Assemblée législative de l'Ontario

MINISTRY OF EDUCATION AND TRAINING

OFFICE OF THE PREMIER

CONTENTS

Wednesday 21 October 1998

Ministry of Education and Training

Ms Nancy Naylor, director, education finance branch

Ms Veronica Lacey, deputy minister

Mr Aryeh Gitterman, executive co-ordinator, secondary school project

Mr Ross Peebles, assistant deputy minister, corporate management and services division

Mr David Trick, assistant deputy minister, post-secondary education division

Office of the Premier

Ms Marilyn Mushinski, MPP, parliamentary assistant

STANDING COMMITTEE ON ESTIMATES

Chair / Président

Mr Gerard Kennedy (York South / -Sud L)

Vice-Chair / Vice-Président

Mr Rick Bartolucci (Sudbury L)

Mr Rick Bartolucci (Sudbury L)

Mr Gilles Bisson (Cochrane South / -Sud ND)

Mr John C. Cleary (Cornwall L)

Mr Ed Doyle (Wentworth East / -Est PC)

Mr Gerard Kennedy (York South / -Sud L)

Mr John L. Parker (York East / -Est PC)

Mr Trevor Pettit (Hamilton Mountain PC)

Mr Wayne Wettlaufer (Kitchener PC)

Mr Terence H. Young (Halton Centre / -Centre PC)

Substitutions / Membres remplaçants

Mr David Caplan (Oriole L)

Mr Tom Froese (St Catharines-Brock PC)

Mr Wayne Lessard (Windsor-Riverside ND)

Mr Toni Skarica (Wentworth North / -Nord PC)

Mr Len Wood (Cochrane North / -Nord ND)

Also taking part / Autres participants et participantes

Mr John Gerretsen (Kingston and The Islands / Kingston et Les Îles L)

Mr Blain K. Morin (Nickel Belt ND)

Mr Gerry Phillips (Scarborough-Agincourt L)

Mrs Sandra Pupatello (Windsor-Sandwich L)

Clerk / Greffier

Mr Viktor Kaczkowski

Staff / Personnel

Mr Larry Johnston, research officer, Legislative Research Service

The committee met at 1535 in committee room 2.

MINISTRY OF EDUCATION AND TRAINING

The Acting Chair (Mr John Cleary): I call the committee to order. We have members here from all parties. It's my understanding there are 49 minutes left. We have the parliamentary assistant in place of the minister. We start with a 20-minute rotation with the governing party.

Mr Tom Froese (St Catharines-Brock): There are a few questions I would like to ask you, Mr Smith, but before I do that, I'd just like to talk about some of the concerns that young people across the province have. I met with many young people over the last three and a half years, both in my riding and across the province, students who are primarily talking about the concerns they have, more so the senior elementary students, high school students and those who are in college and university. They're extremely concerned about youth unemployment. They're concerned about jobs and where they are or where they aren't.

When we talked about it, they knew that governments of the day bring forward initiatives to combat the problem of youth unemployment, but what they're really looking for is for government to not do so much of what maybe previous governments have done, and that's just provide money for short-term jobs or solve the problem on a short-term basis. What they're really looking for are initiatives that governments bring forward that will actually solve the problem of youth unemployment and create long-term jobs.

We talked a lot about different programs, but they've heard about the apprenticeship program. They talked a lot, not only about programs like that, but how that can assist them in that area of getting long-term, sustainable jobs over their future. The Minister of Education introduced a bill in the House, I believe it was in June of this year, regarding apprenticeships and certification. What I'd like to know from you is, why was the bill introduced, and what will be the benefits of that program for our young people in Ontario?

Mr Bruce Smith (Middlesex): First of all, thank you for the question. To start in response to your question, I'm glad to hear that the young people who you're consulting with in the province are asking about apprenticeship reform and what it is and what it means to them in the province. I'm pleased to hear that, because as much as we do as a government in terms of reforming that system and bringing the current legislation up to date, a large part of that is increasing the awareness that young people have with respect to opportunities they may wish to pursue in the skilled training areas.

Certainly, as you've indicated, the issue at hand is, why did we introduce the apprenticeship act? At the outset, it was one whereby we wanted to have a flexible apprenticeship system in this province, one that is contemporary and certainly responsive to the needs of skilled workers and employers in this province, as we continue to see statistics where we have a declining pool of accessible skilled labourers in this province. Very clearly, there is a need to address the legislative framework that governs that process.

As part of that decision, the bill was presented for the purpose of moving us towards the year 2000 and creating opportunities for young people. I might add that equally important to that scenario is the awareness of opportunities that may present themselves for individuals who are seeking retraining or opportunities and new career directions. Certainly we've heard from a number of stakeholders over the course of the past two years about apprenticeship that that's an equally important part of the formula. It's not just about young people but about providing individuals with new career opportunities. We're confident at the Ministry of Education and Training that the legislative framework that has been proposed in Bill 55 will meet that expectation.

You indicated at the outset that you had been consulting with young people, and I think that speaks well to the degree of consultation that has been provided with respect to apprenticeship reform in this province. Essentially, the ministry, the minister's office, including myself and my predecessor, and the parliamentary assistant's office, have engaged in a number of consultations and dialogues with various stakeholders across the province. I welcome the input that you've received. It's that type of input that's built, in my mind, to improve the apprenticeship legislation we have today.

Mr Froese: I do have another question as well. I'd like to thank you for your response. I know the people of Ontario, and indeed those individuals who are looking for retraining, are grateful to the government, yourself, the minister, for finally giving more opportunity for them to be retrained and to have the opportunity to get training to ensure that they have long-term, sustainable jobs.

In June the government announced a program called the Ontario youth apprenticeship program. I would like you to tell this committee how the program runs and how it will help, particularly, young people.

Mr Smith: I think this is one of the exciting parts of apprenticeship opportunities in Ontario with respect to the youth apprenticeship program. It's part of a comprehensive approach to deal with apprenticeship reforms and career opportunities in the skilled trades. By suggesting it's a comprehensive approach -- that's why we've pursued the OYAP at the secondary school level in support of the reforms that would be anticipated at the community college level and beyond. It's very much a part of the government's comprehensive approach to not only increase awareness but certainly at the end of the day to see a doubling of the number of apprentices in this province from its current level of 11,000.

It's in that context that the Ministry of Education has provided some $1.4 million of new funding to secondary school boards in this province, with the purpose, again, of increasing the opportunities for students to participate in that area. In fact, I believe there are some 1,000 students currently participating in the Ontario youth apprenticeship program. The amounts that have been provided to school boards at the secondary school level will increase that number of participants to about 2,000. Very clearly, as I indicated in response to your previous question, it's that comprehensive approach we're looking at, at both the secondary and post-secondary levels, that I think strengthens our opportunity to have an increased number of young people involved in the apprenticeship system.

If I may move away just a little bit, as part of that, in addition to providing the funding, certainly a key element to this is a loan-for-tools program that will enable apprentices practising now to offset costs. Again, I want to emphasize the comprehensive nature of it. I think it's positive news. There are a lot of exciting experiences taking place in the secondary school setting, and this additional funding through the OYAP will allow us to broaden that positive experience.

Mr Terence H. Young (Halton Centre): I visited my son's school the other day and he has a new teacher. She's actually new to the public system. She taught in the private system and she taught up in the north at a school, teaching Eskimo students. She's brought in new ideas. She's an excellent teacher and they're very glad to have her at the school.

Can you tell me how the teachers' pension plan has allowed the system to accept new teachers, how the changes to the pension plan are benefiting the system to bring in new teachers?

Mr Smith: I think that's an important question in terms of looking at the picture of the entire labour force with teachers in the province and one that this government has pursued in terms of a rejuvenation plan of sorts with teaching professionals, one that has involved some very dedicated work on behalf of the ministry and on behalf of those individuals representing teachers. From my perspective, the objective is to recognize not only the long-serving status that teachers have brought to this province and the contributions they've made but also the opportunity to create situations where the young teachers of this province, both new and those in the earlier part of their grid, will have the opportunity to stay in their profession of choice.

What we've seen is an agreement that's certainly fair and balanced, from the perspective of both the teachers and taxpayers alike. I think it's in that context that we are pleased to see and certainly pleased to have the opportunity to find some conclusion to this issue.

I might add that the teachers' pension board has received some 9,500 notices of retirement this year and expects the number may exceed 10,000. It's in that context that we will continue to see not only a recognition of long-term service, as I indicated, but new opportunities for young teachers to pursue their careers in education.

Mr Young: The minister recently attended a sod-turning in my riding of Halton Centre in north Oakville for a new Catholic elementary school, which is great news. Everybody's thrilled to see it. I know the Halton Catholic board practises very good stewardship with their properties and that there will be more new schools. Can you tell us how the funding formula and the recently announced grants for new pupil places address the need for new schools and will allow us to build new schools?

