Assemblée législative de l'Ontario

MINISTRY OF NORTHERN DEVELOPMENT AND MINES

CONTENTS

Wednesday 6 November 1991

Ministry of Northern Development and Mines

STANDING COMMITTEE ON ESTIMATES

Chair: Jackson, Cameron (Burlington South PC)

Vice-Chair: Marland, Margaret (Mississauga South PC)

Carr, Gary (Oakville South PC)

Daigeler, Hans (Nepean L)

Farnan, Mike (Casbridge NDP)

Johnson, Paul R. (Prince Edward-Lennox-South Hastings NDP)

Lessard, Wayne (Windsor-Walkerville NDP)

McGuinty, Dalton (Ottawa South L)

McLeod, Lyn (Fort William L)

O'Connor, Larry (Durham-York NDP)

Perruzza, Anthony (Downsview NDP)

Wilson, Gary (Kingston and The Islands NDP)

Substitutions:

Arnott, Ted (Wellington PC) for Mr Carr

Brown, Michael A. (Algoma-Manitoulin L) for Mrs McLeod

Martin, Tony (Sault Ste Marie NDP) for Mr Perruzza

Also taking part:

Miclash, Frank (Kenora L)

Wood, Len (Cochrane North NDP)

Clerk: Carrozza, Franco

The committee met at 1533 in committee room 2.

The Chair: I would like to call to order the standing committee on estimates. We are reconvening to commence the estimates for the Ministry of Northern Development and Mines, specifically votes 301 and 302, which deal with Northern Development. Before we commence, I would like, if I might, to share with the committee some information. With the indulgence of the minister, it will only take a few moments but we have to resolve some committee matters.

The committee will be aware that under your direction I wrote to all the House leaders requesting an opportunity to extend our hours and our time frame to complete the estimates as assigned to us in accordance with the standing orders -- in other words, of all 12 ministries -- and to be given sufficient time in order to complete them. I have received a letter dated November 4, now in front of you, that the government House leader's special assistant is writing us that they have been unable to agree on terms that would allow the committee to utilize additional sitting time.

I want to further advise the committee that when checking with the three House leaders I am advised that both the opposition parties had expressed concern in meeting the request and that the resistance was coming from the government House leader. That was borne out in my conversation with the government House leader. I understand that both opposition parties have requested through their House leaders that this matter continue to be raised to try to seek a resolution. They are not satisfied that completing only 5% of the total estimates of government spending for this fiscal year is a supportable position, especially in light of the fact that this committee did not put itself in that position. There were circumstances beyond the committee's control.

I will entertain any brief discussion, but I am sharing this update with the members of the committee and will be directed by their guidance. That is terrific. I thank you. The Chair will therefore continue with his ongoing discussions with the government House leader and report back to you.

MINISTRY OF NORTHERN DEVELOPMENT AND MINES

The Chair: As stated earlier, I would like to welcome the Minister of Northern Development and Mines, Miss Shelley Martel. Minister, welcome. As you know, you have up to 30 minutes for your opening statements, copies of which have already been circulated to the committee. Please introduce any or all members of your ministry staff you have invited to participate, at least in the opening segment. Then we will move to the official opposition for up to 30 minutes and we will go in accordance with the standard procedures. Please proceed, Minister.

Hon Miss Martel: Thank you, Mr Chairman. Thank you to all the committee members, as well. There are a number of ministry people and my own political staff who are here, who will be available for questions as well. I will just introduce those people at this point. With me are Brock Smith, the deputy; Mike Barker, who is assistant deputy minister on the Northern Development side; John Gammon, assistant deputy minister on the Mines side; Sheila Willis, the assistant deputy minister of corporate services; Mike Irvine, the director for financial services; and Heather Robertson, the senior policy adviser in corporate services. My own political staff are MaryLou Murray, my acting executive assistant, and Kathleen O'Hara, my communications assistant. Stewart Kiff, who does policy, is wandering in and out.

Two things, if I might, before I begin my formal remarks. We indicated to the Chair some time ago that although the Mines estimates have been completed by the former minister, we were prepared to answer questions on them. I will be making some reference to the Mines section of the ministry in my remarks. Second, we have copies of the remarks for everyone. You have English copies, I would think, most of you. I have some French in mine, but I think you will be able to follow along. Having said that, I will begin my formal remarks.

Mr Chairman and members of the committee, I am pleased to have the opportunity today to speak to the 1991-92 estimates for the Ministry of Northern Development and Mines.

In the past year the new provincial government has had to deal with some of the greatest challenges our citizens have had to confront in a long time. Ontario has in fact been faced with the worst recession in 50 years and the north has been particularly hard hit.

In the mining sector we have experienced closures or layoffs precipitated by a decrease in metal prices and the high value of the Canadian dollar. The forestry industry in northern Ontario has also been faced with difficult times. The high Canadian dollar, interest rates which only recently have begun to be lowered, and the 15% tax on softwood lumber have all contributed to the instability of numerous sawmills.

De nombreuses localités ont également été durement touchées par la récession et par d'autres problèmes économiques. Le ministère du Développement du Nord et des Mines a toutefois joué un rôle très important dans le Nord de la province cette année et a aidé les résidents et les résidentes à surmonter certains de ces problèmes.

Before I deal with specific initiatives, let me give committee members a general overview of our ministry's mandate. One of the two votes you will be taking during this process will be on the activities of the corporate services division of our ministry. Last month the corporate services division completed its first year of occupancy in its new home in downtown Sudbury. Our new operations are a fine example of how government ministries can function very well away from Queen's Park and outside the greater Toronto area.

In our ministry, as in other ministries, the corporate services division helps our two programming divisions -- the northern development and transportation division and the mines and minerals division -- operate smoothly and efficiently. It provides management, administrative and policy co-ordination services which help the divisions carry out their programs.

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Northern Development and Mines is the only government ministry whose responsibilities, on the northern development and transportation division side, include delivery of a full range of programs to a specific region of the province. In fact, we have a network of 28 storefront operations, consisting of a northern development officer and a client services adviser, who provide information on all government services and programs. These people are sometimes the only government presence in some small northern communities.

The second vote you will be taking is for the programs of the northern development and transportation division, which is responsible for promoting local and regional economic development and diversification, improving access to social and health services for northerners, and planning and co-ordinating an integrated transportation system.

En ce qui concerne le développement économique, le ministère offre les programmes suivants : le programme d'aide au développement économique des municipalités, le programme de subventions d'immobilisation pour les communautés non enregistrées, le programme d'amélioration des immobilisations des petites localités, ainsi que des programmes d'aménagement riverain et des programmes de développement économique pour les autochtones.

These programs are aimed at diversifying the north's economic base, particularly in single-industry communities. They also help to create and expand small and medium-sized businesses, and maintain the competitiveness of the north's resource-based industries. The underlying theme of these programs is to increase employment opportunities for northerners.

Other programs, such as the summer science school program, SNAP, the supplementary northern assistance program, and native social programs are aimed at improving the quality of life for northern residents by assisting in the development of basic amenities within each community. Priority is given to providing social and health care services locally, particularly to the elderly.

An important part of the northern development and transportation division is the Northern Ontario Heritage Fund Corp, or NOHFC. Its major goal is to promote and stimulate economic development in Northern Ontario. I will come back to the heritage fund later.

On the mining side, the ministry's responsibilities extend to mining and exploration communities throughout the province. The mines and minerals division administers a network of resident geologist offices and mining recorder offices in Ontario.

The Ontario geological survey provides information on Ontario's geology and mineral resources in order to encourage exploration, provide a basis for land use planning and aid the development of non-renewable resource policies.

The mines and minerals division develops policy, standards, guidelines and legislation to maintain an optimum level of mineral production in Ontario.

As I said earlier, in this most difficult year, the Ministry of Northern Development and Mines has made a big difference in the north. I want to take some time to look at specific initiatives which we undertook to respond to the hard times we were encountering. First, anti-recession.

Au mois de février, j'ai annoncé l'octroi de 40,8 millions de dollars pour la mise sur pied de divers projets dans le Nord de l'Ontario. Ces projets, qui s'inscrivaient dans le cadre du programme antirécession du gouvernement, ont permis non seulement de réduire le taux de chômage attribuable à la récession, mais aussi, dans de nombreux cas, d'améliorer l'infrastructure indispensable à la croissance et au développement des collectivités du Nord.

Projects funded by my ministry included waterfront development, top-up on water and sewage systems, and improvements to community centres and snowmobile trails.

I am especially pleased that we were able to provide community-based services and facilities for day care, family violence programs, as well as shelters and group homes for developmentally handicapped people.

More than 60 localities and some 90 native communities across the north benefited from our anti-recession initiatives.

The native component of the provincial anti-recession program generated employment opportunities in areas of extremely high unemployment while at the same time accelerating the development of community facilities and improving community housing. Many communities took advantage of this funding to supplement and accelerate regular federal and provincial programs, particularly in the housing sector.

Our recession-fighting strategy also provided $100,000 to Confederation College of Applied Arts and Technology in Thunder Bay to supervise native alcohol treatment programs on 23 reserves. College faculty fly to remote communities to train local counsellors to deal with alcohol abuse.

Our anti-recession projects have created more than 3,000 person-years of work. By the month of August, funding for 80% of these projects had already been allocated and many were well under way.

I believe our government's commitment to northern Ontario was well demonstrated through its anti-recession program. More than $210 million, or 30% of the $700-million package, was allocated to projects in the north.

In response to our youth migration report, which confirmed that many of our northern young people leave the north in search of employment opportunities, I announced last January a new initiative called Nortop, the northern training opportunities program. This $3-million northern training opportunities program is a wage subsidy program which encourages employers in northern Ontario to provide practical work experience for young people. But Nortop is not only a job creation program. It has a strong training component that enhances participants' skills and helps them secure permanent jobs in the future. The loss of our young people is one of the biggest problems facing the north and Nortop is one way of ensuring our youth have a future here. Last summer's introduction of Nortop was very successful. All the claims have not been recorded, but we expect the final tally will show that more than 2,500 positions were created.

I might add at this point, because we want to be sure the program is effective and working well, we will be undertaking consultation in eight communities across the north this winter with both those students who participated and employers to figure out how it works and how we might improve on it.

I am very pleased with another initiative our ministry has undertaken in the past year. In March, I announced a new capital grants program, SCIP, the small communities improvement program, for northern municipalities with a permanent population of up to 2,000 and for native communities. SCIP provides minor capital funding for the construction or renovation of permanent installations to enhance the delivery of essential services. This new program has helped to improve the quality of life for people residing in small communities across the north. Projects which may qualify for funding include community wells, fire stations and public works facilities. In special circumstances, supplementary funding is available for parks, community centres, libraries and day care centres, as well as cultural and heritage facilities.

The success of this program has surpassed all our expectations. This year, SCIP's entire budget of $1.5 million was allocated to 38 approved projects. We are committed to making SCIP a full-fledged ministry program.

Our greatest challenge as a ministry this year has come with our involvement in seeking positive solutions to the great difficulties that developed in Elliot Lake and Kapuskasing.

Change and restructuring of the northern economy is occurring. In our opinion, the ministry and the government need to be part of this transformation to manage it as well as possible. Elliot Lake and the communities along the north shore have experienced and will experience devastating layoffs in the uranium mining industry. Our government has made every effort to support the people of this area in their efforts to diversify the economy.

In December, I announced a $15-million diversification package for that region which included a $10-million contribution from the province and a $5-million contribution from the Northern Ontario Heritage Fund Corp.

I am pleased to report that all the initiatives provided for with this funding are under way. The $2-million expansion of the Elliot Lake airport is now complete. The $3-million field station for reclamation and abandoned mine research by Laurentian University of Sudbury is now being staffed: 15 to 20 research and development positions will be created.

The Oaks Addiction Treatment Centre in Elliot Lake is now under final design. This centre will create 40 full-time and part-time jobs.

The Ministry of Natural Resources' land transfer of property in Elliot Lake to the city has been finalized.

The Elliot Lake retirement living program, a major economic diversification thrust for Elliot Lake, has attracted approximately 2,000 seniors into the community to date. This represents some $30 million to $40 million of annual expenditure in the local economy.

