in that way gain some cost savings.

Mr Bisson: There are two different ways, as you know, to taking that approach. One approach is, you say to a non-profit or co-op, "You will have your operating subsidies reduced by X per cent," and then the reduction forces the efficiency, or you can come at it from the other way, which is, "We want to sit down with stakeholders and figure out what can be done internally in order to do it cheaper." Which of the two are you looking at, at this point?

Hon Mr Leach: I'm opposed to straight, across-the-board cuts, because I think that method penalizes those that are working efficiently at the present time, and there isn't any doubt that there are many co-op units that work as efficiently as the private sector. There are many that don't, and what we want to try and do is to ensure that those that aren't working as effectively or efficiently as they can start to bring their procedures in line.

Mr Bisson: So you'd be opposed to a straight, across-the-board-cut approach then?

Hon Mr Leach: Yes.

Mr Bisson: All right. So then if you come at it the other way, obviously that's more difficult to manage. Part of the criticism that we got as a government, in fairness to the public, was that a lot of our approach was to try to figure out how you sit down with stakeholders, for an example, in long-term care, and go through a process of redesigning the system so that you're able to afford to offer the services. Do you have any idea what kind of process you're going to be going through at this time, or is it still too early to give us an idea?

Hon Mr Leach: They're still developing that.

Ms Patti Redmond: I'm Patti Redmond. I'm a manager in the non-profit area.

We are sitting down with the sector organizations for both the non-profit and co-op providers and looking at what their manageable costs are and, with benchmarks, trying to determine who is operating at higher levels than others and targeting the constraint in that way. We're also looking at where we can work together to streamline requirements, because as was said yesterday, a lot of what these costs involve are their administration costs, and what aspects of their operations we can jointly try to streamline in order to make the constraint easier for the non-profits and co-ops to manage. We're doing that in conjunction with their sector representatives.

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Mr Bisson: Just for the record, for Hansard, I think it would be useful if you would just explain -- and I think the government members may not know this; no fault of their own, it's just that it's quite a field -- how non-profits are funded, the different pots of money they get through the shelter allowance, from GWA or FBA to the operating subsidies. If you could just explain that.

Ms Redmond: Obviously, we provide a monthly subsidy cheque to non-profit housing providers that is comprised of essentially the difference between what their total operating costs are -- which are their mortgage payments, their taxes, their utilities, their maintenance and their administration budgets -- and how much they receive in revenue. That's both a combination of their market rent revenue and their RGI revenue and what we call non-rental revenue, which would be laundry, parking, things like that. So that's what we provide in subsidy.

We've talked earlier about the fact that we sort of divide that between what we call a bridge subsidy, which is essentially the difference between the market rent and those operating costs, and an RGI subsidy. But what we actually provide non-profits is a single subsidy which measures that difference. So the RGI would be comprised of people who are on GWA or FBA, that kind of thing.

Mr Bisson: I recognize that if you're going to try to reduce those, there are certain commitments that the non-profit has to keep up to: paying the mortgage, paying the hydro etc. I take it what the minister is saying is that he doesn't want to get into doing an across-the-board cut of the monthly subsidy that they receive, if at all possible.

Ms Redmond: That's correct. What we did in the past was we did provide an across-the-board, so every single provider in the system received the same level of reduction. This year we want to make sure we target that to those that are operating less efficiently; in other words, they have higher costs than other providers. So that's the difference and that's what the minister is referring to, that we want to have a system that tries to look at not reducing everybody the same, as was done in the past.

Mr Bisson: The ministry would have at its disposal how much it costs to run each of these non-profits, based on their actual cost and what they're getting as a subsidy from the ministry. Can you provide us, this committee, with that? Is that something fairly easy to --

Ms Redmond: You mean in terms of the average cost for providers?

Mr Bisson: I would be interested, for example, in looking at, say, Timmins non-profit housing and some other non-profit somewhere else and saying: How much does it cost them to run their units? How much are they getting per unit? Let's say they're managing 500 units in that housing authority, compared to another 500 units, to take a look at what some of the differences might be. Could you provide us with that?

Ms Redmond: We have cost data on our non-profits, obviously, so depending on -- do you want it for specific providers or averages across the system?

Mr Bisson: I would like to have it for specific providers, if that's not too much trouble. Is that possible or is that an enormous amount of work here?

Mr Burns: It's a significant amount of work, but we could do it, because we've got a database now.

Mr Bisson: I would take it it's in a computer. There must be a way of pulling that out.

Ms Redmond: We have a good database now.

Mr Bisson: I remember that; it cost us a lot of money. So the answer is yes, you can provide us with that?

Hon Mr Leach: I'm assuming that there isn't any legal problem or freedom of information issue. Provided that there isn't any impediments in that, certainly it's available.

Mr Bisson: Yes, I know the non-profits in our area used to provide me with that locally, just so that I knew what their issues were and where their pressures were when it came to our government, how we were dealing with subsidies. So I used to get that for my area.

Ms Redmond: Yes, we provide data to the sector organizations as well. We will look at the FOI implications of identifying specific costs with specific providers, but we should be able to provide you with information.

Mr Dino Chiesa: On the question of what scale, we have 2,400 projects and 1,000 groups.

Mr Bisson: I'm talking housing authorities here.

Mr Chiesa: Oh, I'm sorry; you're talking housing authorities, local housing authorities?

Mr Bisson: Yes.

Ms Redmond: I thought you were referring to non-profits, Mr Bisson.

Mr Bisson: I'm sorry. I should have been clearer.

Mr Chiesa: If you're talking housing authorities, we could provide that. I have it with me, actually.

The Chair: Just for the record, could we start identifying ourselves. We have a lot of different conversations going on, and I'm not quite sure Hansard is picking them all up. Dino, could you introduce yourself again?

Mr Chiesa: Dino Chiesa, acting CEO of the Ontario Housing Corp. I was just asking a question as to what kind of information. If you're asking specifically on housing authorities, there's not a problem; it's public information. We'll provide it to you. I have it with me.

Mr Bisson: That's what I was looking for, but now you've piqued my curiosity and interest. I don't want all non-profits, but can you give us some sort of gist? Is there some sort of document you can provide us with that says, "Here's what it costs in the north; here's what it costs in the south," on a couple of non-profits just so that we can take a look at it?

Mr Chiesa: Not a problem. Yes, we will.

Mr Bisson: Moving on from there, here's the gist of what I'm getting to: You recognize, and I think the minister recognizes as well, there are only so many things you can do to affect the cost of running an individual non-profit. A housing authority would be a little bit of a different game, but still there are only so many things you can do. What kind of process are you looking at undertaking? Are you looking at working with the associations? Where are you going with this and what are your time lines?

Ms Redmond: Obviously, as I said, we are working with the associations, and you're right: We're trying to look at the different components of their budget structure. So things like their mortgage payments, although we've made some very good savings with respect to interest rates in our strategies there, it's not really within the control of the non-profit or co-op itself. It's the same with their taxes and utilities. We have been focusing our efforts on what we've been calling that component of their costs called "manageable."

I think as we said the other day, there is a very wide variation of costs among non-profit and co-op providers in that area of manageable cost. We're just trying to look at why some are able to operate at much lower cost as compared to others. We're sitting down with the sector organizations to work through that. When we look at constraining their budgets, we're looking at actually doing it differentially. In other words, those that have higher manageable costs on average will receive a greater proportion of the constraint, but we are looking at some of the factors that do contribute to those higher costs. In other words, I think we talked last week about special-needs providers. Given some of the needs of their tenants, in some cases they have higher administration costs than may be necessary in other projects, and it's trying to get at that.

Another issue is very small providers who don't have the economies of scale in order to operate, so to try to look at those things, and we're doing that with the sector organizations so that when we do reduce their budgets, when they are provided with constraints, it is not an across-the-board, "Everybody gets the same amount," and those that are inefficient are essentially not taking the same level of cut as those that have been operating efficiently over the years.

Mr Bisson: Would there be any attempt, in communities where more than one private non-profit exists, to do some pooling of resources?

Ms Redmond: The sectors have actually tried to do some of that pooling. It's been effective in terms of trying to deal with constraints. We think there are greater opportunities and we certainly do encourage it. That's another issue with respect to economies of scale. Some of the very small providers getting together in order to be able to reduce their administration costs is part of what we're trying to do with respect to the constraint. We're moving on this very quickly, obviously, because it's going to affect their 1996 budget portfolio.

Mr Bisson: Thank you. I take it what I'm getting here as an answer is that you're going to be doing everything you can in order to figure out how private non-profits in this case are able to run more efficiently, but that in the end the ultimate goal is, you're going to have to reduce their operating subsidies, their monthly cheque, to a certain extent. That'll drive the efficiency at one point.

Hon Mr Leach: Yes.

Mr Bisson: That's a bit of a contradiction to what you said a little while ago, though.

Hon Mr Leach: No.

Mr Bisson: I don't want to get argumentative here, but a little while ago, and I was happy that you answered the way you did, I asked whether you are taking this from an approach of reducing the budget in order to create the efficiency, and the answer was, "No, we're trying to make the changes."

Hon Mr Leach: We're going to create the efficiencies which will reduce the budget.

Mr Bisson: And then take out an equal amount of money that you find in the efficiencies.

Hon Mr Leach: Yes. I think as the staff just indicated, they're going to be dealing with each of the non-profits.

Mr Bisson: All right. As long as that's clear. So what you find in efficiencies, you'll then remove from the subsidy? That's yes?

Hon Mr Leach: Yes.

Mr Bisson: Okay. Thank you very much. I appreciate that. If you can provide that, that would be useful.

Again within the non-profits -- I think I already know the answer to this question but I'll ask it just for the record -- you don't foresee, in your attempt to find efficiencies within the private non-profits, and eventually a reduction in their transfers, putting them in any kind of danger of not paying their mortgage -- in other words, going broke? You don't see it getting to that?

Hon Mr Leach: As the staff pointed out, we're looking at and trying to reduce the manageable costs by becoming more efficient. That's the goal.

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Mr Bisson: Just so that you know where I'm coming from, some of the non-profits that are talking to me -- I imagine some of them who are going to you are saying the same thing -- their fear is that the subsidies they receive from the Ministry of Housing will be reduced and will put them in jeopardy of not being able to pay their own bills at the end. They don't have a clear understanding yet where they're going to be at, but it's reassuring to me that you're telling me that the intent of what you're doing here is not to put the non-profits out at risk; it's to find efficiencies and not to underfund them to the point that they have to shut down, in other words.

Hon Mr Leach: Absolutely. As was pointed out by the staff, those fixed costs, the mortgage, utilities etc, are being removed from the equation and we're looking at reducing the manageable costs.

Mr Bisson: I'm going to be direct. I don't do this to be argumentative, but just so you know where I'm coming from: There are people out there who think what the government is up to is to underfund the non-profits and thus force them into bankruptcy. I'm being really blunt here. That's not the intent of the government?

Hon Mr Leach: I don't know what the government would gain by doing that.

Mr Bisson: I know, but for the record, that is not --

Hon Mr Leach: We'd be out a lot of money and there would be a lot of people out of accommodation, so that doesn't make any sense to me whatsoever.

Mr Bisson: Okay. But you agree with me that's not where the government is going?

Hon Mr Leach: Yes.

Mr Bisson: That's what I've been telling people, believe it or not, and some people don't believe me on that one. So I can use your comments in order to reassure them.

The other thing, just moving on to the housing authorities in the other group of housing: There are larger efficiencies that can be made there, I would take it, in comparison to the non-profit housing authorities.

Hon Mr Leach: Yes.

Mr Bisson: We're talking local housing authorities now. I take it larger efficiencies can be made, based on what you said yesterday, with the housing authorities, by the fact that yesterday you said some of the things that you're able to do and that you're looking at are possibly changing the tendering process by which they procure goods and services, possibly -- I'm trying to be polite here -- moving away from collective agreements to a contracting-out proposal --

Hon Mr Leach: No. I didn't say that yesterday.

Mr Bisson: Could you clarify? That's how I interpreted what you said yesterday.

Hon Mr Leach: What was said yesterday was that the costs for local housing authorities or public housing are often more expensive than the private sector as a result of those issues. The public sector has to tender, the private sector can negotiate, and as a result, often the operation of a public sector complex is more expensive.

Mr Bisson: On those two issues, the issue of tendering and the issue of contracting out, I understood yesterday or Thursday, whatever day we had this discussion, that there was a recognition by the government that this added to the cost of operating the housing authority and that it was something the government was looking at changing. What you're telling me is, you don't intend to change the tendering process?

Hon Mr Leach: No, we're not proposing change.

Mr Bisson: You don't intend to force housing authorities to contract out services that are presently provided under collective agreements?

Hon Mr Leach: We would suggest to housing authorities all over that they operate as efficiently as they possibly can. If there are means of obtaining more cost-effective ways of doing things, they should explore every avenue they have available to them.

Mr Bisson: Okay, but my antenna goes up now. I know a lot of people, as you do, who work for housing authorities. They happen to be under contract with one union or another -- CUPE, whatever it might be. They get paid probably not enough, in their eyes, but more than you would get in the private sector. Are you saying what you're possibly looking at is allowing the housing authorities to contract out services that are presently being offered through collective agreements?

Hon Mr Leach: I think that would be up to the individual authorities when they're negotiating their labour contracts. That's what negotiations are all about. There's no intent of this government to interfere with the negotiations of the local housing authorities and their unions.

Mr Bisson: But the intent of negotiations is never to negotiate away your collective agreement to where a contractor does your work. I'm just trying to get some assurances here.

Hon Mr Leach: That's up to the local housing authority and the unions that they deal with. They negotiate the contracts. The contracts are not negotiated at Queen's Park.

Mr Bisson: But I understand the fear of the workers who are working for those housing authorities. I know the people who work both in the Iroquois Falls and Timmins area, as well as some of the people down here in Toronto who have come to see me, are really worried because of changes that were made to the Labour Relations Act and also changes that were made under Bill 26. It is a lot easier for the housing authority, under the new law, to disband unions and go to contractors because there are now no longer any successor rights in collective agreements.

I guess what I'm asking you is, is it the intent of the minister, in order to follow that approach that has been taken by the government and the municipal sector, to do the same within the housing authorities? That's basically the question.

Hon Mr Leach: I think that generally unions are going to have to jump in and be part of the solution. When they're undertaking their negotiations, they're going to have to take into consideration a lot more things than they had to in the past, perhaps, to become more cost-effective.

Mr Bisson: Listen, I would argue that unions have been part of the solution for many years. This is not a new phenomenon. I will take you on tours of places like Algoma Steel in Sault Ste Marie and de Havilland in Toronto.

Hon Mr Leach: Then there shouldn't be any problem, should there?

Mr Bisson: There's a difference, though. I just want to make this clear. The basis by which those restructurings happen, where the employer and the union sit down and come to some terms about, "I'll give you this, but I get something back in return," and eventually it works out that it's a mutually beneficial package.

The difference now is that there are a lot of workers in housing authorities out there, who are under contract with one union or another, who fear, because of restraints to costs and the ideological position of the government, that they're going to lose their jobs to a private contractor on the basis of what's happened with successor rights in other parts of legislation that you've done.

What I'd like to do is to say to those workers, "The Minister of Housing, Al Leach, says that it is not the intention of his ministry to contract out services that are presently being offered by housing authority workers in the province of Ontario." I'll gladly go out and spread that word if you were to commit to that.

Hon Mr Leach: Labour negotiations are a factor of negotiations. What a local housing authority does with its local union is between the union and the local housing authority, if they can negotiate something, and I'm sure the union leadership that deals with local housing authorities is very efficient and effective and will negotiate a package that's in the best interests of their members.

Mr Bisson: We're obviously not --

Hon Mr Leach: I think I just saw a concerned citizen come in. I have his picture here.

Mr Bisson: It doesn't sound to me, in all fairness, that you're prepared to give --

Hon Mr Leach: A concerned renter.

Mr Bisson: It doesn't sound to me like you're prepared to give those assurances to the workers. But I want to just point out to you --

Hon Mr Leach: What assurance I can give to the workers is that I'm sure their union leaders will represent them to the best of their ability.

Mr Bisson: Minister, there is a very big difference between going to a negotiating table where the employer sits down and says, "We have problems; we want to work them out together," and you negotiate a social contract local agreement or some sort of a restructuring of your collective agreement to deal with the times, and what I think what's going to be happening: the premise that the employer will say, "We can get this done cheaper if we contract it out," so when the collective agreement comes due, sayonara. That is going to be possible under the changes that your government has already made to existing legislation. That's why these people are worried.

Hon Mr Leach: Let me assure you that the process that's used in negotiation will be fairer than the one that was imposed by your government under the social contract. Let's put it that way.

Mr Bisson: I think time will tell. I can tell you directly, during the negotiations of the --

Hon Mr Leach: We will negotiate, not just impose.

Mr Bisson: We negotiated as well, but through the whole process of the social contract I met head-on with most public sector workers in my riding, and after -- since you people have come to power -- and do you know what they're telling me? They're saying the social contract was a heck of a better alternative than what this government is putting forth, because they really fear what all this means in the end is that you're going to favour private sector contracting out at a lesser wage for private employees rather than paying public sector employees a livable wage. I can understand where they're coming from because the legislation points to your doing that.

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Hon Mr Leach: I'm a bit disappointed that they lack faith in their union leaders to adequately represent them.

Mr Bisson: They have lots of faith in their union leaders. They don't have faith in you.

Hon Mr Leach: If they have faith in their union leaders to negotiate a good package for them, and a fair package, then I don't see what their concerns are.

Mr Bisson: I'm not going to punch around this one for very much longer because I think the minister is saying that whatever happens, che sara, sara. That's what you're basically saying.

Hon Mr Leach: No. What I'm saying is that labour and management will sit down and negotiate a contract that's fair and equitable to both sides, and that's what labour negotiations are all about.

Mr Bisson: You have an opportunity to clarify for the record, and I would be the first one to go back and tell those people that the minister says he ain't interested in going out and contracting out. I will deliver that message for you.

Hon Mr Leach: I don't want to be a government that interferes in labour-management negotiations like you guys did.

Mr Bisson: Whoa, now hang on. You don't want to be a government that interferes in labour? Come on, Minister, take a look at your record up to now. My God.

Hon Mr Leach: What I'm saying is that the collective agreements between local housing authorities and union members will be negotiated.

Mr Bisson: We'll just see how many of them are negotiated and how many of them are privatized next time you come back to estimates.

I've only got a couple of minutes left but I'll just put you on notice that one of the things I'd like to get into, maybe in the next round and just shortly in this one, is the question of lists within housing authorities. You made comments on Thursday that one of the things you don't like about the list system at the housing authority is that because it's a weighted system those in deeper need get in and those people waiting at the fringes are not able ever to get there. Are you looking at making changes to the list system?

Hon Mr Leach: We've made changes to the list system.

Mr Bisson: I'm not aware that has been done.

Hon Mr Leach: They were effective January 29.

Mr Bisson: When was that circulated?

Hon Mr Leach: It's certainly public knowledge.

Mr Bisson: I'm the critic for Housing and I've never received anything, unless it came and I never got it.

Hon Mr Leach: You'll have to start paying more attention.

Mr Bisson: Hold it a second. Can I call a staff member to the committee?

Hon Mr Leach: No. I can do that, though, if you like.

Mr Bisson: Can I call one of my staff people to the committee?

The Chair: One of your staff members?

Mr Bisson: Yes. I want to ask a direct question --

The Chair: No. Actually, this is estimates and information --

Mr Bisson: No, I want to find out. It's in relation to the estimates. The minister is saying that --

Hon Mr Leach: If you want to confer with your staff member, go ahead. I don't think it's appropriate to call him.

Mr Bisson: No, no.

The Chair: It's Housing estimates, and if you want information coming from the minister himself, he'll respond. In the meantime, you don't have time. Your time is up.

Mr Bisson: Very good. I just --

Hon Mr Leach: That means stop.

The Chair: On the next round.

As the Chair and also the critic, I just want to step down to ask a couple of questions. I'm going to ask Mr Cleary if he could sit in the chair until I get some information from the minister.

Mr Bisson: Talk about wearing two hats.

Mr Rollins: Make your questions nice.

Mr Alvin Curling (Scarborough North): Minister, I'm going to need some information and maybe you could help me along with this. First, I think what I'm hearing through the estimates and through your government's position is that you have now established the fact that you will be selling off the 84,000 units owned by the government in social housing.

Hon Mr Leach: Our position is that we're establishing a protocol to look at getting out of the bricks-and-mortar business. Obviously it's going to be a long-term, very complex undertaking, but as much as we can we would like to get out of the bricks-and-mortar business.

Mr Curling: I just want to be very clear. After looking at it, your goal is to sell off those 84,000 units owned by the government to the private sector.

Hon Mr Leach: As much as it is possible to do so while ensuring that the residents and tenants in those complexes are protected.

Mr Curling: I just want to get a very clear answer. I know you're a responsible government and you'll make sure that the tenants who are occupying those places will be well looked after, but having established to your own belief and to your government's belief that they will be looked after, the ultimate goal is to sell those 84,000 units to the private sector.

Hon Mr Leach: Yes. It's not a new strategy. It's a strategy that's been followed by previous governments. Both Liberal and NDP governments on occasion sold off OHC units. In 1994, I think it was, the NDP sold off some OHC units, so it's not something unique and new.

Mr Curling: I understand that. I was just talking about your government itself.

Hon Mr Leach: Yes. This government's going to do much along the same lines as other governments have done.

Mr Curling: I can't recall the Liberals selling off any. I could be corrected here, but that's the case. I just want to establish, and you haven't established that, that those 84,000 units will be sold off as soon as you're finished your study and made sure that the tenants --

Hon Mr Leach: It depends on the outcome of the study. I wouldn't want to prejudge the undertaking that all 84,000 units would be sold off. Obviously there are some that will be far more difficult than others. You have to recall that we're not the sole owners of those. We're in a partnership with the federal government and in some cases with municipal governments.

Mr Curling: That's my next question. You're coming into my next question, which I know you'll answer very efficiently. You have agreements with two other levels of government, federal and municipal governments, some owning the land and some owning the mortgage itself. Have you started any negotiation with those levels of government and could you give me an update of what has happened so far in those discussions of moving in that direction of selling off those 84,000 units?

Hon Mr Leach: There have been some opening discussions with both levels of government, some on a project-specific basis. For example, on the project that's being looked at at Regent Park there have been discussions with the various levels of government. The federal government is doing a complete review of the operation of CMHC and we're awaiting some advice and direction from the federal government about where it's going with housing policy. We've been advised that they're going to take a long, serious look at how they provide housing.

Mr Curling: So who are the players in this now? Let me establish it again. You have the municipal government, you have the federal government, you have the provincial government. Who else?

Hon Mr Leach: That's the three levels of government: municipal, provincial and federal.

Mr Curling: Yes, that's good. On the side of tenants now, are there any tenants at the table or in discussion about the sale of these units? Is there any tenant representation there at all?

Hon Mr Leach: Yes, there is, if we talk about the projects that are currently under way. If you're looking at Regent Park, for example, that has had considerable tenant participation. As a matter of fact, it's being tenant-driven for the most part. I'll give you another example of a major high-rise at Alexander Park where the tenants have initiated a goal to turn that building into a co-op, so the tenants are actively involved in the entire process.

Mr Curling: So each property would be negotiated separately because they do have different configurations involved. In other words, maybe the municipality is not involved and maybe it's just the feds and the province and tenants.

Hon Mr Leach: Every part of the portfolio is going to have to be looked at on an individual basis. There might be opportunities to look at blocks of units or individual units. It depends on what's in the best interests of both the tenants and the taxpayer.

Mr Curling: So that's the approach you would be using. After having brought all the parties to the table -- and I understand you have to do different phases. You have to go maybe first to the government section and then the tenants, and then bring everybody together to see the impact. That will be done in your process?

Hon Mr Leach: Yes.

Mr Curling: How long do you think this will take before you start selling?

Hon Mr Leach: It's very difficult to say, because it's very complex, but there are units within our portfolio that could be put on the market earlier than others. The chairman of the Ontario Housing Corp is looking at a small part of the portfolio at the present time to test the market with 10 or 12 individual units.

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Mr Curling: How quick do you think the first test run will be?

Hon Mr Leach: It's possible it will take place this year.

Mr Curling: So within this year you'll be selling some of those units then, this year of 1996, or within 12 months?

Hon Mr Leach: There's a small part of the portfolio that's being reviewed by the chairman of OHC to see what the market conditions are like. If the market conditions are favourable and sales would be in the best interests of the taxpayers, some could take place this year, but it would be a minor part of the portfolio.

Mr Curling: Before you do that, though, you'll be having discussions with the tenants?

Hon Mr Leach: If there are tenants involved in the units that are put up for sale, obviously they --

Mr Curling: Tenants will always be involved. I'm talking about those who are occupying them.

Hon Mr Leach: Not necessarily. There are some units that could be vacant or between tenants, for example. If you have a unit that has become vacant for some reason or other, that might be the most appropriate time to look at whether it's saleable.

Mr Curling: Will you be bringing these properties up to standard, so to speak, before selling them off?

Hon Mr Leach: Again, that's what we're going to test the marketplace for. In some instances I'm sure that the investment of some funds to improve them would get you a better return, so we would do that. In other instances you may put something on the market as is. It depends, I think, on the type of facility that we're looking at.

Mr Curling: But you're saying within a year you may be -- I hate the word "testing" -- I presume those units that are not occupied, and some may be occupied units that you'll be selling off.

Hon Mr Leach: We won't, in the short term, be selling off any occupied units.

Mr Curling: In the short term you won't; in other words, not within the year itself. Have you put aside any money? Is there any figure for funds that you have available that will be put aside to improve the properties before you sell them?

Hon Mr Leach: Not in this year's budget.

Mr Curling: There is nothing in this year's budget, so no money --

Hon Mr Leach: Not to upgrade for sale.

Mr Curling: No money will be spent on any property to improve the property before sale within this year.

Hon Mr Leach: There are capital moneys available to undertake work to ensure that properties stay in safe, healthy condition, but those funds are not being expended solely for the purpose of putting them up for sale.

Mr Curling: Do you anticipate spending money not in this budget but in the next budget, since you are going to sell those units off, to bring them up to standard?

Hon Mr Leach: That's very difficult to say. We'd have to look again at the projects on an individual basis and make a determination whether you would be better to invest money to improve it to put it for sale or whether you would talk to individuals about buying it as is, just as anyone would do with you own private home.

Often when you're selling your own home, for example, you might paint it or spruce it up a bit to make sure that it has the best face on it to go for sale. In other cases you'll just say, "I'll take a few thousand dollars less and put it on the market as is," and I think we will be taking the same type of approach as any individual would in dealing with the sale of a piece of property.

Mr Curling: Let me tell you why I take that line of questioning, Minister. Many of the units that are out there now, quite a few, are below standard, below habitable standard at times, and the tenants do complain about the standard of the property, and that's what you talk about. It had been poorly managed.

When I hear you say, yes, they have the money to spruce it up to sell it, I wonder why didn't you spruce it up -- or why the government itself. I'm not going to blame you. Let's be completely straight with you. They are all governments, all three governments. Your government has been in so shortly, not having the time to really spruce it up so that tenants can live there, and when the opportunity comes now to spruce it up, they're going to sell it to the private sector. They said, "It would have been nice that our landlord would have looked after us better, done more than spruce it up just to get a profit, had wanted to spruce it up for us to have a good standard of living."

I am very disappointed that the government would be looking to sell off those units, but that's your direction and that's your philosophy, which I think you will regret later on. In the meantime, I hope that those moneys you'd have spent to spruce it up could be looked at more --

Hon Mr Leach: I think I said just a few minutes earlier that we don't have any money in the budget specifically to spruce up any OHC units to put them up for sale. I think I was very clear in stating that we do not have any money in the budget specifically to spruce up buildings to put them on the market.

Mr Curling: All right.

Hon Mr Leach: Any moneys that are in the budget now are to ensure that capital works are undertaken to make sure they're in good condition.

Mr Curling: Your party has projected itself as very competent and efficient business people, supporting the private sector, "We can do things better than government," which I don't believe, really, that the private sector can always do things better than government in this instance. Yes, I think we have not done as a government, as a landlord, a very efficient job, and you put me on notice of that all the time, yes. I don't think we've done a good job as a landlord looking after our tenants. I think we can do better.

