Assemblée législative de l'Ontario

MINISTRY OF INDUSTRY, TRADE AND TECHNOLOGY

CONTENTS

Wednesday 2 October 1991

Ministry of Industry, Trade and Technology

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 (Cambridge 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:

Kwinter, Monte (Wilson Heights L) for Mrs McLeod

Phillips, Gerry (Scarborough-Agincourt L) for Mr McGuinty

Clerk: Carrozza, Franco

The committee met at 1544 in committee room 2.

MINISTRY OF INDUSTRY, TRADE AND TECHNOLOGY

The Chair: I would like to call to order the standing committee on estimates. When the committee was convened yesterday, at the close we had 2 hours and 40 minutes remaining. Before I move directly to recognize the time allocation that had been given to the official opposition, the minister has one or two responses.

Hon Mr Philip: Just one response.

The Chair: It is in writing, so perhaps you could précis your comment and then we will distribute it.

Hon Mr Philip: The question, I believe, which is one that had been raised with my predecessor on a few occasions by Mr Kwinter in the House, was raised again by him in committee. Indeed, I believe it was raised by another Liberal member in the committee earlier when Mr Kwinter was not here.

The question in summary was, "Why has the industry, trade and international relations support program's budget gone down by $17.4 million over last year?"

The response for the record is:

"The industry, trade and international relations support program budget has not been substantially reduced over the last year if you take into consideration both the operating and capital budgets.

"The total budget has remained approximately the same over last year, $209.7 million versus $208.1 million.

"The reason the operating budget has gone down and the capital budget has gone up is because there was a transfer of funds from loans to repayable grants under the industrial assistance program. Under this program, loans are considered operating and repayable grants are considered capital.

"The total ministry budget including operating and capital has increased by $19.7 million over last year, from $333.5 million to $353.2 million. The increase reflects the increased funding for the manufacturing recovery program and Innovation Ontario's pre-venture assistance."

As a footnote, we say that the 1991-92 estimates summary for both operating and capital has been distributed to all the members on this committee. Do you want to table this as a document?

The Chair: Yes. All documents are to be handed to the clerk, who will in turn get them copied and distributed to all members.

I would like to recognize the official opposition member if he is prepared to begin.

Mr Phillips: The area of the budget that is most interesting to me is whether the minister feels there are sufficient funds in here to generate the jobs that are called for, the job growth. I would be interested in knowing, because I think next year calls for a very substantial increase in job creation. The expectation is that they will come from what sectors, and what is MITT doing to generate them?

Hon Mr Philip: As I said earlier, I do not think you can equate the amount of money you are spending with the amount of jobs you are creating. A lot of the money that does create jobs is in the form of loan guarantees rather than direct grants. These are of course less expensive to the taxpayers, but a lot of jobs are being created by the creation of the kind of industrial strategy and structure that we are designing at the ministry.

Examples are working with each sector to develop a strategy; the memorandum of understanding we have just signed with the plastics industry; working in a more efficient way, as we are doing at the international level, to develop a more organized and systematic way of identifying potential markets; working with existing industries in going after foreign business, and combining a series of companies. A lot of those are not terribly expensive to do and in fact can be done by the bureaucracy through reallocation of resources and using them in different ways.

To answer the second part of your question, our approach to an industrial policy is to develop high value added activities throughout the economy. The higher value added strategy applies to every sector of the economy. We are trying to create a strategy that is creating competitiveness through co-operation. That kind of strategy means not only picking where we have the best winners, if you want, within an industry, but rather an emphasis on continuous improvement in research and development, an effort in providing programs that will allow small- and medium-sized companies to obtain the kind of expert help they need, and subsidizing those engineering or marketing skills, as the case may be, through the programs that we now have. I do not think you need to throw large amounts of money at companies. I do not believe in large subsidies. I do not think that is the way in which you become more competitive.

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Mr Phillips: Would you help me out, because I cannot work through that one. Is it going to be in manufacturing? Is it going to be in service? Give me maybe three or four of the big wins you have had in the last couple of months that may help me.

Hon Mr Philip: I would be happy to. You asked the kind of question that I thought I would have to give to the members of the government to ask. But let me give you some of the big wins.