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In March, we helped establish a working group to advise the government on how best to help the Elliot Lake area with its economic diversification initiatives. The working group consists of representatives from the municipalities, education, labour, business, first nations and the government. It is an example of the kind of consultation and co-operation the province wants to stimulate. The efforts of the working group were indispensable in developing a package of initiatives that addressed the critical issues of the region.

Last June I was very pleased to announce a special $250-million adjustment and diversification package, funded by Ontario Hydro, which is designed to help the Elliot Lake area make the transformation from a dependence on uranium mining to a more diversified economy.

This comprehensive package contained three main elements:

(1) a commitment by Ontario Hydro to continue purchasing uranium from Rio Algom until December 1996. This helped create 75 new jobs and maintain 575 jobs at Rio Algom operations;

(2) Ontario Hydro also committed $65 million to be used to meet community needs for both short-term adjustment and long-term diversification. Of this amount, $9.6 million was targeted for short-term job creation to benefit about 1,000 workers in the Elliot Lake area;

(3) Ontario Hydro will earmark $25 million for a number of energy initiatives including a local energy efficiency program and developing cogeneration potential in Elliot Lake.

This adjustment and diversification package recognized Ontario Hydro's unique obligation to the Elliot Lake area. Hydro is fulfilling its role as a responsible corporate citizen by assisting that region as it adapts to changes in the uranium contracts.

In Kapuskasing, after months of discussions, the Ontario government, Kimberly-Clark, Tembec, the Employee Ownership Group and Ontario Hydro worked out an agreement to save as many jobs as possible at Spruce Falls Power and Paper Co. This agreement allows the employees and the community to own 60% of the shares of the new company. There will be 800 workers at the mill next year and 670 after 1994. Another 150 to 200 workers will be involved in construction to modernize the mill. Kimberly-Clark had originally planned to cut the entire workforce to 250.

I am pleased that the efforts of the government working group, which our ministry established and chaired, led the negotiations which eventually made a deal possible. It was rough going and hundreds of hours were spent putting pieces together. Both the Purchasing Employee Group and the Employee Ownership Group were instrumental in finding a positive solution.

Le ministère continue à jouer un rôle important dans la région de Kapuskasing. Nous présidons en effet un comité interorganismes, formé de fonctionnaires, qui coordonne les mesures adoptées par le gouvernement pour répondre aux difficultés économiques qui affligent Kapuskasing et les localités avoisinantes.

Nous participons également aux activités du groupe de travail communautaire local voué à la diversification économique régionale. Le comité de diversification économique de la région représente six collectivités de la région dans un corridor de 70 milles.

The 6/70 committee has been very active and is now awaiting funding for various job creation projects. These include forestry programs, the renovation, expansion and upgrading of municipal, recreational, and community facilities, and the beautification and construction of community buildings. I am looking forward to making further announcements pertaining to the Kapuskasing area in the near future.

I have the privilege of serving as chairperson of the Northern Ontario Heritage Fund Corp. The corporation has invested more than $62 million in northern Ontario businesses and firms since October 1990.

Some of the projects that have received assistance include $5 million to Algoma Central Railway to help maintain its operations and secure employment in Wawa and Sault Ste Marie; $2.1 million to Deak Resources in Virginiatown to upgrade the daily capacity of the gold custom milling facilities; $2.2 million to the Nipissing Indian Band 10 for the establishment of a fur-dressing plant near North Bay; $1 million to the Ontario Cancer Treatment and Research Foundation in Sudbury to help further research in the area of bone marrow transplants, and a total of $5.1 million in loans and loan guarantees to the two major employers in the town of Atikokan -- the Sapawe sawmill and Proboard Ltd -- protecting almost 500 direct and indirect jobs in the region.

In July, the three-year term of a large number of NOHFC members had expired and I made a major change in the composition of the board. We now have equal representation of men and women and a balance between business and labour, as well as increased aboriginal participation. I believe the board better reflects the makeup of our northern society, and I am convinced the new members will be as committed to their work as were the former members.

Sawmill adjustment initiative: In response to an overwhelming need to aid our sawmill committees through tough economic times, we have worked with our northern communities to keep their mills open. This sawmill initiative has helped 12 communities with sawmill and wood-related industries. Again, these communities were negatively affected by the high value of the Canadian dollar and found it increasingly difficult to export their goods.

The NOHFC has provided $14 million to sawmill communities to see them through these tough times. We have also helped mill operations in their dealings with various banks and have levered assistance much beyond the amounts originally committed.

Last August, I officially opened the Northern Reception Centre at our offices at 10 Wellesley Street East in Toronto. This new centre is designed to help northern municipalities, first nation representatives and economic development officers carry out their business in an effective, professional way while in Toronto.

The Northern Reception Centre consists of a boardroom, two offices and support equipment such as photocopiers, telephones and a fax machine. It is a response to the need expressed by northern community leaders for a place to call their own while doing business in Toronto.

Most recently, on the northern development side of the ministry, I announced the creation of the northern Ontario marketplace program. This is a three-year pilot project to help northern enterprises tap into public and private sector procurement markets.

The new program will consist of two storefront offices that will provide a matching service between northern buyers and northern suppliers. It will also serve as a central source of information about the buying needs of northern agencies: federal, provincial, municipal, institutional or business sector. One office will be located at Confederation College in Thunder Bay and the other will operate at Cambrian College in Sudbury.

The marketplace program will result in greater opportunities for northern businesses to compete for the delivery of goods and services.

Last week, I announced a new grass-roots consultation program for northern Ontario which we have called SCAN North -- strategic consultation and action now north program -- or, in French, Stratégies Consultations Actions Novatrices, Nord. This program consists of specific projects initiated by the ministry on the advice of northerners. These projects will take various forms, including task teams, project advisory committees and one-day roundtable sessions. Individuals and groups with a special interest or area of expertise will be asked to apply their experience, insight and skills to assist us.

Five SCAN North projects pertaining to forestry, mining, waste management and recycling, support for small business and native entrepreneurs, and native economic development in the private sector have been initiated.

Le fait que les participants sont issus des syndicats, du monde des affaires, des premières nations, des localités et de la province témoigne de la collaboration et des partenariats qui se sont établis jusqu'à ce jour.

Our ministry also administers programs aimed specifically at native communities. For example, our winter roads and remote airport programs allocate about $10 million a year to provide improved transportation to first nation communities.

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We also provide funding to improve the social infrastructure on reserves and help communities complete resource development agreements which give them economic and social benefits through local resource extraction. These agreements include targets for native employment along with appropriate training. Native culture and traditions are taken into account.

Recycling: The Ministry of Northern Development and Mines is active in the promotion of recycling across the north. We provide capital assistance to communities wanting to introduce recycling. Our funding supplements Ministry of the Environment and Ontario Multi-Material Recycling Inc programs. Since October 1990, for example, we have provided some $785,000 to Sudbury, $310,000 to Sault Ste Marie, $250,000 to North Bay, and $80,000 to Parry Sound and district to further their recycling and blue box programs.

MEDA: The municipal economic development agency program continues to be the primary catalyst in helping northern communities to help themselves. Through it, some 35 communities receive an annual allocation of more than $3 million to operate and staff their economic development offices.

Mines and minerals: I would like to point out that my appointment to the Mines portfolio in last July's cabinet shuffle was beneficial on two counts. First, as you are aware, most mines are located in northern Ontario, and the joining of Northern Development and Mines responsibilities gives us a much more comprehensive picture of what is occurring across the whole area.

Second, rejoining Northern Development and Mines under one minister has helped rationalize the work of the ministry staff. I know the committee is not voting on the work of our mines and minerals division, which went through the estimates process earlier in the year, but I am the minister responsible for both portfolios and I would like to take some time to speak to some of the new initiatives in that division.

OMIP: One of the first actions after acquiring the Mines responsibility was to change the criteria of our Ontario mineral incentive program, or OMIP, to recognize the need to promote exploration activity in the north. OMIP provides grants to qualified companies and individuals carrying out exploration in Ontario.

Normally grants amount to 30% of eligible expenditures to a maximum of $300,000. In August I was pleased to announce that OMIP would be increased for northern Ontario and up to 50% of eligible expenses could be granted for mineral exploration in the north.

But even with the change in criteria, not all of the funds allocated to OMIP have been committed, this in spite of our efforts to increase the attractiveness of the program, particularly in the north. Two million dollars of these funds were, therefore, sent back to Treasury as part of our effort to respond to the government's restraint measures.

On another front, OPAP, the Ontario prospectors assistance program, has enjoyed unqualified success. This year, the total $4-million budget was committed to qualified individuals carrying out prospecting and other exploration activities.

Client centre: The building of our mines and minerals research centre, which will house our Ontario geological survey in Sudbury, continues on schedule and staff should be moved from Toronto by the summer of 1992.

Work has also begun on our new mines and minerals information centre in Toronto. In consultation with PDAC, the Prospectors and Developers Association of Canada, and other client groups, we are planning the opening of a new information centre to service our clients in Toronto. Toronto is the home of many mining company head offices and it was their desire to have a resource centre located here to meet immediate needs.

Rehabilitation: As part of our added responsibilities flowing from the proclamation of the Mining Act, staff of the new mineral development and rehabilitation branch have been working with mining companies to develop proper closure plans. Closure plans which describe how and when rehabilitation will be carried out must be approved before production begins. This requirement for an approved closure plan before production starts will result in mines being developed, operated and closed in a more responsible manner.

Le nouveau comité consultatif sur la Loi sur les mines a été mis sur pied vendredi dernier, date de sa première réunion. Ce comité compte des représentants de divers secteurs de la société, notamment des groupes d'exploration et d'exploitation minières, des syndicats, des industries, du tourisme et des groupes autochtones.

As part of our continuing consultation on mining legislation, members will monitor the impact of the Mining Act regulations and recommend needed changes. We look forward to the advice and input of our participants through this process.

In the same vein, I was pleased to have both native and labour representatives accompany me to the mines ministers' conference in Halifax last September. The mining industry has traditionally been well represented at that event, but this year was the first time a Minister of Mines chose to bring other stakeholders in the mining sector to the conference.

After the Halifax conference our ministry participated in Verona's international stone exhibition. This was our second year at that exhibition, which is an excellent vehicle for our government to promote the development of Ontario's marble and granite deposits and potential.

Italy is a world leader in the granite and marble industry, and last month I was delighted to welcome an Italian delegation to northern Ontario. The arrival of that delegation, as well as others which are planned, was prompted by the visit to Italy. The building stone industry in that country is fascinated with Ontario's dimensional stone potential, and is looking at investing in our province.

On Monday a federal-provincial agreement that will inject $95 million into the economy of northern Ontario was signed in Sudbury. The northern Ontario development agreement, or NODA, covers three economic sectors: forestry, minerals and tourism. Seven line ministries from both governments are responsible for implementing the terms of the joint agreement directed at the revitalization and diversification of the north's economy.

Under NODA, innovative strategies will be developed and implemented to ensure that the minerals, forestry and tourism sectors remain competitive and develop in an environmentally sustainable way. NODA has the potential for immediate job creation as well as long-term benefits for northern Ontario.

I am proud of what my staff -- both ministry and political -- have been able to achieve in a short time under difficult circumstances. Our priority will continue to be the twofold goal that has been the basis of our work to date: first, to deal with the very difficult conditions imposed by the recession and fundamental restructuring of the economy in as humane a way as possible and, second, to foster development in a manner that creates co-operation among business, labour, first nations and municipalities, while respecting the environment and aboriginal rights.

In the past year, these goals have guided us as we have worked with northern communities in crisis. Sault Ste Marie, Elliot Lake and Kapuskasing are the best known. A number of sawmill towns, such as Atikokan, have received a lot of attention, as has the Algoma Central Railway. As well, over $210 million of anti-recession funding was pumped into northern communities.

Nous continuerons à nous efforcer de trouver des solutions pratiques permettant de protéger et de créer des emplois, de respecter l'environnement et de répondre aux besoins des premières nations. Ce faisant, nous mettrons en place les structures nécessaires au renouvellement de l'économie du nord de l'Ontario.