I think the moves your government has taken somehow punish the tenant, "It is your fault; it is you who have caused all this," when it is the inefficiency of the administration of the government, which had had a very high administrative overhead and did things and contracted things in a very poor manner in which the costs --

Hon Mr Leach: I don't recall at any time during the discussions we've had in these estimates on Thursday or yesterday, or at any time for that matter, indicating at all that the tenants were at all to blame for anything.

Mr Curling: I put it this way to you, that somehow all of a sudden the government is getting out of the business in social housing, that we're not into the bricks and mortar. Somehow I thought you understood that when the government is in social housing, it really was never into the bricks and mortar; it was necessary to have the bricks and mortar to house the community and to put in that community support. I think that by selling off these units, you're going to lose that community, the community that needs the government desperately to get their lives on track, to get affordable housing.

At times we confuse the social housing aspect of it with the affordable housing outside in the private sector. When we make that bridge about the private sector and the public sector, we know that the private sector will not build for those people who we, the government, take care of, so to speak, or assist and support to get on with their lives and build a community. When we sell those units to the private sector, most of the community infrastructure and support will be gone. You feel basically that if we give a shelter allowance to some individual and they go on into the private sector, they are much better off. I think there's other credibility in the fact that the selection process --

Hon Mr Leach: You finally got a job you can handle.

Interjections.

Mr Curling: Let the record show the minister is referring to Mr Bisson, not me.

Hon Mr Leach: Yes.

Mr Curling: I'm extremely worried, Minister, that we would lose the kind of good work the government does in assisting people to go to affordable housing, because the private sector will not build it at all.

Hon Mr Leach: I think it's just the opposite to that; in fact, it's totally opposite to that. What this government wants to do is to ensure that we provide assistance to those in need, that rather than be concerned about the provision of bricks and mortar, we look at the needs of individuals and ensure they have subsidies and shelter allowances that allow them to live in any part of the community that they choose to, or any location in Ontario that they choose to, rather than being tied to a unit, that just because a pile of bricks and mortar gets a subsidy, they're forced to live there. If they want to move to another part of Ontario, they go back on another waiting list to get into a subsidized pile of bricks and mortar.

I would rather provide the subsidy and a shelter allowance to an individual to allow them to choose where they want to live. I think that's a far more effective way to operate.

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Mr Curling: Minister, I'd hoped that through the estimates, as the critic for Housing and a strong advocate and supporter for the social housing concept, we would have been able to convince you not to have blinkers on so that you stare just down the passage or the tunnel, not realizing it's not only that people want just shelter -- that is important here in the concept we have -- but to build a community for those people who get lost outside there.

That is why I keep insisting: We keep on comparing the two concepts as being equal and saying that one is so expensive that we've got to get out of this business because the private sector does it better; the private sector not only doesn't do it better but the private sector doesn't do it at all. The private sector is not concerned two hoots about the community at large. The private sector's bottom line is to make a profit, and if it's not profitable, they will not build it and they will not put money into the community, so to speak. That's why we have clichés of "good corporate citizens."

Hon Mr Leach: That's totally wrong. That's 100% wrong. Let me give you the example right over here in our community, if you would just go over to Gerrard and take a look at the northeast corner of Regent Park, which is being proposed for redevelopment by the private sector, still providing rent-geared-to-income units to the same extent that exists now and integrating it into the community rather than creating a ghetto.

Mr Curling: You see, it get us all over the place. Bridle Path is a ghetto too. Don't let us feel that ghettos are only --

Interjection.

Mr Curling: Let me finish, Mr Minister. How much time do I have?

The Acting Chair (Mr John Cleary): You've got about nine minutes left.

Mr Curling: We've got lots of time.

The Acting Chair: Mr Brown has a question.

Mr Michael Brown: I want to ask a supplementary just on that point, Mr Curling, if you'd let me.

Mr Curling: Go ahead. I was on a roll here, though.

Mr Michael Brown: I know, I'm sorry.

This is where I get a little puzzled, and I was puzzled the other day when you talked about Regent Park. You talk about this new development including rent-geared-to-income housing, which we're not going to build any more. That's where I get confused, because you talked about shelter subsidies.

Hon Mr Leach: Let me clear up your confusion. The complex will be built -- there's lots of rent-geared-to-income units in private facilities now.

Mr Michael Brown: Yes.

Hon Mr Leach: This is a case where we're going to take a publicly owned facility, have it built by the private sector and have rent-geared-to-income units in that private development.

Mr Curling: Let me just pick up from there again. The minister is trying to give the impression that a shelter allowance is something rather new. Rent geared to income in the private sector also could be considered a shelter allowance.

Hon Mr Leach: It's a form of shelter allowance, that's true. Nobody ever said it wasn't.

Mr Curling: So the fact is there's nothing new you're coming up with when you say --

Hon Mr Leach: No, let me tell you what the difference is.

Mr Curling: I'm on a roll.

Hon Mr Leach: I just have to clarify this situation because you're obviously confused about this.

Mr Curling: I'm confused about it?

Hon Mr Leach: Rent geared to income goes to the unit. The money goes to the unit.

Mr Michael Brown: It's not going to happen in Regent Park, is it?

Mr Curling: That may be so, Minister, talk about it goes to the unit. The only slight change here is to tell that individual that instead of solely looking at that unit where you can only rent, you're saying to that individual, and I fully agree with you: "Here is the money itself; you can select within a wider range, and anywhere you go, to live with that allowance you have instead of the unit." I understand all that.

Hon Mr Leach: Okay.

Mr Curling: But I'm speaking about a different concept all together when I say to you that the private sector is not concerned about community living. The landlord would be getting his money anyhow when you have something like, "Here is your allowance, you can go to any of those landlords and rent." The fact is, they are not concerned about the community concept and that's what makes us different: social housing and the concept of government building a community. In the meantime, Minister, your proposal down the road is to eventually take away rent control, so the private sector is pretty happy about that.

I got off at a tangent here. I had wanted to continue that, as I said to you earlier, I don't want you to have blinkers, going down a tunnel and not looking elsewhere, but say, "Listen we want to get out of this bricks and mortar situation, and the concept of community living is completely gone because the private sector is not concerned about it.

Hon Mr Leach: You're certainly not going to tell me that the only people who have an interest in community living are people in social housing. I know that in my community we have a community interest. I'm sure that in your community there's community interest in making sure that your community is well looked after. Whether it's private or social is irrelevant.

Mr Curling: As government and this mandate you are dealing with, those people who need affordable housing -- many times the government contributes to that. This affordable housing accommodation is not provided by the private sector, we know that.

Hon Mr Leach: Many of them are. If you go over to St James Town --

Mr Curling: They would love to provide that in the private sector, but the fact is they don't build for that, they're building for a profit at the top end of the market. Then they're waiting until they saturate that top end of the market before we make allowance for those who are making less money. That's where we come in as a government, to provide for those people access to affordable units. I want you to get that concept that there's going to be a terrible situation as soon as you bring your policy in place, because those people are not able to access.

The point I was making yesterday to you, that even though those people, especially those on social assistance who are accessing the private market -- 21.6% of their income was taken away; then you're asking them to still access the private market. I'm telling you that chaos is going to break out somehow, and confusion and some disillusionment about where our government support is in all of this. I think you're abdicating your responsibility as Minister of Housing --

Hon Mr Leach: Are you making a speech or asking a question?

Mr Curling: I'm making a speech.

Hon Mr Leach: I'd like an opportunity to clarify by example where you're mistaken. I think you would agree that probably the largest social housing complex in Canada is at St James Town, which is just over here at Wellesley, the largest social complex in all of Canada.

Mr Curling: Why don't you tell us something about public housing for Ontario?

Hon Mr Leach: Just wait, okay?

I think you would agree with that. Do you know that three quarters of the buildings in St James Town, the largest social housing complex in Canada, are privately owned? Do you realize that? The private sector owns three quarters of the largest public housing complex in Canada, so don't try and confuse the record by saying that the private sector has no interest in owning social housing; they do.

Mr Curling: But you, Minister, in your budget, and Community and Social Services, and Health, put money into the community, and you're going to pull that out. We know you're going to pull that out and you're not going to give that kind of support. You're talking about shelter allowance and scatter them around more; I'm just saying we must concentrate them --

Hon Mr Leach: You were trying to confuse the record by saying that the private sector doesn't have an interest in providing housing for those who need it, and three quarters of the buildings in St James Town are owned by the private sector.

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Mr Curling: Let me put it this way to you then: The Ontario government is the largest landlord in this province, is that right, sir?

Hon Mr Leach: That's right.

Mr Curling: You're not the private sector. I'm trying to say, what you're trying to do now -- you said, "I'm going to come out of that business and I'm going to give it to the private sector."

Hon Mr Leach: The private sector is already in that business.

Mr Curling: You don't say anything about Regent Park, the people in Kitchener, the people in Ottawa, the people in Guelph, the people all over who need the support of the government --

Hon Mr Leach: And many, many of the buildings in the communities that you've just mentioned are owned by the private sector. As a former Minister of Housing, you should know that.

Mr Curling: My point to you, Mr Minister, is that having taken the position that you will be selling off 84,000 units regardless of what configuration you come up with later on -- that's your intention, that you're going to sell off those units -- that you involve the people who live there. It's not a matter of bricks and mortar, it's their home, and you as the landlord decided, for reasons, that you feel you can get more money out of it, and will be selling their home some time from under them.

I would say to you, before you do that, since you're intending to do that, make sure they are part of that discussion, fully, and not on the fringe. I hope they can look to you as a friend and as a supporter, that you will not sell them down the drain.

Hon Mr Leach: Obviously we're going to involve tenants in any actions that we undertake. I think the example that I indicated of St James Town being owned by the private sector, at least three quarters of it, is a fine example, and I don't see where the tenants of St James Town, for example, should be concerned if -- of the six or seven buildings that are there, four are owned by the private sector -- the other three were owned by the private sector. The buildings are still there. Their homes are still there. They wouldn't be treated or dealt with any differently than the tenants who are in the buildings that are owned by the private sector. Who owns the bricks and mortar is irrelevant.

Mr Curling: They get notice when they have a new boss.

Mr Tony Martin (Sault Ste Marie): I just have a few comments that I'd like to put on the record in response to some of what I heard yesterday and some of the dialogue this morning, for the minister and for the members of the government across the way. I'm just a little disappointed that Morley has left. I don't know where he went.

Mr Rollins: He'll be back in about two minutes.

Mr Martin: He'll be back in about two minutes. Because what I have to say certainly has some relevance to some of the comments he put on the record, as well. We've sat here now for a few days listening to the minister and, granted, he's very clear in a general sense as to where he and his government want to take us around the question of housing, the provision of housing in this province and the part that various stakeholders will play and his concern, or lack of concern, for the impact that these decisions will have, particularly on those who are most vulnerable. Certainly what I've heard is not inconsistent with the approach his government is taking on almost everything across the board as we see life unfold in this wonderful province that we've all had a tremendous stake in developing to this point in our history and which, hopefully, we will continue to have some pride in as the future comes at us.

The concern I have is not in your right, Minister, and your government's right, to do what you think you've been given a mandate to do by the voters on June 8, 1995. I have no difficulty whatsoever in recognizing that you were given a majority of seats in this place and have a right to bring your agenda forward, and in fact make some change in the four or five years you take by way of the term that you choose to govern in, but I do have some concern re the process.

My comments will speak very clearly to some of the comments that Mr Kells made this morning, and it's the issue of the speed at which you're moving, the decisions that are made by this government behind closed doors under the secrecy of cabinet confidentiality and then all of a sudden, boom, one day there they are. And you say to us and to people: "Learn to live with it, because that's the reality of today. We have a very difficult economic circumstance that we're facing, and we have no choices but to do some of the things that we're doing. We don't want to complicate the issue by listening to people who might have a genuine concern or who may have in fact an idea that might be better in the long run."

Mr Kells this morning spoke of the process that we went through to change some of the rules around the situation, and the islands. You'll respect and recognize that, yes, we did get elected, as you did, to a majority government in this place. However, even in making some of the very difficult decisions we made -- I don't know whether you were watching or listening or not, Mr Kells -- but there certainly was great furore around the province around a lot of what we were doing, as there is and will be around what you're proposing to do.

However, the difference is we spelled out very clearly. We first studied the issue. We brought people in on a pre-legislative package, a consultation. You mentioned Mr Johnson's review of the situation at the islands. We laid on the table all that we were going to do, and we allowed for significant public input, both informally and formally, through the committee process of this Legislature, as we moved forward with that.

Yes, we took a stand that to some people was rather controversial but, as Mr Brown, who was here this morning -- he chaired that whole committee -- suggested, the opposition did come and put their comments on the table and were very active and lively in it, and it was reported in the newspapers.

That's part of the process here at Queen's Park. At the end of the day, yes, we had a majority and we moved forward on what we thought was in the best interests of the people that were most directly affected and in the best interests of the province. Now, we have a difference of opinion as to whether that was the right thing to do or not. The process was public and open and I have to say, and I would challenge you to show me differently, any of you in the opposition or on the government side, where it wasn't by agreement of all three parties, where we did not follow the traditions of this place and bring things to committee and have lively debate in the House about them.

The change in venue, the change in approach, is that open consultation, that sharing of information, that detailed document that we all need to look at as you move forward as a government, that not only spells out what it is you're proposing to change and why, and how are you going to do that, but also some information gathered by people who know and have the expertise as to what the ultimate impact at the end of the day is going to be, particularly on those who are most at risk and most vulnerable.

I think, as a province, we've shown ourselves over the last hundred years to be very concerned, to be very civilized, to have a high degree of integrity when it comes to the question of being just and being fair.

I suggest to you that if you don't do that and if you move ahead as quickly as you have shown you have the will to do over the last six months, in some very major and drastic ways, to affect the lives of people in this province in the ways that the decisions you've made is doing, then you can expect that there will be great upheaval out there among the public. The public will find ways to let you know that they don't like, or they're upset with, or they're anxious about some of the things that you're proposing. And to suggest for a minute that it was the record of previous governments that were the cause of, for example, the violence that we had here last Wednesday night, is to be dead wrong. Last Wednesday night was a response to decisions that are being made by this government which violate some of the most basic tenets of the citizens of this province to which they've contributed.

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All of us, from time to time, find ourselves in a position where we have to ask the government for some assistance, whether it be to go to school, whether it be because we've lost our job and we're down on our luck, whether it's because we have to go to a hospital, or so many other myriad ways that all of us from time to time find ourselves at the mercy of the government to try to keep body and soul together, to try to put food on the table for our children, to try to put a house over our family, particularly in our climate where the weather is so violent sometimes. We did previously, or will in the future, contribute as taxpayers; we did participate, we did give of the money that we made, of the resources that we have, of the energy that we have and the ability that we have, so that all of us have contributed.

We have a right to be consulted, we have a right to be part of the process, we have a right, however minimal, to have our say. When you don't give us that right, when you take that away and you violate the contract that is there between the populace and a government that is elected, then expect that things will happen that none of us will appreciate or like, or see as civilized, but people will let you know, and they will let us all know, that they think what's going down is not in the best interest of this province.

So far in the last couple of days, I have not heard anything from the minister that gives me any satisfaction or any comfort that you have thought out what it is you want to do re the question of how you move a program that is so important, particularly to the most vulnerable among us in this province by way of housing, from public ownership to private ownership, and how you move with that to a scenario where there is no more rent control and what impact that will have on the general populace out there.

I hear you and I have no reason to question your sincerity, or that you really think you can in the end bring in a system of private ownership and different rent control that will protect those who are most at risk. But I have to tell you, the track record of government where it concerns these types of issues is not a good one.

I only have to think back 10 or 20 years to a decision that was made by the government of the day, a Conservative government, to move mental health patients out of institutions and on to the streets of our communities. There was a promise by the government at that time that community support programs would be put in place to make sure that none of those people, in moving from the security of the institution they were in to live in community -- which in itself is, I think, a very noble thing to be doing, because I don't think anybody will argue with you that to live in community with the support of family and friends, as opposed to being locked up in an institution, is a very high ideal. But if you don't provide the services that are required to make sure those people who are most sick, who are in need of most support and help get it, then you end up with the situation actually which is beginning to show its head, very clearly and obviously, in the world that we live in today.

I drove up University Avenue on my way to work this morning, and I saw more people than I've seen in the last six years, because I wasn't in Toronto much before I got this job, living on the streets of Toronto, in some of the most difficult weather that we've had in a number of years: little groups of them on corners, sleeping under sleeping bags, and some of them actually in fact freezing to death. And that is because, that is a direct result of, a decision made by a government 10 or 20 years ago, however noble --

Mr Kells: That's second-guessing. That's unfair.

Mr Martin: -- to move people out into the streets and into communities without the supports that they need.

Interjection.

The Chair: Let's direct it to the Chair here.

Mr Martin: Now we're finding them in parks and on street benches and in bus shelters and over grates, because the government of the day did not think out the consequences, did not do the impact study that was required --

Interjections.

Mr Martin: -- and this government is doing the very same thing.

It's doing it when it cuts welfare to people by 22%. It's doing it when they close down group homes for the mentally handicapped in communities like my own, and shifting people back into their homes and into hospitals without the services that they need. And they're doing it in housing.

You're going to do it in housing by moving the very effective and important program of public housing out from underneath the umbrella of the responsibility of government and moving it into the private sector, where profit becomes the bottom line.

You're doing it when you talk about lifting rent control. None of us, I think, has to think too hard to remember the situation we had in this province, particularly in Metro, where most of the people in this province live, in the mid- to late 1980s, when properties were being flipped over like flapjacks on Sunday morning at the church pancake breakfast and poor people could not find decent houses to live in because they couldn't afford it any more.

That's what you're moving to, and you haven't shared with me anything yesterday or today that comforts me in my hunch and my very deep feeling in the gut of my stomach that you're doing something here based on an ideology, based on a theory, based on some thought that if we just turn it over to the private sector, if we just get government the hell out of the way, if we drop the regulations and the rules that were built up over the years, it's all going to work out.

Well, I tell you that it hasn't worked out, and it's not going to work out, and you're going to be hurting people. We already have I think some very dramatic examples of the kind of pain that's going to be felt by people in this province because of some of the decisions that are being made by this government, in such haste and without a full public consultation and without having thought out the ramifications or the impact down the road or without having put in place those very valuable services that will pick up those who will fall through the cracks, and there will be many.

We've had three people die on the streets of Toronto in the last couple of weeks. And yet we have not heard from the Ministry of Housing, which has been charged by the province to make sure that everybody in this province is housed, we have not heard from you one speck of concern. We have not heard from you that you're going to do any kind of a review of why it is that these three people died, of what the circumstance was within which they were living and operating. All we heard was a statement made in estimates when the Minister of Community and Social Services was before us that these people chose -- actually chose -- to live on the street, that it was their fault somehow, that somehow they are responsible for the fact that they froze to death.

Mr Bisson: Unbelievable.

Mr Martin: I think that's quite unconscionable.

So, again, as I did yesterday, I ask the minister if he wouldn't -- for me, so that I can take it back to at least my constituents and share it with them so we can participate as fully as we need to in the very difficult decisions he will make as part of this government over the next few years that will impact directly on them and on their friends and neighbours as services are reduced and programs are changed and opportunities are diminished for people to in fact live a dignified, relatively high quality of life in this province. Would you table for us, Mr Minister, any plans or studies or document that has been developed to this date that will tell us what your both short-term and long-term plan is re the question of moving from public housing to private housing and moving to some form of rent control that is different from what we have today, and what you plan to do to mitigate the damage that will be done against those who are least able to deal with it?

Hon Mr Leach: Hold on a second. Don't I get a chance to respond?

The Chair: Allow the minister to comment.

Mr Martin: Yes, fine.

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Hon Mr Leach: It probably won't take any more than seven minutes.

I'm absolutely amazed that you could make that rambling statement and say that you haven't heard over the last three days any comments that address the issues.

Mr Martin: Just pious platitudes, Minister. Just pious platitudes, that's all.

Hon Mr Leach: We have been talking about rent control. Previously when we were talking, when the issue of the homeless and people living on the streets was brought up, we discussed the policies that we have to house the hard-to-house group in our society. We talked about policies to ensure that there are special-needs projects for those who are coming out of institutions. All of those issues have been discussed. We have talked about rent control and where we're going and what our philosophy is on rent control for hours at a time.

Mr Martin: With no details, Minister. Absolutely no detail -- nothing.

Hon Mr Leach: To sit there and say that there hasn't been any discussion or any of our plans provided to this committee is mind-boggling. I mean, where have you been for the last three days? All of the policies that you mentioned have been talked about in great detail: where we're going with rent control, where we're going with social housing, where we're going on special-needs policy, what our position is with the hard-to-house. All of that has been discussed, and it'll continue to be discussed for the next half-hour, hopefully. But to sit there and say that you haven't heard any details on any of these things is amazing to me.

Mr Bisson: I guess the first question is, Minister, just in response to what we were talking about a little while ago about the list, a very simple question, the new list system that has been changed and announced on January 24, has that information gone to your own government members?

Hon Mr Leach: The change in the procedure on the list that was put in was put in on a pilot project in MTHA on the 29th. It's a process that was originally proposed by your government. It's been talked about with all of the stakeholder organizations.

Mr Bisson: That's not the question. Just so you understand, I haven't got a problem with your change in the list system if you're going to make it better. The question is, have you provided the information about that change to government members?

Hon Mr Leach: To the best of my knowledge, everybody has been advised of the --

Mr Bisson: Okay. Has that information from your office gone to members of the opposition?

Hon Mr Leach: I'm not sure how the distribution took place. Does anybody here have a --

Mr Bisson: Can somebody look into that and give us an answer before the end of today?

Hon Mr Leach: I can tell you who was consulted about it. ONPHA and CHAO, all of the stakeholders were involved.

Mr Bisson: Listen, you don't have an argument with me on that. If you want to make the list better, I think that's great and all kudos to you.

Hon Mr Leach: I'm missing your point.

Mr Bisson: Well, if you haven't figured out where I'm coming from, you'd better open your eyes.

The Chair: I'm not quite sure, either, what list you're speaking about.

Mr Bisson: What I'm asking is, there's been a change in policy on how the lists are operated on a pilot project here in Toronto. That affects the ability of all members to do their jobs, especially those people in the Metro area who deal with Toronto housing. The simple question is, have government members got a copy of those changes? The answer was yes. And I'm asking, have opposition members got that information? I can tell you as the critic for my party on Housing I have not, and I would wonder if opposition members have got that information. It's a very simple question.

Mr Burns: As far as I know, the ministry hasn't systematically mailed this out to all members of the Legislature. There are people in Toronto, in constituency offices, in community settings, that pay a lot of attention to MTHA and actually keep track of the rule book. They in all likelihood have got it.

Mr Bisson: In other words, no, it hasn't been sent out. I would only say to the minister that you know as well as I do housing is a big issue that we have to deal with in our constituency offices and it would be appreciated if members were to get that kind of information so we can inform our constituents of changes and deal with that. I think my rights as a member, quite frankly, if I haven't got that, have been done away with if that information has been given to the government and not been given to the opposition. But for another time.

I've got a couple of very short questions and they require yes or no answers. Do you own any businesses, Minister, that have anything to do with owning or controlling or being a partial owner in an apartment building in the province of Ontario?

Hon Mr Leach: I'm sorry. Say that again.

Mr Bisson: Do you own shares in any company that might be a participant owner in a rental unit here in the province of Ontario?

Hon Mr Leach: No.

Mr Bisson: Do you own any shares in a numbered company that might be owners in an apartment building in Ontario?

Hon Mr Leach: No.

Mr Bisson: No to a numbered company as well. Do you have any relationship with Greenwin Property Management?

Hon Mr Leach: Do I have any relationship?

Mr Bisson: Do you have any relationship with Greenwin Property Management?

Hon Mr Leach: Personally, no. I think my constituency office might be located in a building that's owned by them.

Mr Bisson: You think that they might be. Okay, I won't go down that path. But you are saying personally you have no relationship with them whatsoever.

Hon Mr Leach: No.

Mr Bisson: Did you ever take any campaign contributions from Greenwin?

Hon Mr Leach: I can't recall. I wouldn't want to say yes or no. I would have to check the list.

Mr Bisson: Okay, can you provide us with an answer to that later? All right, back to the list thing. I've got that on the record.

I just want to say to the minister, if you've made changes to the list system, that information should be disseminated to all members of this assembly, especially those members who are affected within the area of the housing authority that's been affected, because as you well know, Minister, we do a lot of work in constituency offices with housing issues, and if the government is making changes to policy, we need to know. And I would like to say to the Chair directly that I think my rights have been violated on the part of this government if it's provided that information to government members and not to members of the opposition and I'd like to know what happened.

Hon Mr Leach: Policy procedures and statements are issued by the ministry on a regular basis. This is a policy that would be put out in a very similar manner as all other policies. There's been absolutely no attempt by anyone at any time to withhold any information from you or anyone else in this Legislature.

Mr Bisson: Okay. Back on the last question, in summation, you're saying, as Minister of Housing and the member for your riding, that you have no relationship whatsoever with any company, numbered entity, that has any kind of --

The Chair: Mr Bisson, may I --

Mr Bisson: I have the right to ask the question.

The Chair: I know. As to entertaining your question at length, I just wonder what is the relation, what this has to do with estimates.

Mr Martin: What do a lot of his questions have to do with the estimates?

Mr Bisson: Which question, question 1 or question 2?

Hon Mr Leach: Mr Chairman, I just want to ensure that I have an opportunity to get my response on the record.

The Chair: Yes. I notice we are just about finishing off on your estimate time, but I was just wondering what direction you were going to go. However, I want to give the minister a moment to respond, and I'd hope that we don't pursue that kind of line of questioning unless we can find some relevance to it in estimates.

Hon Mr Leach: I can tell you right now that I have absolutely no interest in any numbered company of any kind on any issue, nor do I have any personal interest in any private company at this point in time.

Mr Bisson: Okay.

Hon Mr Leach: Nor have I had.

Mr Bisson: Thank you very much.

Mr Joseph Cordiano (Lawrence): I have a question. Maybe it's not a question. Maybe it's more of a rant, but you're used to it after three days of this committee.

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Hon Mr Leach: Take half an hour.

Mr Cordiano: I think we're coming to the end; we have half an hour left. After three days of discussion in this committee and after having been on the job for six months, you must have a pretty good feel for what you're required to do and what you should be doing as Minister of Housing. Maybe you could describe for me what you think the objectives are of your mandate as minister.

Hon Mr Leach: To provide good government.

Mr Michael Brown: That's reasonably broad.

Mr Cordiano: It's a start.

Hon Mr Leach: We might narrow that down as we go along.

Mr Cordiano: Let's ask, then, what you think your responsibility is with respect to public sector housing, private sector housing, the average citizen out there and how he can expect that you would look after his interests with respect to housing.

Hon Mr Leach: What we want to do is ensure that all citizens of the province of Ontario receive equal treatment; that we provide policies to meet Ontario's needs for affordable, safe, secure and suitable homes; that we achieve effective production and management of housing; that we strengthen consumer protection and empowerment; that we support economic renewal and prosperity; that we ensure building and housing quality; that we promote community responsibility for housing.

Mr Cordiano: Production of housing -- you said something about that. What did you mean by that?

Hon Mr Leach: To ensure that we have policies in place, and I think that Bill 20 is before committee in the room just next door. There are a number of clauses in Bill 20 that promote the production of housing by simplifying procedures, ensuring that developers can get their projects under way.

Mr Cordiano: Let's assume that instead of taking 18 months or two years to get through the development process, you can now do it in six months. Consequently, the developer then gets his project to market in that time or relatively shortly after that period of time, but the fact of the matter is that there are no people buying homes out there because consumer confidence is down. Other factors enter into that equation, along with regulatory burden. So you're doing something about regulatory burden and you believe that will improve the chances of purchasing taking place by consumers.

Hon Mr Leach: Yes. The reason for that, of course, is that if you can streamline the procedures and develop a policy that allows a developer or a home builder to get his product to market in a shorter period of time -- time is money. Right now you have developers that sit on large tracts of land, paying high interest costs while taking two and three years to get through the system. If we can shorten that time frame down, it reduces their costs, which would reduce the cost of providing the product.