Mr Smith: I think all committee members are aware of the general context which has been established, both through the new funding formula and through the pupil accommodation grant. Very clearly, as part of that process we've established a formulary that not only recognizes the need to address new schools and growth areas within this province but also the need to provide sufficient funds with respect to facilities renewal. At the outset, the some $180-million investment that the minister has announced with respect to capital is an important first step in terms of ensuring that we have safe and adequate learning environments for all students in this province. In terms of some of the specifics, I'm going to ask Ms Naylor to provide you with some input on the pupil accommodation grant.

Ms Nancy Naylor: I'm Nancy Naylor. I'm director of the education finance branch. With respect to the new funding for the new pupil places that the minister announced a couple of weeks ago, that funding is based on a school-by-school review of existing capacity that is owned and operated by school boards. A ministry and school board committee reviewed an inventory of pupil accommodation that was submitted by boards and established a capacity rating for each school. That capacity rating was based on very reasonable criteria, which excluded space such as gyms, lunchrooms, cafeterias, hallways, offices, any room considered too small to be reasonably used as a learning environment, so the actual classroom capacity which was established school by school should be viewed as quite a reasonable estimate of the capacity of those schools.

For any board whose enrolment suggested that they need space beyond the existing capacity, grants are determined on a formulaic basis. Those grants are sufficient to support school construction that would close the gap between the board's enrolment and its existing capacity.

Mr Young: For instance, the Halton Catholic board have practised good stewardship and they have a proven need for new schools based on the square footage of class space, so there are automatically monies flowing for new schools. On the other hand, in the Halton public board they have 6,773 empty classroom spaces. They have to divest themselves of that space before they get money for new schools, or they have to divest themselves of a majority of that empty space, which by the way, includes four schools sitting in mothballs. Is that correct?

Ms Naylor: A board which had excess capacity relative to its enrolment -- that board that you cite may be an example of that -- would not receive funding for new school capital under this formulaic approach, that's correct.

Mr John L. Parker (York East): I asked a question yesterday about secondary school reform and the deputy was very helpful in providing the answer. I wanted to follow up on some of the issues that flowed from that answer. We discussed some of the initiatives that are underway, and what I wanted to zero in on in particular was, as the secondary curriculum develops more rigour -- and I think we touched on science and technology as areas where we wanted to see better performance -- I've heard concerns that maybe there will be some casualties in other areas and maybe some other areas would be sacrificed in order to increase the focus on science and mathematics and so on. I want to hear your response to that concern, which I have heard from a number of sources.

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Ms Veronica Lacey: Thank you for the question. I'm going to start in and then I'm going to ask Aryeh Gitterman, who is in charge of secondary school reforms, to continue.

We share very much that concern. When we talk about success for students, we're talking about success for every student, not simply those who are directed to scholarship programs at universities or colleges. One of the ways we are honouring young people's very valid ambitions to be successful in life is to have high expectations for their academic performance. One of the ways that the school boards and the school system will honour the ambitions of parents for their sons and daughters is to ensure that there are very clearly stated performance objectives for all our students.

There are many students who go on to college and to university, approximately 35% to 40%, but we also have students who go directly to the labour market. Those youngsters are of extreme concern to us, because too often they're experiencing failure. So it is important for us to have rigour, as you say, not only in science and in technology and in other subjects as well -- physics, chemistry -- but it's also very important that all our young people perform at the highest level in terms of international standards in basic literacy to ensure that we not only make high demands of our young people in terms of academic performance but that we also give them the support they need and deserve.

We are providing, through our funding mechanisms, through our teacher training, through our curriculum development, modified programs for those youngsters. So we're modifying programs without sacrificing our expectations for high performance for all our kids.

Mr Aryeh Gitterman: Aryeh Gitterman, executive coordinator, secondary school projects.

If I could just add that it's not a question of sacrificing one's subject area for another, for example; it's more a question of ensuring that the expectations in the curriculum across all subject areas meet the needs that we determine high school graduates should fulfill.

For example, although you're correct in saying the expectations in science, for example, are increasing and more rigour is being introduced, that approach is being applied across all subject areas, not at the expense of one. Students will still be expected to complete 30 credits for their diploma. That has not diminished. They will be expected to complete 18 compulsory credits. That's in fact an increase. But we've managed to do this in a fashion that still requires them to have a breadth of experience across subject areas, in the arts, second languages, business studies etc.

The Chair (Mr Gerard Kennedy): Your time has expired. We'll continue with the opposition party.

Mr John C. Cleary (Cornwall): To the parliamentary assistant: We've heard a lot about new textbooks in the school system. Is that a commitment from your ministry for stable funding for the textbooks or is it a one-shot deal?

Mr Smith: As you know, we've indicated a $100-million commitment to investment in classroom materials, and that included the purchase of some 3.2 million textbooks for elementary students in this province. As part of that process, obviously that is contained within the funding formula and provides a supplement to it with respect to purchasing support materials for the elementary curriculum. That equates to a commitment of some $150 per student at present. We currently see that program being administered now with the delivery of textbooks to classrooms, and they're moving into the second and third phases of that investment.

At the outset, I can commit that the $100 million has been made available for this initial initiative. It's one that I think is much overdue and certainly needed in terms of having support materials for a new curriculum and, as well, materials in the form of equipment that students will be able to utilize as part of their learning experience.

Mr Cleary: The other thing that the teachers keep asking me is what your ministry has done with approximately $1.5 million of the teachers' pension fund. The second part of that is, they want to know if that will be reinvested back into education.

Mr Smith: What I can commit to you today is what has been committed by the Minister of Education and Training to this point in time, and that is to provide a three-year stable funding environment for education in this province where we'll see some $583 million invested into the classroom portion of the education system. I think that's a very significant commitment in terms of the government's attempt to provide stability from a financial perspective as we move through a very difficult and challenging transition period.

With respect to the issues of the teachers' pension plan, I'll defer to ministry staff for a moment.

Mr Cleary: Just to correct the record, I meant half a billion dollars.

The Chair: For the purpose of Hansard, could you please identify yourself?

Mr Ross Peebles: Ross Peebles, assistant deputy minister of corporate management services. The question was in respect to the savings from the teachers' pension plan?

Mr Cleary: Yes, the half a billion dollars that was taken out of the plan. They want to know if you'll reinvest that back into education.

Mr Peebles: The minister dealt with that question. I think it was put to him by Mrs McLeod on the first day of estimates. There have been no savings to this moment. There's a commitment that the parties have made -- the teachers' federation and the government -- to use surpluses that have accumulated since 1992 to enhance benefits. That benefit enhancement package was part of the agreement that was recently signed. The government has committed itself to continue making payments until the unfunded liability has been entirely cleared. That hasn't happened, and the minister explained that until the actuarial report indicates that there is no more unfunded liability, it would be premature to discuss how any savings that the government might at some point in the future realize should be handled.

Mr Cleary: Another question I keep being asked is that they want to know if your government's intention is to cut money from education and force the boards to staff seven out of eight schools. They want to know your comments on that; in other words, closing schools.

Mr Smith: There are a couple of items wrapped into that. Very clearly our expectation is to ensure that school boards in this province are adequately funded to meet the expectations of their communities and their schools, and those that are working within that framework. Obviously the Ministry of Education and Training believes strongly that that adequate level of funding has been provided with respect to the needs that teachers and others may have and, as well, that it certainly has provided reasonable benchmarks in terms of the operations of schools.

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With respect to the issue of school closure, I think it's important to remain mindful of the fact that school closure or renewal is not a new issue or an issue that's simply one that this government's dealing with, but one that's a difficult community issue that previous governments, including yours and that of the NDP, have had to deal with over the past 10 years. Very clearly, as we continue to see changes in community demographics and demands in various communities, there are going to be some difficult decisions with respect to the future of those particular schools.

On the other hand, as I indicated, we're providing what I believe is a very significant financial commitment to ensure that all our students in this province have safe and quality learning environments as part of their schooling experience.

Mr Cleary: I just want to thank you for the answer. I know there are different views on that. I'll pass it on to my colleague.

Mr Gerry Phillips (Scarborough-Agincourt): I'm very keen on the financial side of it. The auditor required the government to recreate the restructuring funds and told you that $1 billion of restructuring money that you wrote off last year against education was not permissible. Therefore, you're going to have to expense it this fiscal year or next fiscal year or the following fiscal year. How do you plan to re-expense that $1 billion?

Mr Smith: I'll defer to Ms Naylor.

Ms Naylor: I believe you're referring to an amount in respect of capital debt service commitments incurred by school boards which are incorporated into the new funding model. I think what's important to confirm is that the funding projections that have been released as the ministry's estimates of what boards will receive under the new funding model are expressed on a cash basis over the next three years; and on a school-year basis as well, not necessarily a provincial fiscal-year basis.

Those projections did include all the revenue that school boards would require to meet their capital debt service commitments. In a sense, that reflects the fact that the amendments to the Education Act that were introduced by the government do require that all debt service commitments assumed by new boards from old boards are met, that lenders' requirements are met, and on time. So there are quite strong statutory commitments to individuals and institutions who have lent money to school boards for those capital debt service commitments, and the funding model provides school boards with the resources to meet those.

Mr Phillips: I was pleased the auditor caught it, because in my opinion the books were being badly cooked.