We have learned important lessons in the past year. We will continue to facilitate co-operation among labour, business, aboriginal and other interests. We will build on the natural gifts of our geography and resources, attributes that have spawned strong mining, forest products and tourism industries, especially through emphasis on value-added products.

I look forward to future challenges and to working with members from all parties to develop a strong and prosperous northern Ontario.

I would like to thank you, Mr Chairman and the committee members, for what I know was a long presentation. I appreciate your patience.

The Chair: It was right on time, so that is appreciated. Thank you, Minister. I would like to move to Mr Brown.

Mr Brown: I would like to begin by welcoming the ministry staff and the minister, and I congratulate the minister on her new portfolio -- at least it is since I have had time to publicly speak with her -- in taking on the Mines portfolio, which we all know is important.

I think the MNDM estimates are an excellent opportunity not only to review the progress and status of the ministry but also to examine in detail the economic health and social wellbeing of northern Ontario and its residents.

When the Ministry of Northern Affairs was created in 1977 many people in the north were pleased with the belated recognition of their need for specialized service. Under the leadership of the Conservative minister Leo Bernier, money flowed to numerous projects, municipalities and service organizations. This largess was appreciated but quickly recognized as politically motivated and misplaced. What was needed, if northern Ontario was truly going to develop, was the power to make its own decisions.

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Numerous studies have been undertaken -- the Fahlgren report, the Rosehart report -- and political and bureaucratic committees have combed the north examining single-industry communities, sectoral situations and the like, but what was always understood was that without a shifting of decision-making powers from Toronto to northern communities, significant change could not occur.

There was probably no person who understood the importance of this truth more than René Fontaine. He was instrumental in helping northerners understand that they needed more than handouts, that they needed to have control of the levers of change. He facilitated this northern empowerment in three ways: through the northern development councils; by ensuring that senior civil servants were located in the north, both through the transfer and the very successful relocation projects, and finally through the initiation of the northern Ontario heritage fund.

What everyone recognized in René was that he had a vision. He had a sense of how northern Ontario should develop. Not everyone always agreed with all the specifics of that vision, but it was still very important. Because René was so fervent and so clear in his vision, he inspired others, and he provided a leadership role for all northern Ontarians.

Never has there been a need for that kind of visionary leadership in northern Ontario as there is today. Northern Ontario is facing recessionary pressures unlike those in any other part of Canada. For the last year, layoffs have been crippling our principal industries, closing our communities, and leaving thousands of our people out of work and uncertain about their future.

Denison Mines, Rio Algom, Spruce Falls Power and Paper Co, Abitibi-Price in Thunder Bay, Domtar in Redrock, MacMillan Bloedel in Sturgeon Falls, Canamax Resources, Rexwood Products in New Liskeard, and Inco in Falconbridge and Sudbury have all had layoffs. These in turn spark other layoffs, closures and bankruptcies in subsidiary and related service industries.

There are many ways to illustrate the downturn in northern Ontario's economy. One of the most compelling is brought to us by the prospectors of Timmins, who point out that the spending on exploration in Timmins has gone from nearly $100 million a few years ago to less than $14 million this year.

Pyrok of Temagami never opened as a result of bad economics and lack of government support. There are a number of factors that the NDP continue to blame for northern Ontario's most recent economic demise: a high Canadian dollar, free trade, the GST, low metal prices, particularly in gold and uranium as well as other compelling factors, but in this instance, passing out blame is weak and simplistic. Blaming the feds is just not good enough when it is realized that northern Ontario is doing worse than similar jurisdictions in Canada and the world.

The price of gold is the same in northern Ontario as it is in Quebec, British Columbia or Nevada, yet the exploration and mining activity in those areas is outstripping northern Ontario by, in some instances, two to one. The reasons the northern Ontario economy is suffering inordinately when compared to other jurisdictions will hopefully be one of the main subjects of this estimates discussion.

The Ministry of Northern Development was created to respond to the needs of the relatively dispersed population living in the vast northern area of this province, which constitutes well over 80% of Ontario's land mass. I might say at this point that not many people understand that about 10% of the population lives in northern Ontario, but of that, 75% live in one of the five major centres, which leaves 2.5% of the people on almost 90% of the land. It is tremendously difficult to administer and to promote.

We think the specific goals of this ministry should be to promote and support the social and economic wellbeing of northern Ontario residents and to foster the development of Ontario's mineral industry in a manner which enhances the economic performance of this province. In other words, the Minister of Northern Development and Mines must advocate both at the cabinet table and publicly for northerners. She must find ways of developing northern industries, educating and caring for northern youth, creating and maintaining northern jobs, and enhancing the quality of life for all northerners.

These are lofty rhetorical words which will remain so unless they are accompanied by a comprehensive strategic plan. It is the nature of these plans that we will try to ascertain through this estimates exercise.

There are four principal questions we intend to ask during this process. We want to know how the problem is defined. We want to know what the current economic situation is in northern Ontario. What studies have been conducted to ascertain employment levels? Have these been done by sector? How many mines are operating in northern Ontario today? How many saw mills? How many paper mills? What will these numbers look like a year from now or two years from now or three years from now? How many people are being employed in mining, forestry, pulp and paper and manufacturing? How many, in both real and percentage terms, have been laid off in the last year? Has the recession affected some regions worse than others? For example, why is Sudbury apparently less affected than Sault Ste Marie? Are there elements of Sudbury's diversification that can be applied in other situations? How many bankruptcies were there in northern Ontario last year? How many small businesses were started? What is the status of the self-employed sector? How many prospectors are at work since last year? Does the minister have any idea about underemployment in northern Ontario? What are the up-to-date statistics on native unemployment? How many reserves does the ministry now administer to? Are unemployment levels still at 13.5%? Where does the ministry get its numbers? What is its sense of the youth migration statistics? Can the minister give us those numbers and tell us what priorities she has given to the particular report?

What other global factors must be taken into consideration when defining northern Ontario's economic problems? What studies are being undertaken by her ministry currently? What other points of reference has she been using? Has she had contact with other jurisdictions or read any of the material on international northern communities which she feels is particularly pertinent to northern Ontario?

Second question: What resources do we have to attack the problem? Under that question we are going to ask for a description of the ministry's expenditures and programs in more detail, northern Ontario resources transportation program, Ontario Northland Railway, heritage fund, Canada-Ontario agreements and the softwood lumber tax.

Can you provide us with a break-out of what other ministries spend in northern Ontario and what revenues the province derives from northern Ontario in total? What does the government spend in northern Ontario totally? How does this expenditure compare with last year? What is northern Ontario's tax burden and how much has that increased? What are the ramifications of licence fee reductions? Have there been studies on the increased gas taxes and the increased hydro rates? How has the anti-recession fund helped northern Ontario? How was the money expended? Was it expended where it was most needed? What were the criteria for determining which anti-recession programs went ahead and which did not? The third basic question we are going to ask is, how best can we utilize these resources? What are your plans as minister? What is your blueprint for northern Ontario? Can the minister define sustainable development, and how does this intermesh with her vision of northern Ontario? We will want to know how much input the minister has had on Mr Philip's upcoming industrial strategy.

Does the minister have representation on the Premier's Council on the environment and the economy? What plans have you discussed with other ministries for the increased prosperity in the north? How is the minister promoting northern Ontario? Why has she cancelled Ontario North Now, and where is the $500,000 she promised northern Ontario as a result of that cancellation? Does she feel that her trip to Italy was cost-effective, and why? Can the minister explain the details of her negotiations with the federal government on economic regional development agreements? How many times did she meet with those federal officials? Which officials did she meet? Why did Ontario have to take such a cut in the forestry agreement, about $9 million a year?

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The fourth basic question we want to ask is, how do we evaluate the success of her implementation of the programs? What is the minister's sense of the various ministry programs and expenditures? What is her sense of future expenditure on these programs? What criteria does she use?

Transportation: The Ministry of Northern Development is responsible for about 9,800 kilometres of northern highways, new roads for development and the construction of resource roads. How much is the minister planning on spending next year? Why did she spend less this year than the year before? What projects is she giving priority and why? What is her feeling, for example, regarding the four-laning of Highway 69?

What is the minister's opinion on crown land as a development tool? What steps is she taking to open land for prospectors and developers? What is her position on the opening of the Temagami land caution? Why will her ministry not recognize the four townships that Gary Potts has removed from that caution? When will she publicly state her support for the immediate lifting of the entire caution? What is her position on MNR's areas of concern, and is it true that northern development has given MNR an ultimatum that MNR not expand its areas of concern in northern Ontario?

What is the minister's position on northern tourism? Should the emphasis be on northern wilderness experiences, for example, or on more traditional recreational pursuits? Has she met with the hunters and anglers? What perspective does she have on their tourism concerns? Those are among the questions that we intend to pursue during these next few hours with the minister. I will conclude my remarks there.

The Chair: Thank you, Mr Brown. I wonder if you have an extra copy of those questions. If not, the clerk would be pleased to photocopy it so that ministry staff has the complete list before them.

Mr Brown: I think we can do that. I will repeat many of them anyway as we go through.

The Chair: It is acceptable as a format that you request responses to be prepared and sent to the committee. You could have those in your possession prior to our next reconvening of committee hearings, which is probably around 19 November, as the House is not sitting and therefore the committee is not sitting next week.

Mr Brown: Sure. We will certainly give the clerk a copy of these.

The Chair: On that point then I might also get confirmation from the minister and the deputy with respect to any questions that could be submitted. Could you respond in writing during the course of the estimates? That would be very helpful to the committee.

Mr Smith: Some of them are factual and some of them are really questions of philosophy.

The Chair: Yes. I am sure you can distinguish between fact and philosophy and respond to those in written form, but it is not uncustomary to request it in a written form so the committee can analyse that.

Mr Brown: We will do a little bit of work on these questions and give them to the clerk.

The Chair: Okay. They were diligently writing here and I just wanted to make sure they got every one of them. That was all. Thank you, Mr Brown.

I have been notified by Mr Ernie Eves, who is the critic for the third party, that he has been called away as a key member of the select committee on Ontario in Confederation and is in Ottawa. He is ably represented here today by Mr Ted Arnott. However, I believe it is Mr Eves's wish that his opening statement be stood down at this time. We have agreement from all parties on that. I now ask the minister if she wishes to respond now or commence the questioning and wait until after Mr Eves has completed? If you would like to do some part of your response now and save some of that time until Mr Eves makes his presentation or if you would like to go right into questions, we are in your hands, Minister.

Hon Miss Martel: I will wait and allow Mr Eves to make his comments. That will also allow him to have a chance to read what I said and what Mike has said. If he has a chance to do all that, I will then listen to him and respond.

The Chair: Fine. The minister will stand down her response at the moment as well. At this point I am in the committee's hands to confirm if you wish to go with time allocation in rotation. Failing that, the Chair is open to a suggestion of how to proceed.

Mr Brown: I have always found at these meetings that time allocation is a good method to pursue and we are totally supportive of that.

Mr Johnson: The government representatives here agree that we will go with time allocation as it seems to be a fair and equitable way to do this.

The Chair: Fine. That being a consensus, and Mr Arnott confirms as well, then we will proceed. I invite Mr Brown to take the first 20-minute allocation and proceed with questioning to the minister. Then we will proceed with Mr Arnott and then with the governing party.

Mr Brown: Our first basic concern, or one of things we will start out addressing, is the northern Ontario heritage fund. It has been described by northerners, or at least by some northerners, as a mealy-mouthed, Mickey Mouse kind of northern Ontario heritage fund that gives us $30 million a year over the next 12 years. I do not share that view and I wonder if the minister could expand on that?

Hon Miss Martel: I would be pleased to. It is not enough money, as given evidence by this year. Since September of 1990, since I have become minister and chair of that board, we have spent over $62 million. That was the entire allocation for that fiscal year 1990-1991. We also picked up all the money that had been unspent in the two years when the fund started and spent that money as well.

There is no doubt that in the times we are having and the promotion we are doing with the fund -- we have done extensive promotion in the last year in a number of communities to try and encourage people to use it, and we have seen them doing just that, and we hope again this year as well to spend right up to the limit. I wish I had more money to put into it. I do not. But we certainly have proven this year that we can spend it all.