Mr Cordiano: Let's assume that's a certain percentage of what's factored into the equation, as you well know and I know. Now you're rectifying that. Let's take that as a given. What about the other factors? What about other factors that would address a purchasing decision by a consumer? What are you doing with respect to those factors?

Hon Mr Leach: In developing policies and implementing, putting through legislation, that makes it easier for the consumer to afford --

Mr Cordiano: How?

Hon Mr Leach: By providing good policies that ensure that happens. I've lost your line of questioning.

Mr Cordiano: No, no, what I'm saying is, you're speeding up the time for approvals. We understand that. That's probably a good thing. I agree with that. That will make it less expensive than otherwise would be the case.

But there are at least three or four other variables that have to be dealt with. Do you feel that it is within your responsibility to deal with those or do you simply say: "Hands off. Now we've done enough and the rest is up to the marketplace"?

Hon Mr Leach: As members of cabinet, that we work collectively to ensure that we try and increase public confidence, that we try and decrease the cost of providing --

Mr Cordiano: How? That's what I want to know. What are you doing?

Hon Mr Leach: Through policies and legislation.

Mr Cordiano: What policies and legislation? What are you doing to do that?

Hon Mr Leach: Bill 20 is an example.

Mr Cordiano: We've dealt with that. That's one factor. What about the other factors?

Hon Mr Leach: Do you want to go through all the good things that were included in Bill 26?

Mr Cordiano: I want to know what you're doing. I just want to know what you're doing as a minister.

Hon Mr Leach: Okay, what are we doing so far? Let's see what we've done to date. We've got ourselves out of the boondoggle of the co-op housing business, which is going to be a major benefit to the citizens of Ontario, by reducing tens of thousands, hundreds of thousands of dollars in subsidy.

Mr Cordiano: How are you doing that if you're not selling the units? You're not selling very many units. You're maintaining the subsidy.

Hon Mr Leach: We stopped building any more.

Mr Cordiano: But it's costing you $856 million, by your own admission the other day. You said that.

Hon Mr Leach: Yes. By getting ourselves out of the program that the previous government got us into, we'll be reducing our costs over the next five years by in excess of $750,000, just by getting out of that one program alone.

Mr Cordiano: I don't understand, Minister. It's costing you $856 million in subsidy levels --

Hon Mr Leach: And if we had proceeded with the projects that were in the pipeline --

Mr Cordiano: So you're saying you're saving dollars you would otherwise have had to spend, but those are not real dollars that we're spending.

Hon Mr Leach: If we hadn't taken appropriate action --

The Chair: Could we just have some quiet here: one meeting. Those who are having meetings can maybe have their private conversations outside so we can just finish off our next 20 minutes in nice style, please.

Mr Cordiano: Minister, the fact of the matter is that the housing industry is in a moribund state. There are very few people buying homes in the marketplace. The numbers are significantly down, and I don't see what you're doing to improve that. I don't see how first-time home buyers, for example, will be helped by what you're doing, other than speeding up the approvals process, and I don't see how you're making it more affordable for those first-time home buyers to buy those homes.

Mr Kells: That's not his job either.

Mr Cordiano: Now we're getting to the point. That's what I asked him: What is your mandate and what do you see as being your responsibility?

Hon Mr Leach: The actions that we are taking will achieve that or will help to achieve that. Obviously, they won't achieve it with the one policy, but if you can introduce policies that allow a builder to put a house on the market at a lower price, obviously that goes to encouraging --

Mr Cordiano: Yes, but you're assuming you're going to do that.

Mr Kells: Joe, 20% of a house's carrying costs is waiting for the approvals.

Mr Cordiano: Yes, but that was in the 1980s.

Interjections.

The Chair: Address your discussion through the Chair.

Mr Cordiano: Hold on a second. Interest rates are much lower, carrying charges are much lower, so that factor becomes a much smaller factor. That is not the only reason. There are other reasons. People simply don't have the purchasing power they had. People don't have the confidence levels. There are fewer first-time home buyers who meet the affordability criteria. People are not in a position, as they probably were before, to be able to afford to buy that first home.

You haven't done anything to recognize that, other than to speed up the approval process -- you're dealing with Cornell, which is something that was there before and is coming on the market. But at the same time, you're not recognizing that there are far fewer people who can afford to buy that first home than ever before, and you don't see that as your responsibility. That's all I wanted to know. You don't see that it's your responsibility to go beyond that.

Hon Mr Leach: Certainly, as a government it's our responsibility and we have gone beyond that. What we're doing is improving the economic climate by providing good government.

Mr Cordiano: The jury's still out on that. All I see is devastation and despondency out there in the economy.

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Hon Mr Leach: Look for the silver lining.

Mr Cordiano: My point is, you're doing precious little to improve the situation for first-time home buyers.

Interjection.

Mr Cordiano: Come on, you certainly are.

Mr Kells: Your opposition friend is saying we're moving too quickly.

The Chair: Let's have this discussion directed to the Chair.

Mr Cordiano: I'm directing my remarks through the Chair. I'm just looking at the member opposite.

Mr Kells: What kind of answers do you have to hypothetical questions, anyways?

Mr Cordiano: I want a definitive answer in the form of what the minister is prepared to do, what your government is doing. You're doing nothing to make it more affordable for people.

Mr Kells: That's not being constructive to what we're doing here.

Mr Cordiano: I think it is. I think that we're trying to get at --

Mr Kells: Just ask some questions.

Mr Cordiano: If what you're doing is simply hoping on a whim and a prayer that the private sector will build --

Interjection: A whim and a prayer; that's exactly it.

Hon Mr Leach: Okay, let me tell you what we're doing.

Mr Cordiano: -- apartment rental stock. The private sector will solve the problems simply because you're making it easier to get approvals, which I agree with, but beyond that you're not doing anything else and you're even planning to sell off some units.

Hon Mr Leach: Let me tell you exactly what we propose to do. We're working with municipalities and the housing industry to promote housing and communities that are affordable and which make more efficient use of land and public resources. That's Bill 20. We're simplifying the building and land use regulatory system; we're developing a strategy for existing buildings to protect public health, safety and ensure adequate maintenance, address rehabilitation needs and reduce the consumption of energy and other resources.

Mr Cordiano: It all sounds good. It's nice, bureaucratic language.

Hon Mr Leach: Did you want the answer or did you not? I mean, you asked the question.

Mr Cordiano: I'm sorry, go ahead.

Hon Mr Leach: We're working with other ministries and other levels of governments and communities to develop community-initiated responses to meet housing needs of the disadvantaged people and those not suitably housed.

Mr Cordiano: How can you say that when you've cut budgets drastically?

The Chair: Let him finish.

Mr Cordiano: Sorry, I thought he was finished.

Hon Mr Leach: We're working to provide the corporate infrastructure necessary to achieve the key business directions of the Ministry of Municipal Affairs and Housing and OHC and to help accomplish the government's restructuring, fiscal and public service priorities. How about that?

Mr Rollins: You'll be busy all winter, Al.

Hon Mr Leach: God, no wonder I'm tired.

Mr Martin: In four years you'll have it off by heart.

Mr Cordiano: What I'm saying to you is, you simply have not addressed the real concerns of affordability. You're simply not doing that, because quite frankly -- I don't have the estimates in front of me, but you're cutting back.

Hon Mr Leach: Remember that we're dealing here with the estimates of the previous government as well.

Mr Cordiano: Yes, no question about it, but you're cutting back. Projecting it forward, you're cutting back dollars in terms of what's necessary out there.

Hon Mr Leach: Yes, we certainly are, and we have to pretty soon. We've got the province in a position where we're damned near bankrupt. We're $100 billion in debt, paying $9 billion a year in interest payment. The largest single payment we make is the interest on the debt.

Mr Cordiano: I could understand that.

Hon Mr Leach: That's a result of the policies of the free-spending days of the former government.

Mr Cordiano: Hold on a second. I have the floor here. Why are you increasing the debt by $20 billion over the next four years?

Hon Mr Leach: Because we have to pay the interest on the damned bills that you ran up in the five years you were in power.

Mr Cordiano: No, you don't. You don't increase the debt by $20 billion. Interest --

Interjections.

The Chair: Order, order.

Mr Cordiano: Interest payments account for far less of a percentage than you're indicating.

Hon Mr Leach: We took public spending from $26 billion to $56 billion in a very short period of time. It's costing us a lot of money to service that debt. I think we all have to recognize this.

Mr Cordiano: Try and take the ideological blinders off and be a little more practical about this.

Hon Mr Leach: Look, when the largest single payment you have is the interest on the debt, there's a problem. When you're spending a million an hour more than you're taking in --

Mr Cordiano: Minister, do you not think it would be far more effective --

The Chair: One at a time.

Mr Cordiano: Just a minute, I have the floor.

Hon Mr Leach: No, I don't think you did have the floor. I have the floor.

The Chair: Order, order.

Mr Cordiano: I'm asking a question.

The Chair: Let's get some order into these proceedings.

Mr Cordiano: Do you not think it would be far more effective at this point in time if you were to offer some incentive to first-time home buyers by way of a reduction and perhaps some --

Mr Kells: You could take the GST off it.

Mr Cordiano: Why not encourage the federal government to do that? Why not do that? Why not take the provincial sales tax off materials that go into the construction of those homes?

Mr Kells: Take it off land.

Mr Cordiano: Take off some of the additional costs.

The Chair: Mr Cordiano, could you hold on a second, please. If this continues, I may have to have a half-hour recess.

Interjections.

The Chair: I think the tempers are raging so high that I may have to do that. So let us proceed and see if we can complete these estimates by 12 o'clock. Mr Cordiano.

Mr Cordiano: Thank you, Mr Chairman. The fact of the matter is, I think it's appropriate at this point in time, given the market conditions, for you to stimulate that market, and you're not doing it directly. All of these policies that you've pointed to are long term in nature, will take some time to bring some measure of greater affordability into the marketplace. Quite frankly, you're not doing anything over the short term to stimulate activity, when I think it could be far more effective in terms of both your revenue-generation capabilities and, as well, making it far more affordable for those first-time home buyers to get into the marketplace. You're doing nothing about that.

You're doing nothing, on the other hand -- and my friends to the left of me would advocate you continue to build non-profit. I don't think that's the way to go. Quite frankly, I'm glad you've taken the decision to maintain the stock that's there and that you're not going to sell it off holus-bolus, at least I understood you said that, and furthermore, that you would try and upgrade the additional housing stock we have in Ontario Housing, which is badly dilapidated and badly in need of repair.

Hon Mr Leach: Agreed.

Mr Cordiano: You would not argue with me on that.

Hon Mr Leach: Certainly not.

Mr Cordiano: Given that we have such tight vacancy rates, particularly in Metro, what are your options? What are you doing to increase the supply? These are long-term initiatives that you've undertaken. They will take some time to work their way through the system. In the meantime, you're not increasing the supply. It's not significant enough over the short term to make any difference to people who are looking for accommodation, for people who are looking to buy their first home. I don't think you could deny what I'm saying.

Hon Mr Leach: You're not going to increase the supply as long as we have the policies that are in place at the present time. I'm talking about all of the issues that we've talked about over the last several days, getting additional rental stock on the market, for example.

Mr Cordiano: How? You say that, but it's not --

Hon Mr Leach: First of all, you have to deal with rent control. Then you have to deal with the tax situation, for example, both the property tax issue --

Mr Cordiano: Ah-ha, now we're getting to some real meat.

Hon Mr Leach: -- and deal with the issue of a tax on building materials, for example.

Mr Cordiano: When are you prepared to do those two things? Give us an indication of when you're going to bring in a new rent control act or some other form of decontrol, which is what you're probably going to call it?

Hon Mr Leach: We said that we would have policies in place this year.

Mr Cordiano: This year? The spring session you're going to introduce something?

Hon Mr Leach: We want to consult with a number of the stakeholders that are out there to make sure that the policies we put in place are better than the policies that are there now, and we've indicated that we wouldn't make any change to the rent control system until such time --

Mr Cordiano: Okay, so you're going to lift rent controls by spring. What's what I'm going to be able to say to people?

Hon Mr Leach: Who said that? You said that. I did not say that. I said that we are in the process of developing policies, that nothing is going to happen to the current rent control system until we're confident that we have a system in place that will provide protection for tenants. I've repeatedly said that over the last two or three days.

Mr Cordiano: You've said "this year." I'm saying, give us a better time frame. Spring? Fall? When is it this year? You have to introduce the legislation in that time frame.

Hon Mr Leach: As soon as we're confident that we have a policy in place that provides protection for tenants.

Mr Cordiano: Okay, so some time this year you're going to lift rent controls. We can agree on that. In addition to that, you're talking about dealing with the property tax situation in Metro, the GTA. We can assume you're going to bring in legislation by the fall as well, or the spring? What is it?

Hon Mr Leach: On the GTA?

Mr Cordiano: You said we'll deal with the property taxation question.

Hon Mr Leach: What I was just talking about was the inequity of the property tax on apartments via-à-vis the property tax on single-family dwellings.

Mr Cordiano: Right.

Hon Mr Leach: It's about four times the amount for an apartment building as for a single-family dwelling.

Mr Cordiano: Okay, so you're going to do something about that within this year, you've said.

Hon Mr Leach: Don't put words in my mouth, Joe.

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Mr Cordiano: I'm trying to understand what you're saying.

Hon Mr Leach: No, you're not. You're trying to put words in my mouth. I didn't say that we were dealing with that issue. I said there are issues that have to be addressed.

Mr Cordiano: I understand that. This is why I was very careful to point out to you that we're talking about the short term. We're talking about the short term because there are thousands of people out there who are either hoping to buy something or hoping to get accommodation that's decent because the vacancy rates are, once again, extremely low.

Hon Mr Leach: Why are they extremely low? Because nobody is building any new stock, and they're not building any new stock because of the inadequate policies that are in place at the present time.

Mr Cordiano: Fine. So you're telling me you're going to lift controls this year --

Interjection.

Mr Cordiano: If I may, you're going to lift controls this year, and in addition to that --

Hon Mr Leach: There must be a ventriloquist in here because I never hear myself saying those things.

Mr Cordiano: -- you've indicated that you will deal with the property tax differential between apartment buildings and homeowners, the differential being four to one, five to one. Do I take it that I've got it correct now, what you're saying? I want to be clear about that.

Hon Mr Leach: Would you mind repeating that?

Mr Cordiano: We're talking about the differential in property taxation between an apartment building and homeowners and what they pay.

Hon Mr Leach: Yes.

Mr Cordiano: The difference being a difference of about four or five to one in favour of the apartment buildings, and it's unfair.

Hon Mr Leach: It depends on the community you're in, of course. It's about four to one in the city --

Mr Cordiano: We're talking about the GTA, Metro.

Hon Mr Leach: Yes. In Toronto, the City of Toronto.

Mr Cordiano: Now, this is what I'm saying to you. Specifically, you've said that you will do something about that this year, because we're talking about doing something on behalf of those individuals who want affordable accommodation. You're saying in effect to the world, any one who would listen, "I'm going to take action to do something about this problem." I'm asking you when, and you have indicated to me you will do this this year.

Hon Mr Leach: What we're doing right at the present time is that the GTA task force has tabled its report. We have that report out for consultation. We've appointed a panel to hold public meetings to ensure that we get input on all of the recommendations in the GTA task force report, which include property tax assessment issues and reform.

Mr Cordiano: Right.

Hon Mr Leach: When we have an opportunity to consult with all of the stakeholders in the GTA and allow for public meetings to ensure that we have input from all of the stakeholders, we will make decisions on the recommendations that are in the report. If the recommendations in the task force are supported generally, we would be in a position to bring in legislation later this year, hopefully, so that we can resolve this issue in time for the 1997 municipal elections.

Mr Cordiano: You agree with the Golden commission's recommendations in terms of pooling taxation and you agree with the net result that falls out of the recommendations?

Hon Mr Leach: I didn't say I agreed.

Mr Cordiano: Minister, we're talking about action that you're going to take, so don't look askance and say, "Well, this guy, where is he coming from?"

Hon Mr Leach: Mr Chairman, on a point of order: I did not say that. I did not once say that I agreed with the recommendations. I said we have the recommendations out for consultation, for public input, and when we receive that public input and consultation, then we will make a decision on the recommendations in the report.

Mr Cordiano: Then you will move to reform the property taxation system that we have currently in place in Metro and the GTA.

Hon Mr Leach: The property tax system that we have in the GTA does not work at the present time, and I think everyone agrees to that.

Mr Cordiano: But that's what I want to understand. You are prepared to take action to reform the current system. You are making a commitment to do that.

Hon Mr Leach: This government is prepared to take action. That's more than the last two governments were prepared to do.

Mr Cordiano: So what we can expect at some point in this year is that the property taxation system will be different from the one we have today.

Hon Mr Leach: I sure hope so.

Mr Kells: Pretty good, Joe. You're getting there.

Mr Cordiano: The Minister would make it easier for himself if he would say that at the beginning. I just want to know your level of commitment. You're going to make those necessary changes?

Hon Mr Leach: We are going to take whatever action is necessary to resolve the property tax assessment problem in the GTA.

Mr Cordiano: Okay, good. Thank you.

Mr Bisson: What a kettle of fish that's going to be.

Mr Michael Brown: These are just questions of information. How many public housing units will be coming on stream --

Interjections.

Hon Mr Leach: I'm sorry, I can't hear.

The Chair: May we have some order, please.

Mr Michael Brown: How many public housing units, whether co-op, non-profit, whatever, will actually come on stream this year?

Hon Mr Leach: There were 113 projects approved that are currently under construction. The majority of those will come on stream this year. I'm not sure how many units were involved in those 113 projects. That also included 13 projects for people with special needs.

Mr Michael Brown: Could we get the number of units?

Hon Mr Leach: Could I call on staff? Do we have the number of units that were included in those 113 projects?

Mr Chiesa: There are roughly 6,000 units in total that are at various stages of completion. Some will be completed this year, some may be completed next year, some were completed in 1995. So it varies. If you want the specifics as to when they will be completed, we can provide you that.

Mr Michael Brown: Most of them, though, will be within the two-year time frame.

Mr Chiesa: Yes.

Mr Michael Brown: How many units historically have come on the market in the last five years in public housing?

Mr Kells: Some 88,000 or 90,000.

Mr Michael Brown: No, each year.

Hon Mr Leach: I'll ask the deputy to respond to that.

Mr Burns: In 1992 and 1993, both years, it was between 10,000 and 15,000, but in 1994 and 1995 it was in the order of 5,000 or 6,000, I think. It will drop again to probably somewhere between 3,000 and 4,000 this year as the residual of the program is completed.

Mr Michael Brown: Do we have numbers on how many private sector units were built in the same period of time? I'm just trying to find out how many units came on stream in the province year by year so that we have some sense of how many units we're going to --

Mr Burns: I think the total volume of housing starts in Ontario, including the numbers that I just gave you, was in the order of 55,000 a year, 60,000 a year, for the last three or four years.

Mr Michael Brown: But that would include the single detached home.

Mr Burns: Yes, that's all dwellings.

Mr Michael Brown: Do we have a handle on rental units that would come on stream year by year?

Mr Burns: Private sector rental units in the last few years have tended to run around 1,500 units a year.

Mr Michael Brown: Does that include the so-called basement apartment?

Mr Burns: No.

Mr Michael Brown: Do we have any idea of how many of those there are in the province and whether they've been increasing or decreasing, or is that in never-never land, beyond statistics?

Mr Burns: By and large, most secondary suites inside single-family dwellings are created without a building permit and it is a building permit that's used to track the housing start system. I think the universe estimate for secondary dwellings in Ontario is in the order of 100,000. Anne probably has the whole --

Ms Anne Beaumont: Our estimate was that we were looking at approximately 100,000 that were illegal at the time that legislation was changed last year, but in addition to that, there were the legal ones. So you're probably talking of something like 140,000.

Hon Mr Leach: Mr Chairman, I notice that --

The Chair: Don't anticipate me, Minister.

Yes, we have come to the end of the interchange of estimates for the Ministry of Housing. You were saying something, Minister?

Hon Mr Leach: I wanted to thank you, Mr Chairman, for conducting the estimates process. I want to thank all the members of the committee for their input into the process. There has been some interesting and lively debate. I know that everybody is very sincere in the positions that they take.

Mr Bisson: Including you, Minister.

Hon Mr Leach: Including myself. I would like to be included in that category. I think everybody in all parties and at all levels of government, and certainly in this committee and the entire Legislature, wants to ensure that the best interests of the citizens of Ontario are always paramount in the actions that we take. I think the process that we've undertaken here over the last two or three days is part of that process. So again, members of the committee, thank you very much for your input. Back to you, Mr Chairman.

The Chair: Let's see if they're going to pass these votes first, Minister.

That, as I said, is the end of the Ministry of Housing estimates for 1995-96. We'll proceed now in taking the vote.

Shall votes 1601 through 1604, inclusive, carry?

Carried.

Shall the estimates of the Ministry of Municipal Affairs and Housing carry?

Carried.

Thank you, Minister, and your excellent staff. I say that with a lot of emotion and passion too, because I have seen the same group of people over the years, very loyal to the cause, and to the members who have participated, the Conservatives, the NDP and the Liberals.

We stand adjourned until 1:30, when we come back for the Ministry of Transportation estimates.

The committee recessed from 1200 to 1331.

MINISTRY OF TRANSPORTATION

The Chair: We'll begin the estimates for the Ministry of Transportation. Minister, welcome. To lay out the rules, it's 15 hours of estimates for the Ministry of Transportation; the minister has 30 minutes to make opening remarks; the opposition has 30 minutes to respond; and then we open it up for our usual discussion.

The minister has a handout of his opening remarks. We will ask the minister to proceed while we get copies. I understand that the GO people are also here from the Ministry of Transportation. I worked with GO when it started, so I have close connections with GO Transit.

Minister, you have 30 minutes, sir.

Hon Al Palladini (Minister of Transportation): Thank you, Mr Chair. Good afternoon, committee members, honoured guests.

The Harris government was elected to carry out the Common Sense Revolution. In the past eight months, we've shown that we are prepared to make the hard decisions. We are delivering on our commitments to cut spending, change the way government works, focus on core businesses, and bring prosperity and hope back to Ontario.

I have several people here from the ministry with me to help explain our plans. I want to talk about several issues today. I'll start with our economic situation, then I will outline what the Ministry of Transportation does and how it fits into the government's general spending strategy. This will show you our priorities for Ontario's transportation system.

Our first job as a government, and the voters' top priority, is to get the province's books in order. That's exactly what we're doing. And we're fixing things so that taxpayers feel the government is working for them again, not the other way around.

We knew from the start that Ontario's finances were in bad shape. The provincial government was spending twice as much as it had been a decade earlier. It was spending $1 million more an hour than it was taking in. Ontario's debt stood at $100 billion. The cost of financing it was eating up $9 billion a year. Clearly, this situation couldn't continue. Things were critical. That's why we acted so quickly and so decisively.

On July 21, less than a month after our government was sworn in, the Finance minister announced $1.9 billion in spending cuts. Then, on November 29, we released an economic statement with further steps to bring spending under control. These measures will reduce our government's spending on its own operations and administration by a total of $1.4 billion by the end of 1997-98. As a result, this year's deficit will be $9.3 billion, almost $2 billion less than if spending had continued in the old way.

But spending reductions are not enough. In the next four years we will reshape government so that it learns to live within its means. This is how we will reduce the burden of debt hanging over the head of every taxpayer in the province. That is where we're cutting, and why. Now I want to show you where we're investing.

Our government plans to invest about $3.4 billion in capital spending in 1995-96, and that investment quite literally helps keep the province moving. It keeps our roads, highways and bridges well maintained and safe for Ontario's seven million licensed drivers, and it gives shippers the kind of transportation network they need to be competitive.

The ministry's plan for 1995-96 called for about $1.8 billion in capital spending. Traditionally, this money has helped pay for everything from culverts, bridge decks and local airports to transit, municipal roads and provincial highways.

But the spending crisis demanded a change, so right from the beginning last summer we brought in spending constraints. These constraints force us to choose only the high-priority areas for spending where there is the greatest economic payback, and constraints force us to concentrate on the areas that benefit the largest number of people, from commuters to truckers.

For example, we are concentrating on the rehabilitation and maintenance of our highways now. The longer you go without doing this kind of routine work, the more it will cost you to maintain roads in the long term. With our approach, we can avoid having to rebuild completely in the future.

When times are tough, you have to spend only where the need is the greatest. Let me give you some examples. It's been obvious for years that the greater Toronto area, Hamilton and Ottawa all needed new highways. In the GTA it was Highway 407, for Hamilton it was the Red Hill Creek Expressway, and for Ottawa it was the completion of Highway 416. I'm pleased to report success on all fronts.

The 407 is going ahead right on schedule. The province and its roadbuilding industry have learned a lot from the Highway 407 project. Congestion on the 401 through Metropolitan Toronto and the GTA is a major economic drain, costing $2 billion a year. Highway 407 will go a long way to fix that. When it opens later this year, it will send the strongest possible signal that government and businesses can achieve great things together in Ontario. Again, everyone benefits. Businesses and travellers moving through the greater Toronto area have a new, low-cost route to move people and goods, much sooner than they would have otherwise.

We also came to office with rock-solid commitments to build Red Hill Creek and 416 south, and we are following through on those commitments now because we understand that they're critical. We will invest $20 million a year for the next five years to build Red Hill Creek Expressway. Highway 416 south is a $127-million project partly funded by the federal government. It will be finished by the year 2000, providing a vital link between Highway 401 and the nation's capital, and, as the federal minister said when we met to sign the agreement in December, we're doing it in a way that respects fiscal reality.

All three projects are important to their regions. They will help strengthen their local economies and boost private development.

I want to turn now to the way the ministry itself works. To help fulfil the government's mandate, MTO reviewed all its businesses and drew up its own blueprint for change, based on the Common Sense Revolution. The ministry asked: Which activities and services should we continue to provide and which ones should we let go? Who can manage those services in the most efficient, cost-effective way? How can the ministry itself operate more efficiently? The goal was, and is, to identify programs, services and activities that are clearly in the public interest and to clearly define the ministry's role in those areas. Our review gave us the information to make decisions for the future, and it will change the way MTO works.

Historically, the ministry has been involved in every facet of the design, construction and maintenance of Ontario's transportation system. Staff was closely involved in almost every aspect of a project, from the temperature of the asphalt used to build highways, to arrivals and departures at local airports. MTO took a "father knows best" approach to working with contractors and partners.

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Today, everyone understands the need for new approaches, new ways of doing business that focus on increasing efficiency and effectiveness. People may be comfortable with the old ways of doing things, but tough times demand smarter work and getting the best value for each dollar spent.

The ministry will change how it works. It is moving away from doing the job itself to managing others who can do it just as well, if not better. It's going to stop rowing and start steering. It will focus on outcomes and the best way to achieve them.

That means setting standards, letting contractors decide how to meet them, and then measuring the results and holding those contractors accountable for the quality of their work. There are many benefits to doing business this way. For one thing, it focuses government on governing and allows business to do what it does best.

MTO is also changing the way it administers construction contracts. It's making the process simpler and more businesslike. As well, in some cases we are moving to larger contracts, contracts that cover most or all of a particular project instead of this bridge or that off-ramp. We can no longer afford to tender hundreds of small contracts and have ministry staff out there every day, getting involved in every detail.

The ministry is exploring many options to get the job done even more quickly and efficiently and at the lowest cost. But it's important for you to know that MTO will continue to set standards and hire qualified contractors. The change will come in the relationship with those contractors. All kinds of new work arrangements are possible. I've already talked about some of them; many others are in the works. But it will definitely mean that contractors must take more responsibility for the job they do -- and remember, responsibility cuts both ways. Yes, contractors will have more freedom, but they will also have to live up to their full potential.

When it comes to creating a more positive climate for investment, often the best thing government can do is just get out of the way, and in some cases, that's exactly what we're doing.

Our approach to shortline rail is a good example. Our government has changed the law to make it much easier to set up a shortline operation in Ontario. We have removed or reduced 40 years' worth of regulation and red tape. Short lines can offer a good alternative to abandonment. They offer lower costs and greater flexibility. In many cases, they can provide a tailor-made rail solution to a local shipping concern.

I can point to the success of the Goderich-Exeter railway in southwestern Ontario. In its first two years, it almost doubled the number of loads it carries. That means more than $1 million a year in business to the town of Goderich. Our new shortline rail is a perfect symbol of our commitment to create a strong business climate in Ontario. It represents a major shift in how MTO works.