The second thing is, the number the minister uses in his speeches about spending on elementary and secondary schools for 1998-99, which he used on the weekend, I think is $15 billion. Can you give us the breakdown of that $15 billion, where that come from?

Ms Naylor: I think what the minister is referring to is that initially when he announced the funding model, he made a number of statements that gave the projections about total education spending. Specifically what he said was that funding to the classroom would increase by $583 million, that funding for education would remain stable at over $13 billion in each of the next three years, and that funding in 1998-99, including the teachers' pension fund, would total $14.4 billion.

Since that time, the government has announced a number of enhancements to the grants in the funding model and these grant enhancements increased the total funding available to school boards. In addition, the $14.4 billion did not include a couple of other major commitments. One is the $385 million in restructuring funding available to school boards; it did not include the $100 million commitment for elementary textbooks subsequently announced in the Ontario budget; and it did not include some of the funding still being provided to boards in respect of capital projects announced under the previous funding model. None of those were included in the original $14.4 billion and when those are added in they bring the spending on education to a total of over $15 billion in 1998-99.

Mr Phillips: The latest document I have on the spending is the funding model. Could you update that funding model for us, the numbers? That's how you get to the $15 billion. I guess we can ask for that, can we?

The Chair: Yes. Can we have that copied?

Ms Naylor: We can take that request under advisement and check with the ministry.

Mr Phillips: I asked at a briefing on the school capital several weeks ago for the debt plan and I was told it would be forwarded to us. I have not yet received that.

The Chair: Mr Smith, are you able to answer that?

Mr Smith: We can provide that information. As well, as the Chairman knows, we've provided information today on other questions that the committee had left with the minister previously.

The Chair: Okay. Mr Phillips, we will follow up to make sure that is provided to all members.

Mr Phillips: The reason I'm sensitive is because I was told I would get something on the school capital. I tell you, on the school capital one, I am concerned. This is strong language, but I think it's flim-flam financing. Actually there's a pretty good editorial in the Ottawa Citizen saying that.

What we are going to do is continue to spend money on capital year after year and we're only going to expense 1/25 of that capital money. I call it the perpetual debt-creating machine here. That's my judgement. Those are the numbers that I've got. The debt just keeps growing and growing and growing. Now it's all hidden on the school boards' books, out of sight, but the debt, according to my calculations -- and if you've got different ones I'd welcome them -- the brand-new debt on the school boards' books would be $1.7 billion. In 10 years it would be $2.6 billion, because we are only going to provide enough funds to the school boards to pay off 1/25 of their capital cost each year, and the school boards, according to the numbers you gave us, will be incurring capital at the rate of roughly $300 million a year.

If I'm wrong, I'd like to see the numbers on that, and if I'm right -- we now have two sets of books here. The auditor, in my opinion, caught the education ministry and said: "You can't expense $1 billion of expenditures. You're going to have to re-jig that." But the school capital one is just hiding the debt, off the province's books, on the school boards' books, and the debt never, ever gets smaller. If you've got different numbers that prove me wrong, I'd love to see them.

Mr Smith: As I indicated, we'll certainly endeavour to provide that information to Mr Phillips, as we have with questions previously posed to the minister.

Mr Phillips: Good. I was promised that several weeks ago.

The 1998-99 budget records teachers' pension expenses of $61 million. When you figure out the deficit for the province, when you add up the revenue and the expenses, we show in the budget $61 million of expenses for the teachers' pension. That's how we got to the provincial deficit. You've told us today that we're actually laying out, spending cash of $1.132 billion. So we show in the public document $61 million and in the private -- well, I guess estimates aren't private documents, but in the other set of books we show an expense of $1.132 billion. Which is the right number?

Mr Peebles: I think the numbers are both correct. The difference is the accounting on a PSAAB basis or a cash basis. The $1.2 billion, roughly, that you're referring to is a cash number reflecting the government's obligations under the regulations to the unfunded liability. That, in rough terms, is somewhere around half a billion dollars. Added to the current service contributions that are, in rough numbers, $700,000 on a PSAAB basis, on an accrual basis, you come to a different result, because many of the obligations have already been accounted for in previous years.

Mr Phillips: What's the public to think if the document that you prepare shows $61 million but behind the scenes we are actually spending cash of $1.132 billion? Why would we have two sets of books here?

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Mr Peebles: In the long term, the government's plan is to move to PSAAB. I know you're an accountant; I'm not, and therefore I don't feel this is something I'm particularly well versed in, but the explanation is that the government has undertaken, as have all governments in Canada, to move their accounting to an accrual basis. We're in the process of doing that. The government's estimates continue to be expressed on a cash basis. I think there's a crosswalk between the previous system of cash accounting and the new model of accrual accounting.

Mr Phillips: I was just in the House the other day when one of the government members got up and said that when they came into power there were two sets of books and now there's one set of books. You're telling me we still have two sets of books.

Mr Peebles: There's one set of books, but of course there's a difference between cash accounting and accrual accounting. Depending on which form the single set of numbers is reflected in, it gives you a different answer.

Mr Phillips: Just to set the record straight, I'm not an accountant.

Mr Peebles: Oh, my apologies.

Mr Phillips: I wouldn't mind being one, but I just don't want anybody thinking I'm passing myself off as an accountant.

Mr Young: He could teach most accountants a thing or two.

Mr Phillips: The concern I have is that I don't know what the numbers are any longer because we have these different sets of books.

I'll ask another question on the revenue side. You've told us that school boards should expect $478 million of other revenue -- not property tax revenue; other revenue -- almost $500 million, not just for 1998-99 but for 1999-2000 and 2000-01. Where is your expectation that the school boards will get roughly $500 million of other revenue?

Ms Naylor: Those figures relate to funding or revenue sources that the school boards have that come from sources other than three, which are replaced by the new funding model. The new funding model allocates education property taxes raised locally, provincial grants provided by the province, and a former source of considerable financial transfers in between school boards. Previously, school boards had quite a complex inter-board set of transfers to track students who were officially students of their board and whose parents or families directed their property taxes to that board but who chose to attend another board. That was a fairly complex set of transfers that is now no longer required by the new funding model, which will greatly simplify the accounting within the system. Typically, a school board will only receive funding under the formulas of the new funding model from the provincial grants and the education property taxes.

In addition to those, school boards also have at their disposal a number of other revenue sources. Cumulatively these total almost half a billion dollars, so clearly it's a material amount of money that we ask school boards to account for and report publicly.

With respect to some of those revenues, they take on program delivery obligations. For example, they may choose to become a provider of training programs funded by the federal government or training programs that they provide under contract, for example. Clearly there are expenditures associated with that revenue. In other matters, these are revenue sources that the board is free to use to supplement it's other revenues, perhaps on its elementary and secondary students. Revenues such as that would include revenues from the sale or lease of schools, insurance proceeds or other revenues from other ventures that the board may have, for example, property holdings or other types of small businesses. Those revenues, in a sense, must be accounted for appropriately, so our estimate forms and the forms of financial reporting that we require from boards ask boards to specify both the sources of revenue and the uses of those revenues in their expenditures and, in a sense, to net off the use of these revenues in expenditure categories to establish a clear and consistent basis for valuing expenditures by school boards in individual categories.

Mr Phillips: Based on what you've sent me, I can't find $478 million. I've looked at the numbers and -- again, Mr Chair, maybe we could ask for a breakdown of where that $478 million will come from.

The Chair: Is that agreed?

Mr Smith: Certainly, Mr Chair, we'll provide that.

The Chair: Thank you, Mr Smith. One more minute, Mr Phillips.

Mr Phillips: A big part of the revenue of school boards comes from property taxes, set now by the province. That is the fourth-biggest revenue source of the province. Businesses are still paying 55% to 60% of the property taxes that are going to education. Is it the expectation that you will begin to get less revenue from that source over the next few years? Is the plan of the government to reduce the taxes that it levies on small business?

Ms Naylor: Yes. In the Ontario budget, Minister Eves did announce that there was an intention to address the tax load of small businesses and businesses with above-average education property tax.

Mr Phillips: That's for Toronto and Hamilton, isn't it?

Ms Naylor: I'm not sure it was location specific, but he did announce that there would be $80 million added to the provincial grants for education that would go to school boards to replace some of the higher tax rates so that tax rates could be lowered on small businesses and eventually move towards a provincial average.

On the residential side, you are aware that the province has reduced the overall reliance on property tax for the funding of education by approximately half, from approximately $5 billion to $2.5 billion. So the overall reliance on property tax as a source of funding for education has been significantly decreased.

Mr Phillips: I was focused mainly on small business, because I'm getting a lot of flak on that.

The Chair: We will now proceed to the third party.

Mr Blain K. Morin (Nickel Belt): I'd like to focus my attention a little bit around post-secondary education, colleges and universities. As you are probably aware, there has been a lot of talk among students regarding university tuitions increasing by 20% since this government has come into place, as well as college tuitions climbing by 15% on average provincially. Are those accurate figures? Would you refute those figures or would you agree that tuition fees have increased?