Mr Brown: Can I take from that answer that you will be expanding the amount of funds provided in the northern Ontario heritage fund because you see the demand for funds greatly outstripping your ability to allocate them within the $30 million?

Hon Miss Martel: At this point in time, as in all ministries, my own is facing constraints, not only in this fiscal year, but certainly with respect to next fiscal year's. We are in the process now, within the ministry, of taking a very serious look at all of our programs, at everything we deliver to determine how we are going to meet the restraint that has been placed upon us in order to come into line with our deficit projections.

At this point in time, and I have said this publicly so I am not sharing any secrets here or anything new, I will be lucky in many cases to be able to hold the line in most of my programs. It is my hope that I can continue to deliver all of my programs this year, because there is a need for all of them. The constituents who are using them will have a need for them that will probably grow and not lessen.

At this point in time, what I am looking at in my ministry, as are all other ministers at this point in time, is to hold the line on what I have. I could not promise here that I would be able to put any more money in that fund because I do not think, in being honest with members of this committee, that I could do that.

Mr Brown: Can I take it that you support the northern Ontario heritage fund at the $30-million allocation minimum, then?

Hon Miss Martel: Yes, that is correct.

Mr Brown: And that you think this Mickey Mouse plan --

Hon Miss Martel: Mealy-mouthed was another adjective, yes.

Mr Brown: -- is better than nothing and that we should be proceeding with that?

Hon Miss Martel: This year we have certainly proved that it is well worth while and we could use more money. We spent every penny we could and we came right up to the limit, not only on 1990-91 allocations but, as I said, we went back and got into the unallocated funds from the first two years of the program and used those as well. So we have done extensive promotion. We have encouraged all of our heritage board members to look in their own communities, keep their ear to the ground and bring forward recommendations to Arne Sorensen, the general director, for possible projects that we might be able to fund. We have dealt with many applications. We have yet 30 more for our next meeting and I have no doubt that we will probably spend right up to our limit this year as well.

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As I said, I wish I had more money to put into it. I do not think I will, but I can give him this commitment: We certainly will not be subtracting any money from it, because we have seen this year, in one year of spending, that we have spent it all. There is a need for it. We have spent it all and we intend to keep at least what we have there in place.

Mr Brown: You will have to excuse me, Minister, in that I find it somewhat ironic, being as you were the one who said it was Mickey Mouse and you voted against this fund. You did not think it should exist, and if I can recall the reason you gave at the time, it was that it was not enough money.

Hon Miss Martel: I am saying here very clearly that I think it is not enough money and that our experience this year has proven very clearly that had we had more money, we probably could have done even more. However, this is what I am faced with. If I had a lot of money and we were in a buoyant economy, I would certainly talk to my cabinet colleagues about the possibility of going back and amending the legislation to permit more money to flow in. But looking at the current fiscal situation and the restraints I have in my own ministry, the amount of money I will be asked to cut from my budget and my very personal belief that I want to hold all of my programs intact, to at least be able to deliver all of them to the clients we serve, I will not be able to put more money into it. If I had it, I would probably make every effort I could to put it in there, because we have seen this year that there is a need for it and that we have made every effort to spend it all. I look forward to doing the same in this fiscal year.

Mr Brown: Many people would consider that during difficult economic times is the time to spend more money on long-term job creation projects, which is really what the northern Ontario heritage fund is about. Most people would suggest that during difficult economic times, we spend money to create long-term jobs. It is the time when the economy needs the stimulus the most, and it is the responsibility of government to pursue that. That is why I wonder why, in a recessionary period in which we are trying to build a strong, viable northern economy, an economy that has been devastated by a number of events that you have outlined in your statement -- and we agree with that analysis -- it seems in my view and I think my party's view that this is when you invest in the long-term economic viability of the area, when a restructuring is taking place and when there is severe dislocation.

We have a minister who told us she did not like the plan at all to begin with coming here and saying that during these difficult times we do not want to spend any more money. I am having a little difficulty rationalizing.

Hon Miss Martel: A couple of things: I did not like the plan to begin with because, as I said, there was not enough money in it. I think all of my northern colleagues said very clearly during those debates that we did not think it was enough money to do the job. I still believe that.

Mr Brown: I think we all believe that.

Hon Miss Martel: Just a second. Let me tell you about the difficult economic times and how you spend. Let me just go back and point out to all the members the amount of money that has gone into northern Ontario in these very difficult times. Some $210 million out of a possible $700 million -- 30% of all the anti-recession programs and projects -- went into northern Ontario. That money went mostly into small communities, not the big ones, to develop the infrastructure and maintain what was in place for those communities so that when we pull out of these bad economic times, the infrastructure in those communities will be in place, not only to sustain the prosperity but to attract people to those communities. I think that was a significant investment on the part of this government, and I was very proud to be a part of it.

Let me talk about Elliot Lake; $15 million in Elliot Lake as well. Again, difficult economic times, and money put in by our ministry into that community because we understood that unless there was money put in there, there would be no long-term future for not only Elliot Lake but the north shore communities. The $15 million went very much into the structural parts of that economy, into the airport, for example, into capital purchases for homes for retirement living, into research and development which we hope will help in tailings research and into the decommissioning that is going to come in Elliot Lake.

The $250 million that came from Ontario Hydro: difficult economic times and our belief, as a government, that without Hydro maintaining its role as a corporate employer in the province and maintaining that responsibility that it has as a corporate citizen, there would not have been any community left had those contracts been withdrawn immediately. It was a significant investment on the part of Ontario Hydro into that community to help it in the transition from a mining community to a community that is more diversified.

We did the same thing in Kapuskasing. There was a significant investment on the part of the government to try to ease, as much as possible, a very difficult economic situation. Had we not done the deal in Kapuskasing, that community now would have 250 employees at that mill. It will have some 640 at the mill by 1994. I wish there would be more, but I certainly know that number of people in that community is a far better cry than having 250 right now.

Let me look at the $15 million we gave to sawmill communities. Again, in each of those communities there were terribly difficult economic times. Sawmills were closing and people were being laid off and were out of work, so the government put in $15 million. We could not save every sawmill, and some, quite frankly, were not worth saving because they were so far in debt that no matter how much money we had to put in there, we could not fix the problem. Certainly, $15 million in some 12 communities saved those sawmills and the people who were working there.

I would argue with you, in fact, that we have made a very significant investment in northern Ontario in this last fiscal year, given our recognition of the difficult times and our recognition of the need to maintain the infrastructure in those communities across the north so that when the better times come -- and they will come -- the infrastructure will be in place.

I say to the member: given the fact that the Treasurer has made it very clear that in order to meet our deficit projections -- I hear every day how we need to meet those deficit projections -- each ministry will have to cut, and make very difficult decisions about what they will have to cut.

I remind you of some of the programs that you talked about in your questions to me: the northern Ontario relocation program, for example, to allow industries to have access to resources; the economic development that we are doing in native communities, communities that have the highest unemployment in this province; the work that we are doing in terms of keeping money in the Ontario prospectors assistance program and the Ontario mineral exploration program and trying to promote our granite and dimensional stone industry. All of those things are very important, and I would be interested in hearing from him which of those he would like me to cut in order to give more money to the northern Ontario heritage fund, because at this point in time, as we start to cut into those other things, we do create a great deal of distress in those communities and make their difficult times even more difficult.

What we are trying to do in the ministry is to maintain a balance: maintain the $30 million that is in the fund at present, because we believe we can use all the money and that it will be spent, and we have proven that this year; and second, maintain as best as possible all of our current programs intact for the next fiscal year. We will no doubt have to cut money from some of them and we will not be able to serve all the clients who would like to do work in the next fiscal year, but it is my hope that we can maintain all the projects, because I believe all of them are very badly needed.

Mr Brown: That was certainly a wide-ranging discussion of a number of issues. I will not pursue all of those at this time because I think we can deal with the anti-recession fund and some of those other comments the minister made a little later on with more specific questions.

Coming back to the heritage fund, I would tell you that we are a little dismayed and somewhat surprised by the appointments process to the northern Ontario heritage fund. That is not to complain about the specific people who were there, but rather to say to the minister that we believe the selection process followed by the previous government was done in a more open, non-partisan fashion.

I can well recall the former minister coming over to speak to all of the northern members, whether they were New Democrats, Liberals or Conservatives, and I think you can confirm with your colleagues, Minister, that this did in fact happen. I witnessed it happen on at least two occasions where he spoke to members of the opposition about who would be appointed to the board, because we did not envision, when this board was set up, that there should be controversy about the appointments, but that there should be consensus before the appointments were made.

I can tell you that I was disappointed, as were members of my caucus, that we were not consulted about the appointment of the people, that we had no input into that whatever. We were not asked in advance if we thought various appointments were proper. Following that, on the standing committee on government agencies, the committee that is charge of reviewing appointments, we then asked that the members be reviewed. The government refused to bring those 12 appointments before the government agencies committee for review by that committee.

We find that to be, at the very least, a not very open and non-partisan method of selecting people to an important board that I do not think should be political in nature.

I would ask the minister if she could comment on that, because I think it comes right to the credibility of this board with northerners and with the members. When you try to make a board like that, or you give some impression that it might be partisan by not going through that consultation, it hurts the process. It hurts the very credibility of that board.

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Hon Miss Martel: Two things if I might. First of all, I sat in opposition from 1987 to 1990, and I would have been most interested in having Mr Fontaine ask me what kind of representation I would like out of my riding or out of the Sudbury riding. I am sorry, I say to the member, but he certainly never did.

Mr Brown: You should talk maybe to the Treasurer or to Mr Wildman.

Hon Miss Martel: I sat as an opposition member. We very clearly set up the board so that there would be representation from each riding. The representative who came from my riding -- and this relates back to your comments on non-partisan -- also happened to be the Liberal candidate against me in the election, and the same thing happened in Howard Hampton's riding. So I have some great difficulty being told it is a non-partisan process because, frankly, it was never a non-partisan process. I certainly got that when the very member of the heritage board who represented my riding then ran against me in the election, which is his democratic right to do; I have no problem with that. But let's be a little bit serious about how partisan or non-partisan it is and who asked who about what.

Second, with respect to having these names reviewed by the standing committee on government agencies, let me be very clear about this process -- and he would want to check his information. I, as the House leader, put forward the recommendations for change for that committee in June of this year. I sat through an afternoon putting forward the recommendations for change on that committee to make the process better. Both the Liberals and Tories that afternoon spoke and said they thought the process was a farce, and because they thought the process was a farce, they refused to sit this summer. So they did not sit this summer and did not review any of the appointments that had been building up in the public service.

Our appointments under the Northern Ontario Heritage Fund Corp ended at the end of June. We submitted our names as new candidates just after those appointments had expired. They could have been looked at by the committee, but the committee chose not to sit. After the 30-day time limit that is listed in the legislation in terms of reviewing those appointments, those people were automatically appointed.

I do not think it is fair to say the government members or anyone else who was on that committee refused to allow those people to be reviewed. The fact of the matter is that the committee never sat. The Liberals and Tories said very clearly in the debate that afternoon in June, and I would ask you to refer back to it, that they chose not to sit because they did not believe in the process.

The Vice-Chair: You have two minutes left.

Mr Brown: Unfortunately.

I would have to disagree with her characterization of the former board. I expect there were Liberals on that board, as there were New Democrats on that board. That does not mean the board itself was partisan. People in the province happen to be Liberals, happen to be New Democrats, happen to be Conservatives. I does not preclude them, I would think, from sitting on boards, and there were no New Democrats on the former heritage board either.

I am not suggesting that. What I am suggesting is that there be a proper balance. I also would like to tell her -- because I only have two minutes, the Chair tells me -- that our representative, our whip on that committee, made very definite representations to the government asking that the committee sit and asking that the 12 appointments be reviewed. That was done. We were prepared to sit. Our committee was prepared to be here this summer. We were disappointed, to say the least, that, first of all, there was no consultation before the appointment was made. Second, having made the appointments, the government would not subject those appointments to review.

Hon Miss Martel: If I might, you talked about a proper balance. I can tell you, as the chair who sat for the last year with people who are very committed to the north, I have no doubt about that. There was not a proper balance on that board. There was not a proper balance in terms of male-female representation. There was not a proper balance in terms of labour-business representation. There were not enough native people sitting there.