In much the same way, our relationship with the municipality is evolving. In his November 29 economic statement, Mr Eves announced new block funding arrangements for municipalities. The $1-billion municipal support program includes funding that used to be allocated to municipal roads and to maintenance work on highway connecting links. For years, local governments have wanted freedom and flexibility to make their own spending choices; they want to be able to use more efficient ways to deliver programs and services. The municipal support program gives them that and more.

As municipalities take on larger roles in managing their own transportation, the province will give them control over many provincial highways that now serve mostly local purposes. This will mean that municipalities can be more flexible in their land use and development decisions.

These changes can't happen overnight. To help ease the way into this new block funding system, we established a $100-million transition fund. The fund will let the government meet its outstanding commitments. These commitments include some projects that are already under way: the Red Hill Creek Expressway, funding for joint projects with the federal government, and investment in all the projects deferred last year.

That's one place we're saving money. Another is winter maintenance. There has been a great deal of discussion about winter maintenance this year, and for good reason. In many parts of the province this winter has been especially bad. We have changed the way we manage the shifts for winter maintenance. We have found efficiencies not by slashing an essential service but by using the best skills, people and equipment in the business and using them more efficiently.

I want to be very, very clear about this issue: We have not compromised the safety of the people who drive our highways and we will not do so. We will also never gamble with our industries' ability to get their goods to market. There has been some misunderstanding about our commitment to winter highway safety, so let me say this as clearly and as strongly as I can: We are doing, and will do, whatever it takes to meet our obligations to keep the roads clear and safe this winter and every winter. The ministry will continue to meet its standards.

We've changed to be more efficient in several areas. That means, for example, rationalizing road patrols and only bringing in drivers when we need them instead of having them on call when there was little or no work. And we've been able to deal with whatever Mother Nature has dished out this year. I'll give you an example.

The area of Sault Ste Marie got six feet of snow in the first 10 days of December. In just two days we got the roads clear enough so the area could get back to work. The same amount of snow paralyzed the eastern seaboard in the US for two weeks.

We're doing research and development to identify more potential savings, but it does take time. We'll be working towards better winter maintenance solutions for many years to come.

Our commitment to road safety is a year-round commitment. In October, the Attorney General, the Solicitor General and I unveiled Ontario's action plans for road safety. These comprehensive plans spell out how the Harris government will address key areas of road safety: trucks, enforcement, drinking and driving, and aggressive driving. They contain measures for the short, medium and long term. The goal is to reduce the tragic costs of collisions. The plans are the basis for everything our government is doing, and will do, to enhance the safety of our roads.

Much of the ministry's contribution to that road safety package was about improving truck safety, and the cornerstone is a carrier safety rating system. It's a system with one purpose: to improve road safety by identifying the good and the bad guys in the trucking industry and to make it 100% clear which ones are which.

Everyone will be able to find out a company's safety rating, and I mean everyone, including insurance companies, shippers, potential clients and the general public. A good safety record will be as valuable to the businesses as high efficiency and low operating costs.

Our road safety plans also call for sweeping changes in the way truck and bus drivers learn their jobs and earn their licences.

The plans also end the moratorium on axle weights. Full enforcement will begin on July 1 this year. That will mean fewer unsafe trucks on the road and less wear and tear on our infrastructure. We're also looking at higher fines for truck safety infractions and at the whole range of possible sanctions and penalties.

But I want to let you know that the ministry is not making these changes in a vacuum. We're consulting widely with those involved, getting their input and making the best possible decisions. For example, we've held meetings with interested individuals, groups and associations. In the fall, I chaired a truck safety summit. That meeting brought together many key players for a full and frank discussion of the problems we all face and how to best address them.

This kind of work must, and will, continue. Road safety is something that each of us can work on individually to make things better for everyone.

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Today, innovation is at the centre of the Ministry of Transportation's work. The ministry is constantly finding new ways to use technology to make Ontario's transportation system even better. We could talk about the electronic road signs that now ring the Toronto area; we could look at the global positioning systems that will soon be a major factor in shipping manufactured goods; or we could consider the credit-card-sized transponder that will let you zip along Highway 407, at the speed limit, of course, without having to stop for a toll booth.

All this new technology promises to make our transportation system run more smoothly and efficiently and keep it affordable. I'm proud to say that the ministry leads the way in developing it.

The Ministry of Transportation is doing its part to make the Common Sense Revolution a reality in Ontario. Everything the ministry does is under review to make sure it stays relevant. It will continue to meet Ontario's transportation needs using its strengths: planning on a provincial scale, linking services and costs, and ensuring that those who benefit from services pay an appropriate share. The ministry is focusing on governing, while giving others the room to do what they do best. That means letting municipalities make their own spending decisions based on their priorities and involving contractors in design-build innovations.

We believe this new environment will lead to better decisions and higher-quality work, and that benefits the whole province. There is a clear sense of purpose behind what we're doing. The Harris government, and the ministry, remain absolutely committed to the ultimate goal of a stronger, healthier transportation system that serves Ontario's economic and social needs. In a nutshell, that's what the Common Sense Revolution is all about.

Ontario taxpayers now have a provincial government that will give them what they want: better, more efficient service at a lower cost. We will have to make some changes, changes in the way government works and changes in what people expect of government. But in transportation, as in all areas of government service, we will do whatever it takes to get Ontario working again. That's why we were elected and that's what we're doing.

Thank you for giving me the time to address your committee. I will be happy to answer your questions.

Mr Mike Colle (Oakwood): I thank the minister for his outline. There's a question that really begs to be asked. You talked about how decisive this ministry has been and how quickly it's acted, and you say you act where the need is the greatest.

As you know, Minister, for the last couple of years there has been a horrendous number of truck-related accidents on our highways. For 10 years, there have been recommendations on what to do to fix the problem. Even the coroner's jury has recommended quick action -- 31 recommendations. One of the simplest things they asked for is increased fines to bring home the point that making our highways safe is an urgent need that has to be acted upon quickly. Continually, you've given excuses, you've put things off. Nothing of any consequence has been done, and the proof is in the pudding.

A couple of weeks ago there were two random checks of trucks. One truck in fact was an East York truck. Another truck belonged to Tudhope, a company that one minister's wife runs. They were found to be unsafe: 75% of the trucks, that you said are safe now, were not safe to be on our highways. Why have you kept stalling? Why do you refuse to take action? Why does your government not implement the 31 recommendations or at least the most basic ones: higher fines, mandatory training, doing something about the inspection stations, which are a relic of the past? Why do you keep stalling on something that is crying out for urgent action?

Hon Mr Palladini: I want to thank Mr Colle for the question. It's a very good question and one very important to me in terms of the initiatives this government has been taking on road safety. Certainly I would like to reassure you of my personal commitment to road safety. As I've said earlier, this government remains committed as well.

We have considered a lot of the initiatives from the Worona and Tyrrell accidents, and in terms of what we have announced presently on the road safety plan, I believe we've made some tremendous headway. To refer to our people stopping trucks on the highway, with the numbers actually going up in terms of off-road recommendations, I feel that in itself is also a message that we mean to do exactly what we said, that we are not going to tolerate.

A number of changes have already been initiated, and a lot more changes will also be initiated. As I outlined in my remarks, these things, unfortunately, cannot be done overnight. We've got a short-, medium- and long-range plan on how to initiate a lot of these things that were recommended.

I'd basically say to you that as far as the fines are concerned, certain things have to be done for fines to be changed, and we are in that process. That in itself is going to happen very shortly, and I do understand.

I want to take the opportunity to turn this over to Rudi Wycliffe. He will be more than happy to share with you some of the things we've implemented and some of the other things that will be implemented shortly.

Mr Gilles Pouliot (Lake Nipigon): With respect, Mr Chair, while there's a flow and with your benevolence and understanding, the format, please. I'm just seeking clarification. The Honourable Mr Palladini, minister de jour, half an hour allocated. Is this exercise with Mr Colle part of his half-hour?

The Chair: The minister has 30 minutes to make his opening remarks. The opposition has 30 minutes to respond, and in the response he's asking questions. Then you get your 30 minutes. You can, as eloquently as always, do your 30 minutes when the response comes.

Mr Colle: The only question is, how long will this response be from the bureaucrat? Is that going to be part of my time? If so, I'd rather hear from the minister. I don't want to hear from the bureaucrat.

The Chair: You asked the question and the minister asked for some assistance. I would ask you to respect the fact that he has 30 minutes in which to make his response; he will be as precise as possible.

Mr Colle: Can I direct my question at the bureaucrat so he can narrow his focus? I don't want a long speech.

The Chair: Let me put it to you this way, Mr Colle. You have 30 minutes in which to respond. You have 15 hours for these estimates. You can generate all the questions you want without any response now, or you can decide to suspend the sermon for the time being and continue with your response. You can do that.

Mr Colle: My simple question is, considering the urgency of truck safety, why the stalling and the delay and the inaction on the simple recommendations of the Worona-Tyrrell coroner's inquest? Ten years of proposals; nothing is really new. Why the delay? For instance, in Bill 26 they amended 47 pieces of legislation; they said there was an urgent need to make things right. Why couldn't some of these amendments have been thrown in with Bill 26 if it was of such urgency, as most of the public certainly considers it to be? Why wouldn't it have been brought in at that time, considering the public safety risk on our highways? That's the basic question I'd like you to deal with.

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Mr Rudi Wycliffe: My name is Rudi Wycliffe. I'm the acting assistant deputy minister of the safety and regulation division of the Ontario Ministry of Transportation.

As I understood Mr Colle's question, he wants to deal specifically with the recommendations arising from the Worona-Tyrrell inquest in October 1995 and what the ministry has done in response to those recommendations. I would like to go through those recommendations one by one and give a response to very clearly indicate what --

Mr Colle: I want to know why they haven't been implemented, quickly and to the point. Why the continual stalling on things that are very straightforward? How many of the 31 have been implemented?

Mr Wycliffe: In terms of the 31 recommendations, if I start with the first one, which I think is a very key recommendation in terms of the inquest, which deals with the mandatory training and certification programs, the recommendation reads, "Mandatory training and certification programs should be established for all individuals involved in tire and wheel installation with input from OTA" -- the Ontario Trucking Association -- "and the Canadian Transport Equipment Association and the" Ontario Training and Adjustment Board.

The training and certification programs referred to in this recommendation fall under the mandate of the Minister of Education and Training.

Mr Colle: Wait a minute now. The question I asked: Out of 31 straightforward recommendations, Mr Wycliffe, how many have been implemented and put into action by your ministry? I want a number -- 31, 5, 6, 18?

Mr Pouliot: Answer the member's question. Start doing your job.

Mr Wycliffe: If you'll give me a minute to go through the list, I will endeavour to answer that question.

Mr Colle: No, just give me a number of how many have been implemented out of the 31; it's that simple.

The Chair: Would you like him take some notice and come back to you?

Mr Colle: Do you want to just review those and come back?

Mr Wycliffe: Perhaps the best thing I can do is just scan through them and hit the ones that I would like to comment on in terms of --

Mr Colle: No, no. I asked you how many have been carried out; that's a pretty straightforward question.

Mr Wycliffe: From a quick scan, I would say the answer is six.

Mr Colle: Six out of 31?

Mr Wycliffe: That's correct.

Mr Colle: What numbers are those that have been implemented?

Mr Wycliffe: Number 9, which is, "Owners and drivers should be educated on the consequences of failure to comply with regulations requiring a proper `27-point pre-trip inspection.'" That has been an ongoing practice, both in terms of the ministry providing that information -- in fact, we distributed that information during our Roadcheck '94 blitz, and it is standard knowledge in the industry, with a lot of training programs available, both through the various trucking associations and through ministry enforcement staff, who are available and accessible to the industry.

Mr Colle: When did this start?

Mr Wycliffe: This has been ongoing for a number of years.

Mr Colle: Why would the coroner's jury recommend that it be done if it was already ongoing? If they thought it was adequate, they obviously wouldn't have put it in as a recommendation. So obviously there's some kind of miscommunication here or there's some kind of misinformation.

Mr Wycliffe: From my perspective I agree that the ministry has a role to play in the process, but to suggest that the Ministry of Transportation is going to undertake the responsibility for the training of individual staff, individual truck drivers, individual mechanics and individual truck owners and operators I think is a little bit inappropriate and impractical. We think there's a major responsibility on the industry itself, on the consultants to the industry and on the resources that the industry can draw upon, to provide that kind of information. There are no secrets in terms of the program, there are no secrets in terms of the standards or regulations, and it is simply a matter of commitment by individual trucking companies as to whether they choose to enforce the requirements of the law in Ontario on their garage mechanics, their maintenance people and their truck drivers.

Mr Colle: Wait a minute. I'm a bit perplexed with what you said. You said you've complied; then you countered that by saying that basically you don't agree with it, that it's not your job, that it's the job of the truck garages and the truck owners. Now, the jury made this recommendation. Are you saying that they're wrong, that it isn't your job to educate, as they say here, owners and drivers?

Hon Mr Palladini: I would like to answer. Mr Colle, in answer to your question, basically the recommendation was a suggestion by the inquiry for our ministry to consider implementing this particular change. I believe that Mr Wycliffe has said to you that this has been an ongoing process, in possibly not quite the same area but it has been an ongoing process. The recommendation of the inquiry I believe is that MTO should take the lead working with the industry to see how best and how quickly we can achieve that. So I believe the answer you're looking for on that particular item I have just given to you.

Mr Colle: So what are you telling me then? That you've done this, you've complied with the jury recommendation?

Hon Mr Palladini: I think Mr Wycliffe was very explicit, and he said that this has been an ongoing thing. We are presently working with the associations and all possible groups that would have some input, and we are going to come up with a plan that can best be suited to teach drivers in the industry.

Mr Colle: No, but he said this was implemented. I asked him when it was implemented. He said it was being done over the last couple of years. So is the coroner's jury wrong in asking for it to be done? They must have seen some kind of gap in the education or else they wouldn't have put it in here. I'm asking you, when did you start to adhere to what the coroner's jury recommended?

Hon Mr Palladini: We have started the process. I believe we have been working with the associations and the groups to see how best we can implement such an education for driver training as quickly as we can. It has been started maybe in a lot more full detail in the past four months, but certainly like Mr Wycliffe is saying, this has been ongoing, as a ministry, to work with the association and these groups to see if something can be resolved. But we are committed to that recommendation.

Mr Colle: When did you commit and how much did you commit and what's the name of the program?

Hon Mr Palladini: I have told you that has been a commitment. We've been working with the industry and its groups, possibly as many as three and a half months ago. So it's an ongoing thing to see how we could come up with the proper way of teaching these drivers.

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Mr Colle: Another question about road safety is that you've said you've consulted widely. Have you, up to this date -- I've asked you the same question in the House -- talked to the front-line OPP officers, the truck inspection unit, the ones who are underneath the trucks, who pull the trucks off the highways? Have you or your ministry people gone to get information from them on what they would recommend might help make trucks safer? Why I ask this again is because again it was reported in the paper last week during these inspections that you still hadn't contacted the front-line OPP officers about how to make our roads safer. Maybe they're mistaken. Have you contacted Sergeant Wolfe or Sergeant Cam Woolley and asked them how we can make our trucks safer on our highways?

Hon Mr Palladini: Thank you for the opportunity to respond to that question. What I would like to definitely say to you is that we have made a lot of time with a lot of interest groups, including the OPP and the trucking association, to see how best we can work together and resolve the situation we have. I might like to say this as well: I believe I am probably be the first minister in a number of years who has had a face-to-face conversation with our inspectors, and I'm probably the first minister in a long time who has actually gone on a road stop just to see exactly what is going on. So as far as that goes, Mr Colle, I would like to say to you that we are doing what we're supposed to be doing.

Mr Pouliot: On a point of order, Mr Chair: I come from the house of benevolence. This man here cost me $30,000 a year. I don't mind that at all; that's the way it goes. But when that man there says -- I was the minister not that long ago, and I too shared the same informative and pleasurable afternoon --

The Chair: What's your point?

Mr Pouliot: -- as he did, right on the 401. So Al, come clean.

Interjections.

The Chair: Order.

Mr Colle: Again, I have this specific question. You've got a nine-man, nine-woman inspection unit from the OPP that inspects trucks. Why are you refusing to talk to them face to face? It was brought up in the House. Why don't you go talk to the front-line OPP truck inspection unit about making our roads safer? Why the reluctance? I can't see that it makes sense, politically or safetywise. Why won't you talk to these front-line officers?

Hon Mr Palladini: I believe I gave you the same answer in the House. It is an ongoing situation. OPP involvement is ongoing; it never stops.

Mr Colle: No, no, the front-line officers. Why won't you talk to them, Al?

Hon Mr Palladini: We have over 200 front-line officers who constantly talk with OPP people --

Mr Colle: No, I'm asking you. Why won't you go talk to Cam Woolley, to Sergeant Wolfe --

Hon Mr Palladini: I have talked to Mr Woolley. On a couple of occasions I've talked to Mr Woolley.

Mr Colle: Oh, you have, then.

Hon Mr Palladini: I have talked to Mr Woolley. And so have our people talked to the OPP. It is an ongoing thing; it doesn't stop. It isn't something that you're going to stop and then pick up again. It is ongoing. After all, the OPP and Ministry of Transportation must and will work together.

Mr Colle: But isn't the fact that 75% of the trucks that were pulled over two weeks ago were unsafe basically telling you that you'd better get on with fulfilling these 31 recommendations, that all the so-called actions you've taken so far have done nothing to improve truck safety? In fact, Mr Minister, a flying truck wheel on January 4 went right through your inspection station outside of Essex, Ontario. How much of a clearer message do you have to get, when a flying truck wheel goes right through an inspection station, that you have to do more than what you're doing, that you have to implement these recommendations in order to make our roads safe? What's the roadblock? What's stopping the basic initiatives that everybody's been asking for -- the increased fines, the mandatory training, the stopping of people from driving trucks when they're under appeal, trucking companies that have records with 10 years of unsafe trucking that are still on the roads? When are you going to put a stop to that? How many more truck wheels -- do they have to fly into your office here in the Macdonald Block before you'll do something? When will you finally do something in terms of increasing fines etc?

Hon Mr Palladini: We believe that this government has a tremendous plan in place to see how we can rectify those shortfalls, and if you would allow Mr Wycliffe an opportunity to tell you where we are in implementing some of these changes you're referring to, you would have a much clearer and better picture and also see that the Ministry of Transportation is in fact acting very quickly and swiftly to make sure that these initiatives are put through.

Mr Colle: I'll let Mr Wycliffe respond in the balance of your half-hour at the end, and I'll be looking forward to that, but the proof --

Mr Preston: Oh, no, Mr Chairman, I don't think we're prepared to accept that.

Mr Colle: Well, wait a minute. It's my time, Mr Chairman.

Mr Preston: No, have him respond in your time. Don't have him respond in our time.

Mr Colle: It's not your time.

The Chair: I'll chair it and make sure that everything --

Mr Preston: Thank you. I have full confidence in you, Mr Chair.

Mr Colle: In another area, in opposition your government was very critical of Highway 407 funding. The question that I have is, how much money has your government spent on Highway 407 funding since you've come into power?

Hon Mr Palladini: I would like to share this information with you, Mr Colle, and all the people here. The 407 project is going to be a tremendous highway that Ontario is going to be measured by, and in so far as the funding, as far as yesterday is concerned, we will not be spending one dollar more than we would have when we first contracted.

Mr Colle: How much have you spent so far?

Hon Mr Palladini: It's a billion-dollar operation, I believe, and it's still a billion dollars.

Mr Colle: No, I asked you, how much have you spent this year on Highway 407 funding?

Hon Mr Palladini: You're talking up to date, in other words?

Mr Colle: No. Since you came to power, how many millions have you spent as a government on 407 funding?

Hon Mr Palladini: I guess I can give you that information. I have Mr Galange here, the president of OTCC. I'm sure he can give you the exact number.

Mr Colle: Yes, how much? That's all.

Hon Mr Palladini: So you want to know how much money we've spent to date on 407.

Mr Dennis Galange: I can get you the numbers. I don't have the exact numbers for you.

Mr Colle: Well, how many? Fifty, sixty, a hundred? Give me a ballpark figure.

The Chair: He said he'd come back to you again.

Mr Galange: I'll come back to you with the proper number. I'm not going to try to guess a number.

Mr Colle: Could I also get the amount of money the private sector has spent, as compared to what your government has spent?

Mr Galange: I don't understand what that question means. It's a design-develop-build contract. We are responsible for reimbursing the developer for the trades as the trades are to be paid. It's on a holdback basis. We advance against those budgets. We do full inspections for percentage completion and advance on that basis. It's a $930-million contract overall, basically spread over the three years.

Mr Colle: Let me just take you back a bit. You're spending money -- it's supposed to be a partnership, right?

Mr Galange: No. We are financing the total project. It's a design-develop-build as it relates to constructing the highway.

Mr Colle: So all the money so far has been spent just by the government.

Mr Galange: Correct.

Mr Colle: So you'll give me the figures of how much.

Mr Galange: Yes. I'll give you the specifics of how much was spent since June, whatever the date was that you're asking.

Mr Colle: Do you have any idea of the profits that have been made on construction so far by the corporations?

Mr Galange: No, I don't.

Mr Colle: Can you get that for me?

Mr Galange: I can't release that kind of information. It would be conjecture. I don't know what kinds of profits the private sector would make on it. What I do know is that it was a hard, competitive process of tendering and that the lowest cost was the tender we selected.

Mr Colle: You're telling me you can't find out how much money these companies have made as a result of this contract to build --

Mr Galange: Of course not.

Mr Colle: Why not?

Mr Galange: Because I can't estimate what their profits might be in certain circumstances. I can't tell you, for example, if I'm buying widgets from company XYZ, how much profit they're making on the widget.

Mr Colle: Who is putting up the money?

Mr Galange: The money is being put up by the government at this point on an interim plan basis.

Mr Colle: When do you get that money back?

Mr Galange: The money will be recovered through the net toll revenue cash flow from the project. It will be recovered over an amortization period of approximately 25 years.

Mr Colle: Up until 25 years from now, you'll have no idea of what the private sector's profit share of the project is? Will you ever?

Mr Galange: No, I don't think that kind of information is realistic to expect to have.

Mr Colle: It's not realistic?

Mr Galange: No. I'm bidding on a project against other competitive bidders and I'm not going to say to you, "My profit margin is X; his is X minus two." You don't know what those are. You have an estimate of what it would cost if the ministry were to proceed and do the specs and use its own standard costs to assess what the total price would be, but whether an outside, private sector contractor could take advantage of economies of scale and other opportunities to reduce his costs, I don't know what his ultimate profit is going to be. I can't give you a number; that's not reasonable.

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Mr Colle: But since the government is putting up the money, taxpayers' dollars basically for this project, wouldn't it be --

Mr Galange: No, wrong. The government is financing the project. The project will repay the debt out of its cash flow. That's no different than my going out, and I will be doing this, and borrowing the money from the private sector to finance the project.

Mr Pouliot: It's 1% --

Mr Galange: It's cheaper right now with the government financing it the way it is, but as the project matures, we expect that we'll be able to access the private sector markets and replace that very competitively.

Mr Colle: So you're not interested in finding out what profits are being made, as far as the government of Ontario?

Mr Galange: We are satisfied that we have accepted the lowest-cost alternative and are getting the highest value on a process that required competitive bidding, like any other contract you would competitively tender.

Mr Colle: All you're doing is writing the cheques, basically.

Mr Galange: We are doing a lot more than writing the cheques. We are inspecting the project significantly, the percentage completion of the project. We are overviewing the standards, the quality assurance, all of those functions, to make sure that the project is coming in according to the specs, according to safety standards and everything else, and that if we are advancing any money against the project completion, it's fully supportable by engineering percentage completion reports.

Mr Colle: You will be bringing forward the amount of cheques you have written so far on this project to the private sector?

Mr Galange: Yes, I will.

Mr Colle: Thank you. In terms of Highway 407, in the House, Mr Minister, you denied the fact that these tolls would mean that you could put liens on personal property if these tolls were not paid. Do you now realize that Bill 26 allows for liens to be put on personal property? Why wouldn't it just be sufficient to put liens on people's vehicles? Why do you have to go to the extreme measure of putting liens on people's personal property and assets?

Hon Mr Palladini: I believe, Mr Colle, that I did not deny; I just said that basically there wouldn't be a need.

Mr Colle: Oh, no, that's not what you said.

Hon Mr Palladini: As for the legislation, the legislation we have in place affords us that right, that we can lien personal property.

Mr Colle: That's not what you said in the House, Mr Minister. Do you want check Hansard? In the House, you said this is just about cars; it's got nothing to do about house cars, or something.

Hon Mr Palladini: I'm going to say the same thing. This is about cars, not houses. We have no intention of liening someone's house. That is a safeguard that is in the bill; so be it.

Mr Colle: The power is there, but you never use it.

Hon Mr Palladini: If you would like me to answer your question, I'd be more than happy to.

The Chair: I think we could get Mr Colle's answer in the next round. I ask the NDP. You have 30 minutes in which to respond to the minister. You can use it in any way, but please keep within the rules.

Mr Pouliot: Thank you very kindly, Mr Chair. It's somewhat unlikely that I will use the limited time available to the third party to ask too many questions, because we will have to share the time with my colleague and friend M. Bisson. I might have one or two questions vis-à-vis the number of employees at Transportation at present, what are the plans for the future in keeping with the bender, the binge which is the Common Sense Revolution.

Let me begin by congratulating the minister on his appointment. It's a pleasure to see the minister at estimates. It's becoming more difficult to see ministers of the crown by virtue of being busier than ever, they will say, or because the prominence, the stranglehold, that the Premier's office has on their members of cabinet is an invitation to best evaluate under the cover of darkness. Simply put, the less you see of us as cabinet ministers, the better off the province will be.

I want to use this opportunity to commend people that work for the Ministry of Transportation. The minister is blessed with not only a dedicated but a very loyal and knowledgeable staff who go beyond the call of duty. You have to work very hard to get in trouble when you're the Minister of Transportation. There I think you've been working extremely hard and I will point out some examples. We have done battle in the House.

You began your remarks by mentioning the CSR, the Common Sense Revolution, and I have a copy of the manifesto right here in my hand on the Common Sense Revolution. I haven't been here too long, but I share the same date, I trust, with two of my colleagues, 11 years. It's not a long time, but enough to mention that I have never worked with such zeal. It's as if they meet their main person each and every day. That's the lot to which you belong, those who endorse the Common Sense Revolution: 725,000 jobs over the next five years. No, this will not happen, even for it is written.

A 30% tax cut over three years, and that's the catalyst of your Common Sense Revolution. It's also its glass jaw, its weak point. It says half in the first year, specifically half in the first year. So don't offer advice, just give me money by June 8. No, it will not happen.

You've mentioned that your budget was to come in at some $2 billion less than the previous administration. The Common Sense Revolution mentions that the budget will be balanced in the first term. No, it will not happen.

You're looking at $15 billion, $10 billion by your own admission, which is the present deficit, and by estimates an additional $5 billion, so that's $15 billion that you have to reconcile in a period of one term.

When I come back here next year, Minister, how many of these fine people will still be here, those women, those men making a living and serving the public good, serving Ontarians? Because you, sir, as a member of that vigilante, with unsurpassed, unparalleled zeal, intend to cut, and I will be asking, is it 1,500? Is it you, madam? Is it you, sir? Because you will slash and burn. That is your policy. That is the bender you're on, that's the dangerous treadmill you're on, and this you will do with passion, and you will do that with vengeance. And we will be there, sir, to remind you.

The 407, approximately 20,000 jobs, about 69 kilometres, $928 million aside from the gadgetry, the gizmos, a project that was much needed for all the reasons, just-in-time delivery, ease of congestion, give people an option, a project that was questioned at great length by the member of the third party. Oh, but I guess that was then. They're the government now.

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The 416, which has a political, to say the least -- I'll be kind -- a political taint to it. In fact, cynics would say that the degree of toxicity attached to this project is rising by the week. The Red Hill Creek Expressway, you had to fight very hard, you had to fight the Liberals to -- who was going to get, "I love you," "You know I do." "I said it first," "I love you too" -- because this is project enough.