Mr Smith: What I can indicate to you, and I will be deferring to the assistant deputy minister as well, is that this year we will be spending some $3.3 billion on post-secondary education. We have some additional $134 million being spent on OSAP and an additional $150 million over three years for high-demand programs in those institutions that have experienced that. Certainly my understanding at the post-secondary level is that we have approximately 90% of all students facing a 10% or smaller increase in their tuition fees in this province. As part of that process, not only did I indicate the supports we've provided through OSAP, but the government has provided some $600 million in the form of permanent trust funds for post-secondary school students.

Not only as we deal with the tuition issue, certainly the government has undertaken a number of steps at the post-secondary level to ensure -- and I think this is the most important issue -- that not only do students have appropriate financial supports available to them but that their opportunity to access their institution of choice is not being compromised.

Mr Trick, would you like to add to that?

Mr David Trick: My name is David Trick. I'm the assistant deputy minister for post-secondary education. In terms of the current year, the average tuition fee for university students is increasing by 9.7% and for college programs 9.8%. A little over 90% of students will be paying fee increases of 10% or less.

Mr Blain Morin: An interesting remark as well under the same topic of post-secondary education is that the Council of Ontario Universities says that Ontario ranks last in Canada on per capita funding for universities. Do you dispute that? Do you agree with that? I'd like to hear your comment on it.

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Mr Trick: The Council of Ontario Universities has published figures on this for most of the past 20 years. The methodology is something that we have worked with them on a fair bit because sometimes the comparisons from one university system to another across the country aren't easy to make, particularly where you have college transfer students and so on. If you look at the total operating income per university student, our best estimate is that Ontario ranks fourth among the 10 provinces. That would be the broadest measure of operating revenues that are available for education.

Mr Blain Morin: So you would refute that by saying we're not the last, we're somewhere in the middle, we're around fourth in Canada.

Mr Trick: If you include total operating income, of which government revenues would be a part, but other revenue sources would also be a part.

Mr Blain Morin: Would it be fair to say that we're fourth as far as a national average as a goal for post-secondary education? Would we be ranked in the same area as far as our funding principles compared to other provinces?

Mr Trick: Again, it would depend on whether you look strictly at the government operating grant or at the total operating income per student that's available at the universities. Being fourth, we would already be above the national average in that regard.

Mr Blain Morin: You do agree, though, that the Council of Ontario Universities refutes that. They don't necessarily agree with the position being put forth.

Mr Trick: The number they are looking at there looks at only one source of revenue, which is the government operating grant.

Mr Blain Morin: I noticed the facts and figures in the booklet handed out by the Council of Ontario Universities. They've indicated a very interesting statistic. They talk about private donations to post-secondary facilities. Could you describe how this government has increased that, or what you have done to try to enhance those donations to post-secondary schools?

Mr Trick: Universities have always had the right and have always been active in terms of their own fundraising. There is one initiative in particular that this government has undertaken which has caused quite an upswing in fundraising at universities, which was the Ontario student opportunity trust fund program, where effectively the government announced in May 1996 that for every dollar contributed to universities or colleges for student aid at the college, the government would put in a matching dollar. That was a time-limited program, and during the time it was available universities and colleges raised a total of about $300 million, which the government matched, so that is establishing $600 million in permanent trust funds for student aid. That would be probably the largest single thing the government has done to increase donations to the universities and colleges.

Mr Blain Morin: Those donations were from private sources, private companies, though, through scholarship funds.

Mr Trick: It could be companies, it could be individuals. It could be a range of sources.

Mr Blain Morin: Would you describe that as stable funding?

Mr Trick: The fundraising for that purpose was time-limited, and in that sense it was concentrated during a period of time. The trust funds, of course, are permanent, which means that there would be a permanent revenue source that derives from them.

Mr Blain Morin: But there is a fluctuation there. There are no hard and fast facts there. These donations are not there forever; that's what I'm getting at. Is the ministry going to be very aggressive in trying to fund universities and colleges by continuing to go out into the private sector and being perhaps a little more aggressive in finding the funding in the private sector?

Mr Trick: I would have to look at the year-to-year data in order to answer your question specifically. In general, I certainly agree that all universities are trying to be active in the fundraising field and what they receive from one year to another may vary.

The Chair: One more minute, Mr Morin, in the time we have for estimates.

Mr Blain Morin: I have another question about fees and tuition, again going back to the Council of Ontario Universities. They have indicated that the funding for fees and tuition, where the colleges and universities get the money -- in 1993, for example, they're saying $631 million was made available through tuition fees. I look back to 1996-97 and we're looking at $847 million coming from the source of tuition fees. Has post-secondary enrolment gone up that much or is that increase due to rising tuition fees? It may be both, right? Has tuition gone up in post-secondary education that much?

Mr Trick: Over the past several years the enrolments in post-secondary education have been increasing very slightly. Most of the increase you're talking about there would be due to the change in tuition fees per student.

Mr Blain Morin: But enrolment hasn't gone up that much?

Mr Trick: Enrolment has been a very small increase, because the population source for that age group is fairly constant as well.

The Chair: Thank you, Mr Trick. This concludes the time we have for estimates. I'd like to thank the parliamentary assistant and the ministerial staff who have attended these discussions.

I would now advise the committee that we're in a position to vote on the estimates. I would ask your pleasure in terms of whether the vote is combined -- we have a total of four votes -- or conducted one at a time. Is it the pleasure of the committee to combine?

Mr Young: What are the four votes, Chair?

The Chair: They are, by vote number, 1001 through 1004. Combine or individually?

Mr Young: Combine the votes.

The Chair: The other caucus, combined votes? OK. Shall votes 1001, 1002, 1003 and 1004 carry?

All those in favour, please say "aye."

All those opposed, please say "nay."

In my opinion, the ayes have it.

Shall the estimates of the Ministry of Education and Training carry? All those in favour? Opposed? The ayes have it.

Shall I report the estimates of the Ministry of Education and Training to the House? I shall.

That concludes the time we have for the Ministry of Education and Training. We now call upon the Office of the Premier.

A five-minute recess has been requested by the assistant to the Premier, so we will reconvene in five minutes at 24 minutes to.

The committee recessed from 1628 to 1640.

OFFICE OF THE PREMIER

The Chair: We'll give the parliamentary assistant a minute to get settled and then we will commence. I'd like to welcome Ms Mushinski. Perhaps you might wish to introduce any of the staff you have with you from the Premier's office for the purposes of Hansard, and each time they answer questions, it would be helpful if they would identify themselves for that same purpose. As you undoubtedly are aware, we'll begin with half an hour of presentation, which will be followed by half-hour responses from each of the opposition parties and half an hour for you to respond in any way you see fit. That will actually take up more than the time we have today, and we'll go to the full question times next session. I'd like to invite you to begin.

Ms Marilyn Mushinski (Scarborough-Ellesmere): Mr Chairman, before I start, I have to extend my regrets that I have to leave at quarter to 6 this evening. I am scheduled to represent the Premier at the Lieutenant Governor's reception, which is honouring volunteers and supporters on the occasion of the 50th anniversary of the Toronto Association for Community Living. It is at 6 o'clock. The difficulty is that my understanding is that protocol dictates that because I'm a part of the official receiving line, I must be there at 10 to 6 on the dot. I actually just discovered this today, so I do apologize, but I will have to leave in order to be at the Lieutenant Governor's suite at 10 to 6.

Mr John Gerretsen (Kingston and The Islands): That's right next door, isn't it?

Ms Mushinski: It's right next door, yes.

The Chair: On behalf of the committee, we will have to accept that. I just want to say that we are using up estimates time to examine other ministries, and while regrettable, we'll certainly accept that and again invite you to proceed with your presentation today.

Ms Mushinski: I am pleased to come before you today as parliamentary assistant to the Premier to present the 1998-99 estimates for the Office of the Premier. With me is Mr David Guscott, deputy minister of communications in Cabinet Office.

On an opening note, you will see from the material that has been provided to your committee that the Premier's office continues to work within the confines of a virtually flat-lined budget.

I will outline the details relating to our 1998-99 office budget, but before I do that, I want to offer some context for these estimates. Specifically, I want to begin by briefing the committee on how the government, including the Premier's office, is addressing the issues of importance to Ontarians.

Our party came to office three and a half years ago with a mandate to balance Ontario's budget within five years, to cut taxes in order to create jobs, restore hope and opportunity to the welfare system and to reinvest in the health care system. This agenda wasn't just pulled out of thin air. It was developed by our leader, Mike Harris, through detailed consultations, which were held with ordinary Ontarians from communities across the province. The ideas we heard and shared with Ontarians were pulled together into our blueprint for change, and of course we all know that was the Common Sense Revolution, and it was distributed to every Ontarian over a year before the 1995 election.

Ontarians told us that they wanted the province's finances brought under control. They wanted an end to the hopeless cycle of skyrocketing deficits and ballooning debt. They wanted unfair and discriminatory job quotas scrapped. They looked to us to replace the revolving-door welfare trap with a program of mandatory work for welfare to give hope and opportunity to those most in need. So, that's exactly what we set out to do.