I would like a board that is truly representative of the fabric of northern Ontario society. I think the changes we have made, which permit an equal number of males and females, which permit almost an equal number of people having a business background and a labour background, which now allows for five aboriginal people to sit, is a much better-balanced board. They will be as committed to the north and carrying out their role in the heritage fund as the former members were.

On the second point the member raises, that his whip went and asked if these appointments could be reviewed, I would ask him to read the Hansard from the day this matter was debated in the House. That would have been in mid-June or near the end of June of the last sitting. He will see very clearly that his own House leader spoke and said clearly that his party would not sit this summer to deal with any appointments because they were not satisfied that the process was working. That is what his leader said in the House.

As to what went on in committee, I cannot describe that. I only know what I sat through and what I heard from his House leader, and it did not sound like the House leader was very interested in having that committee sit to review these appointments.

Mr Arnott: As Mr Jackson indicated earlier when he was sitting in the chair, Mr Eves is our party's critic for Northern Development. Other business takes him away today. He is part of our party's commitment to the select committee on Ontario in Confederation and he is away with that responsibility as of today.

I am very pleased to be here and welcome the minister here today to the standing committee on estimates. I am from the south, but I have a considerable interest in the north. This summer I took a tour through some of the northern communities I had not seen before. I met with the mayor in Elliot Lake. I dropped in at the Ministry of Natural Resources office in Chapleau and learned a lot about the firefighting function there and the fish and wildlife function it looks after, toured a mine in Timmins and went through the MNR mining laboratory there, saw some of the devastating economic consequences that are happening right now in Kirkland Lake. I toured a remote logging site near Elk Lake and I dropped in to see the member for Nipissing while I was in North Bay.

What really struck me were the incredible transportation needs that still require addressing in the north, as well as the economic development needs that are there. Mr Eves has been good enough to furnish me with a list of specific question he would like to ask later, but I have a few general questions with respect to what I have heard this afternoon.

There have been many commitments made to the north in the past by your government. Most notably comes to mind, from my perspective and former perspective as critic for Transportation, the promise made last summer to four-lane the Trans-Canada Highway through the north. Certainly during the heat of those 37 days through the month of August and early September in 1990, I dare say there were a great many commitments given. Critics have come forward and asked you about those commitments. How do you respond to them?

Hon Miss Martel: There is no doubt that we made the promise to four-lane in the last election. It was a commitment that was made by the party some time ago at both conventions. Even during the time I sat here in opposition for three years, there were many debates my colleagues and myself were involved in. We reiterated that need, in particular for economic purposes but also to ensure that people in the north are able to access medical care, etc.

I say to him, as I said earlier to the member with respect to the northern Ontario heritage fund and whether I will be able to put more money into it at this time, the answer is no. I do not have any money at this time to accelerate the program which is already in place, which we are working through in conjunction with MTO, to do selective four-laning.

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I could provide the member with the information. I can do it here or give it to him in writing, an outline of the particular highways we are working on right now, Highway 11, Highway 17 east and west, where we are coming up from Highway 69 into Sudbury and the plans we have over a five-year term to develop those. That is very much the way we work now. In conjunction with the Ministry of Transportation and myself, we do agree every year on the next portion of a five-year plan and move along that way.

Certainly at this point we could see the four-laning in place, but it would be in the next century and it would cost a little over $2 billion to put it all into place. We have done a number of studies in that regard. We certainly did a number when we came to government, because it was our view to try and move on that election promise and to try and outline clearly to the public the plan we had, how much it was going to cost, the phases we would break it down to in order to do that work and whether we could accelerate any of that work.

At this point in time, I could give you very clearly what the plans are and where we are. I cannot tell you that I can put any extra money in to accelerate that work because I cannot.

The other area where we may have a problem -- I only flag this; it may not be a problem -- is that there are some negotiations which will have to go on with native bands along a number of those strips, and to date we have only had initial consultation with some of those bands. We have not gotten into formal negotiations over the broader questions of whether we will be able to have access to the land, what the tradeoffs will be, etc.

Finally, it would be helpful, because it is the Trans-Canada Highway, if we could have participation as well at the senior level of government. We have not been able to obtain a commitment in that regard at all to potential funding from them.

I say to you at this point that certainly the commitment was made and it was a commitment I do not back away from in terms of my desire to see it done. I cannot say to you at this time that I would have any extra money in my budget this year to accelerate some of that work so that we could get to completion earlier than is estimated in our current plans.

Mr Arnott: Just to be clear and clarify in my own mind, it appears the commitment has been made, the commitment remains, it is going to be at least nine to X number of years before the full highway will be four-laned. Is that correct?

Hon Miss Martel: On most routes. I would prefer it if I can give you directly where we are, because I do not want to say anything that is wrong here. I could give you the work we will be doing in the next three years up to 1994, because I have that information with me.

I could also give you some sense of, if we were to continue in a pattern of spending which is equal to or at inflation with what we are doing this year, how long it would take us to get to the end of all of those routes. If you want, I can provide that verbally, at least in terms of what we are doing in the next four years, or I can give it to you in writing, whichever you prefer.

Mr Arnott: Okay. Are you able to give some indication as to how many kilometres of the highway will be four-laned by, say, 1994 or thereabouts, or failing that, what percentage of the Trans-Canada Highway will be four-laned by 1994 or thereabouts?

The Vice-Chair: Would you like that previous answer in writing? The minister offered it to you in writing.

Mr Arnott: Which one?

The Vice-Chair: The previous information. She said she would give it to you in writing or whichever way you prefer.

Mr Arnott: If it is not readily available --

The Vice-Chair: No, I mean the question before this.

Mr Arnott: Yes, I would.

Hon Miss Martel: What I can give you right now is what we are doing in 1991, 1992, 1993. As to the actual kilometres, I do not have them listed. I 1ill have to give that to you. Let me just give you what I have right now.

Our starts this year: the cost on the Highway 11-Highway 17 interchange at North Bay was $8.5 million; four-laning Highway 69 from Parry Sound to Nobel, $3 million worth of work this year.

Tentative starts for 1992 include the following projects: four-laning Highway 11 from Callander to Powassan, $38 million; Highway 11 north, five new passing lanes; four-laning Highway 17 from Thunder Bay to Nipigon, and two new lanes, Shabaqua. That is about $6.8 million for those initial projects. We have estimated about $7.6 million for the Highway 17 interchange, the Kenora bypass. The commencing of the development of the southeast bypass in Sudbury will begin, hopefully -- it better -- $26 million, and the cost of Highway 69-Highway 124 interchange at Parry Sound is $5.2 million.

The tentative starts for 1993 are as follows: Highway 17-Highway 102 interchange, the Red River Road, and improvements to the Thunder Bay Expressway will cost about $28 million.

Let me just give you some of the pricetags we are looking at so you can see what I am dealing with from my end. To do entire four-laning on Highway 11 from Huntsville to Powassan would be about $400 million; Highway 17, Thunder Bay to Nipigon, almost $700 million; Highway 69, Waubaushene to Sudbury, over $1 billion.

What I will have to get back to you with is the kilometres that will be done by 1993.

Mr Arnott: Yes, I appreciate the actual dollar figures but would also appreciate the ratios in kilometre figures, if I could receive them in writing.

Hon Miss Martel: I know. I understand what you want. I do not have that.

Mr Arnott: The next issue I would like to raise is the whole issue of economic development strategy in the north, and I assume there is considerable work going on within your ministry, as well as the Ministry of Industry, Trade and Technology, to develop economic strategy for the whole province as well as the north specifically. I just wonder if you would clarify or discuss briefly what is happening with respect to that issue in your ministry.

Hon Miss Martel: Given the last year we have had in terms of the communities we have dealt with that have been in a crisis -- to say it again this publicly and say it here -- the ministry did not devote a great deal of time to a broader long-range strategy for economic development. We found our resources, both political and ministerial, wrapped up in trying to deal in Kapuskasing. We are now dealing in Sault Ste Marie with Algoma Steel, Atikokan, Elliot Lake and a number of smaller sawmill communities which I did not list in my presentation. A great deal of our time was devoted strictly to trying to work with labour, business and the community to deal with those.

Most recently, we did two things: First, last week I announced a consultation program which will replace the former northern development councils, which was a project run by the former government. We have replaced that with a project which we have called SCAN North where we have set up, at this point in time, five groups which will work over the next number of months on at least two of the very key areas we think are crucial for entrepreneurial development in northern Ontario. That is particularly the panel dealing with value added in the forestry sector and, second, the panel dealing with value added in the mining sector. We have reached agreement among labour and industry and prospectors and developers, etc, in the mining panel, and the entire forestry industry in the second panel, that is, sawmills, pulp and paper and hardboard operations, to participate in the process along with the labour groups.

Clearly, what we want to discover from them is what they think, coming from industry, are the areas in which they can move, and what do they need from government in order to try to do that? They also understand that we are running under constraints, both in finances and in terms of actual human resources to deal with it, but we want to hear directly from them, given the times we are in, what they see as the best way to pull out. What can we do in the northern economy that is beyond the traditional cutting and traditional mining?

We have set that into place and announced that last week, and hopefully the chairs will be selected for those committees within the next two weeks.

Second, I have also asked my own deputy, who was with the former minister as well as being with the Treasury and other ministries in this government, to put together for me an initial paper which looks at what some of the governments have done before we got here, some of the areas where he thinks we have some room to move in order to incorporate that as much as I can into the work we are doing on the consultation side. He has only recently begun that. He is now going to be directly involved in what is going on at Algoma Steel. I hope that between himself and myself and the groups we have out there consulting in the north under our new program, we will be able to put into place a framework, which we do not have yet, in the north as to where we want to head, not only in terms of mining and forestry, but also in terms of energy production and also in terms of tourism, which we have not spent a great deal of time looking at.

Mr Arnott: I understand that in the past year considerable resources have been consumed by ad hoc emergencies or crises, if you want to call them that. In the coming year, what is your view of the prospects for the north? Do you expect more of these single-industry, specific problems coming forward that may in fact continue to consume most of the time so that it might be difficult for an overall strategy to come to fruition?

Hon Miss Martel: To be very honest with the member, it would be nice to wake up one day and not have a crisis somewhere in the north, but that has not been the pattern we have seen in this year and I suspect it is not going to be the pattern we see for a while.

We had some broad consultation last week with a number of representatives right across the forestry industry -- big pulp and paper mill people, sawmill owners, small sawmill owners, labour, as well as a number of government people from a number of ministries -- to talk to them very seriously about what is happening in their industry with respect to recycling, different product line, how much it will cost to do those kinds of things, with respect to the flow of wood, the flow of wood chips and what they see some of the problems are.

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They have indicated very clearly to us, and I think it is common knowledge, that the rationalization and restructuring going on in forestry is not over yet in northern Ontario. I do not expect we are going to have a much better year than we did this year. There are a number of factors for that. Their greatest concern continued to be with the high value of the Canadian dollar and difficulty exporting, but they expressed concerns about the need to recycle as well, given the demand for content in some of the jurisdictions they are selling into. That is on the forestry side.

On the mining side I would say it is the same thing. If the current conditions continue with respect to a very high Canadian dollar, and if base metal prices remain as low as they are in international markets, things are not going to get any easier. I would not want to say they will at this point.

I hope, however, that we have learned from this last year, and I think we have, having dealt with bigger communities that have been in crisis. We at least know how to tackle the problem in that we know how important it is to be working with business, labour, municipal leaders and education leaders in the communities affected. I think we have demonstrated in the last year that the ministry has acted as a very important catalyst in bringing those groups together. I hope that is the role we continue to play, trying to bring those partners together in very difficult times and trying to find the best solution we can in each of those communities and with each of those cases.

Mr Arnott: I assume the minister has given considerable study to past northern development initiatives programs that have been in place and so forth, some of which may not have been as successful as their proposers would have hoped. Could the minister indicate what she has learned with respect to things that have gone on in the past that have not quite been as successful as people would have liked, and how new policy will be generated in light of those?