The reality is, don't talk to me about 407, 416 and the Red Hill Creek Expressway, talk to me about the Common Sense Revolution, and let me quote what it says.

Mr Bisson: What did it say?

Mr Pouliot: Well, it's quite simple: $300 million less. So let's talk about capital. You're spending $300 million less. It's like a shell game here, except that the government is controlling the game. You can't have it eight different ways. The Common Sense Revolution says that you will spend $300 million less on road construction.

I want to talk about safety. You're on the hook there when the writs were issued, during the election campaign. And you adhere to this, and I believed you. You wish to make Ontario roads the safest in North America. You don't want anybody killed there, people that are injured, people whose life expectations are reduced by virtue of accidents, but you're on the hook when the writs are issued, because at the time, it's not all that popular.

Photo-radar: Now you're scheming, you're weaselling, using every device and every trick in the book to get a "semblant," a facsimile of photo-radar right back, because you know that speed kills, you know that one out of every six fatalities is the result of an accident in speed, people going too fast. But you have dwindling resources. So you're putting your officers there, not enough of them, not as effective as photo-radar, and you're not getting nearly as much revenue.

When it comes to user fees or users pay, God knows, heaven knows, will attest that you are front-row centre, you're a member of the first brigade when it comes time to pick pockets. You have unsurpassed zeal.

How can safety not be jeopardized when you've cut the number of sanders? How can safety not suffer when you increase the kilometres for patrol? How can safety not be jeopardized when you're cutting staff? And when I ask, with respect, through the Speaker in the House during question period, I was told, "You can use your cell phone, you can always call the OPP," those women and men in blue, and they'll come and help you and bail you out.

In the riding of Lake Nipigon, which is the largest geographical riding in the province -- we have 26% of the overall land mass -- the cell phone, well, it doesn't work there. Like I said in the House, on a clear day, once you get near Hudson Bay, you can almost see the earth's curvature. So you can have a cell phone -- well, when my phone doesn't ring, it must be the minister calling. We thought that it was bravado and in bad taste. No sooner do we leave government, no sooner do I leave the ministry, than the wheels start falling off the ministry, almost literally.

Mr Rollins: We need a sleigh.

Mr Pouliot: This is a very serious matter.

Mr Bisson: We use sleighs on northern highways.

Mr Pouliot: Let it be a matter of record that some members of the government are making fun of highway safety. I don't make any fun regarding vis-à-vis highway safety.

Mr Kells: It's the way you present it.

Mr Pouliot: We're concerned about the brake problems on trucks. It's been a perennial, a residual problem that has been with us. I'm an avid reader, as you might know, Mr Chair. I read quite a range of publications, books and read the classics. I try to do so -- in a few languages. I'm not one who subscribes to the Now magazine, though. That I can tell you, sir.

So this magazine here was handed to me. I see a picture of the Deputy Premier, Minister of Finance, Minister of Revenue and all the good deeds out there, a very important person, a buddy, a friend of the Premier. Well, he would be the one who would have the most say on truck insurance. That means this is a person of consequence. You hush when you talk in such company, and sometimes you could be granted the pleasure of an audience, if you're well connected, that is.

I see here, it goes on -- I won't trouble you too, too much with it, because I know you too are concerned about safety -- about potential conflict. It says, insurance risk, not public, etc. But the tab here is a great truth seeker, and it talks about family connection and it raises a question, and I'm not imputing motive. I know that everyone is treated the same, but those people like to dig, you see, and if you read something often enough, if you repeat it often enough, sometimes you believe it. So I would caution the minister regarding connections that could be made vis-à-vis truck safety, vis-à-vis vehicle rental, because there's always someone watching when you're in politics.

Public transportation: Miss Jones is 74 years old, Mr Minister. She has a small apartment -- not rich, Miss Jones, she'll never show a profit, I can assure you. But like many people of that generation, she played an active part in handing us the standard of living that we have. She lives in dignity, a person of moderate means, lives alone, as is often the lot reserved for people that are that age. Her companion passed away some time back. And she has a sole source of companion, a little cat. So she goes home, in the privacy and comfort of her cubicle, if you wish, it's a very small apartment.

Twice a week, because she wants to be like you, sir, she wants to be like the others, she uses Wheel-Trans because she's physically challenged, she's a little frail, she's not as mobile as she used to be. What's going to happen to Miss Jones, my pal? Where's the human dimension where her very lifestyle is threatened, because she doesn't have the extra token in her purse and at your discretion, by decree, have started to kill her a little bit, in that context.

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I couldn't do it, sir. I could not do it. There are thresholds, but if it's for the mere sake of a buck, if it's for a fistful of dollars, if it's to satisfy the need and greed of an ideology, I guess Miss Jones will have to suffer a while longer. She doesn't speak very loud. She's not a powerful element, for she is not to be seen around the Boulevard Club and the Toronto Club, and she can't run as fast as the others. So I guess she will be left behind.

We have very good people at GO Transit. I understand that they too will have to find another notch. Traffic congestion will not decrease; it will increase. Mr Colle would speak better than anyone regarding TTC and public transportation in Toronto. He has a better knowledge, a better feel than I have, for he has laboured with public transit and urban public transit in Metropolitan Toronto for many, many, many years. But my understanding is that they too are asked to take a hit.

Everyone that you touch takes a hit, because those are the marching orders. Lives will be lost. I'm not here to say that you wish to have this; it wouldn't be fair, it doesn't make sense. You don't have blood on your hands. But I'm just wondering when the capital dollars and the transfer payments to municipalities, to the client group, the stakeholders, is reduced and further reduced, what does it do. We have an investment. You've talked about just-in-time delivery. You've talked about the need to be more efficient, to be more competitive, the need to protect the infrastructure dollar, the capital dollars. It puts people to work. The multiplier is rewarding. It's there for all to see. I want to wish you success. I think you have a very challenging and a very full agenda ahead of you.

To the minister, through you, Mr Chairman, how many employees at the Ministry of Transportation?

Hon Mr Palladini: I believe we have -- Mary Proc.

The Chair: Introduce yourself, Mary, and your title.

Ms Mary Proc: Hello. I'm Mary Proc, the assistant deputy minister for the corporate services division at the Ministry of Transportation. Our authorized staffing level is 8,452 full-time equivalents, FTEs. We are currently at 7,992 FTEs.

Mr Pouliot: Thank you. So 81,000 people in the civil service, or thereabouts, let's acquiesce; 67,000 belong to OPSEU, and 14,000 are non-unionized or they're management.

Mr Colle: That's 1,400?

Mr Pouliot: Out of 81,000, 67,000 belong to OPSEU.

Mr Bisson: He's talking about total public service.

Mr Pouliot: I need your help, Madam. You see, this here says 13,000. I read in the paper that it could go as high as 27,000. Could we split? Let's say 20,000, okay? So you're 8,400, but they're not all filled, so you've got a little cushion there, about 500, right? Plus the factor 80. So out of 81,000, that would be -- one second, he's cutting 20,000. Let's say 16,000, that's 20%. Wow. Am I in the ballpark, 2,000 jobs?

Ms Proc: At Transportation?

Mr Pouliot: Yes, or is it 1,800?

Ms Proc: Everything will very much depend on the business plan and how it is accepted by this government and on the plans that the Treasurer announces in his upcoming budget.

Mr Pouliot: You see, people at the coffee machine, at the water fountain, they've got a mortgage. I know some like to go out, because it keeps them young, working with the public. They don't talk about pensions because it's the subject that's the least talked about but the most often thought about. Under Bill 26, under the decree bill, surely at this time -- because at one time people are going to have be informed; there's a lot of anxiety -- I would like to know, and it's my right as a member of this assembly, how many heads are on the chopping block.

You know, your deputy minister, and I think you still have six ADMs -- those people are giving the marching orders because you get your marching orders. The Treasurer and the Premier are in bed, and you guys pull on the blanket. Then they come up and they say: "This is it. Go do it." So you go to this man there, George Davies, he's very able, and the other people who survived many nights of the long knives so far, and they come back and they say, "We're going to cut this staff or this staff." On the eve of tragedy, you should be able to tell me how many people are going. I'm not asking for an exact figure. No one will take you to task. Will you chop 1,500 jobs? Will you chop 2,000 jobs?

Hon Mr Palladini: Thank you very much for the question, Mr Pouliot. Basically, what I'm going to say to you is that our government, obviously, is committed to fiscal responsibility. We have to create efficiencies within government and look for every possibility of where we can save. Now, as far as the actual business plan is concerned, to answer your question on the number of jobs, we are in the process of looking at every possible way we can streamline MTO and become cost-efficient, and not at the cost of less service.

Mr Pouliot: Mr Minister, please, I really do need your help, because there's a lot of anxiety out there. You must know which sector will be impacted. Mr Davies would know that. He's very efficient, and that's his job. Where are you looking to cut? Is it going to be your communication department? Is it going to be at the regional level? You've been in power now for more than eight months. You want to slash and burn quickly, because politically it's wiser to do so in the first year. What will it be? I want to know, because people are asking me in my riding. It's a legitimate, concise question. Surely, if you have something, tell us.

Hon Mr Palladini: I appreciate the opportunity to be able to share with you as much information as I have. Basically, I have said that as far as what we are planning and doing is concerned, this government is committed to fiscal responsibility and coming up with efficiencies and a business plan that's going to be in the best interests of all Ontarians.

Mr Pouliot: When will we know?

Hon Mr Palladini: We are in the process of finalizing our business plan. I guess you will probably have an opportunity to ask me on it next year.

Mr Pouliot: Well, there won't be a shuffle on our part. I'll look forward to it. That's all I have for now. I'll have more questions as the estimates progress.

Mr Bisson: How much is your capital budget? How many passing lanes are you going to cut in northern Ontario? What happened to the cell phones? I'm going to try to put it all in three minutes. Let's just deal with one real easy one: capital budgets in northwest and northeastern Ontario for highway construction and reconstruction, last year's levels compared to what you're foreseeing upcoming this year, less money?

Hon Mr Palladini: I appreciate the opportunity, and I wish that I could share with you an exact number, but we have not finalized those numbers. This government is committed to supporting the north. I can assure you every consideration is going to be taken to make sure that the support levels that are required will be there.

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Mr Bisson: I know that. I drive Highway 11 every week and I see the commitment. I know you can't give me a specific number because the guy at the corner office hasn't given you how big the cut yet, but is it the idea that you're going to reduce capital budgets in this upcoming fiscal year, both in northeastern and northwestern Ontario, for highway reconstruction and capital?

Hon Mr Palladini: It is this government's agenda to find every efficiency available to us. We will support the northern budget in the best way we can to make sure it's in the best interest of growth and safety and economic growth. The support levels will be there.

Mr Bisson: Get away from the spin; it's a very simple question. Will they stay at this year's level? Will they go down?

Hon Mr Palladini: We are in the process of taking a look at every opportunity and I do not have a number that I can share with you. I apologize but I do not have a number that I can give you.

Mr Bisson: I appreciate your apology, but our understanding, talking to field staff throughout northeastern and northwestern Ontario, is that one of the things that your ministry is looking at very seriously is reducing the overall budget for capital construction and capital reconstruction for highways in northeastern and northwestern Ontario. That concerns me, not only from the perspective of driving on highways, but it's going to cost the province a heck of a lot more money down the road if we allow that infrastructure to erode. So the question is a very simple one: Is the commitment of the government to at least keep those capital budgets at levels that they're are at now, or close to? Or is what I'm hearing out in the field correct, that you're actually going to reduce those budgets? Try it again.

Hon Mr Palladini: First of all, I do agree with you as far as the infrastructure is concerned: If you don't spend the money when you're supposed to, in the end you could actually end up spending more. So every consideration will be given to making sure that we do have enough money in our budget for capital to protect our infrastructure.

The Chair: Thank you very much, Mr Bisson. Mr Minister, you have 30 minutes in which to respond.

Mr Bisson: You don't have to take it if you don't want to, Al. The more you say, the more we'll be after you. Always remember that. First rule of estimates: Say, "Thank you very much to my critics and I look forward to further questions."

Hon Mr Palladini: Thank you very much. First of all, I basically would like to once again outline our government's stand and responsibility as far as Wheel-Trans is concerned. I know it's been brought up again here today. Clearly it was never the intent of the Harris government to cut Wheel-Trans. This was something that was done by the TTC, against my urging to not do that. I asked them on numerous occasions to cut the conventional budget rather than the disabled transit budget, but they chose to ignore my advice and proceeded to cut Wheel-Trans in lieu of conventional transit. However, I made sure that the same thing was not going to happen with this year's budget. We made it very clear. We segregated the two budgets to do exactly that, protect Wheel-Trans so it wouldn't be touched. The budget for this fiscal year is going to be exactly the same as last year, so Wheel-Trans is not going to be affected in any way.

I know what the Common Sense Revolution says and what it was meant to do, but I want to just share one thing with everyone here. Mr Pouliot, if deficits created jobs, we would not have one single person unemployed. Unfortunately, that's not the way it works; deficits are counterproductive. They end up losing jobs and losing investment. So this government's responsibility was to balance the budget, and the only way that can be done -- or one of the only ways, because there are other increments that will play some part of a role -- is to balance the budget, to get our spending cuts and stop spending money that we don't have, continuously spending it on programs that we could not support.

This government had the strength to make the tough decisions. Again, I'm very proud to be part of a government that's taken on that responsibility and been able to say no when there was really a sore spot and it hurt to actually say no. I want to say that the last government and the government previous to that, I would maybe add, were not necessarily good teaching parents. I believe the last two governments thought they were good parents, but in many ways they were not. I just want to share this analogy of my thoughts. These are my personal thoughts.

A child comes home and he says to his parent, "Ma, I want a new bicycle." The mother tells the father, "Why don't you get Randy a new bicycle?" So they go out and they buy Randy a bicycle. The next day, "I want a new television set," and the parents keep giving this child whatever he asks for. I believe that's exactly what these last two governments have done. They've given the children of Ontario -- whatever their children asked, these two governments gave. That in itself does not necessarily make you a good parent, by giving all the time. A good parent will teach. A good parent is going to come up with ways to make sure that their children know exactly the meaning of a dollar and how much hard work it takes to earn that dollar before they spend it. So, Mr Pouliot, the last government was not necessarily a good parent.

Mr Pouliot: If I wish to be a good parent, I know where to go.

The Chair: The minister has the floor. Let him complete his response, will you.

Hon Mr Palladini: We are committed to fiscal responsibility, and, yes, I do believe that this government is trying to be a good parent and is trying to support the necessities and the priorities that are needed. Tough decisions have to be made on both sides. I think the government has to make the tough decisions, but I also feel that the people of Ontario have voted on that and they want us to make those tough decisions and they are with us. They are behind us and they understand that these decisions have to be made before we lose everything. Why keep supporting spending money and supporting programs that we clearly cannot afford at the expense of losing everything, of losing health care, of losing education? Tough choices were made, and I'm proud to be part of a government that's looking out for the future of our children and their children.

The safety commitment MTO has to the people of Ontario in regard to our highways I'm very proud to be affiliated with, and I certainly would like to share the sentiments Mr Pouliot said earlier about our staff. We do have a tremendous staff, a dedicated and committed staff, and I'm very proud to be associated with them. I look forward to a long relationship and to see how best we can deliver the services to the people of Ontario. This minister and this government are committed to road safety. Make no bones about that. We are going to do whatever it takes to make sure our highways are safe.

I believe we have over 200 inspectors in the province, and we are in the process of hiring an additional 20. I don't know the exact number, but I believe it brings it to around 230 to 240 people. That is clearly a much stronger commitment than the last government -- not that it wasn't committed, but certainly the last government did not have as many people committed to road safety as this government is taking on.

There are some changes. Ladies and gentlemen, one thing I'm going to say, coming out of the private sector, is that I wish that some things in government could work as quickly and as swiftly as the private sector does. To implement certain changes, unfortunately it takes a little longer than I would have thought. My colleagues over here also understand that things do not change just at the snap of the finger. There are a lot of things that have to take place before we can implement the changes.

The key is you've got a government that's definitely committed to road safety. The things that were recommended in the Worona-Tyrrell inquest are things we are looking at. There isn't one item on that list that we're not considering, and I believe we have initiated some of these items. We are in the process of initiating others within the next couple of months. But overall, we are going to be initiating many of these things over the next 12 months. I wish we could do things in a hurry, but we cannot. We have to make sure legislation is in place.

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My critic here, Mr Colle -- one of his favourite topics is fines. I wish he would understand that I'm on his side. I wish we could increase the fines to the point where it would certainly make him satisfied and me happy at the same time, but fines alone are not the only detriment thing that we need to get people to pay attention to safety. Have I used up my time?

The Chair: You've got lots of time, Minister.

Mr Colle: Stop while you're ahead.

Hon Mr Palladini: Clearly, when it comes to fines, they will prove to be a deterrent. But there are other things that must be done for us to turn this thing around in terms of road safety.

I believe the approach we have taken is a very good approach, because we want to be involved with the trucking associations, we want to continue to be involved with the OPP, and input has to be given at every possible level. Just increasing the fines doesn't necessarily mean you're going to solve the problem.

I believe the education aspect is also a very important one, and this is something we started with the Minister of Education, to see how we could end up training truck drivers to adjust their own brakes. Coming out of that field, I know the importance of being able to perform that service. Let me just share this with you: Who else would know when a brake is not functioning the way it should, other than the truck driver? The mere fact that he will be able to pull over to the side of the road and adjust that brake in itself is going to save many lives, just being able to pull over and do the brake adjustment himself. That's something we've implemented. It is in the process of working.

Sometimes things don't happen as quickly as you and I would like, and I can certainly appreciate that, but that doesn't mean we are not committed. It doesn't mean the things we are talking about are not going to materialize. That's not the case. Every recommendation in that Worona report is going to be looked at. We are going to consider every one of those things and how best and how quickly we can implement them.

Having said that, I would like Rudi to share with us some of the things, so my colleagues here know exactly what it is we are implementing, and the timing you could possibly share with us.

Mr Wycliffe: Thank you, Minister. What I intend doing, if this is what you wanted, Minister, is to go through the road safety plan and highlight the initiatives that relate to trucking, and then comment on the 31 recommendations in the inquest and indicate what the ministry is doing about each of those recommendations.

The plans for action on road safety respond to three questions: What are our priorities? What can we do right away? What will it take over the long term? Because road safety is a complex field, the issues and options are as diverse as the province's seven million drivers. To identify priorities, we looked at trends, public concerns and detailed road safety research.

Some key points make the priorities very clear. In Ontario, excessive speed and loss of control are the major driver errors that lead to collisions. Failing to yield the right of way and following too closely also contribute to more than 600 collisions that occur each day. Most recent studies show that 42% of all the drivers killed on our roads had been drinking.

Police presence has a dramatic positive effect on driver behaviour. Evidence shows that drivers don't fear penalties for dangerous driving habits until they see proof that they can and will be charged. That's why enforcement units must be highly visible.

While only 7% of vehicles involved in fatal collisions in Ontario are tractor-trailers or other large trucks, safety checks of commercial vehicles throughout the province show that many vehicles do not meet safety standards. Truck crashes are usually more serious because of the size of the vehicles involved. At the same time, public anxiety about the safety of trucks is high.

In terms of the road safety plan, improving truck safety is among the highest priorities. The minister has already mentioned the carrier safety rating project, which is well under implementation. Information about the safety records of trucking companies will be available to anybody thinking about doing business with them. The information will be based on both a company's safety performance on the road and its overall corporate safety policies and practices. A rating of satisfactory, conditional, or unsatisfactory will help identify the companies with good safety records and those that need to improve.

One of the other major truck safety initiatives deals with enforcing weight laws. Since 1986 Ontario's weight laws limiting the axle weight of trucks carrying gravel have not been enforced. All the laws are now in place. The industry has had time to adjust to the limits and must be called upon to obey them. To protect our roads and ensure that higher safety standards are met, truckers and shippers will be charged if loads exceed the limits. Full enforcement is scheduled to begin on July 1, 1996.

The minister already mentioned air brake training for truck drivers. Until now in Ontario, only a licensed mechanic could legally do anything about air brake adjustment. Often, that meant a truck would continue to travel with air brakes that weren't adjusted and working properly. A new training program will give drivers the skills they need to adjust their brakes themselves, in many cases. As the minister pointed out, it's essential that the training is adequate and the testing is adequate to make sure that the drivers are in fact adjusting the brakes properly and not creating a bigger problem than they are trying to solve.

There's been a lot of discussion already about increased penalties for safety offences. Under the law, truck drivers are responsible for doing a proper safety inspection before their first trip of the day and making sure their trucks remain in good condition. Owners must set up a regular system of maintenance. Drivers and operators face fines of between $100 and $2,000 the first time they are convicted of breaking safety laws, and jail terms of up to six months if they are convicted more than once.

The ministry is reviewing those fines, with very definite plans to increase them, particularly for second offences and beyond. The ministry is also looking at whether demerit points can be assigned to the driving licences of truckers who break safety laws.

The ministry is also undertaking a thorough review of the way truck drivers earn their classified driver's licence. We want to make sure that truck drivers understand all the safety requirements and laws they're supposed to follow. This would include the possibility of a graduated licensing system extended to truck and bus drivers to ensure that less experienced truckers are not driving vehicles that require the most skills. I'll talk a little more in a few minutes, but the province is working right now with the trucking industry to explore options for training and licensing of truck wheel installers. This was the primary recommendation of the Worona-Tyrrell inquest that I mentioned earlier, and I'll comment on this recommendation and others in a few minutes. The government will also look at incorporating any recommendations, as I will go on to say, arising from that inquest.

One of the other safety recommendations already in place is the automated monitoring of trucks, a program that we call Avion, which is an acronym for Automated Vehicle Identification Ontario. It is an electronic monitoring system linked to the I-75 interstate system that runs from south Florida all the way through to Detroit. We're linked into their database and their monitoring system, which promotes safe, efficient trucking by rewarding good truckers with fewer inspection stops and allows us to focus our enforcement officers and our resources at our truck inspection stations on the less safe trucking operations, the ones we need to concentrate on the most.

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I've already mentioned the primary recommendation of the Worona-Tyrrell inquest from the coroner's jury, and that was mandatory training and certification programs for individuals involved in tire and wheel installation. That recommendation is being worked on very actively by the Ministry of Transportation, the Ministry of Education and Training, specifically the Ontario Training and Adjustment Board, OTAB. The Ontario Trucking Association has developed a training proposal, and the ATSSA, which I believe stands for the allied technical services association, is implementing, with the cooperation of the Ministry of Transportation, later this month a training and awareness program across Ontario to make sure that trucking operations and garage operations are aware of the need to follow manufacturers' recommended procedures in terms of removing, inspecting and installing wheels on trucks and heavy-duty vehicles.

We're working with the Ministry of Education and Training and OTAB, as I said, and with the key input of the industry -- the Ontario Trucking Association, the repair industry and many of the other stakeholders -- we expect to have later this year regulations that will prescribe the training requirements for those involved in tire and wheel installation in heavy-duty vehicles in Ontario.

We will also be working with jurisdictions across North America, because as this committee well knows, the problems are not limited to trucks operated exclusively or even operated by Ontario-based business or even maintained or inspected within Ontario. We have to work with the other jurisdictions across Canada and across North America to make sure that if Ontario puts in a requirement we can expect similar treatment from those jurisdictions in terms of how they take care in the wheel installation industry. We will certainly be -- as we are doing at the present time, the Ministry of Transportation along with the Ontario Provincial Police -- very aggressive in the enforcement area. Obviously, the solution rests in doing proper wheel and tire installation, and that is the knowledge, awareness and the use of the proper techniques, tools and materials in adequate condition in order for those wheels not to come off at the rate they've been coming off over the last year.

The second recommendation in the coroner's inquest deals with licensed class A mechanics, and trailer mechanics must be required to upgrade their skills and be certified if they install heavy truck wheels. The training proposals under OTAB will include training for mechanics as well as training for wheel installers. Wheel installers are presently a non-regulated trade in the province.

The third recommendation deals with the fact that prosecutors and the judiciary should be educated on the consequences of mechanical and load infractions endangering public safety and fraudulent use of annual inspection certificates. We are dealing with our legal people within the ministry, the Attorney General's staff, to seek appropriate fashions to undertake a judicial outreach program, to make sure the courts understand the severity of the charges we're laying and the consequences of the unsafe vehicle conditions that we're finding at the side of the road.

The fourth recommendation is as follows: Invoices or work orders for work requiring the removal of truck trailer wheels should state the torque at installation using a torque method approved by the manufacturer and the need to retorque. Following installation, according to manufacturers' specifications, wheels should be tagged by an approved system which includes the appropriate retorque specification to ensure that retorquing is performed within the mileage specified.

We're proposing to amend the inspection maintenance regulations under the Highway Traffic Act pertaining to commercial vehicles to include torquing and retorquing requirements. As I noted earlier, we're already dealing with the technical trades associations of the trucking industry and the repair industry to get the message out.

It was fairly obvious in early 1995, through most of 1995 in fact, that many people in the industry did not commonly use torque wrenches for the installation of truck wheels and did not follow the recommended practices of the manufacturers of wheels and wheel securement components. This came out very strongly in the coroner's inquest in October 1995.

The fifth recommendation is as follows: The qualified mechanic should be required to red-tag trucks and trailers which have defects which might present a risk to public safety. Safety defects should be annotated on the work order, invoice and the annual inspection certification. There are some questions of legal implications of this requirement. Basically, any mechanics who presently do not follow that procedure, if not exactly red-tagging but at least refusing to issue an annual safety inspection certificate on a truck -- if they fraudulently do certify that truck as safe, based on the ministry's annual safety inspection requirements, they can and are prosecuted. We lay charges in our enforcement program to deter and discourage that kind of practice.

Hon Mr Palladini: Would you wrap up, Rudi? How many more do you have to go through?

Mr Wycliffe: I'm only at recommendation 6.

The Chair: I could give a recess until 3:30, but if you want to continue, that's fine with me.

Mr Wycliffe: If you want me to summarize things quickly, I can do that in two or three minutes.

Hon Mr Palladini: Yes. Would you summarize?

Mr Wycliffe: There are a number of recommendations in the coroner's inquest that pertain to the training and licensing of truck drivers. The minister has already indicated, and the road safety plan already indicates, that it's one of the priority areas where we are looking at the whole question of the credentials of truck drivers, their testing by the ministry and the possibility of graduated licensing. I mentioned it before.

The coroner's jury: Again the link with the road safety plan talks to the possibility of expanding the demerit point system which is now applicable to drivers for moving violations -- speeding, failing to stop etc -- to some of the safety code violations that exist in Ontario's law under the Highway Traffic Act. That would include the possibility of demerit points for failing to do a pre-trip inspection, operating an unsafe vehicle, operating an overloaded vehicle, operating beyond the hours of service stipulated under the act etc.

The coroner's jury makes recommendations on the ministry reviewing its safety performance monitoring system of trucking and busing operations that we call our CVOR, our commercial vehicle operators registration program. We are following that recommendation and looking very seriously at a timely ability to monitor and, as appropriate under the powers of the act, to sanction those carriers.

Fines we've talked about at length; the inspection standards; axle weights. I think much of the rest of the recommendations have been covered already.

The Chair: Thank you very much.

Hon Mr Palladini: May I, Mr Chairman? I'll be 30 seconds. First, I certainly understand where my opposition critics show concern on road safety, and I basically concur. I appreciate your interest and concerns, and I look forward to working together to best see how we can get some things implemented. Some of the initiatives we are going to be initiating that will need legislation -- I encourage you to support the legislation so we can quickly expedite and get some of these things implemented. As far as road safety is concerned, you've got my commitment and this government's commitment, because I know we're on the same side.

The Chair: We'll take a recess until 3:30.

The committee recessed from 1520 to 1532.

The Chair: You have 30 minutes, Mr Colle, if you wish to begin.

Mr Colle: Thank you. In terms of the minister's comments about the former government being bad parents who were always acquiescing to a child's request for bicycles and that this government is a good parent, perhaps we should remind the minister that it's not a case of children asking for bicycles. This is a case of children asking for basic food.

There are children in my community who are going to school in the morning without breakfast and without lunch because of the fact that your government arbitrarily cut them 22%. When you cut welfare and social assistance, you basically cut these children. It's not about bicycles. These children are asking for basic necessities, and to put it off as children asking for luxuries is trivializing the very serious situation we have throughout Ontario. People are asking, not for bicycles but for jobs. They're asking for dignity. They're asking for basic, good housing. These people freezing to death on our streets are people reaching out for help, whether it be medical help or housing. They're not asking for bicycles, and that's one thing I want to put on the record.