Premier Harris began the process after our election by appointing the smallest executive council in 30 years. We immediately undertook a thorough review of every area of government spending and put in place a program to meet our goal of balancing the budget by the year 2000-01. We scrapped the unfair job quota law and cut welfare benefits by over 20%. We created our mandatory workfare program, and we began to cut red tape. We cut income taxes by 30%, putting money back into the pockets of hard-working Ontarians, stimulating a period of economic growth like never before seen in this province. Over 366,000 net new private sector jobs have been created since September 1995, and Ontario now leads the nation in economic growth.

And we did much, much more. The past three years saw our government implement the most ambitious and positive agenda for change ever seen in this province; they saw our government make the tough decisions previous governments shied away from. With most of these tough decisions behind us, our April 23rd speech from the throne focused on our ongoing dialogue with Ontarians, a dialogue on how to build an even brighter future for our children and loved ones. As the Lieutenant Governor indicated:

"For almost three years Ontarians have shouldered the burden of moving this province back on track. We can take pride in the result. Our sacrifices, our contributions, our determination to build a better future for our children and grandchildren, are paying off."

One of the people's most important contributions has been their continued advice and counsel about how to build a brighter future for Ontarians. This government believes in the people of Ontario. We trust in their judgment and understanding, and while we are unconditionally committed to reaching our goal of a better Ontario for all, we continue to be very open about discussing how to get there. It makes for more accountable, more accessible and more responsive government.

Many people have already joined in the dialogue about Ontario's future. From participants at open forums and town hall meetings, to public servants offering suggestions on service improvements, to countless callers and letter writers, thousands of Ontarians have offered welcome input that will continue to be reflected in the government's plan.

How does this affect the Premier's office? Like the rest of government, the Premier's office is committed to assisting the Premier in nurturing, maintaining and improving this dialogue with Ontarians. The greatest benefit of participating in any dialogue comes from hearing what others have to say. Over the past three years, Ontarians have identified several priority issues that are of importance to us all. Ontarians have told us they want all who need jobs to have jobs -- fulfilling, secure, quality jobs -- on which to build hope for the future. They want the tax burden on hard-working Ontario families and on small businesses reduced to an even greater extent. They want excellence in education that will help all our children reach their full potential. They want us to continue our work to put in place quality educational standards.

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They want our world-class emergency services, long-term care and hospital system sustained and strengthened. They want their government to continue to take steps to better meet the needs of our changing and aging population.

They want better opportunities and new skills for people on welfare through further welfare reforms and a continued crackdown on welfare fraud and abuse. They want safer streets and safer communities.

These are all key matters on the minds of Ontario's citizens, and the government is responding in a variety of ways to these concerns and expectations. For example, we are creating the pro-growth climate to foster jobs and economic stimulus. We've announced 66 tax cuts in our first three budgets, and the final phase of the 30% tax cut was delivered on July 1 of this year, one full half-year ahead of schedule. This means more take-home pay for hard-working Ontarians, which in turn helps boost our economy and create more jobs.

Ontarians have asked us to focus on helping children reach their full potential. We're doing that by introducing new quality educational standards like a new, rigorous back-to-basics curriculum, standardized testing and clear, understandable report cards. These and other educational quality initiatives are helping to prepare our children for the future.

Ontarians want welfare programs to live up to their original purpose, as temporary financial help while people are trying to get back to work. Our work-for-welfare reforms are making welfare a stepping stone to employment. So far, more than 420,000 people have escaped the cycle of dependency and gained a new-found sense of opportunity and hope by participating in our Ontario Works mandatory activities.

Ontarians have also told the government they want our world-class health care system strengthened to continue to deliver accessible, high-quality health services. We have responded with the largest single expansion of long-term care in Ontario's history. We are providing better access to services for women and expanding priority programs, such as heart health and cancer treatments, in both hospitals and the community.

People are also concerned about keeping their communities safe. Our government's approach to public safety teaches young offenders respect and accountability and targets our resources directly to the front lines, where they're needed, like our initiative to put 1,000 new police officers on the street to help protect Ontario's law-abiding citizens and families.

As I said at the beginning, the sum of the government's responses to the public's concerns and needs is our plan for Ontario. Given what we've seen and heard, our plan is working. From the perspective of your committee, Mr Chairman, it is important to note that across the government and in the Premier's office we are achieving our goals while holding the line on expenditures.

The Premier's office is obviously a part of the government and a principal support to the Premier in coordinating the government's actions. But the Premier's office is also an example of the government's directive to work hard, be accountable to taxpayers and live within our means while providing services to Ontarians.

Before I get into details about the Premier's office estimates, I think it's important that I comment on the purpose and organization of the Premier's office. The Premier's office supports the Premier in his role as the head of the executive council and as the leader of the government of Ontario. The office coordinates the government's policy development and legislative agenda, as well as the government's communications activities. It also supports and advises the Premier on issues facing cabinet and the government.

The Office of the Premier is responsible for the following pieces of legislation: the Executive Council Act, the Lieutenant Governor Act, the Policy and Priorities Board of Cabinet Act and the Representation Act.

The Premier's office assists the Premier in carrying out his daily business. The office is comprised of the following departments: tour and issues management, outreach, policy, communications and strategic planning.

The Premier's office works closely with the Cabinet Office, ensuring that consistent political and policy advice flows from the centre of government to ministers and ministries. Cabinet Office is, of course, a separate ministry. In fact, the review of Cabinet Office's estimates is scheduled for later in the year, so I will be deferring all questions pertaining to their estimates until then.

I can say, however, on an operational level, that Cabinet Office provides support to the Premier in a number of ways. Cabinet Office assists the Premier with his correspondence, provides bureaucratic advice on policy matters and ensures that issues are monitored and brought to the attention of the Premier's staff, deputy ministers and other senior public service executives.

With respect to the Premier's office estimates, Mr Chairman, you and the members of the committee will find that the Premier's office budget has remained virtually flat since our election. In fact, while it is not part of your committee's mandate to review last year's budget performance, I think members should know that the Premier's office underspent its estimated 1997-98 budget by $157,000. Last year's financial prudence is a good example of the three-year trend of flat Premier's office's budgets.

Your committee will note a variance of $132,500 in the 1998-99 Premier's office estimates. Before committee members become unduly concerned, I should note that the Premier's office is treated like all other ministries, as it should be. Hence, the Premier's office is affected by the government-wide Management Board accountability policies and efficiency measures. There are three adjustments that have contributed to the change in the Premier's office estimates since last year. Each was made in an effort to more accurately and honestly present government spending to the taxpaying public.

Specifically, the Premier's office 1998-99 estimates include a transfer of an unfunded pension liability payment to Management Board Secretariat. This was in response to the centralization of the unfunded pension liability payment in Management Board and the according elimination of the chargeback to ministries that takes effect in the coming fiscal year. This transfer of the unfunded pension liability resulted in a $37,800 reduction in the Premier's office budget.

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As well, your committee will be aware that in an effort to ensure that accommodation spending is accounted for in an open and honest manner, the cost of maintaining office accommodation has been transferred to individual ministries from the Ontario Realty Corp. It is now government policy that ministries must pay for their own accommodation.

This accountability measure was introduced by our government as part of an overall effort to ensure that the accounting systems used by the province more accurately and honestly display government spending. Under previous governments, the cost of accommodation was paid by Management Board and was to a certain extent hidden from the view of the public. This open accounting system, implemented for the Office of the Premier effective April 1998, brings the public sector accounting more in line with the private sector, something that we think is a good thing.

This resulted in an increase to the Premier's office budget of $197,300 and in our view brought about an honest improvement to public sector accounting.

Finally, the Premier's office is participating in the government-wide efficiency measure exercise. This across-the-board initiative is part of the government's commitment to achieve efficiencies in the delivery of ministry programs by reducing operating budgets. The Premier's office's participation in this efficiency measures exercise has resulted in a $27,000 reduction to its operating budget this year.

The net result of these government-wide accountability measures is, as I said, a $132,500 variance in the Premier's office 1998-99 budget estimates.

It is important to note that if the same accounting system was used in 1998-99 as was used by previous governments, the Premier's office estimates would have actually declined by 2.3%.

In conclusion, I would like to restate that the Premier's office works to support the Premier in being accountable to the people of Ontario. It assists him in nurturing a dialogue with taxpayers and in responding to the priorities of the people. Above all, the Premier's office meets its obligations to the Premier and the taxpaying public prudently, efficiently and openly through a budget and set of estimates that has been virtually flatlined for three years.

That's my presentation, Mr Chairman.

The Chair: You have approximately nine minutes remaining. Are there any other remarks you wish to add to your presentation?

Ms Mushinski: No, I think I just about covered everything in my presentation. I hope you can relax a little, given the fact that I have to leave at a quarter to 6.

The Chair: We'll now turn to the official opposition. You have 30 minutes for presentation, questions and so on, and then to the third party.