Hon Miss Martel: I think we have learned that there has been a reliance on straight use of the resources without very much value added consideration being given; what else we can do.

I will just give you an example that comes from the trip I took to Italy. When we were there we were not only looking at the potential for dimensional stone, which is very important for the province and an area where there is actually some very positive and good things happening and some real room to move, but we also talked to a number of people who develop a wide range of lumber products. They told us very clearly that they would be most interested in purchasing from Ontario versus Russia if they could get the dimensions of sawn logs they specifically needed. They expressed a real frustration because all of them had been to Ontario at one point or another and had discussions with a number of groups. They found that people in the industry in Ontario did not seem to be interested in cutting to a European dimension. They were very interested in cutting to an American market and selling in that market, but did not seem to be looking much beyond that.

The reasons that is not happening I cannot say, because we have only started into those discussions with the forestry industry. There is an area where we have some room to move because we know we have another market that we could be looking at that should be very important to us as well. It is certainly going to be an important market to us in relation to dimensional stone.

What I think I have learned in going through it in the last year is that we have maintained a very heavy reliance strictly on extraction, either of mineral resources or lumber resources, and we have not looked very far beyond, either at value added, other markets, other cutting we could do, or manufacturing on any kind of level. Those are the kinds of things we really need to look at. It is one of the reasons why two of the projects we initiated look specifically at value added in forestry and in mining.

Mr Arnott: Picking up on that point about the potential market in Italy versus the fact that the Soviets are presently apparently meeting that need, have you inquired whether we were price competitive on that particular good?

Hon Miss Martel: Yes. The problem was not buying, or money; the problem was in not being able to have people in Ontario willing to cut to the dimensions they were using in the Italian housing market, and that was the sense and the source of the frustration expressed to us. Having said that, we have two people from Italy in the province now, whom I met with, who develop a particular wood product they would very much like to manufacture in Ontario. They are meeting with representatives from the Ministry of Natural Resources and from my ministry in Sault Ste Marie both today and tomorrow, along with a number of people who cut and could possibly cut to their dimensions, in the hopes that they will find a willing host, someone who is interested in doing that.

We would certainly want to entertain at the heritage board how we could help this particular individual, if we can find this person, if the problem is having machinery that can cut to that dimension. We are making efforts now, and that is why this delegation is here, to talk to industry representatives to see if we can convince them of the opportunities that are available and see how we can help them make that happen.

Mr Arnott: Okay, getting on to --

The Vice-Chair: That is it, Mr. Arnott, for this rotation.

Mr Martin: Having lived, studied and worked in northern Ontario for most of my life, my understanding of the history of the development of the Ministry of Northern Development and Mines is somewhat different than the one laid out by Mr Brown. Surprised? No, not really.

It was initially set up, from my experience -- and I watched it from the small community of Wawa -- as an attempt by the then Conservative government to counteract a network of offices that came on to the front manned by the elected members of the New Democratic opposition, who were doing all kinds of interesting things to bring to the fore concerns of people who lived in northern Ontario and lobbying on their behalf with the government to get new programs. Actually, the first offices of Northern Development were simply information centres where you could get information or give information, and there was really no economic development activity out of it that I remember much.

With the coming of the Liberal government into power and René Fontaine coming on the scene, we got somewhat excited about the potential and the possibilities for that ministry because René did, in fact, have some vision. He was a man who had great energy and was actually liked very much by the people of the north. He was one of us and spoke our voice loudly and clearly.

The problem became that his colleagues were not listening to him, and his colleagues chose not to support him. Ultimately, René quit and went back to what he was doing initially in the north, and that was really sad. It was a sad day for the north, and Northern Development really never reached the potential all of us who work and live in the north thought it had, to be the lead ministry in the development of the area.

All of us who live and work up there do so because we like it. We love it. We think it has a lot to offer, not only as a producer of raw materials for the south where the value is added down here, but we think we can add value in a way up there to the resources that respect the quality of life we want to live.

Having said that, I want to commend the minister and certainly the government for a number of the initiatives that have been taken in the last year, in front of some really difficult times and, as has been said, seemingly one crisis after another, in responding to the crises, and putting in place programs that speak to some future and the possibility for some development, for upgrading infrastructures so we will be able to take advantage of the renewal when it comes.

My question, though, centres around the rather sad experience of the visionary Mr Fontaine and his inability to get his colleagues on side in front of some of the programs he had in mind. Actually, your success -- and I speak more specifically to the Elliot Lake operation where you were able to get the Ministry of Energy to participate in speaking with the folks at Ontario Hydro to put in place a plan that spoke to a future for that community in both the short term and the long term. Would you share with me some of that activity so we might all be enlightened, and then maybe expand a bit on how you propose to work hand in hand with your colleagues in the Ministry of Natural Resources and the Ministry of Transportation to ensure that the north is developed and that those of us who live up there will see a day when its potential is realized and we can look forward to a future for our children and their children?

Hon Miss Martel: I have tried to outline in a fair way what we have done in Elliot Lake in terms of some of the initiatives. Let me just back up and give a bit of history. When the first layoffs occurred, before this government came to power, the ministry at that time had an interministerial committee to try to bring together the various social service agencies and agencies of government -- there are about 22 -- to work in a co-ordinated way to deal with the impact of the first round of layoffs, which is very significant in that community.

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My ministry continues to lead that particular exercise and chair that group and we are able to respond to some of the problems in that community in an positive, effective and rapid way. I know the member for Algoma-Manitoulin has consulted me about a particular problem right now where we are involved with the feds and the Ministry of Labour. The Ministry of Labour's portion of this particular program did not come on board and so we have sent a note to the Ministry of Labour today to see where that is all going. But, given that experience, that group has been able to work very well in trying to deal rapidly with the changes that have come because the changes have been very dramatic.

Second, it was very important that we established the working group in Elliot Lake. It was difficult at first because people had to come and leave their baggage at the door. It is hard to tell them, as it is hard to tell five politicians from a different party, that they have to leave their bags at the door and work together. It is the same for municipal politicians. We had municipal leaders from five communities who had to come and try to represent a regional view and work towards a regional solution rather than their own particular community. That has taken some time to sort out, but they are working very well together now.

The importance of having labour, business, education and the influence of the MPP's office and the MP for that area has been very significant because it allows them to lobby at various levels of government, but it also provides for a co-ordinated approach and agreement on some very important changes that are coming. For example, there is a $9-million fund from the bigger fund that Hydro has provided which is being used right now to develop short-term job creation for those people coming off of UIC and who would otherwise be going on social assistance. That committee has worked very well together to develop the criteria for who can apply and what kind of jobs they are looking at. They have managed to hire and have an office now staffed to deal with that. On that, and many issues relating to the communities along the north shore, the group has worked very well. They have been a good sounding board for government as well, because they have expressed to us on many occasions very directly what their needs are and how the needs can be accomplished. When they are not happy about that, they express that to me very directly as well.

The $15 million that was given last December was an important signal to the community that the government was not going to abandon the community even though the foreign offshore contracts with Hydro had been terminated. That money again was targeted very much to projects the community thought were very important: a significant amount of money went into the retirement living program to acquire capital stock to ensure the long-term future of that particular program; money for the airport; money as well for the drug and alcohol rehabilitation centre, which will become an important regional centre in that area. The money was targeted to try to turn around that economy and move away from the main emphasis, which has always been on mining.

I was very proud of the diversification package. I am extremely proud of the work we did and I am extremely proud of the co-operation I received from a number of other ministries in putting that package together. It is a very difficult time. There have been a number of criticisms, and I sat through the debate on Bill 118 in which it was suggested that Hydro was manipulated or used as a tool in this sense to promote the social assistance program for the government. I say very clearly to all the members here, recognize that Hydro is an important employer in this province. Hydro directly employs thousands of people. It has billions of dollars' worth of assets and it has some corporate responsibility to its employees, to its assets, and to people who are directly affected by policy change.

We had a choice in Elliot Lake. We could have told Hydro: "Cancel the contracts. Walk away. Leave the community in absolute crisis," and it would never have been able to be in a position to make the kind of transition we are convinced it will make. We could have said to Hydro, "Continue the contracts at a premium of about $1.2 billion over the next 10 years and allow energy consumers to continue to pay a premium they have paid the last 10 years for the next 10," and we did not think that was very responsible either.

The approach we have taken, I am convinced, is the most reasonable one, not only for energy consumers but also for the community itself. That approach was to say very clearly that we will continue to maintain the contract at Rio Algom so that we will have some mining which will continue in the community. We will put some of the money which has been saved by terminating the Denison Mines contract back into the community to allow it to initiate programs and proposals that would allow it to change from a mining economy to a diversified one.

At the same time we have shown very clearly to the province that we expect Hydro to be not only an agency of this government but a corporate employer that has a responsibility to the people it serves. I would no more expect Hydro to walk away and do nothing in a community than I would expect a private company to. The problem is, most private companies do walk away, and you cannot get at them. That is no excuse for the government to say: "Let Hydro walk away. Let the community go down. Forget that it has an obligation. Forget that the contracts in that community are only there because of the purchases by Hydro from that community. Those two mines operate only for the purpose of providing uranium to Hydro."

I am very pleased with what we have done. I think it was a happy medium to two very untenable positions we could have chosen. I look forward to the change that will come in that community. They are working very well together now as a group, and there are many changes. I think we will see in the next four or five years an economy that is very different but certainly one that is stable, and a community that has made it.

That brings about the broader question you raise about how I can work with my other colleagues in the north and other northerners in particular from other parties as well, because I do not think we have any kind of -- onus is not the word I am looking for -- greater love for the north than any of my other colleagues around the table.

I do think we need to focus a great deal of energy on the other potentials that can come, over and above mere exploitation of resources, mere mining or mere cutting of goods. We certainly have started that process in terms of dealing with the forestry industry. The meeting I was at with all of those representatives included the Minister of Industry, Trade and Technology, the Minister of Natural Resources and the Minister of Transportation. I was represented as well. Treasury had staff at the meeting, although the Treasurer could not be there. We signalled very clearly our need to work together and our desire to work together. We need to do that in the same way on the mining side.

There is a lot of work to be done; there is no doubt about it. As I said earlier in a response to Mr Arnott, we did not spend a great deal of time in this last year doing that long-term strategy work. We could not, because we had communities like Elliot Lake and others that needed an immediate response, and that is what we spent that year doing.

Mr Martin: First, I want to focus for a minute on the resources that we have at our disposal to spend on development in the north and highlight, as you have so elegantly, the limited nature of that resource.

To put it into context, even though $30 million is not very much in the northern Ontario heritage fund, the previous Liberal government could not even figure out a way to spend that. I was totally surprised when I got here to find out that all the money in the heritage fund had indeed not been spent while I was busting my butt out there with my colleagues and friends, trying to develop industry in Sault Ste Marie, for example, and we could not get our hands on money. It seemed they had lost any vision René Fontaine had initially had and were floundering.

The Chair: Are you going to get back to the issue of these estimates for this year, Mr Martin?

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Mr Martin: I certainly am, yes. I am actually taking a page out of your book in some committees I sat on where we went off a bit.

The Chair: If that is an invitation to comment, I would be pleased to, but our concerns are more with the current estimates.

Mr Martin: I thought as Chair you were not supposed to.

The Chair: I was asking you to get back on track.

Mr Martin: I wanted to ask the minister about some of the things she has done in order to actually expand the limited amount of dollars that the northern Ontario heritage fund, for example, and the ministry have to spend. You talked a bit in your previous discussion about how you have co-operated with other ministries to bring significant dollars into the north for development.

You also announced just recently an agreement with the federal government at a time when philosophically we are not in agreement with it about what we should be fighting, whether it is the recession or the deficit. Instead of cutting off your nose to spite your face, you sat down with them and came up with an agreement that spoke to development in several sectors of northern Ontario that are really important. Maybe you might explain to us what that is about, because I know it will have a great impact as we try to come to terms with an industrial strategy for the north and into the future.

Hon Miss Martel: Let me begin by going back to the announcement itself. I guess I was rather surprised at the response, because these days, given how reluctant the feds are to give anyone any money, I would have thought most northerners would have been pleased that we could get any money out of the feds and put it completely into development in northern Ontario. I think $95 million is nothing to sneeze at, especially given the economic times.