Just before I get into public transportation, as you know, there is a review of the insurance scheme in Ontario, and one of the recommendations is to amend the area of tort whereby there will be the right for individuals to sue for economic loss. At present, if you're a victim of an accident as a result of a flying truck tire or a commercial vehicle, you can't sue for economic loss. Are you going to support the change in legislation which will allow for injured parties to sue for economic loss if they're victimized by unsafe trucks, for instance?

Hon Mr Palladini: You'd like me to address your question on the insurance?

Mr Colle: Yes.

Hon Mr Palladini: Before I do that, Mr Colle, I'd say to you that you seem to always come up with the most fearsome things in relation to some of the comments I say. As to being bad parents, it's very easy for you to say that this government is going to begrudge children food and people who need housing or clothing or money to basically survive. On the contrary, my remarks I believe were fairly adequate in saying what I said to the point that it's because of the moneys that were spent in areas where clearly they should not have been spent that in fact deprived children and people in need, in not having the money to actually support the people who truly need that help and support.

This is what a Harris government is all about: making sure that for those who need help, we are going to be able to give it to them. The previous two governments spent far more than they should have in areas where they shouldn't. Doing that deprived the people who needed the help from getting the help.

As to Bill 164, Mr Sampson is in the process of restructuring and coming up with a better and more efficient way so that everyone who is hurt through an accident might have a process of going to court to recoup their losses. We are working on that, and we should have legislation ready in due time.

Mr Colle: This is one of the recommendations, recommendation 24 in the Worona-Tyrrell inquest. They thought one way of encouraging trucking companies to take the responsibility much more seriously, to get them to comply to safety standards -- this would be a deterrent, in fact -- would be if you were to amend Bill 164 and include this right to sue for economic loss. As Minister of Transportation, in light of this recommendation, are you going to support the right to sue commercial vehicles and companies for economic loss?

Hon Mr Palladini: I believe we are in the process of seeing how that can be implemented, but I would certainly refer that to the Minister of Finance to see how quickly that can be done. I do support that.

Mr Colle: So you support restoring the right to sue for economic loss of commercial --

Hon Mr Palladini: Yes, I do.

Mr Colle: Good.

Another area. I was not really surprised, but certainly it's very glaring that in your statement, Minister, there's not one word or comment about transit or public transportation. I'm just wondering whether your ministry has any kind of vision, any kind of plan. You talk about the cost of congestion, and 407's supposed to help cure that, but you must understand that one of the major ways to reduce congestion on Ontario roads, especially in an urban setting, is by investing in public transportation.

I see no reference here to what you're going to do to encourage more people on our commuter rail, that is, GO Transit. GO is not mentioned here at all. I see no reference to your government's commitment to improving urban public transportation in terms of making it more efficient, making it more cost-effective, introducing new ideas.

All I see are your references to highways 407 and 416 etc. That's fine, but I'm sure your ministry must spend a good portion of its budget on public transportation, yet in your vision in terms of what you see in the year ahead, there's not a word or an idea about public transportation. In fact, you're committed to spending $1 billion on building the Sheppard subway, for instance, but there's no mention of that as part of your transportation plan.

Why is there no indication of your commitment to public transportation in this speech? What effects will the cuts you've made or will make have on the modal split, on congestion, and on the future of public transportation?

Hon Mr Palladini: I would like to give you my personal commitment to a balanced transportation system in Ontario. It is also my government's commitment to making sure there is a balanced transportation system available for all Ontarians. We are going to continue to work towards that and definitely develop a vision as to how we can implement improvements within the public transportation system, and we are in the process of taking a look at how best we can deliver those services. As to whether it's going to be a subway or whether it's going to be a bus line or whether it's going to be a highway, I think it is imperative that our province not only has a balanced transportation system to serve the people who use public transit, but also has highways to be able to serve the economic growth and the necessity that highways do have on bringing economic growth.

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Mr Colle: I'm still waiting for the answer. What is your vision or what initiatives, what program do you have to ensure that public transportation remains viable? What are your plans for GO? What are your plans for the future of intercity transportation? Cities across Ontario, because of your cuts, have been forced to increase fares. How are you going to offset the negative impact of that on the modal split? What is part of the plan or direction you're going in in public transportation?

Hon Mr Palladini: We see GO playing a very major part in the future transportation services that it can and will bring to the people of Ontario. GO is a major part of the future of integration.

As for transportation being affordable, I really want to say that there are some inequities that might not be just strictly involving pricing. I mean pricing here, we say we want service and we want transportation services or public transit, but it has to be affordable. It remains to be seen how affordability is accounted.

First of all, we have to get our house in order. We have to get our administration costs in order, and I think that in itself makes a direct relevancy to the cost being affordable. I think we all have a duty to perform and certainly this government is going to make sure that initiatives are begun to see how quickly we can have an integrated transit system, an affordable system that also gives the service as well.

Mr Colle: But, all across Ontario, as I said, people are finding public transportation less affordable; therefore you're losing ridership and you're losing revenue. So your actions have made it less affordable. I'm asking you what way you're going to use to counter that.

Hon Mr Palladini: It remains to be seen when you're using the excuse that people do not take public transit strictly because it's expensive. I think there are other elements that possibly make a contribution. One of the things we have to take a look at is delivering that transportation system. This is what this government is committed to doing. If it isn't affordable right now, there are reasons why it isn't affordable and, as a government that has been in power for eight months, you cannot expect us to have all the answers. We are looking to see how quickly we can adapt and come up with answers and savings so we can make transportation affordable.

Mr Colle: I'm sure your experts, your deputy ministers are aware of the direct relationship between higher bus fares, for instance, and ridership, that there's a direct correlation.

Mr Pouliot: But they're chauffeur-driven.

Mr Colle: Therefore, how are you going to stop this dropoff in ridership as these fares go up?

Hon Mr Palladini: I wish I could give you an answer on how we're going to stop it.

Mr Bisson: He can tell you how to start it, not how to stop it.

Mr Pouliot: You've got to use it yourself, Al, the services.

The Chair: Let the minister answer.

Hon Mr Palladini: I appreciate all the advice. But to assume that the Harris government is responsible for the situation that we find ourselves in regard to public transit is totally absurd. Ridership decrease started over 10 years ago, so maybe your government should have started back in 1985 to see how it could implement the changes and possibly my good colleague over there's government should have been doing the same thing.

This is what a Harris government is committed to. It's committed to coming up with a balanced transportation system that's affordable for all the people of Ontario, not just the GTA. This is the goal we have, and we would like to see an integrated transit system under a new governance that will be developed within the next few months. We will deliver a much, much more balanced public transportation system than this province has ever had in the past.

Mr Colle: At least the past governments did make a conscious investment, and the exponential increase in investment in public transit is quite obvious. Your government has drawn away from that and gone to more of a user-pay system with decreased subsidies. For the first time in 10 years, as soon as you got into office, you reduced subsidies to specialized transit for the disabled. Your government is now reducing that kind of support for public transit and it's resulting in higher fares. In Kitchener, in Hamilton, in Sault Ste Marie, all over the GTA, all over Ontario you've got higher bus fares. Minister, all other factors aside, what is one thing you can do to counter that movement away from transit because of the higher cost?

Hon Mr Palladini: I totally disagree with your analogy that this government has made a direct contribution to higher transit costs across the province of Ontario. I believe that this situation has been evolving for longer, well before this government formed the government. I just totally disagree that you're putting the blame on us. I believe this government has told the municipalities: "You are not operating in a cost-efficient way. We would encourage you to come up with savings that can be reinvested back into the transportation system."

If you would like some very good specifics, which I don't happen to have on me, I'd be very happy to turn it over to either Carl or David Guscott to share some of the strategies and what this government is looking forward to doing.

Mr Colle: Before I get back to the bureaucrats, I just want to ask you a few more questions in terms of your policy directions. In terms of GO Transit, as you know, one of the things you're committed to is deregulating intercity buses. You're going to do that, I guess, come April, because the Ontario Highway Transport Board is gone. How is GO Transit going to survive if you've got these deregulated, privately owned buses running routes parallel to GO Transit bus routes?

Hon Mr Palladini: Here we go. People expect government to do everything for them, yet the moment the government wants to start turning things back in order for a business to prosper, we seem to have to rely on government and tell them why you can't deregulate. We have a lot of regulation. Here is clearly an opportunity that busing deregulation is not only going to be good for the industry but will actually be excellent for the province of Ontario.

Bus deregulation, number one, it's not going to be done just like snapping fingers. We're talking about January 1998. We're also talking about doing it in a very orderly fashion. We're not just going to deregulate. Contrary to what you're assuming about bus deregulation, that we are going to have less service for the people of Ontario, that's not true, because under regulation over 400 municipalities in this province lost busing services in the last 10 years.

Mr Colle: The question is, in April this year I think the highway transport board is gone, right? They regulate bus routes and busing in Ontario, do they not? Once that goes in April, who's going to do the regulation? You say you're not going to do it until 1998, so what happens between April 1996 to 1998?

Hon Mr Palladini: Yes, the highway transport board as it stands will cease to exist as of April 1996, but we are in the process of putting a commission together which is going to oversee until full deregulation takes place, so we are not just going to let things drop. Like I said, it's going to be done in a very orderly fashion. January 1998 is when deregulation begins, but up until that point we will do it in a very orderly fashion.

Mr Colle: So you're going to replace the highway transport board with -- what's this commission going to be called?

Hon Mr Palladini: We don't know exactly what we're going to call it, but certainly we're going to come up with a responsibility, which is more important than what we call it. As far as how many people we're actually going to have on it, we haven't made that decision, or who it's going to be, but David Guscott will be more than happy to give you a little bit more information, more detail than I can.

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Mr Colle: I just want to get back to GO Transit again here. When you've got these buses that are independent running, competing with GO routes, obviously it's going to have an impact on GO. Are you saying that GO is going to be viable in competing side by side with privately run bus routes, on the same routes, which are basically their bread-and-butter feeder routes into the main system?

Hon Mr Palladini: I'm going to tell you something. If you can't stand the heat, get out of the kitchen. If you can't be competitive, then you shouldn't be in business. The people of Ontario have been supporting businesses, government has been supporting businesses that clearly should not have been in business. I am not saying that GO is not going to be viable. On the contrary, I have a lot of confidence in GO and I think it's going to be around and it's going to become stronger than it is today. But we cannot keep subsidizing businesses that do not want to run efficiently.

Mr Colle: How are you going to strengthen GO?

Hon Mr Palladini: We are going to strengthen GO, number one, by making sure its operation is streamlined and also by making sure that the routes we are presently on are going to be profitable or viable. We're going to take a look at how we can expand GO Transit in other areas. We have railways abandoning lines presently and there's nothing being done with them. Maybe there are ways we can implement some of these abandonments and turn them into lines that we can utilize and expand services, not only in the GTA but beyond the GTA.

Mr Colle: But you've announced all the cutbacks that this government announced. I mean, they announced expansion programs and you pulled them all back. Are you going to go ahead and expand them again?

Hon Mr Palladini: This government is committed to giving the people of Ontario the best possible balanced transportation system and also to becoming a very fiscally responsible government. We are going to govern by spending money on a priority basis. That's the way this government is going to be spending money. We will address the needs as they come up and how we can prioritize them and what needs are going to develop.

Mr Colle: No, you said you were going to expand GO but the first thing you did when you became minister is you cut out of the budget the expansion of GO that this government was committed to when they were in office.

Hon Mr Palladini: We don't have the money. You can't keep spending money that you don't have.

Mr Colle: So where are you going to get the money to expand now?

Hon Mr Palladini: This is today, but we do have a vision. We do have a plan that can be implemented once the funds are there, that we can substantiate spending that money.

Mr Colle: Where are you going to get the money now for this expansion? You're saying you didn't have the money, and that's why you cut it out. Now you have faith that the money's going to come along to expand GO again. Where will you get this money to expand a program that you say you're going to expand?

Hon Mr Palladini: Let me just say that I certainly have a lot more faith in this government than I had in the last two. If there is an opportunity for eventual growth, this government is going to explore it and is going to come up with innovative ways of how we can deliver those services. Possibly privatizing GO could be an opportunity for some smart business person out there who can see an opportunity in how GO can be privatized and actually be self-sufficient without support of tax dollars from the government. That's what I can see down the future.

Mr Colle: There's no problem with selling off Ontario's GO Transit to the private sector if you feel that's to your government's bottom-line interest.

Hon Mr Palladini: This government has a responsibility to all Ontarians. We are not going to sell our assets just for the sake of selling our assets. But you cannot expect all taxpayers of this province to subsidize a business that's not viable. This is the key. We want a business that's going to be viable and deliver the services in a cost-efficient way. If the private sector can do it better and cheaper, then yes, the private sector's going to deliver those services, not businesses that are going to be continually subsidized with government money, taxpayers' money, Ontarians' money.

Mr Colle: Why not put GO up for sale right now, if you don't believe in subsidizing business?

Hon Mr Palladini: Because we have not given up on GO as a viable asset. We feel very strongly that GO can develop a much better monetary possibility and we haven't given up on it. We're going to look for ways that we can become more efficient in operation and be viable in giving the people the service we feel it can.

Mr Colle: As you know, over the last five years, GO has been streamlining, GO has been making itself more efficient, GO has been raising its fares, GO has been laying people off. What else should they do to become more efficient? What have they been doing wrong in terms of their streamlining they've been going through for the last five years?

Hon Mr Palladini: Maybe we can do a better job in marketing GO; maybe we can do a better job in marketing GO passes; maybe we have to come up with innovative ways that we can encourage people to take public transit. There are opportunities, clearly, that we can pursue in trying to alter, but we just can't keep subsidizing 75%. This is where it has to end. There just isn't enough money to keep doing things in the same old way. We have to come up with better ways, and I believe that we are going to come up with those better ways.

Mr Colle: But I asked you, how do you make them more efficient, not about attracting more ridership through marketing, which is very difficult when you're cutting back their budget. What things should they do to make themselves more efficient as an organization and to deliver a product more effectively and more responsibly? Never mind the marketing.

Hon Mr Palladini: I believe I gave you some of my suggestions, and one thing that's very clear, you want me to give you answers that I don't have. All I can share with you is the information and the ideas and some of the concepts I do have. I believe that I've done that, and I'm trying to do that in the best possible way, but it isn't doom and gloom. That's not what I'm saying. I'm saying that we have to accept the responsibility of making an attempt at making things better. This is what this government is committed to do: trying to make things better. We don't have all the answers, and we are not going to solve all the problems.

Mr Colle: Just to switch from GO to the transit situation in Toronto, one of the first things you did as minister also was you arbitrarily cut the construction of the Eglinton subway project. What analysis and what studies did you do to help you come to that decision? I know you decided to keep Sheppard going and that's laudable, but what was the difference between looking at keeping a Sheppard and cutting an Eglinton and what were the factors that went into that, in terms of ridership figures, in terms of cost, in terms of the overall transit plan for the GTA? Why does Sheppard make more sense as part of the overall transit plan of the GTA than an Eglinton, that hooks up to an airport, where Sheppard basically ends up -- where does it end up? I'm not sure. Anyway, why did you keep Sheppard going and not Eglinton?

Hon Mr Palladini: I'll tell you what. Thank you for the question. What I can give you is the short answer, but then, as far as the long answer with the numbers you want to relate to, I can get David Guscott.

That was a TTC priority. They're the ones who called the shot. It wasn't us.

Mr Bisson: TTC?

Hon Mr Palladini: They called it.

Mr Colle: Who at the TTC, or what report --

Hon Mr Palladini: That was the call made by Metro, not this government.

Mr Colle: No, no, no, wait a minute now. Where's Metro's position on paper that it supported Sheppard over Eglinton? That was the position maybe back in 1972.

Hon Mr Palladini: That was a position that I have seen remarks made by I believe some people on council, present council, and we basically concurred with what they decided. They wanted Sheppard as a priority over Eglinton, and we chose to go along with their priority.

Mr Colle: I'm not talking about remarks made by a councillor. If you're going to make a billion-dollar decision, you're going to spend a billion dollars on Sheppard, you made that decision on a few remarks made by councillors? Where's the report? Where's the analysis that said that Sheppard made more sense than Eglinton or that Sheppard was a worthwhile $1-billion investment?

Hon Mr Palladini: I have my own version, but I'm not going to share that with you; it is my own version.

Mr Colle: That's astonishing. A few councillors' remarks, they made the decision. I guess one of them was Lastman, was it?

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Hon Mr Palladini: Okay. I believe I've just been given the remarks that were said, and I believe, Mr Colle, it was your government, Let's Move report, 1985, that showed Sheppard a number one priority and Eglinton a number four. So it was your government that initiated I guess the scaling or rating of what is a priority, and basically Metro agreed with your government and we agreed with Metro.

Mr Colle: That was 1985. There were maybe 15 subsequent reports that looked at the analysis of the different subways, Mr Minister, and if you were to read the reports, they would let you know that there was no preference in terms of Sheppard or Eglinton or the York University line, that Metro took the position that basically, as your deputy ministers took the position, all four lines were viable and Metro's very specific strategy was to invest in all four, and never did Metro say that Sheppard or Eglinton or the York University was a preference. So if you state something that goes back to 1985, that was an original proposal by the Liberal government which talked about a plan, and that plan went through 10 years of changes. To go back to 1985 for the reason why you cut Eglinton to save Sheppard doesn't hold water, Mr Minister.

Hon Mr Palladini: Mr Colle, I don't have anything in writing that I can show you that we based our decision on what Metro prefers, so you'll just have to take my word for it presently, but there are some other details that we might be able to share with you, if you would allow Mr Guscott to speak on it. One of the people who spoke as far as deciding which one is a priority, Mr Christie is one of those people who made that comment.

Mr Colle: So he was one of the councillors --

Hon Mr Palladini: He was one of the people who made that --

Mr Colle: But, Mr Minister --

The Chair: Mr Colle, one second.

Mr Colle: -- this is a $1-billion decision. Wouldn't you want to see some analysis?

The Chair: Mr Colle, your time is up and I would ask that the NDP proceed to their 30 minutes.

Mr Pouliot: Mr Minister, I think I heard you say that you would wish to have a GO system make money or break even? In a broadly summarized form, what's your exact position vis-à-vis GO Transit?

Hon Mr Palladini: I'm sorry, Mr Pouliot, I wasn't paying attention to your question. My apologies.

Mr Pouliot: No problem.

Hon Mr Palladini: Would you mind repeating it?

Mr Pouliot: Not at all. You've mentioned that you would prefer to see GO Transit at least break even or make money. Is that right?

Hon Mr Palladini: I think I might have said something along those lines, but really what I did say afterwards is that it has to be viable and I believe that's the word I would like to put on the record, that I believe any operation has to be viable.

Mr Pouliot: "Viable," in my dictionary, Webster or Oxford, of synonyms says that they have to at least break even. Do you have any plans for this to happen?

Hon Mr Palladini: Do I have any present plans of privatizing? Is that what you're asking? I'm sorry.

Mr Pouliot: No. To make GO "viable," have it break even, have it live with delivering the service without subsidies, do you have any plans?

Hon Mr Palladini: I believe there are opportunities that we can explore, yes. We do have some initiatives we are going to take a look at to see how we could explore and make them beneficial.

Mr Pouliot: You're quite familiar with the intricacies, with the workings of GO Transit, for the province is responsible, so you're responsible, for the running of GO Transit. Is that right? Okay. I see your counsel nodding.

Hon Mr Palladini: To some degree, I guess.

Mr Pouliot: I can certainly share that.

What is the percentage of revenue emanating, coming from, the fare box?

Hon Mr Palladini: Frances Chung, would you please come forward. Maybe you could help this young man here, Frances.

Mr Bisson: Thank you, father.

Ms Frances Chung: My name's Frances Chung and I'm the director of finance with GO Transit. The question regarding the proportion of revenue coming from the fare box is 65%.

Mr Pouliot: You need money to operate, so for every dollar that gets in, there's a 35-cent deficit, right?

Ms Chung: Yes, on the operating side.

Mr Pouliot: How much money is that? How much money is spent on operation of GO Transit in total?

Ms Chung: Are you interested in our operating subsidy or the operating budget?

Mr Pouliot: How much does it cost to run GO Transit, operation? Not the rolling stock, not the leaseback, just how much does it cost to run GO Transit?

Ms Chung: For this current year, our operating budget is in the range of $174 million.

Mr Pouliot: So 35% of $174 million is what you're looking for, Mr Minister.

Hon Mr Palladini: I guess if you take her numbers and you want to go to 100%, then it's 35%, obviously, but I believe that there are some other tangibles that do come into play -- not that I want to say that Frances doesn't give you the right numbers. You asked her the question and she gave you the right answer.

Mr Pouliot: That's right. She said that --

Hon Mr Palladini: But as far as the overall operating is concerned, you have other things that come into play.

Mr Pouliot: You see, there are no tricks here. You have a shortfall of more than $50 million a year to operate the GO Transit system. That's the hand that takes the money and the hand that gives the money. At the end of the day, you're short over 50 million bucks. So if you want to reconcile this and make it viable, you have to hit the consumer, big time, because the money doesn't grow on trees even with the Conservatives. So what is your solution?

Hon Mr Palladini: Mr Pouliot, before I get Frances to speak on some of the solutions, I think it isn't as simply put, just like you're putting it, "Hey, the consumer has to pay more money." I don't believe that is a scenario I want to take a look at solely as a remedy-solver.

Mr Pouliot: Where are you going to find 50 million bucks?

Hon Mr Palladini: Number one, I believe that the service we deliver has to be competitively priced. It has to be to the standards of what they are in North America within the same type of communities. But there are other remedies that we should be taking a look at, and clearly this government is prepared to do just that. I'm going to allow Frances to share some of the concepts and some of the ideas of where we could in essence come up with the efficiencies. Frances, would you mind?

Ms Chung: Sure. I'll be glad to share some of the things we have been doing.

Mr Pouliot: With respect, in a broadly summarized form, because your time is so precious, Madam.

Ms Chung: Yes. We are continually streamlining our organization in terms of administration. We have done in the past, we have had some layoffs, and we shall be looking again as to how we can refine that.

We are also working very closely with our union. We are looking at the work rules right now that are there, in a cooperative effort. In the work rules right now, we believe there is room for improvement, but we are working on this in a collaborative way together with the union.

We are also looking at expanding our revenues. We are investigating ways of approaching advertising on the buses as well as the trains.

We are also working in negotiating with the railways to reduce the railway crews from four to three. Hopefully, this can be done in the coming year, and also in the future we hope to further reduce it from three to two. A precedent has been set in BC Transit whereby it has just initiated West Coast Express, and their crew is a two-member crew. So we are working in that regard.

Mr Pouliot: Is your objective to have, like, in the process of deregulation, if we keep that as a concept, is it your intention to have every route make money?

Ms Chung: As the minister has discussed, we are looking in the area of our buses or our bus routes to see which ones are affordable. As in any private sector, there are always cross-subsidies. There are going to be some routes that are going to have a better R/C ratio than others, but we are looking at the whole cost of bus corridors. We are prioritizing them. We are working, in cooperation with the ministry, to see how we can best improve.

Mr Pouliot: Yes, yes, yes. I'm so happy that -- I'm learning a lot here, Madam, and I thank you for it. Cross-subsidization -- it's not my mother tongue, so I do apologize -- is that not a form of regulation where one route makes money and then you take part of that money and you cross-subsidize, you send it elsewhere to serve the good folks out there, with the understanding that some of the routes will not make money? Is that not a fair assessment, that cross-subsidization goes hand in hand with a regulated system?

Ms Chung: Yes. That is a fair assessment and that is why we are looking at all our bus routes to see which are the ones that we can afford. In the process of deregulation, I believe the government has also said that there are pitfalls to be avoided.

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Mr Pouliot: You've already answered the question, and I thank you very kindly, on deregulation. How many of the routes lose money?

Ms Chung: Right now, our R/C ratio is 65%, so on a general basis you can say that all the routes lose money.

Mr Pouliot: Well, well, well, Madam, it doesn't speak very well of the system. If there were only you and I, Madam, with respect, would you buy GO Transit if it loses more than $50 million a year, plus you would have to buy rolling stock because those things wear and tear; they have to be replaced. That man there --

Mr Michael Brown: You already sold them.

Mr Pouliot: I'm not asking for comments. I can very well do this.

Mr Colle: Who owns them?

Mr Pouliot: It's a leaseback arrangement. Any time you want to talk about that -- that's not the question. Mr Chairman, is this my time?

The Chair: It's your time if you direct your comments to the Chair.

Mr Colle: You sold them all off.

Mr Pouliot: It's my time.

The Chair: Mr Pouliot has the floor. He's on a roll.

Mr Pouliot: The member for the Liberals should have better things to do with his time than to reel off or peel off old Hansards, try to take under those records that are irrelevant indeed.

Back to GO Transit, I have one last question. Aside from the rolling stock, if it's costing more than $50 million a year, are you in the process of preparing a fare hike? The policy of this government is clearly to break even, à la free enterprise. As you look around you, you will see many good capitalists here, but most of those capitalists don't have a capital.

Hon Mr Palladini: Mr Pouliot, may I give you an answer? I think we have to stop speculating on price increases. I think we've answered that we are going to look for every possible way that we can come up with efficiencies. Price increases are not the only answer.

Mr Pouliot: Thank you very much, Madam. You couldn't resist, Minister, with your latest pique or sortie, blaming past government, and you reminded us that your regime, sir, was not like others. You've mentioned children, children hungry or children starving. Let me assure you, sir, that we don't for one minute have any lesson in humanity to take from your government. You have cut 21.6% from the less fortunate, the people who cannot defend themselves. Then you suggested to them that they go shopping with a hammer -- buy dented tuna. That's appalling and shocking. Then you offered them a menu. They were referred to as not the marginalized, not the less fortunate, but downtrodden and low-lifers, and then you've endeavoured to move up the food chain. Be careful. Some people will better defend themselves.

When you mention making ends meet, you make no mention, Minister, of a 30% tax decrease that will benefit those who are the most fortunate. This will swell your deficit from $10 billion to $15 billion; therefore, you will have to enact more and more cuts. You have a vision all right and that's what you said.

Well, when you rammed through Bill 26, you had no fewer than 150 amendments. When your ministers or colleagues were questioned in the House, they were ill-equipped to answer; they didn't know. They portrayed a tableau of unprecedented incompetence. It's too bad. Well, that's what you say, that the municipalities that are the recipients of subsidies do not choose to make an allocation to Wheel-Trans. You see, when you pass the buck, when you download, they too are under a lot of pressure, so if you give them fewer dollars, little surprise that they too will have to spend fewer dollars.

I have a letter here addressed to the township of Nipigon. It's signed by David Ferguson, manager, public transportation office, dated September 11, 1995, when you were the government. The subject matter being addressed is the specialized transit program at this time.

I will quote parts of the letter because I am quite disturbed. It flies in the face, it is contrary to what you have said before:

"While we have not been assigned a specific budget target for 1996, we expect that at a minimum, the current reductions will be permanent. Further reductions through restructuring of the specialized transit program are currently under consideration."

With your ideology and philosophy we know which direction that is.

"We recognize the inconvenience this may cause...."

"Based on the current program review taking place I regret that we cannot consider the addition of new municipalities to the specialized transit program at this time."

It concludes: "Thank you for your interest in providing public transportation options for person with disabilities in your community." Ministry of Transportation letterhead, a proof fatale.

What do I tell those people here, to move to Toronto, that the township of Nipigon is, sorry, off the beaten path, that they don't have a chance to be like the others, that they are about to be tossed on the human junk pile?

You see, they have collected, they have nickelled and dimed people to death here. This is a small program. You had a choice. You could have said yes, but you said no. You said to the people of Nipigon, in the riding of Lake Nipigon, and to many, many others, that it's no use calling, no room at the inn, we're shutting shop. But when it comes time to give to those who have the most, the people who run ahead of the pack, people with power, people you meet at the Boulevard Club and the Toronto Club, then a 30% tax cut to make you even richer.

Mr Minister, you've spent some time with us using, by way of analogue, by way of parallel, and you thought it was filled with validity, the example of being a good parent. Give us a break. We need one.