Mrs Sandra Pupatello (Windsor-Sandwich): I understand that we are not given sufficient information to appropriately look at the Office of the Premier and their budget. It means absolutely nothing, to not have access to information about the Cabinet Office while we're looking at the Office of the Premier. We know the Premier is spending more than ever before, has a staff complement that is absolutely incredible and is growing every day, that the Premier's office is as lush and luxurious as we've seen for some time and that the Premier, at the same time as cutting back ministry staff who actually work in the field, did a number of renovations in the Whitney Block, where I happen to have an office. It was so suspicious that in fact they staged a security guard at the door so that when you got off the elevator at the appropriate floor you couldn't go in and see what was going on.

Mr Young: Oh, come on. There's always a security guard at the door. Be serious.

Mrs Pupatello: An elected official in Ontario would never be prevented from knocking on the door of the Premier. End of story. All of a sudden there are these wild renovations going on behind closed doors, none of which we can see, huge bins rolling down the corridors of the Whitney Block with these huge tarps thrown over them, and we're all wondering what's happening. Then we see the fashion trucks pulling up at the Whitney Block, at the side entrances and their maintenance doors, uncovering under cloak and dagger all this furniture that's trucking up to the Premier's office. I mean, if he's so frugal, why the big secret? If he's just running down to Ikea for some wooden furniture, let's have a look at it, but we don't think that's what it is. Instead, if you see the sign on the truck, "The Art Shoppe," we've got a little bit of concern.

Mr Young: Are you saying you saw a truck that said "The Art Shoppe"?

The Chair: Mr Young, you'll have your opportunity. Order.

Mrs Pupatello: Why would there be such secrecy around renovations in the Premier's office? This Premier, of all premiers, who boasts about being so frugal, has entertained renovations in his own offices that are absolutely luxurious.

Second, we know that the budgets have all been shifted. So I say to the parliamentary assistant, it does us absolutely no good to talk about how you haven't spent to budget here, you haven't spent to budget there, because we know everything's been moved around to other budgets. We know, and this is just a common occurrence for everything that has happened in other ministries as well. You say you don't cut here -- you don't cut, you just move it there and you cut it when it gets there.

We've seen the same in community and social services, that I happen to be the critic of. You've moved whole programs out of that area and over to health so you can say at the end of the day, "Look, we're spending more on health care." You may be spending more in total under a health budget, but it also is now including programs that used to be under community and social services. So in effect that's a cut.

At some point this is going to happen. We've itemized which those were. Of course, we had to get the information through order paper questions. We had to ask specifically which programs have been moved wholly from Comsoc into health, and we got the list. This $50,000 here and this $75,000 is no longer under Comsoc; it's under Ministry of Health. So when the Minister of Health stands up and says, "We're spending more on health care," all that means is she's responsible for different programs in addition to what she was responsible for before.

Going back to some of the comments you made, you actually suggest in the report from the Premier's office that your job has been to strengthen the hospital system and sustain it. Strengthen the hospital system? We now have documented proof across Ontario that over 50% of Ontario hospitals are in deficit. This is absolutely unprecedented. Never before in the history of Ontario have we had this kind of financial crisis, all of which was confirmed by CIBC doing its report for the foundation of the Ontario Hospital Association, which clearly states that only since 1996 have hospitals dealt with this kind of deficit.

Never before have they been so strapped to provide services that CEOs from 24 hospitals, just to support a private member's resolution that's being brought forward by a private member during private members' hour, actually found the courage to speak out and say, "This is untenable," while all the other hospitals said: "We're in terrible shape, but we sure can't be public about it. We talked to our local Tory MPP. I took your resolution down to that Tory MPP" -- they're just waiting to see what riding I'm going to mention in this case -- "and I told them 'This is exactly what we need,' but those Tories know that we're in big trouble." Did one of those Tory MPPs have the courage to stand up for their communities when they knew their hospitals were in deficit, that they're making choices in hospitals to cut service or run deficits, and most hospitals are doing both?

In the case we raised today, the London Health Sciences Centre, made up now of the children's hospital, University Hospital and Royal Victoria Hospital combined to form one, for the first time has a deficit in the neighbourhood of tens of millions of dollars, all in hushed tones waiting to see -- "They said we might be getting an envelope of money to take care of this part" -- on all these false promises, so in fact we have charities being requested to fund wages of doctors who are giving treatment to children with cancer. That is what we have today in Ontario. The hospital foundation has funded the wages of a doctor in London for the last year but could not do it any longer, so they turned to ChildCan, another charitable organization whose fund-raising is actually meant to pay for things like transportation of families who have to come from Owen Sound to London or Windsor to London and instead -- they're asked to fund the wages of doctors?

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Mr Young: On a point of order, Chair: I hate to interrupt a good filibuster, but are we not supposed to be talking about the Premier's office?

The Chair: That's not a point of order. Mrs Pupatello, please continue.

Mrs Pupatello: We're talking about the report. In fact, this was clearly said, "Hospital system" to be "sustained and strengthened," and I am responding exactly to that comment. It's completely bogus. It's completely irresponsible to have statements like that made at this committee. That this is coming out of the Office of the Premier is unbelievable to me, just as unbelievable as seeing the Premier himself truck on down to Mount Sinai Hospital with a $600,000 cheque to a hospital that's $7 million in debt, while there are seven people waiting in the corridor at the very same time who can't get a bed. Now you've sent out cheques along with a contract that says: "You sign the contract, because if you don't sign the contract you're not getting the money. But if you sign the contract you're subject to it, and if you don't meet the standards set out by what you've signed you will be subject to an audit."

You know what those standards are? They're all the utilization numbers that were set up by the hospital closing commission that are so aggressive, probably the most aggressive in North America, and you are expecting hospitals to meet those standards. But they can't meet them unless this government makes the community reinvestments in mental health, in long-term-care beds.

Today in the House our leader, Dalton McGuinty, said, "You said 1,700 long-term-care beds." Those weren't the long-term-care beds that are going to be there forever; those were the transitional long-term-care beds, whatever that means as a term. I don't know who dreamed that up: transitional long-term-care beds on the interim basis. That's what the 1,700 were. That's just to get over the hump. That's what that was for. None of them have appeared yet, not that you haven't had ample opportunity to have them appear. They're not there.

If the investments are not made in the communities, the hospitals will get no relief, which means they'll never meet their utilization targets, which means they are then in breach of the contract they signed and you now subject them to an internal audit. What kind of a strapped position do you think you can put hospitals in?

I remember the first Minister of Health who said, "We're not here to micromanage the system." I know the health critic remembers these words fondly. We've got the health minister on the phone with every Tom, Dick and Harry hospital in Ontario looking for details -- "What's your problem down there?" -- because you don't have a system that's being managed well enough.

On the day we had a resolution in this House, on October 1, and the Ontario Hospital Association had actually written a letter of support saying, "These are exactly our issues; we are in deficits the likes of which we have never seen," at the eleventh hour they were being twisted and turned to write a letter of dissent to the letter they had already written. But not one Tory got that letter, and that's because they would not write it, so those backbench Tories had to stand up and say, "Our office talked to that office at 2 o'clock in the afternoon and he denied it." I said, "Put it in writing," but he didn't put it in writing because the facts are the facts. They knew full well, just like the Minister of Health did, that not long after a report was being done by an outside organization that proves those audit numbers that hospitals across Ontario are in the greatest debt they have ever had.

To sit here to hear the Premier talk about strengthening the hospital system is absolutely galling. Even if you wanted to think in the long term of strengthening the health system, it is completely bogus to think of.

The worst part is that Windsor was your test case. You knew things were not working well, because you needed to invest before you shut down services, and that is still the case today. The only difference is that Windsor's not alone any more. Now I can hold up letters from all kinds of communities right across Ontario, Hamilton included, critical bypasses all the time; Windsor, 230 times just this summer where ambulances could not discharge their patients into the emergency rooms, the only two remaining out of four that we have, because there's no room in emergency to take them in. Half the time you'll have the doctors sitting there twiddling their thumbs because they can't get a patient in because there's no cot to put the patient on, or the ambulance can't leave the emergency room because they can't get the patient off the gurney to put the gurney back in the ambulance to send it on its way to pick up another patient.

If this is too dramatic for you, I've invited all of you, including the Premier, to come down to Windsor and see for yourself that this is no joke. We're talking about 230 people who got stuck in an ambulance, for God's sake, where they're supposed to be going on for help. That they couldn't actually get them into an emergency room is astounding to me. There are so few bays, parking spots, for ambulances to drive into at the Hotel-Dieu Grace site that they stopped the ambulance on Ouellette Avenue and Main Street and rolled the patient on the gurney down the ramp and into the emergency room.

I want to see the Premier lying on a gurney in full view of God and country rolling down the ramp while he reads the speech of how well the Office of the Premier is doing in handling the finances of the Ontario hospital system. That to me is the commercial that you should be playing this coming November when you launch your next $3-million ad campaign. That's the commercial: Mike Harris strapped to the gurney rolling down the ramp in downtown Windsor in full view of God and country, while he talks about how well he's done strengthening the hospital system.

Does that leave any reaction for any Conservatives? You don't even have to be a partisan person to be in Windsor and feel very strongly about what's happening, because they see this.

Mr Trevor Pettit (Hamilton Mountain): Where's Alan Rock on this?