Mr Phillips: I asked for the first part first. Are they going to be in manufacturing, service or where?

Hon Mr Philip: I think what you have to do is identify the value added components of each of the industries. In the case of service, for example, one of the things we will be doing soon is meeting with the hotel industry to find out -- and indeed I had breakfast and talked to Mr Kwinter about this -- if there are ways in which we can export our tremendous architectural and hotel management capabilities to other countries. Is that a potential market for us? Even though the hotel industry is in a state of considerable depression at the moment, there may well be opportunities for us to export some of our expertise.

In the timber industry, for example, there are specialty products that we have been developing and that can be exported, even though we have trouble in that industry as a whole. Even in the furniture manufacturing business there are components in terms of design, in terms of certain specialized products that are exportable. So there is a value added in each of the industries.

In the more traditional industries, such as the steel industry, with the restructuring of Algoma we are trying to become more competitive through a whole restructuring program that we have been able to put together and that we trust the banks are going to find satisfying. Stelco, for example, has been restructuring and developing specialized products, so even in the very traditional areas there are value added components. Of course we are going to encourage the computer business, the high-tech business, the electronics design industries and indeed, we are attracting a number of them. General Electric, which operates in Mr Carr's riding, is a good example of a company that is very actively investing in Ontario in the sums of hundreds of millions of dollars, and there are other industries that are doing that as well.

Mr Phillips: I am trying to get some idea of the numbers here. You say you are going to increase the job market by about 105,000 next year, I gather. That is all I am interested in. You have got the jobs --

Hon Mr Philip: Let me give you an example of some of the ones that are on the go at the moment. The Ford Motor Co of Canada is presently spending $100 million on a new plant facility in its Oakville car assembly plant. Chrysler Canada Ltd has announced that it is increasing capacity at its Bramalea plant. It is building a new stamping plant which will substantially increase employment. Connaught Laboratories has a new biochemical centre to be built in Metropolitan Toronto. In Collingwood, LOF Glass of Canada Ltd is shifting production from its US plants to Ontario, providing 100 new jobs. I can go through a whole list of them.

Mr Phillips: All I want, by industry next year, is where the 107,000 jobs are coming from. That is all.

Hon Mr Philip: The 107,000 jobs?

Mr Phillips: That is in the budget.

Hon Mr Philip: Our staff can add up the various projects we are involved in and the projections. If you want us to do that we can give you a fairly detailed answer, but I am not prepared to do it off the cuff.

Mr Phillips: That is fine. Just as long as we can get that.

Hon Mr Philip: I can give it to you and the whole committee, if you like.

Mr Phillips: I have another quick question in regard to the analysis of how we stack up vis-à-vis our competing jurisdictions. This may have been asked earlier, but I would like to have some of those studies and maybe even a top line from the ministry on how well we do stack up versus our competing jurisdictions in the manufacturing sector and the service sector, just to get some feeling. Are we very competitive, average or --

Hon Mr Philip: Peter Sadlier-Brown has been looking at some of those studies. In fact, there is an interesting study I just obtained yesterday that was done not by the government but by private enterprise. I have not had a chance to go through it yet.

Mr Sadlier-Brown: If you could just give me a minute, I will find the numbers for you.

Mr Phillips: Thank you. Maybe we can come back to it.

The Acting Chair (Mr Johnson): Would you like to have that information on the next go-round?

Mr Phillips: C for competitiveness.

Mr Carr: Q for question.

The Acting Chair: Peter needs more time. How about we move on to Mr Carr, and when we move back to the Liberals, maybe you can take more time with that information.

Mr Carr: In my discussions with some of the owners of small businesses -- and this is one of the things I think has been forgotten in a lot of the rhetoric over the free trade debate -- they were saying that initially one of the biggest problems businesses faced was that they worried more about protecting their own backyards, their own markets here. They were working to get their costs down to remain competitive and so on. But one of the untapped potentials is expanding into the US market and taking advantage of some of the markets like California. Of course, one small state would have more consumers than the entire country of Canada.

If you could walk me through what would happen if I am a small entrepreneur with 10 or 15 people making widgets in Ontario and I come to the Ministry of Industry, Trade and Technology and say: "I produce good widgets. I know where I can sell them. I can go over to K Mart and Woolco in Toronto, but I want to attempt to get into the US market and expand my company." I will throw it to you, Minister, and then you can point it off. How would I be directed? What would the process be if I come to you and say, "I want to sell my widgets in the United States"?