What do I tell the people here? Specialized transit for people with disabilities. What do I tell them, sir? They don't drive a specialized or a big car. They're ordinary people. They don't have the means of the more fortunate in our society. What do I tell them? They've received that letter saying: "Don't call back. We're not going to approve your grants now or in the future. The cuts are permanent."

It's your ministry; you're the minister. What do I tell the people of Nipigon regarding specialized transit?

Hon Mr Palladini: May I respond now? You're asking me to respond, Mr Pouliot?

Mr Pouliot: Yes, they're asking you to respond to them through me; that's right, Mr Minister.

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Hon Mr Palladini: As far as the actual letter that you've got, I haven't read it so I really don't know all the contents. I know you pointed out some of the contents that you read out. But basically, what I would like to say is that somehow we have to live within our means, and clearly the last two governments were not living within their means.

Mr Michael Brown: That's not right. That's not factually correct.

The Chair: Let the minister respond.

Hon Mr Palladini: We are trying to live within our means, and some of the decisions that have to be made are very difficult ones and certainly ones that we don't like, as ministers, as MPPs. I know how my caucus feels about some of the tough decisions that had to be made, but we made these tough decisions so that we can in fact come up with a remedy that will somehow bring the future with a little bit more light. Right now, we are in a very dark age. We are living way above the means.

Mr Colle: You're bang on there. We would all agree with that.

Hon Mr Palladini: We can't afford to keep supporting a $100-billion debt. How much more money do you want to spend as a government, just adding to the debt on the heads of our children, like you were saying earlier? We cannot keep doing that. I'm saying that the people of Ontario finally have a government that has seized the responsibility and is doing the things that need to get done, tough as it may be, but we are doing the things that we must do.

Mr Pouliot: Like borrowing money on international markets to pay for the tax cut. That's so commonsensical. In no time at all, you'll have us all in the poor house.

Mr Preston: We're there.

Mr Pouliot: I have no more questions for this session.

Mr Preston: You guys turned out the lights.

Mr Colle: Get your candles ready.

Mr Bisson: I'll wait for the committee to come somewhat to order here and I will endeavour to ask some questions.

Interjections.

Mr Bisson: No, no apologies. I understand how members -- and I at times engage in exuberance on this committee as well, so I'm not passing --

Mr Rollins: You don't. I can't believe it.

Mr Bisson: I am not passing any judgement, believe me.

First of all, just a quick comment and then I've got a series of questions around regional transportation and GO and a few other things. You made the comment that basically it is the goal of the government to make sure that everything in the end, when it comes to services offered by GO and others, is offered on a break-even basis, because after all, it's not wise expenditure on the part of the government of Ontario to subsidize through the taxpayers' dollars, such services.

I just want to remind the minister, and I'm a little bit surprised that the minister doesn't know this already, that it's a matter of public policy in this province, as it is in every other jurisdiction in the civilized world -- and last time I checked, Ontario falls under that heading -- that we engage in the development of public policy in order to be able to offer to the people of our jurisdiction services that are somewhat cohesive and services that are somewhat in kind, the same, to different people across our jurisdiction, that being the province of Ontario.

Unfortunately, the private sector cannot do it on its own because the market base is just not big enough to make that happen. So the government of Ontario, like every other government across the known world that works in a free market economy, has moved into those areas that are not economically viable because the private sector couldn't do it on its own. The government offers those services so that the people within our jurisdiction are able to, in this case, come to work every morning or go to visit people in the city or go wherever they might be going, through the services of GO Transit. I'm a little bit miffed by a minister of the crown who is supposedly responsible for transportation not recognizing there is a factor of public policy in all of this. Anyway, needless to say, there are a couple of questions around that.

GO Transit operates at a current subsidy of about 35 cents on the dollar; 65%, or somewhere about there, is through the fare box and the rest of it is through a subsidy. I take it -- a yes or no answer, please, without a lot of detail -- that where you're trying to get is that the subsidy is altogether eliminated and entirely paid for either by efficiencies or by privatization or by higher fares, or a combination of all three, or others I might not have mentioned.

Hon Mr Palladini: Viable, to me -- you can interpret it in a couple of different ways, but certainly it is this government's intention to see how we can become viable in a cost-efficient way, and there are opportunities that could be explored and should be explored --

Mr Bisson: I understand that. That's not my question. I've only got 10 minutes and I'd like to get an answer to my question. I understand where you're going. You're making a decision that I have to respect because you're the majority government -- I don't like it, but I respect it -- and that is, you have stated on this committee that you want to see GO Transit become break-even; in other words, no government subsidy. That's where you're going.

Hon Mr Palladini: That would be our intention, that would be our goal. That would be the goal in the best interests of all Ontarians.

Mr Bisson: Nothing wrong with that; if you can do that, that's fine. But the question that begs to be asked is, if you're not able to get to that goal of being break-even, do you plan on cutting out the service?

Hon Mr Palladini: I'm going to answer you in this way. We are going to look for every opportunity where we can get the savings, and we are committed to giving the people of Ontario a balanced transportation system.

Mr Bisson: I am committed with you in doing the same thing.

Hon Mr Palladini: I have no intentions of cutting off GO. I have no intentions at this time of privatizing GO or getting rid of GO.

Mr Bisson: Now I'm getting answers. That's the answer I'm looking for. You're telling Ontarians, through this committee, that if you're not able to find all the efficiencies that you and I would like to find, and you're not able to find better ways of running GO Transit, you're still prepared as a government to keep that subsidy in place so people keep their services?

Hon Mr Palladini: We have that commitment of providing the people of Ontario a balanced transportation system, and GO is a major part of it.

Mr Bisson: And that means you're not going to pull services out of communities like Oshawa or Whitby, or whatever it might be. Those people are safe?

Hon Mr Palladini: This government is committed to fiscal responsibility. We have to look for ways to find the opportunities to --

Mr Bisson: Okay; all right. I'm going to get more of the same.

I've only got five minutes, so I'm going to try to go through this. Do you plan on expanding any other kind of rail service, through shortline services? Are you looking at trying to find ways of dealing with the whole question of shortline rail transportation in addition to what GO Transit now does?

Hon Mr Palladini: We are taking a look at everything for how we can improve the transportation system. Shortline rail -- we introduced it; we're the government that introduced it, so we are committed. We see opportunities and investments coming in shortline rail --

Mr Bisson: You don't have to be defensive; it's a very simple question. The government is actively looking at trying to find ways of looking at the shortline rail system as being in addition to what GO Transit would presently provide so Ontarians are better serviced?

Hon Mr Palladini: Yes, we are going to encourage --

Mr Bisson: Thank you. The next question --

Hon Mr Palladini: We are going to encourage the private sector --

Mr Bisson: But if the private sector is unable to do it on its own, will the government look at getting into some kind of partnership arrangement with those private sector carriers on shortline rail to make those lines viable, or providing other kind of assistance, if necessary?

Hon Mr Palladini: We will look at every opportunity there is, but we cannot keep expecting government to bail us out or to make businesses viable. We cannot just say that government is going to make up the difference. We must stop.

Mr Bisson: You're being very defensive on this one, and there's no reason to be. All I'm asking is whether there's a policy this government is undertaking to figure out a way to move on the shortline rail question that would be in addition to services presently provided in our system of transportation. You want to do that primarily through the private sector; I respect that. But in those cases where it's not viable, where the private sector can't do it on its own and may need some assistance to provide shortline rail transportation to some communities somewhere, is the province prepared to play some kind of role in assisting the private sector? It may not be a direct subsidy; it might be other things.

Hon Mr Palladini: I guess there has to be a good strategic reason and it has to be a priority, for government to take a look at further involvement from a subsidy standpoint.

Mr Bisson: Are there presently any proposals before the government in regard to short line, before you on your desk, at this point?

Hon Mr Palladini: Not at present, that I'm aware of.

Mr Bisson: Are there any proposals about regional air carriers in regard to a system of transportation? Any kind of regional air carrier proposals on your desk?

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Hon Mr Palladini: Not that I'm aware of. I have heard some rumblings, but I can't really answer that.

Mr Bisson: Have you heard rumblings around Air Oshawa? Is there any proposal for Air Oshawa?

Hon Mr Palladini: I really can't give you any specifics because I do not know any specifics.

Mr Bisson: The deputy is shaking his head no. There are no proposals from Air Oshawa at the Ministry of Transportation at this time?

Mr George Davies: We have not received any.

Mr Bisson: Minister, can you check for tomorrow if there are any proposals for Air Oshawa on your desk? I'd be curious to know.

Hon Mr Palladini: Sure.

Mr Bisson: I've got one more question.

The Chair: You've got about two minutes.

Mr Bisson: Wow, I'm having to clip through all the way. On the question of air transportation, to follow that a little further, you would know that your colleague the Minister of Northern Development and Mines, one Chris Hodgson, the hatchet man of northern Ontario, is in the process of shutting down norOntair, which means at least nine communities in northeastern Ontario will lose air service altogether, and the danger of having their airport shut down because they lose a subsidy from you, as the Minister of Transportation, on those municipal airports, and then they lose the landing fees on top of that.

Are you prepared, as the Minister of Transportation, the person who is ultimately responsible for the transportation system in this province and provincial policy on transportation, on behalf of northerners to talk to the Minister of Northern Development and Mines to get him to slow down this closure of norOntair to ensure that the private sector will move in, as you say they will, to take over the routes in those communities that will be affected?

Hon Mr Palladini: I really can't answer on Minister Hodgson's situation, but I can give you an answer from a government standpoint. We are going to take a look -- this is our government's mandate -- at every opportunity to see that things get done in an orderly fashion. Just for the sake of getting rid of a service -- it isn't just going to happen just like that. I am sure the process Mr Hodgson will be taking on is going to be in the best interests of all Ontarians.

The Chair: Thank you. The Conservatives have their 30 minutes, and I see the hand of Mrs Marland.

Mrs Marland: I'm thanking my colleagues for giving me this brief opportunity. I am concurrently sitting on another committee, but I really wish, when I listen to the former Minister of Transportation, that I were on this committee, because we could have a lot of fun together.

I would like to ask the minister -- I know he isn't going to have any difficulty saying yes to this question, but I need to put this on the record. For the 11 years I worked in opposition with the Ministry of Transportation, I discovered there is a mindset in the ministry, and it's one I would like to get your commitment on changing; that is, when the ministry is reviewing projects anywhere in the province, that it directly involve the local MPP.

In my case, it hasn't made any difference that I'm now in the government seven months later. I found out from a constituent that whatever the regional office is that's responsible for the Queen Elizabeth Way and the Mississauga Road interchange, the ministry is now in the process of holding public hearings and in fact has even advertised public hearings on the work to be done. There's repair work, apparently, necessary on the bridge over the Credit River, and there's a discussion about redesigning and reconstructing the Queen Elizabeth-Mississauga Road interchange.

The reason I'm asking you directly is that I have not been able to achieve this with former minister, and I would like to get the commitment from you that when public hearings are being held in a riding, the ministry automatically invite and inform the local member of provincial Parliament, as the representative of the ministry for that area, of those meetings and in fact extend the courtesy as far as scheduling the meetings with the MPP's personal schedule in mind.

Hon Mr Palladini: I want to thank my colleague for her question, and certainly I concur. I apologize if that process has not happened, but you have a commitment from me, and I believe our staff would certainly back me up on that. Number one, it's good business. Things are tough enough to begin with, and we have to be able to work together and at least give you the opportunity to serve your constituents. You have done such a marvellous job in your riding that I want to commit to you that it will happen.

Mrs Marland: Thank you. I appreciate that, Minister.

The Chair: Just a matter of clarification. Are you saying, Minister, that all the MPPs will be contacted? I just wondered, for clarification.

Hon Mr Palladini: I believe I have committed to my colleague to give her the information, and I guess my colleagues --

The Chair: Not the opposition?

Hon Mr Palladini: Not the opposition, but I just want to say --

Mr Colle: No, wait a minute --

Hon Mr Palladini: I want to say this.

Interjections.

The Chair: Order, order.

Hon Mr Palladini: You didn't let me finish. Just like that day in the House, you didn't let me finish. I clarified my answer. I was answering then, but you did not allow me to finish my answer. Please allow me to finish my answer.

The Chair: Go right ahead, Minister.

Hon Mr Palladini: Thank you very much, Mr Chairman. As a government official, I serve all Ontarians, not only Conservatives; I serve the NDP, and I serve Liberals. I believe we have to work together. Whatever information I have, my ministry has -- and I began this mandate of mine with a letter to all MPPs, including the opposition, that if my ministry could be of any help, we would do so, we would give you whatever information, whatever help you needed in your constituency. You have my letter on file. Whatever information I give my colleagues, I will give to the opposition as well. You have that commitment from me.

Mrs Marland: Hansard will show that I was asking that the ministry work with the local MPP when there are public hearings and open houses and projects being considered within their ridings. That was the commitment I got from the minister, and I thank you for that.

Mrs Ross: Mr Minister, I'm glad to finally get a chance to say something here. As a new member and a new member to the standing committee on estimates, I want to read something from the Provincial Auditor's report.

"The Ontario government is faced with enormous financial pressures. To cope with these pressures, tough decisions will have to be made about which government programs and services should be preserved as they are, which programs and services need to be modified to become more economical, efficient and effective in meeting legislative objectives, and which ones should be discontinued.

"To survive, these programs and services will have to compete for shrinking resources."

That is not our government speaking; that is the Provincial Auditor speaking. I wanted to get that on the record. I also want to say that one of the observations from the Provincial Auditor noted here is, "MPPs from all three parties expressed concerns that `party politics' play too great a role in the review process."

Having said that, I guess I'm going to follow suit and talk about something near and dear to my heart. I come from Hamilton, Hamilton West precisely, and Hamilton seems to have been ignored by a lot of politicians in the past at both the provincial and federal government level. We are characterized as being just a steel town, and I take great exception to that. We are a very diverse community. We are leaders in environmental fields and education fields and in health fields, so to say that we are just a steel community is wrong.

On December 17, 1990, the then Transportation Minister met with my predecessor, Mr Richard Allen, behind closed doors and made a decision that impacted very severely on our community. That decision was the cancellation of the funding to the Red Hill Creek Expressway.

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I would like to just give a little bit of background on this project for some of the members who may not know. The project was 38 years in the making. I do have some dates on that. It originally began in 1929 when the city purchased some property. Then in 1957 they suggested an expressway go through there. It goes on, and the dates that I'll just refer to are: 1977, when a definitive study was made by the region that favoured the use of the Red Hill Creek Expressway as the only route to take through the city; in 1979, city council and the region both voted to go down the Red Hill route; March 13, 1987, the Liberal cabinet at that time approved the project; and then of course December 17, 1990, the then Minister of Transportation, Ed Philip, announced the support was no longer there for the north-south route.

There are a couple of things I'd like to clarify. First of all, we talk about the east-west route and the north-south route. This is in fact one road; it is not two different roads. The purpose of the road is to get traffic from one end of the city and to get the trucks off of our residential routes. The east-west portion was proceeding as planned and the cancellation affected the north-south route. Just to make it really quick, the opposition claimed that they cancelled the funding on that project for environmental reasons. In fact, when it came closer to the last election they decided, a year before the election, they'd better get doing something about this because they were going to lose a lot of support in Hamilton. They proposed a project which would involve several other conditions attached to building this road. But lo and behold, the route going down the Red Hill Valley was going to be considered after all. So their claim that it was for environmental concerns really was just words, in my opinion.

Prior to our government coming to power, Mike Harris visited Hamilton and made a commitment to the Red Hill Creek Expressway. In the fall of this year, we deferred some of the funding, $6.75 million, because we were looking at all of the projects and all of the spending areas, which is what the Provincial Auditor's report suggested we do. So we postponed any further funding on that so that we could have a look at the project, and I understand the reason for that. But I'd like to ask you at this moment in time just to clarify for the record, so everybody is clear, what's happening with that roadway. What is the funding now with respect to the Red Hill Creek Expressway and what is our commitment?

Hon Mr Palladini: We have committed to going ahead with the Red Hill Creek Expressway, to the support of $20 million for the next five years. Like I basically said to you last fall, because of the fiscal situation that we do find ourselves in as a government, we are not able to go ahead with certain projects, and the Hamilton-Wentworth was one of them -- $6.75 million. I basically said that I would make it up to you next year, and I have. So not only are we going ahead with Red Hill Creek, supporting it at $20 million, but re-establishing the $6.75 million that we pulled back from last year.

Now, if there are some specific details that you would like, I'm sure I can get Ian Oliver to give you exactly how it's going to take place. Ian, would you mind coming up, or Carl?

Mr Carl Vervoort: I'm Carl Vervoort, the assistant deputy minister of the quality and standards division.

As the minister has indicated, the funding outlined and announced is for $100 million. In addition, as the minister has indicated, the $6.75 million which was deferred from the current fiscal year will be available in the next fiscal year, 1996-97. In fact, in the first year the total available subsidy from the province will be $26.75 million; thereafter, $20 million in each of the four years.

That is the fiscal plan, the general layout of the available funds. We have had conversations with the local commissioner of transportation, Mr Dale Turvey, about the prospects that there might be different cash flow requirements in the future years, depending on the rate of progress of the project, and we undertook that, depending on the allocations of the day, there could be some variability in the preciseness of those allocations. But the commitment is for the $100 million and reinstatement of the $6.75 million deferred from the current year.

Mrs Ross: Just a couple of questions then with respect to the funding. At the bottom of the north-south route, at the connection with the Queen Elizabeth Way, I know that the Ministry of Environment is working closely with regional staff to develop that hookup at the bottom. I also am aware that some of the funding for that hookup, which was a provincial responsibility, has been given back to the municipality, but there are ways of them making up that money. It has to do with development costs, and I'm not a developer and I don't understand that. I wonder if you could just clarify that for me.

Mr Vervoort: Yes. In general, in the past the ministry has required that if in a particular project there are revenues received as a result of contributions by third parties, those contributions would be deducted prior to the sharing of the project costs. With the announcement of the government in supporting the Red Hill Creek completion, it was indicated that should the regional municipality of Hamilton-Wentworth identify additional sources of money related to developers, it would not in this case impinge on the announced subsidies available from the province.

Mrs Ross: There were also comments made with respect to I guess it's the Highway 416 savings found in expenditures through different ways of purchasing. Could you just tell me about that?

Mr Vervoort: Yes. In general, I believe what you're referring to is a notion that is frequently referred to as value engineering and is the process whereby, prior to actual award of construction of a capital project, there would be a review of the project to ensure that all of the features that are proposed to be constructed in fact are fundamental and essential to the project, and to ensure if there are any opportunities to reduce the scope of the work to reduce the approach to the job. So in order to save time -- time of course having value in and of itself -- those projects, those components would be reviewed and modified, as necessary, in order to reduce costs. So there's a process of review known as value engineering which might reduce the cost of any particular project.

We're increasingly looking at projects which have had a long life, and perhaps most of our freeway projects and major highways in the province do have associated with them a long planning horizon and a long design time. In the current time it's clear that, with limited resources, we do want to make sure that we are only building the components that are essential, and perhaps some of the components can be deferred until a subsequent time period.

Mrs Ross: As I said earlier, this is a project that is near and dear to my heart. As a matter of fact, when the Red Hill Creek Expressway was finally committed, my husband was a freeway manager, and so I get a lot of pressure from home about where our government stands on this project. No, I don't have money invested in it, and no, I don't expect to make any profit out of it. What I expect is that it's going to provide a very needed access through our community to get trucks and transportation off the residential roads, and so I'm thankful that we're going ahead with the project. I'll pass it over to my colleagues.

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Mr Preston: The minister has been hit with numerous questions and statements regarding a whole bunch of different ministries that he hasn't got responsibility for, so I thought I would make a kind of blanket statement.

My friend in the third party has gone on ad infinitum, ad nauseam, regarding the number of jobs that are going to be lost. I would like to bring to your attention that this weekend the former Premier, now the former leader of the third party, stated on Sunday -- and I'm paraphrasing now, but the intent that I convey is exact -- "I've known for four years the public sector is unsustainable."

In my view, "unsustainable" means you can't carry it on. Why can't you carry it on? Because you can't afford it. We have been saying that for quite some time now. The opposition took our CSR, poured a little water on it, bleached it out a bit, but had mainly the same kind of situation as we proposed; and the third party's leader at that time knew for four years you couldn't carry on the way you were carrying on.

It's been left to us to take up the reins, to bite the bullet, to put ourselves in jeopardy, but to get the job done properly. That's not five minutes worth, unfortunately, but those are the views that I wanted to express.

Mr Rollins: Mr Minister, getting back to something that I feel we know a little bit about, the truck industry, I've been involved in it for a little bit myself. I do know that you are considering lowering rates on axle weight. Is that something that you're going to try to look at? And some of the triaxle trailers that we have on the road that are very hard to -- those lift axles, has there been some discussion with the industry over that?

Hon Mr Palladini: Thank you very much for the question, and certainly what I'll do is I'll share just some brief information, but I'd like to turn it over to David Guscott. I think he'll share with you.

It isn't just axle weights, because nothing has been formalized. We are lifting the moratorium that presently is in place. We have legislation in place, but it's not being enforced. So as of July 1, on the aggregate haulers, the moratorium will be lifted.

As far as the types of vehicles that are presently on our highway are concerned, certainly we want to work with the industry to have an orderly deregulation, so to speak, of making sure that our infrastructure will be protected. Clearly what's happening right now is that a lot of the truckers are not paying attention to their responsibility. Lift axle is one of the main contributors to the deterioration of our infrastructure, and we cannot keep accepting that. So that is just one entity of it, but David, do you want to handle it or have Rudi do it?

Mr David Guscott: I'll start. I'm David Guscott, ADM, policy and planning, Ministry of Transportation.

There are initiatives under way with respect to changing regulations in eastern Canada with respect to trucking. Our concern is twofold in this regard. Number one, we have very valuable infrastructure in the roads and highways of this province that we have to maintain, we have to ensure stays in good shape. With ever-diminishing dollars to keep them in good shape, that's become even more important than it ever was. At the same time, this is a balancing act, because there is a direct effect on the productivity of our manufacturers and shippers and the efficiency of the trucking industry itself as you reduce the loads that are permitted.

What we're attempting to do and to balance in this regard is to determine the axle configurations which have minimum impact on the roadway itself. There are ways of configuring, as you will know, the loads and the location of the axles under those loads to provide a minimum amount of adverse effect on the roadway.

At the same time, there are types of commodities moved in this province that can't move by rail, at least for their whole trip, that do have to move on our highway system and for which the technology has not developed as far as we'd like to see with respect to appropriate configuration of axles and weights in that regard.

There's pressure from our provincial neighbours to the east, that's all of the provinces, to bring us into conformity with some of their views on what those weights ought to be. The easy thing to do would be to go along with that. The difficulty would be that it doesn't properly reflect or acknowledge the impact of our infrastructure and our competitiveness in that regard.

For that reason we have prepared, and at the minister's request shared with all of the involved parties, the terms of reference for a study which would look at this very delicate balance that must be struck between the preservation of the infrastructure and the efficiency of the movement of goods on our roads and highways.

We expect to begin that study soon and we hope to have it finished in the summertime. It will involve an investigation and some detailed engineering work on the state of our structures. It will also involve talking to shippers and manufacturers to determine what their needs are, what their plans are and how we can best bring this balance into the proper situation.

Mr Rollins: One of the concerns I have too is that I detect some of our neighbours, particularly to the south, coming in with basically half loads on their trucks, and because our restrictions are not what theirs are, then they can top up their load or increase their tonnage to travel through our roads and wear them out. I think as long as you people are working in conjunction with some of our partners on our perimeters to make sure, but ever keeping in mind -- I know it's nice to be able to draw bigger loads and bigger loads and more tonnage, but we're paying dearly for every one of those tons that go on wrongly loaded and put pressure and weight on the roads that are tearing it up by the minute. I think that's one of the criteria that we've got to really look after very strongly. Forget about the safety aspect of it, but we've got to be very strongly in mind of the tonnage that we're drawing over our roads.

Mr Guscott: Absolutely. I would just add to the minister's comments about unregulated loads, which effectively have taken place in the aggregate hauling business for many years, that there's finally an end to that. There are parts of the province, particularly in the aggregate producing areas of Durham etc, where you can see the roads the trucks take by the ruts in them and you can see where they take the turns. The roads are in very bad shape. It's long time to bring in the regulation of that.

Mr Rollins: As long as we're keeping that in sight, because people who haven't been on the roads realize that when they're on some of the roads and they feel that wave moving back and forth in a car, and in a truck it's even a lot more pronounced. When that road keeps being used all the time and those little wear bars on that road keep getting thinner and thinner, it's a problem. There's only one thing that causes it, and that's weight.

I know the truckers would all love say, "Just forget about that; we can draw as many tons, because of ton-miles and all the rest of it," but I think we've got to ever keep in mind the wearing out of our roads.

Mr Guscott: That's why we want to do this partnership study with both parts. I will say that in our discussions with the trucking industry, they've been very responsible in acknowledging the fact that they don't want to see us post half-load limits on bridges, for example. That has a greater impact on them than some slight reduction in their permitted load. They have acknowledged that there's a balance to be struck here and they don't want to see the infrastructure deteriorate either.

Mr Rollins: One of the other things, and probably you know, with the lift axles we have on at the present time: Is there any idea that maybe those lift axles will be ruled unusable?

Mr Guscott: No. In western Canada where, for reasons that primarily relate to the quality of the subsoil that they build their roads on, lift axles are not permitted; they're banned. They're banned because it's too easy to lift the lift axle, when you're under load, to save some fuel economy, for the short-term benefits, but the long-term disbenefit of the whole situation.

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The trucking industry has acknowledged with us that an orderly phase-out of lift axles is inevitable in the rest of Canada, not just in Ontario. They want to discuss how to make that transition, but they do acknowledge that there are configurations under development and some now available which negate the need for the lift axle; in other words, which allow trucks to make turning movements without a need for a rigid or fixed axle in the middle. Perhaps Mr Wycliffe would elaborate on that.

Mr Wycliffe: As Mr Guscott has pointed out and the member has mentioned, lift axles are certainly the focus of the reviews that Ontario has taken in the past, and the other provinces east of us. I do want to point out, however, that the configurations to achieve maximum weight in Ontario do not require airlift axles. We have been very actively encouraging the industry over the last number of years, and continue to do so, to move to what we call road-friendly and bridge-friendly configurations.

Probably the best example of that, at the risk of being a little bit technical, is a configuration that's called a B-train, which is basically a power unit, a tractor, pulling two semitrailers with two fifth-wheel connections, one between the tractor and the first trailer and one between the tractor and the second trailer. It is superior in terms of stability turning circle and very superior in terms of the proper weight distribution to minimize the weight impact on roads and bridges. So the ideal, if you like, configurations exist that don't penalize the industry in terms of gross vehicle weights. The problem is, there are products that cannot carry on a B-train, for example.

Mr Michael Brown: I'm wondering if you can help me in understanding your new grant structure. When we talk about municipal supplementary grants, are they still in existence in the way they once were, or have they totally been rolled into the -- I've forgotten your grand name for that.

Hon Mr Palladini: Thank you for the question. I hope I can clarify it for you. As far supplementing municipal roads grants, which you're referring to, they are now part of the block funding.

Mr Michael Brown: So that would mean --

Mr Davies: With the exception of the $100 million.

Mr Michael Brown: The transitional money. I do have some concern about that in that the supplementary grants recognize perhaps the greatest needs in the province of Ontario. Especially some of the smaller communities, in terms of carrying out capital projects, are going to have a great deal of difficulty. Some townships, for example, will have far greater needs within their township than others, and you'll be unduly penalizing some townships that perhaps, for whatever reason, have been down the priority list and are now just coming to the top.

Hon Mr Palladini: Certainly we shared the same concern, as a government, to make sure that smaller municipalities would get their fair share as well. That's one of the reasons why we did go to block funding, and we are encouraging municipalities to take a look at how they do business. I'm going to turn it over to Carl Vervoort and he'll share with you how we arrived at that block grant funding.

Mr Vervoort: The question you pose is with respect to supplementals. As has been answered, they are now included and would be part of the municipal support program administered by the Ministry of Municipal Affairs and Housing.