Mrs Pupatello: I'll tell you exactly where he is. He's up there watching what you have done to the hospital system.

You've had the gall to talk in this report about lowering taxes for people. You've actually incurred more debt than Ontario's ever seen. Under your watch, this fiscal finance management hasn't done a thing to increase your bond rating. If everything is so wonderful, why are you still at AA-? You're as bad as Bob Rae. Bob Rae managed to download our bond-rating system, and admittedly during a recession. You went from an exceptional bond rating to what you are today and you haven't moved, and that's after three and a half years of your government.

The first six months you could say you were still on the heels of the Bob Rae government. You could say that after six, seven, eight months. After a little while you say, "Wait a minute, we've got a new gang in charge here." Now we are fully into your term; you have very little of your term left. In the majority of your term you have had the same bond rating in Ontario for its fiscal finance management as Bob Rae of the New Democratic Party, whom you slam-dunked right through the election because you were going to be so much, because you were going to know how to manage the finances.

You borrowed money you didn't have to finance the tax cut and you gave it to people anyway. Then you proceeded to make the biggest botchery of the property system and assessment right across Ontario, which took even you by surprise. When your Conservative friends sit around your banquet tables at your fund-raisers they will tell you square, "I can't remember if I got an income tax cut, but I know exactly how much my property taxes increased and I am not happy about it."

Don't we have a little scramble happening today in the Minister of Finance's office. Now we're going to come out with the seventh, eighth, ninth, maybe the 10th bill to fix the assessment. You've got the gall to tell municipalities like Windsor that they're the bad guy, that they did this. We have a dress shop on Erie Street. The dress shop has a little Singer sewing machine in the backroom, and the little Singer sewing machine usually adjusts the hem, every now and then, when they sell a dress. They now, because of the Mike Harris new assessment system in Ontario, have decided that the dress shop on Erie Street is an industrial class of business. Now not only have they been assessed at a higher level, they've been thrown into a whole new category. How are you going to blame that on my city of Windsor? You guys put the classifications together.

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That's not the only example. You've got a whole legion of small businesses out there kicked into all manner of classes because you were going to simplify the system. We heard from the Association of Municipal Clerks and Treasurers and they said, "We told you this was going to happen." They presented you with one, two, three -- no, four different ways for you to fix the system. Apparently you have been offered, free of charge, the most well-known company in Ontario that works with assessment systems. They said, "I will do it for you for free." That's a good price. You said no. Eves said, "No, we don't need that." You blew it big time. You blew it after the second, third, fourth, fifth and sixth, and now we're into the seventh bill for property tax reform. This is ludicrous. It's like a bunch of yo-yos: up, down, up, down. These people don't know whether they're coming or going. You have municipalities that haven't sent out the first tax bill yet. You've got a whole bunch that sent them all out and now you're saying you're going to change it again.

Will you please tell me how the cities are going to cope with that. You go to the guy who got the decrease of $5,000 on his tax bill and tell him: "No, we've changed our mind. You're going to pay $4,800 more for another year. Then the next year you're going to pay $4,600 more. But all the way along we recognize that you have been paying $5,000 too much." You go tell him, because I can tell you, I've got my list of Conservative MPPs and I'm going to send them to all these people. The writing is on the wall. At some point, they lay out all the information and people will judge for themselves. They think this is crazy.

When we were off in committee in Sudbury in the airport there was a Conservative MPP who answered his cell phone. It was a joy to behold. Some of you will remember because I know you were there. In the airport waiting room was one of the Conservative MPPs with a constituent on the phone, a small business man. It was clear from the MPP's response that he was getting lit into in a big way by one of the small businesses in his riding. He sputtered out all of this information. He would say: "I can't believe the region did this to you. I can't believe the city did this to you. Isn't that terrible." I was amazed at what length you'll go to not assume any responsibility.

You've got the Hamilton MPPs in this very room who, instead of dealing with a problem in hospitals in that area, will say, "It's that CEO. He's bad. We don't know where the money went." Why don't you just accuse him of fraud or of taking money, for God's sake. You'd just as soon have done that already. All of a sudden, this year, he's a bad manager. He seemed pretty good the year before. In some areas they've been fantastic CEOs, but all of a sudden it's their fault. They don't know how to manage the system. Talk about offensive, and this from a senior level of government over municipalities.

Now you decide to go on the attack of municipalities: "Those bad municipalities. How dare they? Don't they know?" You're the ones who downloaded services on them. If you go into Prescott-Russell and ask them how much that new road cost that you just dumped on them, Route 17, we're talking about $8 million in generally rural municipalities. Would you tell me who's going to pay $8 million on their property tax bill? Because that's what it's going to cost them to pay for the road.

I don't remember seeing that in the Common Sense Revolution, which is what this report today said. It said: "mandate of the government to implement the Common Sense Revolution." I don't remember it saying: "In Prescott-Russell we're going to give them $8 million more because now they're responsible for route 17." That was not in the Common Sense Revolution.

It was also not in the Common Sense Revolution that you were going to download things like public health and ambulance services. Do you know the kind of issues we have in rural Ontario today as far as ambulance services are concerned? Now you've decided that city councils and rural councillors and reeves and mayors are going to be responsible for delivering ambulance services. It is just absolutely bizarre, because I remember the health minister saying that we have to streamline the system, that we've got to make it seamless, that we've got to make the organization better. No, you decide to take a great big chunk of emergency services, namely ambulance, and have it delivered by each local municipality.

Have you ever heard of anything so incredibly stupid? There is no good reason to do this. The worst part is that David Crombie told you that. It's a terrible thing to have to say, "I told you so," but all of those people are saying that today. If you remember, the panel that David Crombie and company organized on social service dumping said that if you downloaded social services what you got was a big bowl of spaghetti. You were trying to clean up the system, and it was a complete mishmash of changes that didn't make any sense. All you were after was finding the dollar, no matter what sense it made.

Then you said it would be revenue-neutral. It was the furthest thing from revenue-neutral that Ontario has ever seen. Mike Harris was really offended when a national newspaper picked up Mel Lastman saying: "He lied. He's a liar." Do you remember how angry Mike Harris was about that? You said revenue-neutral. That means zero, and it wasn't. It was a hugely to the plus cost of municipalities around Ontario. That is what they got left with.

You want that, plus you've changed the assessment system. You've got increases in mill rates, thanks to your downloading. Then you've got changes in assessment, some of which have been updated, which is reasonable. The people, the taxpayers, are fully prepared to pay what is reasonable. They've always said that from the beginning. Reasonable: $100, $50, depending on the base they paid the year before.

Dave the barber on Sandwich Street in Olde Sandwich Towne had an increase of 100%. He can only cut so many heads of hair in a day. When you're talking about a fixed cost for small business, that is a cost you will have regardless of your sales. Dave the barber is pretty much euchred. How many heads of hair can you cut? And you can only cut them once, really, so it's not like he's going to increase his number of customers in that year. How do you change a business plan in the same fiscal year to suddenly quadruple your revenue and sales?

Some of you guys were business people before. You know that. Even if you are a lawyer, you essentially are your own business. You only have so many clients who give you so much money. Depending on the business, especially those that are service-oriented, there are only so many hours in the day. You can only bring in so much revenue. It's not the kind of increased cost, like a new piece of machine or equipment, that's going to make increased production by some huge volume that essentially is better sales. It's not that kind of cost. It's a property tax cost that is there regardless of the business they can make in that year. You've euchred them.

This guy is in a building that is 100 years old. When I stood there and looked up at the cracked paint and a ceiling that hadn't seen a brush for probably the same century, I looked around and kind of smiled and said, "Have you had any improvements lately?" He started to laugh, because it was so funny that Dave the barber -- he even has that old-fashioned thing that goes around. I'm telling you, he was shocked.

I asked Frank Mancini, who owns Italia Bakery, to make a calculation: "What kind of sales in buns are you going to have to account for this increase?" Three hundred and fifty thousand panini just to pay for the increase. He said that when he got the bill he laughed. He said: "Look at the mistake they made. This can't be right." He laughed. He's up $30,000. It is funny. Then the joke was, "How many more Italian weddings?" "Only a couple."

We were just flabbergasted that this guy is looking at $30,000 or $40,000 in an increase on the same square footage on the same block. It is just ridiculous. I want you to go to Frank Mancini and tell him whose fault it is that you threw him in a different class. You made 24 more classes, or 104, whatever, a whole litany of new classes for all of these businesses. You were going to make it simpler. It's more difficult and more complicated.

You haven't even sorted out your computer system to figure out these assessments. For God's sake, if you were so determined to do this, why didn't you allow yourselves the kind of time that you would need to make this kind of monumental change in the tax structure? At any given time it would have taken a minimum of four years to reassess properties across Ontario. You did it in one.

Do you remember Gerry Phillips in the House? He brought in the newspaper ads that the government ran because they were looking for tax assessors. I think they bought the $2 ad every day for a week to get the deal on the ad because it said, "Required: Running shoes and a calculator," or something ridiculous. That's the kind of new staff that you employed to enact the whole new assessment system that is affecting every resident in Ontario. Do any of you look at this and say, "Are we watching the cartoon channel or are we running the Ontario government?"