Hon Mr Philip: I am going to ask Peter Friedman to walk you through the process, but in the meantime, let me give you some general figures on what has been done. The trade expansion fund under our ministry has been extremely popular with small business. I have had a number of good reports. As a matter of fact, I was in Don Cousens's riding today and somebody was telling me how helpful it was to him as a business person up there in the Markham area.

Since April 1991, Ontario business has indicated that this particular support program assisted more than $46 million in export sales. It has a base budget of $2 million. It is not a new program; it was established in 1983. But certainly the new government is in support of the program. Its purpose is to increase exports by developing new export markets. To understand the program, it provides matching grants to businesses to a maximum of $35,000 per year to cover up to 50% of market exports, out-of-pocket marketing costs, and it has been quite helpful.

Peter, do you want to answer? I think it was a good question. Supposing I am John Smith and I want to access this program, how do I go through it?

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Mr Friedman: We have 13 offices around Ontario, and they are regionally based. We have 44 consultants who cover territories. Many of our consultants would know these companies, or if they do not, we have promotion materials which tell this company that the Ministry of Industry, Trade and Technology has an office nearby, or we have a hotline, if not that. If they called our hotline, they would be directed to one of our offices.

When they are directed to our office, one of our consultants would go out and take a look at the company and what it is doing. If the company says, "We are covering the Canadian market fairly well and we are interested in the

American market, but we haven't done anything," we have a number of initiatives.

We would first take them on a mission to a neighbour state, like Michigan or New York, on a program called NEBS, new exporters to border states, which is essentially taking them down there, showing them the kind of things they need to export, dealing with customs people, telling them about the documentation they need, and so on.

The next thing, if they do not have the systems in place, that is when the trade expansion fund comes into play, where we would help finance things that they need to change, packaging and other kinds of things that may be required to be changed to be able to ship to Americans.

Then we have offices in the United States and we have people in Queen's Park in the trade area who are sector-oriented or are generalists, who understand the American market. Those people would assist this company and would make contact with one of our offices. If it happens to be California, we have an office in Los Angeles. They would go down there. Our office in Los Angeles would help this person.

Normally the thing you need is to find agents and distributors, because that is how you would sell. The office in Los Angeles would help find that for a company, would make arrangements, introductions to financial organizations down there, letters of credit, and so on. The Ontario Development Corp has an export assistance program; the federal government has an export insurance program. They would be introduced to all those situations.

Mr Carr: How many inquiries do you get in a year from Ontario businesses? You must have a total.

Mr Friedman: Our offices get 4,000 a year. They are not all for exporting and not all to the United States, but our offices get inquiries on a regular basis. Our offices are proactive; they would go out without inquiries. Our offices would call on these companies on a regular basis and see how we can assist them. We are always looking for exporters. That is one of the most exciting parts about getting small manufacturers, most of whom do not export.

Mr Carr: How do you get the agents -- because that is the key, as you know -- the people to sell it down there? What is the total number of agents you would have in the United States that would be out there that you would be working with? Any idea?

Mr Friedman: I can get that for you through our American office, but we have several thousand. Each office has a list of potential agents. Local people work in our offices who have contacts in each of the sector areas and we have hundreds of agents, and we certainly introduce people to methods by which they can find agents. We do this quite regularly.

Mr Carr: One of the things I wanted to get, with the number of inquiries, is what industries seem to be predominantly coming to you. Is it manufacturing of lightbulbs, or what? The reason is that the thing I am looking at is where you are getting the inquiries would give us a good indication of where we in Ontario see some of our future potential to be.

Then it would be very interesting to also see the number of agents selling that product, because I think that is one area where there is a tremendous amount of potential, not to say that you are not doing a good job there, but that we can do better. One of the problems we have is matching up the good products that we produce. Quite frankly, the 250 million Americans who are sitting down there do not know about our good widgets, and so on.