If anyone was to suggest that we should have held out more, we should have tried to negotiate more or we could have done better, I say to you that we have spent the last year trying to get more money out of the feds and they would not give us any more money. We were prepared to put more money on the table. The feds were not interested in participating any more than the values we were finally able to achieve.

As one who has to represent the north and one who hopes the money is going to be used to benefit the north, I am prepared to take that money and put it towards the benefit of northerners. I think it was a significant investment, particularly in research and development, which is going to be important for some of the longer term strategies we all need to look at in northern development.

Just quickly on what was announced, there are three components to the northern Ontario development agreement. They affect forestry, mining or mineral resources and tourism. The amounts of money allocated are the following: $50 million has been allocated to forestry, $30 million to the mining component, and $15 million in terms of the tourism sector. That is an equal cost-sharing plan, so in each of those categories the province will contribute half the total value over the next four years.

Speaking strictly for the mines and minerals component of that agreement, our emphasis is in two places. First, the industry has said very clearly to us that there is a need to have adequate, up-to-date, current and accurate information with respect to mineral potential across northern Ontario. So a good portion of our money and the projects we will undertake will involve detailed mapping of areas where there is a great deal of mineral exploration and mining work going on now, for example, in the Kidd Creek area.

In Kirkland Lake and Timmins as well, we will establish databases for the first time so that the general public, prospectors, people involved in mineral exploration, can have easy access to information with respect to mineral potential, geography and the potential of other renewable resources in those particular areas. In Kirkland Lake, we will take in the area of Kirkland Lake and Larder Lake. In Timmins, we will take in an area strictly around Timmins and south of it.

That was an important response to the industry, because it has said clearly to us, "These are our needs at this particular point in time." People would argue -- prospectors in particular -- that their immediate need would be for us to increase the money in our Ontario prospectors assistance program and allow them to explore more. I do not deny that need is there, but what is also important to us is that we have the best, most up-to-date and accurate information we can have to help these people in their work. We hope to have that and develop it, given some of the money we have achieved under this agreement.

The tourism component is very important. It is targeted directly to northern Ontario. It is the first time we have had that kind of money dedicated directly to northern Ontario. It is particularly to emphasize capital projects in a number of communities, waterfront developments in particular, so that people will have the infrastructure in place in their own communities in order to attract others to come and stay.

On the forestry side, there will be a definite emphasis on silviculture practice in community forests, and a number of initiatives that will create short-term employment in the immediate future. The target in the mines section is that there will be short-term employment, but ours was a longer term emphasis on research and development as well. It is a little different than the other two sectoral components.

I think it is a good agreement. As I say, if the feds had been prepared to put more money on the table, we certainly would have put more money on the table. Our money was there. However, it did not seem to make much sense to me or my colleagues to haggle with them when the need in northern Ontario for this money was so evident. So we were pleased to sign the agreement on Monday. I know in our ministry in particular some work was being done in advance, so we will be able to begin almost immediately with some of the projects we outlined.

Mr Brown: Because we are on that topic right now, I would like some clarification from the minister relating to the tourism component and the waterfront development in particular.

One of the problems that has existed in my riding and all along the north shore of Lake Huron -- Tony will be familiar with the problem also -- is that the federal government has the responsibility, and the provinces always viewed it as its responsibility, to do the work that is actually in the water when you are developing a waterfront. The small craft harbours directorate, which is the federal agency that deals with this, has experienced a dramatic drop in funds over the years. In the Ministry of Northern Development and Mines, we have over a long period of years now been pursuing onshore facilities that are necessary, but the difficulty has been that the federal government has not been willing to commit dollars to the actual in-water work. I am wondering if as a result of this agreement, because both governments are involved, we will now be able to take advantage of doing a marina that actually has docks.

Hon Miss Martel: It would be nice. I wish I could respond in more depth with respect to the projects the Ministry of Tourism and Recreation has under way. I know my own fairly well. I am a little reluctant to try to respond to what Peter's ministry will do because I do not know them as well as I probably should. I can only say that a number of our projects have been stalled because the federal share has not come through. For example, we had some difficulty in Red Rock, awaiting federal funding when we had anti-recession money prepared and on the table to go with our portion.

Mr Brown: Is that waterfront?

Hon Miss Martel: Yes. We had our portion on the table through anti-recession, but we had great difficulty getting the feds to cough up their share. It was a commitment that had been promised for some time. I can only hope some of the federal money will be used in the same way and that it will complement the projects that the Ministry of Tourism and Recreation wants to carry out in northern Ontario in particular. I know on our side there are a number of projects where we will be dealing directly with the federal government, in some of the agencies we already sit on, to look at acid drainage, for example. We have committed some funds there and we are already working together, so that co-operation will continue.

What the minister's relationship is with his federal counterpart I do not know, but it would make some inordinate good sense if they did work together. Otherwise, you are going to run into the same problem we have run into -- our people with their share doing the work at the shoreline and up to it, and then nothing going beyond that. It would be a real disgrace if we could not start to pull that together for the benefit of the northern communities that need it.

Mr Brown: I thank the minister for that response, because it has been an ongoing frustration for everyone to have a lot of projects ready to go and not be able to take advantage of the funding that the Ministry of Northern Development and Mines would provide just because small craft harbours could not come up with its portion. I hope this agreement allows for that type of project.

I think in Spanish, for example, we did something rather innovative a year ago where for the first time, to my knowledge, the province got involved in making a navigable channel actually navigable. That was really not the province's responsibility, but it had to be done for the good of that community. So I would encourage the minister to do what she can to encourage that project.

Hon Miss Martel: You are in the right place to make note of this. Brock has just advised me -- I had forgotten about this; my apologies -- that Mike Barker, the assistant deputy minister, is going to be co-chairing how the agreement is to be managed. We will have a chair on this side and a chair on the federal side. You probably brought your concerns to the right place, because we will have direct representation in the workings of those committees.

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Mr Brown: Just call me lucky.

Hon Miss Martel: I tell you, it is your day. Do not ask for money, though.

Mr Brown: Shifting gears, I want to go back, because the member for Sault Ste Marie brought up the whole subject of Elliot Lake. I would want to tell the minister up front that as the MPP representing that area, I was most happy that the ministry came forward in December with the package of $15 million, but I would like to remind the minister, if we go back through time, that there were other commitments made to Elliot Lake by the former government and the former minister -- and most of these happy faces here were there at the time -- that essentially laid the groundwork for this.

I am not saying this to take away anything from the minister, because we are happy with what she has done, but there was a small difference of philosophy, I think, and the difference in philosophy was that we were, as a Liberal government, prepared to allow the communities more flexibility in that we had pledged a $10-million diversification fund which they would administer, not a $2-million one. You decided, and I do not fault you on this, other than we thought it should have been a community decision, on supplying retirement living with $7 million of that $10 million, so to speak. I guess the difference in philosophy was that we were more prepared to allow the community to make those decisions than your announcement. However, I think the decision would have been the same. So having said that, I am just trying to point out the difference in philosophy.

When we talk about Elliot Lake, as members understand, this is quite devastating. There have been 2,400 people laid off. We are looking at another 1,000 next spring and then in 1996 the final 600 or 650, whatever the number happens to be.

Elliot Lake only exists because uranium was there. The town was built in response to having mines in the area. It would never in anyone's wildest imagination be where it is without uranium. I think we all accept that. The problem then is what to do, because diversification plans, however well intentioned, can be quite difficult.

We have stated the position over and over that we are in full support of diversification measures for Elliot Lake and that we are happy the community has at its disposal, with the advice, I take it, of the working group, $65 million, which has been flowed to the heritage fund for disbursement within the community over three years.

The difficulty, and this should be clear to the minister, is not with whether the money should have been allocated. The problem we have and the problem Liberals have is that we share the view of the Minister of Natural Resources, who in opposition clearly said -- I did not bring it today, but I had his letter at the Mining estimates that indicates that the taxpayer of Ontario should pay for that kind of diversification, not the ratepayer of Hydro. It is fundamentally wrong, I think, to ask the ratepayer to pay for something that is clearly an economic development issue.

You say, "Oh, yes, but Hydro has a direct responsibility to this community," and I do not disagree with that. So did Duke Power, so did Tokyo Electric and all the other people who bought uranium from Elliot Lake.

I know, as you know, that Hydro invested large sums of money in that community. As a matter of fact, I do not know if you are aware of this, but Hydro is walking away from $146 million still to be repaid by Denison Mines in Elliot Lake and I suspect something in the same order at Rio Algom. I cannot confirm the latter.

There are real problems there with that, but when Hydro signs contracts, it signs them after review by the Legislature of Ontario, by the government of the day, with full consent of the government of the day. Mind you, I suspect your party and my party were not thrilled about that, but that is what the government of the day did.

It is the responsibility of government, in our view, as many people would suggest, that those contracts were directed to Elliot Lake, and I am sure someone close to you might have even suggested that, Minister. Therefore, we think that asking the ratepayers of Ontario Hydro to pay the bill causes some great problems, because in northern Ontario we consume 13% of the electricity in this province; we are net importers of that electricity. You would know that is far out of the way in proportion to our population, and that is because resource industries are important to us, that is because we have a colder and longer winter; for a lot of reasons that I think all of us will understand.

We think that asking northerners to pay twice, which is what happens if you ask the ratepayers to pay for that, is a problem. If you ask the taxpayers, northerners get back some of the money that went down in resource taxes to the provincial government. That is not a hypothetical distinction. I think it has real impact on northern development and northern viability in the long term.

I would just ask you to think about that, because talking to the forest products industry and my friends at E. B. Eddy, which is one of the best producers of pulp and paper and fine paper in the world in terms of both the environmental impact of its operation and in terms of its economic viability, the numbers are staggering if you look at what that does to their cost of production and therefore their viability, and these are some of the better plants, because they have been restructured fairly recently.

If we are looking at the long-term viability of sawmilling, if we are looking at the long-term viability of pulp and paper, we have to look at the impact of electricity prices, and that is why having ratepayers pay for diversification in communities is a real problem. I just wonder if you have analysed that. Have you had a look at what kind of impact using Hydro's ratepayers' dollars to perform a function that more properly belongs to the general revenue fund has on the northern economy in general?

Hon Miss Martel: Let me make a couple of comments, because we are going to disagree fundamentally about who had the role to play here. I guess there are a couple of things I want to put on the table for members to consider.

Number one, the utility consumers or energy users have been paying through the nose for those contracts since 1978. We will not get into why or wherefore the former government forced Hydro to get into such premium contracts, but it did. Since 1978, energy users in the province have paid about $1.2 billion over what they would have paid had Hydro been able to purchase uranium on the open market, or on the spot market. I want people to bear in mind what energy consumers have already been paying in the last 10 years.

A big part of the increased Hydro rate this year has been blamed almost entirely on what has gone on in Elliot Lake and Kapuskasing, and I resent that, because I think what went on in Elliot Lake has very little to do with the rate increase. I think a big part of the rate increase is the cost to pay for Darlington now and for the problems that have come because the nuclear industry has not gotten on stream as quickly as it should have and without the problems it has had. We are left over the next three years as a province picking up some of that tab that frankly should have been paid for before.

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But what I saw happening in the debate on Bill 118 was a characterization of the rate increase as being very much part and parcel of what went on in Elliot Lake, and it is just not true, not if you look at the figures and the amount of money we are going to pay for Darlington.

Second, I think the member would argue as I would argue that a company that walks away from a community has a moral obligation. I wish we could have got those offshore people and got some money from them for the devastation they have caused in that community. Hydro, in spite of the fact that it is an agency of the government, still continues to be a major corporate employer in the province, and surely we would no more expect Hydro to walk away than we would a private person to walk away if in fact there were obligations and responsibilities it has and should be meeting.

Given the package we have developed, the energy users in the province are going to end up paying much less than they would have had we continued with those contracts. There is a significant saving in here. We have gone from $1.2 billion to $250 million, and the $250 million carried out over three years.