Mr Froese: Right now we are.

Mrs Pupatello: Come on. Mr Froese, I'm going to go down to Niagara-on-the-Lake and I'm going to ask the business people there, "How are your hospitals doing?" Why is it that Fort Erie dropped all of the OB services? Their money didn't change. They're not in deficit either. You know what they did? They just cut the service out entirely. They don't even offer obstetrics there any more. That's the Fort Erie hospital. Why? Did you question that at all? Did you question the fact that all of the other hospitals in that region now have to pick up the services for those women who are delivering babies in your region? That Fort Erie Hospital is not in a deficit but it cut that service holus-bolus right out of that hospital. Did you question that with the minister? Did you knock on her door and say, "Hey, maybe this isn't a deficit so it's not going to be red-flagged, but we just lost a whole service here for my community"? Where are these women driving to at the eleventh hour, which you probably can relate to well? Are they going to Hamilton? Are they going over the river now? Do you remember Minister Wilson at the time when he said that the Windsor people having babies -- he said in the House that they can just pop across the river. Do you remember that outlandish statement? The fact that across the river is an entirely new country and state? I mean, this is the cartoon channel in Ontario today. It's embarrassing.

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I brought two busloads of people up from Windsor to sit in the Legislature to debate this bill. Those were people who had suffered personally, some of them, at the hands of our hospital system. They were the ones who couldn't get their arm cast set for three days. They were left with a dislocated shoulder, which is extraordinarily painful, for 14 hours in the waiting room. It's ridiculous to think what the people have suffered. The fact that someone who's coming in and dying on the stretcher cuts right through all of this and gets in is a good thing, but the seriousness of what's getting left in the waiting room to date is so different from what it was even three years ago, not to mention pre-1993. The cuts did start in 1993.

We have never seen the likes of this before, and I know some of you think it's funny, these examples are so exaggerated. These examples are absolutely true. I have documentation for every single one of them, absolutely, on paper.

I have to walk through this little shop of these young business people trying to make it in their world, in their first couple of years in business, with their business plan that they dutifully went to their bank with, trying to decide what their business costs were going to be in that first year, and budget and borrow accordingly, to get hit and socked with a property tax bill that they cannot afford. For one business that's doing very well, they actually weren't able to pay last year's property tax bill. When they saw their new one they couldn't believe it. They can't believe that this government would do that to small business.

Now they're going to watch Ernie Eves come to the rescue. What, did he go find a red cape in some back closet somewhere and now he's flying down from the mountain? Like he's going to come and save the day: "Those darn municipalities. We'll show you, because if you don't help them, we're going to step in and we're going to do it." When you step in and do it, what likely is going to happen is, you're going to force municipalities into debt.

You've got very few major public sector partners out there. You've got hospitals -- you've done them over a long time ago, starting in your first year, 1996 -- acknowledged by everyone, even outsiders, this is the worst financial crisis they've ever faced.

Municipalities now, which you've cut as well, have already eaten over the last three years most of the reserves that any of them have sat on. Now you're going to come in and force them to do this municipal change in their assessment? For what? Are you going to give them the accompanying funding that goes with that? Or are you going to do the legendary unfunded mandates that were so famous with the NDP: "Here, just go do that. No, we don't have any more money to give you. Just go do that."

Is that what you're going to do? Or are you going to find your little envelopes for your friends? You'll notice that we asked a long time ago what the formula was for funding municipalities. "Gee, I don't know what that is. Gee, we're not sure. We don't know what the application form looks like." I'll tell you what it looks like. At the moment it looks like a Tory face, and if those Tories decide they like you enough, they're going to give you the money. If they don't, you don't get the money, and you better not complain about it because you won't get anything for anything. That is the position that we now have Ontario in today. In closing, may I say -- am I ready to close, Chair?

The Chair: You are ready to close.

Mrs Pupatello: In closing, may I say that I have never, never seen the gall as displayed today to talk about the kinds of things you've talked about in the Office of the Premier, when we know that there are expenses that will become legendary, the propagandist advertising that this government has launched into at the cost of taxpayers; that you would dare be so offensive and insulting to people who should be your partners. I think you should be ashamed. I hope that the public continues to watch this cartoon channel because at some point they're going to tire of it, and I hope that's soon.

The Chair: Thank you, Mrs Pupatello. I'd like to now turn to the third party, Mr Wood.

Mr Len Wood (Cochrane North): How much time do I have?

The Chair: You'll be able to have 24 minutes today and the balance of six minutes when we reconvene next Tuesday.

Ms Mushinski: I wonder if you could clarify that. I have indicated that I --

The Chair: Yes, I'm sorry. The parliamentary assistant has asked us to break off at exactly a quarter to, so we will do that. Therefore if you could give us the first part of your presentation today, we will continue with that when we reconvene next Tuesday. All right, Mr Wood.

Mr Len Wood: Thank you, Chair, and thank you for your presentation. In the few minutes I have before you have to leave, I would like to point out a few things. During the five years the NDP was in government, the expenditures of the Premier's office continuously dropped each and every year from at least 1992-93, down to 1995-96. Then in the 1995-96 budget we saw a drastic increase of almost 21% in the first six months that Mike Harris took over. So if we're looking back, in the last three years the cost of operating the Premier's office under Mike Harris has increased about $1 million per year, more than what was being spent in the Premier's office while Bob Rae was Premier.

In your opening comments you said the Common Sense Revolution mandated that you were going to make some changes to the province of Ontario as you lead forward, but I didn't see anywhere in the Common Sense Revolution where the budget in the Premier's office would have to increase by that much year after year, at the same time as cutting off the food and shelter for the kids in this province by almost 20% in the first year. I'm talking about the first year that the Premier's office expenditures, in estimates and in actuals, went up almost $1 million. The children in this province on welfare were asked to go with only one meal a day instead of three meals a day and sleep out on the streets. And we're continuing along. The expectation is that we'll see some communities destroyed completely as they close over 600 schools across this province and reduce operating budgets of hospitals so that they will have to close as well. Some of the estimates that we've heard is that 40, 50, 60 hospitals will close during the five years that Mike Harris has been in the Premier's office.

At the same time as the large expenditures are happening in the Premier's office, there's money being given away to people who don't necessarily need it. Our position has been very simple: that the people who are making more than $80,000 per year shouldn't be getting a 30% tax cut. It should be used to reduce the costs of the communities, to help out the education system and to improve the health care system in this province. We've taken a different position from what the two other political parties have taken. We're saying we cannot see the system continue the way it is. I'm sure that under Premier Howard Hampton expenditures in the Premier's office would go back to what they were and continue to reduce year after year, instead of seeing increases, in 1995-96, in the first six months that Mike Harris took over, of almost 21%, and then in 1996-97, we've seen a jump of 43% in the Premier's office.

Now, what is this money being spent on? We'll have a lot of questions and more comments another day, but what is this money being spent on? Is this part of the expenditures of the junk mail that everybody gets in their mailboxes, saying: "We did polling out there and people don't believe they're getting a tax cut. We're going to send you an explanation as to the savings that you should have been seeing on your paycheques and if you're not seeing them, we don't know where the money's going." The people know exactly where it's going: in user fees and increasing property taxes and things of this kind.

In our estimation, the expenditures in the Premier's office have been out of control over the last three and a half years, and they're continuing at this point in time. We're looking at numbers in estimates close to $3 million, when in 1995, the last year that Bob Rae was in government, it was less than $2 million. We don't know the reason for this increase. As I said before, we're going to have a lot of questions on that.

In your comments I got the feeling that some of the blame is being pushed on to other people, whereas our party is saying that the blame has to be put back where it belongs, right on Mike Harris's office and the Premier's office. When they're throwing money away or wasting money --

The Chair: One more minute, Mr Wood.

Mr Len Wood: OK, thank you.

There's a concern out there: that much of an increase in the Premier's office and you have teachers who are being laid off in Etobicoke. In the Félix-Leclerc school in Etobicoke, in the middle of September, the principal and the school board said, "We have to get rid of two teachers because our budgets have been cut, so we're going to include grades 7 and 8 in one classroom." One of the teachers that I know out there has 38 students.

If some of this money that was being wasted in the Premier's office, whether it's in this building or over at the Whitney Block, was spent on education and health care, we wouldn't have to put that burden on to the teachers. It's impossible, in my estimation, since the middle of September for this particular teacher to do a good job of teaching grade 7 and 8 students, with no assistance, with 38 kids in a classroom. It's impossible. She cannot continue to operate in that manner.

Our education critic today raised the issue that in a number of other schools, since September 1 until now, we're seeing classrooms being shut down and more and more teachers being juggled from one school to another school, and more and more students shoved into the same classroom. That was not in the Common Sense Revolution that I saw, but it's happening out there. It's time that we got a new government in here that will change things around for the good of the province.

The Chair: Thank you, Mr Wood. We look forward to hearing the rest of your presentation. We commence on Tuesday. I declare the meeting adjourned.

The committee adjourned at 1743.