There is for a period of time $100 million, as the deputy minister has indicated, available to assist during the period of transition. That money includes some $40 million designed to accommodate projects deferred from the current fiscal year, as well as a recognition of a couple of programs that are in place with respect to the federal government. The strategic transportation improvement program, and in addition, support for the Red Hill Creek, are components of that $100-million fund.

The expectation will be that municipalities will be planning their capital needs, making assessments of their capital needs and making plans for those investments on a longer-term basis than perhaps they may have in the past. The ways in which those necessary expenditures could be financed remain to be seen. I think at this point there is an expectation that, increasingly, municipalities will be looking for ways to match their expenditure profiles on their capital investments over the life of the asset. Typically in the past, in most infrastructure investments, they have been very lumpy. We tend to face large investments in the creation of new infrastructure or substantial significant rehabilitations on a periodic basis. The view to the future would be that increasingly municipalities find ways in which to match their profile of revenue creation and the capabilities they have to generate funds locally with those future flatter expenditure profiles.

In addition, clearly there will be an obligation on municipalities to increasingly work together, to recognize where there are mutual opportunities to share in both the benefits and costs of infrastructure. There will continue to be advice available from the Ministry of Transportation in respect to the municipalities that may not have the degree of expertise that some of the larger municipalities have. Indeed, we are currently embarked on a program of working with the Ontario Good Roads Association as well as other related groups to see how they, as associations of municipalities and technical transportation experts, can help support both the technical advice and the financial planning and management of infrastructure within the municipal area. This will be a new role that our ministry will be playing that will begin with the coming fiscal year.

Mr Michael Brown: I appreciate the answer. I believe it's code for the townships to borrow their own money to do their own work, and the local ratepayer will pay. I know of only one township in my entire constituency that receives slightly more money under this program than others, and most were looking at significant drops in their support from the ministries of Municipal Affairs and Transportation.

I want to ask about a couple of specific projects in my constituency and the progress on them. The first would be Highway 6, in the neighbourhood of Little Current. There is a bridge called Goat Island Bridge between Goat Island and La Cloche Island, a relatively small bridge that the ministry is reviewing. We are very interested in seeing the highway realigned and a new bridge. I think the ministry's quite aware of that. We have a deferral from last year, while the ministry reconsidered its position, and I appreciate the deferral, rather than going forward with work the community really didn't want done. But we would like to know when we're going to straighten the road and put the bridge in the right place and get on with life.

Hon Mr Palladini: Thank you for the opportunity. I'm going to turn it over to Ian Oliver. He'll be able to bring you up to date on exactly what is going on.

Mr Ian Oliver: I'm Ian Oliver, acting assistant deputy minister of operations, Ministry of Transportation.

In answer to the question, the work is progressing to redesign that project, as you alluded to earlier. The opportunity is presented to realign Highway 6 because there's some Canadian Pacific Railway property that would now be available. For that reason, the bridge job itself was deferred, so the whole thing is being treated as one package. In the meantime, the regional and district people are watching the bridge very carefully for any repairs that have to be made so that it's kept in safe and usable condition. Timing for the actual construction is to be determined in the current discussions that are under way about setting priorities and future budgets.

Mr Michael Brown: Can I take, from what you've just said, that the commitment is to realign it and put the bridge in the new position that the community seems to believe --

Mr Oliver: From a technical point of view, that is the way the project is being designed at this particular time.

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Mr Michael Brown: So it's just a matter of appropriate funding at the appropriate time, and there is no question that it will be changed.

Mr Oliver: That's the way it's being redesigned.

Mr Michael Brown: Is that the commitment, Minister?

Hon Mr Palladini: If Mr Oliver has told you that, I believe that would be the commitment, yes.

Mr Michael Brown: Okay, thank you. We appreciate that, but we want it done in as quick a time as possible. As you know, it's a very dangerous situation. Ask both the mayor of Little Current and I, who were both in an accident at the same place right there just at the same time as the Conservative Party's nomination, last year about this time.

The other question I want to ask is, we have a request from the township of Assiginack, a long-standing request, looking at hopefully the ministry taking over a section of road that leads from Highway 6 to the border of the Wikwemikong First Nation. It's been a long-standing request of that township, which I think they're trying to remake. As you might know, the Wikwemikong First Nation is a very large community of some 4,000 or 5,000 people, and the road, although not terribly long, is extremely well used.

It is a problem for the taxpayers of Assiginack township to maintain that road because of the traffic volumes, and it's essential to the people of the first nation that they have good access through that road to get to where they are. I was just wondering if you have a position on that, and if you don't, I would encourage you to get one.

Hon Mr Palladini: I am not really familiar with that at all, but give us an opportunity and we'll get you the information and get back to you.

Mr Michael Brown: Yes, I would really appreciate it. I know the township council is -- you won't be the first minister they've lobbied for this and certainly it is very difficult for this township of only about 800 people to be supporting a road that has this kind of traffic volume. It isn't really a township road in terms of just serving the township; it is a vital link to the --

Mr Pouliot: Four lanes.

Mr Michael Brown: No, not four lanes -- to the Wikwemikong First Nation.

Hon Mr Palladini: Give us an opportunity to get back to you on that.

Mr Michael Brown: I appreciate that, thank you.

Mr Colle: I want to get back to the decision-making processes, the planning process in your ministry. When I asked you before about how you decided to continue to spend $1 billion on Sheppard and not build Eglinton, did you take into account, let's say, the whole GTA in terms of expenditure? Considering the demographic shifts that are taking place, did you evaluate perhaps investing in GO considering the growth of the population of the GTA? Why would you just solely put $1 billion into Sheppard? Why would you cut GO by $30 million and put $1 billion just into Sheppard, which is an inner-urban, almost, subway line?

Hon Mr Palladini: I believe I gave you earlier the answer you are looking for, but I'll give you some more details. I'm going to ask my assistant deputy minister, David Guscott --

Mr Colle: No, but I just want to ask you --

Hon Mr Palladini: I'm sure he can enlighten you on any information you want.

Mr Colle: No, but you made the decision, Minister.

Hon Mr Palladini: You are entitled to get the best possible information and I'm giving you the best possible person to give you that information. Whatever I tell you, I am not as knowledgeable, and I wish that I was so I could address your concern. Here is a man who will address your concern and give you exactly what you're looking for.

Mr Colle: Mr Minister, I asked you a question. They put these options on your table, right? They said, "We've got $1 billion to spend on transportation." You had to make the decision. The buck stops at your desk. They said to you, "We put $1 billion towards Sheppard or we put $700 million towards Eglinton or we put maybe $100 million towards GO." Did they put those options on the table for you?

Hon Mr Palladini: There were a lot of options that we discussed and I was made aware of. This is the reason I would appreciate having Mr Guscott go over it with you so he can tell you exactly what did happen.

Mr Colle: He didn't make the decision. You have the limo. You are the minister. You make the decision. He doesn't have a limo. Mr Minister, answer my question. What did you make your decision on? Did you think of the GTA needs?

Hon Mr Palladini: I am trying to be very understanding of you. You know, Mr Colle, I am somewhat disappointed with your attitude and also the confrontational method that you choose, that you would like to intimidate me. I'm going to ask you one time and I'm going to ask you right here and now, please refrain from referring to the government vehicle that I happen to use on occasion as my limo. I'm going to ask you on the record, please refrain from referring to the government vehicle that I'm driving as my limo. It is not a limo; it is a four-door automobile --

Mr Colle: It's not a two-door?

Hon Mr Palladini: -- it is being driven by an individual who works in the Ministry of Transportation political office, in my office, and I utilize him to drive me around so I can put government time to better use. Mr Guscott, would you like to give Mr Colle the answers that he's looking for.

Mr Colle: No, I want you to answer the question.

Hon Mr Palladini: I have given you my answer, and there's nothing further I have to say.

Mr Colle: No, you haven't answered.

Hon Mr Palladini: Mr Guscott will be more than happy to bring you up to date.

Mr Colle: Mr Chairman, I'm asking the minister a simple, basic question: Did he take into account the transportation needs of the GTA, the needs of GO transit, the needs of other transit authorities before he made a decision to invest $1 billion in the Sheppard?

Hon Mr Palladini: Mr Chairman, I would just like to basically say that I do want the member to get the proper information and certainly the most up-to-date information so he is very much aware. What I am going to be able to give him is not sufficient. Mr Guscott will give him a complete GTA transportation plan and hopefully what Mr Guscott is going to say to him will suffice his concerns.

The Chair: May I say this then, Mr Colle, do you feel that the information Mr Guscott will give --

Mr Pouliot: But he's asking the minister. He's asking the top person.

Mr Colle: Mr Chairman, I can contact Mr Guscott to get his information. It's very rarely I get a chance to question the minister. That's why I'd rather question the minister, but he doesn't want to answer that. I'll move on to another area, okay?

Earlier today -- I'm not quite sure what you were saying -- you said very emphatically that you believed in privatizing GO, then you retracted and said you don't. Could you just explain whether privatization of GO is part of the solution you're looking for? Is it or is it not?

Hon Mr Palladini: I believe that as a government we have a responsibility to govern in a cost-efficient way and give the people of Ontario the services that certainly they require, but we must do that in a cost-efficient way. What I did say as far as GO was concerned was that if there is an opportunity to privatize with savings for Ontarians and improve the service or maintain the service levels, more cost-efficient, why not?

I also said that we are not looking to privatize GO at this time. On the contrary, we are looking at opportunities how we can expand GO and make it viable, make it efficient so it will give the people of Ontario the services they expect.

Mr Colle: Okay, another question: In terms of your priorities here, the auditor stated that 60% of Ontario roads are substandard. They're essentially in dire need of repair. I look at your statements today and I see nothing but glowing comments about expanding 407, writing a blank cheque for 407, you're going to expand 416, you're going to do the Red Hill Creek. What is your strategy or how many dollars are you going to put into rectifying that 60% substandard road inventory you have?

Hon Mr Palladini: We are going to make sure that enough money is going to be shifted over to the rehabilitation program, but as far as numbers are concerned, I can get Ian to get you exactly what numbers in essence we are going to deal with.

Mr Colle: No, I don't want the numbers. Is there a program in place?

Hon Mr Palladini: Yes, there is.

Mr Colle: What is the name of that program?

Hon Mr Palladini: I'm going to get Ian Oliver to go over it with you. How's that? You want that information? Allow me to have Ian Oliver share it with you.

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Mr Colle: I asked you the name of the program that is going to meet with the 60% --

Hon Mr Palladini: You want the information, and I'm telling you, we do have a plan and a program, and I've got my man right here, he's going to give you the exact information you want and you don't want me to have him do that.

Mr Colle: Okay, I'll ask your man.

Mr Oliver: I suppose the best way to describe with some kind of label what we're doing to address this --

Mr Colle: Ian, excuse me if I'm quick. I just want to know the name of the program and how much money is being put into it.

Mr Oliver: The answer to your first question is, we're calling it refocusing and repriorizing provincial capital dollars, and I can tell you what that means and what we're doing specifically.

Mr Colle: No. How much money?

Mr Oliver: I can't answer that because that is the subject of discussions that are going on right now in terms of the estimates for the coming years and the overall priorities.

Mr Colle: And this is a new program?

Mr Oliver: This current year, we are at a level of about $200 million dollars, total, across the province -- it's more than $200 million -- and that is what we call rehabilitation and safety. What we have been doing is moving a higher percentage of dollars into rehabilitation and safety as our obligations to fund the major expansions in these major corridors are coming to an end over the next couple of years. That's our strategy. As we all know, we've had probably seven or eight or nine years of addressing needs for congestion and economic development corridors, and as those come to completion, our plan is to move a higher percentage of available dollars towards rehabilitation.

Mr Colle: So this is 200 million extra dollars you put into this year to rehabilitate?

Mr Oliver: No, that's the share of the capital dollars --

Mr Colle: So that was there before when Mr Pouliot was there.

Mr Oliver: That's correct.

Mr Colle: So there's nothing new been spent on the 60% deficiency?

Mr Oliver: We are working on moving more of the dollars that we call highway construction dollars to the actual work that's done on the road. We've been doing that progressively over the last five years. As to the percentage of money that's going into what we call precontract engineering, all of those steps one has to take before you have a contract to let, we are reducing those costs, we're streamlining our methods and our procedures, we're looking at new ways and means of cutting the costs of assuring the quality in the job, to get more dollars to go out on the road to actually be in the form of what we call payments to contractors for actual construction work.

Mr Colle: But essentially there has been no new money put into rehabilitation subsequent to the auditor's report pointing out this glaring deficiency in our roads?

Mr Oliver: In this current fiscal year, no.

Mr Davies: On that particular point, as Mr Colle knows, construction takes place after design and engineering. The minister gave us direction to begin making that shift, so that shift has already occurred in terms of the preconstruction work that has to be done. The priorities that have been identified from the minister's direction bring about a significant shift in the proportion of the contract money. The shift has already occurred with respect to the functions related to design and engineering so that we can be positioned, as soon as the construction season starts, to implement the minister's new direction.

Mr Oliver: I also add that in the context of the label for this approach or this program for refocusing, we are looking at all our contracts that are on the shelf for the coming years. They're being very closely scrutinized to be sure that wherever possible we focus only on the most critical pavement and structural and safety deficiencies, and focusing on structures and pavement, which is of course the main issue in the auditor's report. That again is in line with the general label we give this of making sure we address the most critical deficiencies that need to be addressed in the short time period we face.

Mr Colle: Mr Minister, considering 60% of your roads are substandard, isn't it perhaps time to refocus your attentions in terms of taking care of the infrastructure and reinvesting in the infrastructure and perhaps diverting some moneys from your megaprojects into taking care of the 60% of the roads that are substandard?

Hon Mr Palladini: That is definitely our intent, but I really want to highlight that these roads have not deteriorated in the last eight months; these things have been going on over other years, obviously, but it is our intent. We do see the importance of our highways in terms of the contribution they make to our economic growth, but at the same time we are being responsible, because we have a process in place to see how quickly we can get at resurfacing and rehabilitating these roads. We know where we are. I just wish I had the billion dollars or the $1.4 billion it would probably take to really do the job I would like to do, but we can't. Therefore, this government is committed to doing things in a fiscally responsible way but making sure we protect the infrastructure. That is our commitment to the people of Ontario.

Mr Colle: But as you're continually highlighting the major investment you're making in 407, shouldn't there be a parallel strategy as high profile -- which has not been mentioned; I don't see any reference to a high-profile, almost emergency program to meet this really dangerous situation that exists on our highways. I don't see any kind of highlighting.

Hon Mr Palladini: Highway 407 is probably going to do as much good as $150 million or $200 million would do resurfacing a certain road. Highway 407 is going to take a lot of traffic that presently has no other choice but to take the 401, but because of the 407, it will actually give us an opportunity to be more fiscally responsible.

Mr Colle: I just can't see why there isn't an investment in that. In terms of 407, how many dollars is the government lending this consortium?

Hon Mr Palladini: I believe the official contract was $930 million for the actual construction of 407.

Mr Colle: So when does the government start to reap the benefits and get a return on that?

Hon Mr Palladini: The sooner we open our highway and start collecting tolls, we can start paying our debt. If you want exact information, Mr Galange from OTCC will I'm sure be happy to share it with you.

Mr Colle: When does the taxpayer get back some of that money we're lending you?

Mr Galange: Maybe I can give you a very quick outline of how the financing is taking place on the 407, because the financing for the 407 has no impact on whether the government will have access to funds for other purposes. Do you want me to explain that?

Mr Colle: Are you going to explain off-book financing to me?

Mr Galange: No, it's nothing to do with off-book. The revenue stream on the 407 is adequate to allow servicing of all the debt related to the costs of that project, including meeting all the operating costs. We will be approaching the rating agencies with that revenue stream, and we will be successful in having the rating agencies agree that the allocation of debt to that project will be rated as off-credit to the province. What that means is that it will not be taken into account as the province looks for other borrowing requirements. If the province is borrowing, let's say, $1 billion to fund the 407, it would be rated as off-credit; that $1 billion worth of funding will not be taken into account when the province wants to borrow another --

Mr Colle: You're saying off-book, basically.

Mr Galange: It is not off-book. "Off-book" means accounting. I'm talking about off-credit, how the credit rating agencies will regard that borrowing for the province. That means that project is completely self-sufficient and does not influence the ability of the government to have funds available for other projects.

Mr Colle: It's basically a separate borrowing, is what you're telling me.

Mr Galange: It's a separate borrowing that isn't being held against the government in terms of debt. It isn't being recognized as debt to the government.

Mr Colle: But the government is borrowing that money, right? I want to know, when does the taxpayer start to get that money back that it's borrowing?

Mr Galange: The money won't go back to the taxpayer; the money will be repaid to the lenders. The money will be repaid strictly out of the toll revenues of the project. The taxpayer is not involved in funding the project. What the taxpayer will receive is the benefits of the project in terms of decongesting the 401 and other arterials, and also the taxpayer will get the benefit of a congestion-free roadway and the highway to be handed back with no debt to it in approximately 25 to 26 years.

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Mr Colle: But this government really believes in the private sector doing things. Usually when you borrow money, there's a return for people who lend money. In other words, they do it for a return. Other than the predictions of decongestion, which haven't been proven out in other jurisdictions, where building one highway usually just leads to building more highways and more congestion -- take, for example, the California situation -- what is in it for the taxpayer monetarily, lending this $930 million?

Mr Galange: The taxpayer isn't lending --

Mr Colle: How much money do they get? Do they get any kind of interest payment on that?

Mr Galange: The taxpayer isn't lending the money. The taxpayer is not taking the money and lending it.

Mr Colle: It's borrowing money on your behalf.

Mr Galange: The money is being borrowed from the financial institutions, and it is being completely serviced from the toll revenue of the project, and it is not being classified as government debt for purposes of government looking for other funding. The taxpayer isn't in the equation.

Mr Colle: Who is underwriting the borrowing?

Mr Galange: The toll revenues; the user of the highway who will be paying the toll revenues.

Mr Colle: What do you need the government for?

Mr Galange: The government is able to borrow at the most effective rate for us --

Mr Colle: That's what I'm saying.

Mr Galange: -- and we will have the full benefit of having none of that borrowing regarded as government debt. I think that's a tremendous strategic financing position for the startup of the project.

Mr Colle: No, no. But I'm saying the government is borrowing on your behalf, so there will be all kinds of benefits to the private sector.

Mr Galange: There surely will.

Mr Colle: I'm asking you, what's the return on the government putting itself on the hook for $930 million? Do we get 1%, 2%?

Mr Galange: The government is not putting itself on the hook for $1 billion. The project's revenue stream is solid enough that the rating agencies are prepared to rate that debt as not being the equivalent of government debt. It will be the users of the highway that will be paying for it. The taxpayers overall will be receiving a finance-free highway in 25 years, and all the benefits of it over this duration.

Mr Colle: In 25 years, and then we'll pay for the maintenance. It will be part of the 60% of the roads that are substandard by that time, and then we'll get it. Sure.

Mr Galange: Provisions for rehabilitations are included in the ongoing cash requirements of the project, that would be self-supporting from the toll revenue stream.

Mr Colle: Just to get off the highway for a second --

The Chair: You've got about half a minute.

Mr Colle: Okay, I'll stay off the highway.

Mr Pouliot: My understanding -- and I need your help; you'll correct me if I'm wrong -- is that vis-à-vis the 407, the resolution at cabinet dedicates and talks only about the 407. That is my understanding. You cannot say we will use -- maybe the same method, but not through the same resolution can you add on for other projects. This was a dedicated amount only for the 407. Were you at cabinet?

Mr Galange: I'm very sorry. I didn't appreciate the question.

Mr Pouliot: You mentioned the corporation using the convenience to raise money for additional projects.

Mr Galange: The OTCC, you mean? Yes.

Mr Pouliot: The motion at cabinet calls only for the 407 to do that --

Mr Galange: That's correct. That's the situation.

Mr Pouliot: So you would use the style --

Mr Galange: Yes. If another opportunity presented itself that we could finance and it would be self-sustaining, we would look at applying the same process.

Mr Pouliot: Grosso modo -- I could be wrong -- there are 21,000 kilometres or thereabouts of highways in Ontario, 3,000 bridges, about 136,000 kilometres of municipal, regional -- well, city, big and small -- roads. The Provincial Auditor says that 60% of the 21,000 kilometres of highways, and I would imagine the 3,000 bridges, are in a state of disrepair that warrants calling for immediate action. He doesn't catastrophize, that's not his role here, but he's saying that 60% are substandard and should be repaired.

I know it's difficult. You've raised your voice, Minister -- it's a normal reaction; I can appreciate candour -- with my colleague and with me also. I understand. It's probably because you see yourself -- I know you can't say this -- under a state of siege, that you were mugged at cabinet. The opposition is not us; the opposition is the people you sit with, and I guess you don't meet your best friend every five minutes. So I caution you to please, please -- we want to keep you with us -- exercise extreme caution with the company you keep, Minister. I know it's not easy.

Then you come on with some verbiage; you say nice things. I'm sure you mean them. I know you're not one who would fake things. You perspire sincerity, and we can see the perspiration. Oh, I guess if you can fake it, you can fake anything, because I'll tell you what: You have fewer dollars.

Engineers like to build things. By the way, you got a stall, madam. You've just skipped one fiscal year, courtesy of the very verbose and eloquent expertise at Transportation. And right after, we were reminded that before construction, there is design and engineering. Thank you for that; I feel better now. But now you're poised; you're like young tigers ready to pounce as soon as the snow goes.

Well, you're shying away from the truth. Simply put, when all is said and done, you don't have the dineros, you don't have the money to do what needs to be done. We can talk about the commitment. We can use words; dictionaries are full of them. But in real talk, in the real world, you just don't have the money to do what needs to be done, and what is a situation that should be ameliorated, that should be improved, will only deteriorate further. People will point their fingers at you and you'll have to answer.

They won't always be fair. People like blacktop; they like roads. It used to contribute to electing governments in the past. They spent a lot on their vehicle. You would know; in your other life, if you could shed a mask, you are an entrepreneur. I read about it in the paper. You sell cars. You provide employment. If people go to your establishment to buy a car, I'm sure they pay dearly for the excellent quality of the vehicle -- I'm watching it now -- they're about to purchase, so they want the good roads. They don't want to go back, even if it's a quality product with the intake, 32-valve system you sell your customers --

Mr Rollins: Yes, but they can handle the rough roads.

Mr Pouliot: I don't know; I'm not in that kind of product.

I was the Minister of Northern Development and Mines. Before that, I had been the Minister of Transportation. Once a year we used to get together officially -- more often than that, of course -- and we divvied up the money dedicated for highways. When I was at Transportation, I said, "Try to be equitable," and I was reminded through the good people we have -- and they are very, very much this -- that people tend not to preach for their parish. But it did not make me less sensitive to our special needs in the north. It's not because I have a tenure, a job, that I should turn my back on the needs of our riding. It's difficult. You have to be seen to be equitable, but you're not going to be oblivious to the needs of your riding because you're the minister either. So try to be honourable, if you wish, and do things.

I had mentioned the need, as an MPP, of having the section between Beardmore and Longlac in the riding of Lake Nipigon. I had mentioned it when I was later on with Northern Development and Mines. Government had given it its acquiescence that yes, there will be some real work done.

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I don't want to tie it to the election, but I want to tie it to the construction season past. I wanted to see a shovel in the ground. There were no signs erected. I tried to find out and I was left at the local post offices apologizing, making excuses because I had said, and it had been confirmed, that the project was delivered for the road had deteriorated a lot faster than first anticipated and the plan therefore had to be revised.

I know there's nothing systematic and deliberate. You don't impute motives, but I said to myself, should I have the opportunity to represent the good people in the riding of Lake Nipigon, our very special part of Ontario, I will avail myself of that opportunity to do my job and it's to remind that I will be pushing for a timetable. The need is acute. It is recognized by everyone who drives the road.

Yes, now I preach for my parish and sometimes I wonder if I was forceful enough. I don't know what happened. I don't want to find out which ones don't do very well with me. I don't spell words such as "vendetta," but sometimes I can't help but think that if no deception took place, if I wasn't lured, I acted with a lot more candour than I would. Again, I want to bring your attention to it and you don't see me coming with a shopping list. It's not fair, but this is a situation that needs to be addressed with promptness, as soon as possible, with a reasonable timetable.

I know things are difficult and everybody will come calling and your colleagues too, "We want to cut, cut, cut, but if it's for my riding, you can cut someplace else." That's always a dilemma that you have. We say cut, cut, cut, but when I was minister, the most, if not all, from time to time of the Conservatives and the Liberals would come calling, "Cut, cut, cut, but do something for my riding." I think it's a normal reaction. You have to blend the two.

I will be asking for an update. We had the worst storm in 40 years. No sooner are the standards being revised -- my God, I got caught with the summer standards when they came calling and said "standards," I said: "Be careful. Be careful." I mean Harry Smith, the grader operator, versus the faculty of engineers -- Harry Smith doesn't win because engineers are very forceful. They believe so strongly in their science and they like to build things and it was a commitment, Minister. Southeastern versus southwestern, whatever it takes, people build and build and build again.

No sooner had the minister yielded, succumbed to the winds of -- I don't know. Maybe a covey of minions, but I can hardly imagine. It snowed; it snowed more than it had for 40 years in a short period of time, I could just see my good friend and I felt sad. I said maybe I should give the minister a call. Since it's me, maybe if I mention my name, he maybe will call back. And it snowed and snowed, four days. The Trans-Canada Highway was shut.

Minister, it does something to a budget, quick time, big time, doesn't it? If you were with the Ministry of Northern Development and if they mentioned standards, half the forest would burn. The last thing in the world in our special part of Ontario that we need is anxiety. Anxiety leads to fear. Rumours take on an extraordinary proportion, you know?

Sir, at one time it would not have mattered how much money you would have spent. That's the tragedy of it, that people had become accustomed in relatively quick order, their mindset is that you were cutting the budget, that's why it took longer. So I want to say that we're very sensitive. We don't have alternatives. We travel long distance. You know our story. You've been there. You've lived it. We can put up with some because we don't have the density of traffic, but whoa, we need special attention when it comes to winter maintenance. It should be the last thing that is compromised. For as long as the sun shines and the river flows, there's going to be winter. It seems that there was far less snow now that I'm no longer the minister.

Mr Colle: Snow flies and the river freezes.

Mr Pouliot: The river flows, the river flows. It's an Ojibway legend.

So I'll be asking for an update because my constituents are asking what happened during the big storm. How much money was spent? Because we know that the patrols, people we talked to -- we listened to people. They don't patrol as much and they have a longer time, more kilometres to look after. That's the reality of life.

We know that the number of sanders and salt spreaders, if you wish, has been diminished. We know that some staff were axed, were told to go home, that they were no longer required. So their paycheques ceased, and with that their expertise and with that the protection of taxpayers.

Just a few comments on these. Tomorrow I will talk about the great world of deregulation, when the money keeps rolling in and the free-for-all. Accountants get in the way, Mr Minister. Figures slow things down.

I will remind you of some comments vis-à-vis the transport board. You know it was not a whim. The board has been there for some years. We did not invent or unduly perpetuate the board. And now they're gone. Now they're no longer there. Now if you go for public necessity and convenience, you grab a number and you wait and you wait, and the public is not being served.

We'll remind you about the history of our country through regulation, that it's there for a purpose, that the have-nots, the more remote, the small, the villages cannot be thrown to an open market without some guarantees, because we will be forgotten, or the price will be so much that we will not be able to afford the service. And we too are Ontarians. If you wish to adopt a different style, so be it, but by the same token we pay taxes for those services too. I know it's quite a challenge. In some cases with respect to the free enterprise system, it cannot pick up the slack. It's not their role.

There's nothing wrong with being profit-motivated. I'm a socialist. I wish everyone to be rich. There's nothing wrong with making a dollar, but there's something wrong when equity ceases to exist, when we're good to send the gold, and that's okay, we get paid for that. We extract our resources, we export our sons and daughters and as a grand finale we export ourselves, but there has to be a bit of a tradeoff. We too developed the resources. We too contribute. Part of the tradeoff is to have our share of returns to transportation.

I will waive; we have about five minutes. So tomorrow I will be talking on behalf of our party about deregulation. There will be some of our brothers and sisters and they will pay you the compliment of their visit, Mr Minister and Mr Chairman.

The Chair: Then the committee stands adjourned until 9 o'clock tomorrow. We have completed four and a half hours of estimates.

The committee adjourned at 1751.