I say to him I do not think it was a problem for the rest of the taxpayers, nor should it have fallen on the consolidated revenue fund to fix. Hydro is directly responsible for those contracts. When they walk away, they still have some responsibility to make good for that particular community and to aid in that transition. I would not have expected that to come out of the consolidated revenue fund when the employer was someone completely different. I mean, the employers are the companies, but certainly the person who had the contract in here was Ontario Hydro.

I just go back to your point about whether they should or should not have set up a fund. You would probably recall that in Kirkland Lake, when Dofasco walked away, it set up a fund in that community as well. It was only $5 million, and it was sure as heck not enough to fix the problems that are going on in that region, but even they recognized that they had some moral and some social obligation when they walked away. I would say that Hydro had the same.

Mr Brown: Of course, the difference between Dofasco and Ontario Hydro is that Ontario Hydro is the purchaser of the uranium. Dofasco was a producer. If you were asking Rio Algom or Denison to do it, I would totally agree that it is the same thing, but it is not the same thing for Hydro. I agree with the minister that it is Hydro that has the responsibility, but it is a responsibility that was -- Hydro did this. They were directed to do this. We do not disagree with that. The province was the one that really dictated the contracts. These were probably -- well, I guess I should not make judgements; it happened 10 years ago. But it was a judgement of the provincial government as much as it was the board of Ontario Hydro. If it was a political decision at the time, maybe the politicians have to take responsibility for that.

You would know that at the time the contracts were signed, they were probably not that far out of line. At the time, given the fact that other utilities entered into somewhat similar contracts -- I am not arguing these were good contracts, but they were in the ballpark anyway. The saving that has occurred, the $1.2 billion you talk about, is mostly because lower-priced uranium has been found in the world. At the time, Elliot Lake was the premium supplier of uranium to the world market. So things have changed.

My point, and it is the same as Mr Wildman's, just is that the taxpayers had the responsibility. I am not changing my position whatever; you are changing yours, or at least the position of Mr Wildman on this.

The other thing that I think has to be quite clear is that your commitment to Elliot Lake prior to September 6 was very clear, and it was not this at all. That causes the community some difficulties, at least in the credibility of politicians. Do we believe what any politician might say to us? That is my problem. I think an electorate has the right to expect a government to do what it promised when it was in opposition. Maybe you do not, but I think they have every right to expect that. The promise to Elliot Lake was clear, concise, and I heard it thousands of times, as my constituents probably did. This is quite different than that, and I would remind you of that.

I would also remind you that Ontario Hydro has a plan before the Environmental Assessment Board today, and in that plan, if it is approved by the board, there is great possibility for economic diversification of the North Shore. Under one scenario in that plan that is put before the environmental assessment, there is a $12-billion or $15-billion project proposed; under another one there is a multimillion-dollar proposal for a generating site. There is also the Patten Post hydroelectric dam that is before that plan.

There are a lot of things that Hydro has indicated it wants to do before an environmental assessment. To me, doing things that make sense to Hydro certainly is the best way to get northern development going and a strong base in the community. Could you give me the status of Patten Post? What is going on with Patten Post? You did not mention it in your release, although it was mentioned at the previous announcement.

Hon Miss Martel: The north shore tribal council, as the member would probably know, moved a motion, it would have been early in September, to indicate that it had not had any consultations with the government and/or Hydro on a possible development at Patten Post, and therefore were opposed to any development in the area at this point in time.

The Minister of Natural Resources, who also has responsibility for native affairs, is in the process of tracking down a negotiator to deal with the tribal council in order to figure out what its concerns really are with respect to Patten Post and if this also involves other concerns with respect to land management in the area, etc. So at this point in time, Hydro awaits some kind of settlement between one band in particular, although the whole tribal council has adopted this position, and the government with respect to these particular issues.

There has been no further movement on getting the work ready for the environmental assessment until we have been able to sort that out. Clearly the announcement that was made on the 17th and the impression Hydro has been operating under from that point on is that there would have to be agreements with the bands in the area for that development. Since we do not have it at this point, they are awaiting some kind of settlement of those outstanding issues.

Mr Brown: Just to clarify that, are you saying that the bump-up of Patten Post is off until you get this agreement, and it is just going to be dealt with within the environmental process, or the bump-up will occur after you get some resolution, if in fact you do get a resolution with the north shore tribal council?

Hon Miss Martel: We are in some difficulty in proceeding when we had made it very clear to particularly the member who was on the working committee who was representing Serpent River that we would expect agreement between the native communities, Hydro and the government on how to proceed. There is no agreement at this point in time. We would be causing a bit of a problem in that community about how serious we are about negotiating if we also gave a direction for Ontario Hydro to continue with its work without having a resolution in place. I do not think I would advocate that Hydro proceed while on the other hand the government is trying to negotiate with the bands involved to figure out what exactly the problems are and how we can resolve them.

Mr Brown: In other words, if there is an agreement, you will bump it up; if there is not, it will be dealt with within the total environmental assessment of the 25-year plan.

Hon Miss Martel: If there is an agreement, we would want to fast-track that, as we mentioned certainly in our announcement, because we recognize the construction development potential and the employment opportunities that could come, particularly if you have a group coming out of the mines at the end of 1996 who will be looking for employment. We recognize the value of the construction opportunities that are available there for people in Elliot Lake and the north shore. We had given a clear commitment, it is my understanding, when we went through this process that we wanted to fast-track that particular project.

I will not comment on the other energy initiatives that were involved in the $25 million, but particularly on that one, we did want to fast-track. But I say to the member again that I would be reluctant to give any other advice to Hydro at this point in time, because I think the bands would see that as a serious undermining of any negotiation going on between the province and themselves if in fact we told Hydro to proceed on its merry way while we continued to consult.

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Mr Brown: I think I understand what you are telling me. With relation to Elliot Lake, I think members would be interested in the job creation project that is going on there, where they are using $9.8 million -- off the top of my head --

Hon Miss Martel: I think it is $9.6 million, but it does not matter.

Mr Brown: Close.

Hon Miss Martel: It is in there somewhere.

Mr Brown: -- to create jobs in the community. Can you give us some idea of how many projects are now ongoing and how many people are employed? One of the difficulties, being somewhat familiar with this, is that there are a number of people coming off UI at different times, and certainly what we want to do is have jobs available for those people at the appropriate time. But could you give me some idea of how that is going?

Hon Miss Martel: Let me answer the best I can. I do not know it as well as I should. The working group developed terms of reference for both an office to be developed in the community that would administer the programs and, second, develop criteria for those people who would qualify for programs.

Members should be clear: The government is very much trying to make a distinction between trying to employ those people who were involved in the mining industry and have been directly affected by unemployment versus a general unemployment program where we would allow anyone to come and participate. We said very clearly that the $9.6 million or $9.8 million that we have targeted for job creation must first and foremost serve those people who have been directly affected by a loss of jobs and are coming off of UI or, second, those people who have been indirectly but in some way affected by the layoffs themselves. I think there is a clear distinction that I want to make with the committee between those people and, for example, a student who worked over the summer who is now unemployed and is looking for employment opportunities. We would be focusing our efforts on that group of miners and/or spouses or people who have been directly related to the layoffs themselves and the loss of employment.

My understanding is that we have about 250 applications that are before the committee at that point. We have 50 jobs that have been created already and an estimated 100 to follow by mid-October. That is the latest note I have. We had 10 people who were hired to administer the program in all sectors. We hope we would be employing several hundred people, not only in Elliot Lake but in some of the other communities, over the next year or so. That would give them some opportunity to work enough, frankly, to get back on UI. If we can do nothing else but that, that will be what we will try to do and accommodate as many people through that link as we possibly can.

Mr Brown: As you know, I have had some problem with the interpretation of the criteria. I do not think I have any real quarrel with what the minister is saying, other than that directly unemployed miners are rather easy to identify; people who have been indirectly affected are very difficult. To decide as a result of the mines closing, "Is this one laid off or unable to find work or is that one?" is extraordinarily difficult.

My concern is, we are putting the people in the placement centre in an almost untenable position. I have had over 40 people complain in my constituency office that they felt they qualified and yet the people at the training centre did not think they qualified. Usually after some discussion most of them were qualified and it was all right. I am glad you have indicated you are having a look at this, because I think there is potential that some people would be left out who very well could take advantage of this program and the retraining that would come about because of it or the opportunities that may come about 15 or 20 weeks down the road after they do this particular job. I would urge you to have a look at that so that the community can be assured that everyone who can take advantage of this should be able to.

Hon Miss Martel: I do not want to leave a false impression here, because I would continue to maintain that, for example, for students who had nothing to do with the mining industry and had a summer job and are now off and looking for employment, I do not think this is a program they should be qualifying under.

Second, there would be a number of people who did not come to the community until after the layoffs began. They were not residents of the community and now have showed up. This is not a program for them.

Mr Brown: No, that is not a question. That is not even under debate, the criteria takes care of people who moved in. What we are talking about are the people who are there.

Hon Miss Martel: The only commitment we have made, and I think this has gone off in a letter to you, is that if we get through the initial round of people who are, obviously, on UI, have been unemployed, have lost their jobs as a result, and we can get into a second category, which is a more grey area, the 40 who you have referred to -- if we have some money left after we clear the decks of the original group, we would start to consider those who would be in more what I categorize as a grey area. I appreciate your concern. What we are trying to do from our side is have a balance so that we are not operating a general unemployment program that we could conceivably also be asked to operate in Kapuskasing, for example, or elsewhere, but are very seriously targeting our efforts to those people who are suffering the effects of job loss or are laid off because of the downsizing in the industry.

Mr Brown: I am not disagreeing with your intent. I am just disagreeing somewhat with the way the program has been operating till now. I just know that as a constituency politician I am having a fair amount of interest in the community over the selection criteria for the applicants.

Mr Johnson: Mr Chair, how is our time allocation going? Is it being allocated fairly at this point?

The Chair: Of course it is.

Mr Johnson: I had no doubt about that, Mr Chair. I just thought I might check.

The Chair: By the end of the session you will see it was quite equitably distributed, but in anticipation of what you indicated to me was potentially a vote in the House, I was allowing Mr Brown to complete his line of questioning. I have not seen that we are going to have a vote in the House, but I do not think the minister is uncomfortable completing this round with Mr Brown, unless you had an earth-shattering question you wanted to raise in the next four minutes.

Please proceed. I apologize for the interruption.

Mr Brown: You might be interested, Mr Chair; I think I have more or less finished that line of questioning, but I am quite interested in some others. Perhaps in the final few minutes we might discuss a project that I know is near and dear to the minister's heart. I am wondering what progress she can report to the people of Ontario, particularly the people of Sudbury, on the fertilizer plant. Where is that? When are we going to see people working in Sudbury producing fertilizer?

Hon Miss Martel: We wrote back to the company when I became minister because there had been no new development on that front for some time. It was one of the things among a number I had talked about when I had been in opposition that I asked the ministry to reactivate and find out where we were.

We went back to the particular company which owns the phosphate resource to ask them if it was interested at all in developing this further -- this is at the Cargill township site -- because we certainly had an interest. We were prepared to work with Inco Ltd and Falconbridge Ltd in particular and to talk to our colleague in the Environment ministry to see if we could put something together for the environmental benefits but also for the employment benefits. At that point, the company told us they had no further interest in developing this particular site. They did not have the money at the time; a restructuring had gone on from within and they were not particularly interested. So for a long time there was no movement on any front.

They contacted us again, contacted Tom Marcolini, about five or six months ago, and expressed an interest again that they thought they would be looking at this project. We requested a couple of meetings, made phone calls back to them, and it was dropped from that end again. So we are prepared from this end to meet and bring to the table whoever we can. Unfortunately, the company that owns some of the resource, the phosphate resource in particular, has expressed now on two occasions no further interest in developing this project at all. Mike, I do not know if you have any more.

Mr Barker: That is about it.

Mr Brown: Thank you, Mr Chair.

The Chair: I cannot think of a finer note on which to finish this round of estimates than fertilizer plants.

Mr Brown: I knew you were going to say that.

The Chair: I just thought most of it was generated in this building, let alone what was going to end up in Sudbury.

If there are no final questions, this committee stands adjourned until Tuesday, November 19, when we will reconvene for the estimates of the Ministry of Northern Development and Mines. Thank you.

The committee adjourned at 1759.