I was wondering if I could get that in writing, both the number of inquiries, generally, and the type of manufacturing we get, because rather than the government saying, "We're going to be in this industry," what I think would be helpful is being able to say: "This is what industry is saying to us as a government. This is where we think we can go into the United States." Then what I want to see is how that corresponds with the number of agents we have selling those products in the United States. That would be very helpful, if I could.

Mr Friedman: The one point I want to make is in this arena we do not pick only certain sectors. We would help any manufacturer who is interested in exporting, or at least beginning to export, particularly if it is to the United States.

Mr Carr: But surely from a commonsense, practical standpoint, we would say: "Boy, we're getting a lot of widgets down that people want to sell. Maybe this is a good industry to be in." That is why I am hoping we have got the statistics on that, so that the minister and the other people who are looking at it are saying, "In the long term, what industries do we want to be in to be able to export?"

We will not be saying, "We want to be in the aircraft manufacturing because it happens to fit our political agenda." We are going to be into something that businesses are telling us they want. I was wondering if I could get that in written form through the clerk, as well as what some of the procedures are.

I like the idea that you are proactive and you are going out and you are calling up companies. I take it you have, for want of a better word, the equivalent of salespeople who are going out. How many do you have?

Mr Friedman: We have 44, covering the province and territories.

Mr Carr: So we have got 44 salespeople and they have had about 4,000 inquiries, and those could be that they go out or we get calls in, right?

Mr Friedman: Yes. These are mostly manufacturing. I am not talking about general inquiry. I am talking about manufacturing-oriented consultations.

Mr Carr: If I could get some of the details on these 44 salespeople and how many calls they are making, the purpose being that especially after today we are looking at value for the money.

I know the minister will be able to talk about it. I read some of the figures last night, and when you look at them, the amount of money we are saying we got, whether it is $435 million or whatever in exports, and the amount we spent was only $4 million, it looks very good, but I want to get a little more detail. We've got 44 people out there. How many contacts are they making?

Also, with regard to salespersons, one on one is probably the best way to do it. Are there any other programs that we are doing? I do not know if it is good value for the money, but how much would you be spending on advertisement of some of these programs, if any?

I think the minister has done a good job saying how much we have got and I think we are doing a good job. What I am saying is that I think we can do a better job if we really take a look at it and are able to say the 44 people out there have made this amount of contacts and this is how much they produced.

It may be that we are talking about mass education of some of the business community. I will tell you quite frankly, even the large companies I see -- not the small widget manufacturers. I am talking about major corporations, and I will not embarrass them by naming them because they may have said it in confidence. I was amazed at one of them, a major manufacturer, that said, "We pushed for the free trade agreement, and then we worried about getting our costs down and getting the number of people down and being productive."

I asked him how many salespeople they had in the United States and he said: "We really think we missed the boat by not expanding. We've got distributors and so on." That is why the list of agents and distributors would be very helpful by location, so that we know if we have got a list of 15 distributors in our Los Angeles office but we are having 2,500 inquiries for that office. It would be very helpful to see where the allocation of resources is.

Something else you might have as part of a policy manual somewhere, if we could get what I talked about, is a written summary of what the procedures are. The reason I was thinking of this is so we can keep it very simple and put something together which we lays it out -- and this might already be done within MITT -- very clearly to business in a very simple way, and we can get rid of all the rhetoric about whether free trade is good or bad, or whether Conservatives like it and the NDP does not. The fact is that it is here.

There is a potential to expand, and we should get to the point where we say to businesses: "Hey, look, we're going to be a little more aggressive. We're not only going to worry about playing defence in this football game and losing our markets here; we're going to be aggressive offensively. This is all you need to do: One call to this office, which has the steps and procedures that might be able to help you sell your widgets."

Notwithstanding what the minister says, the impressive statistics, I think in order to meet the jobs we need, those statistics are going to have to double and triple in terms of the amount we get. It would be very helpful if we could get some of that information.

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Hon Mr Philip: I really think the member is making a good point, and it is the same point I have made to my deputies and to my assistant deputies, I think on the first day I met them. It is really something I think we have to do. I was saying, as a matter of fact, to somebody from the Ministry of Agriculture and Food in the elevator on the way over here, "You guys have done a terrific job with your ag rep program."

Mr Carr: Let's learn from that. I think it is a good thing.

Hon Mr Philip: Yes, you know, where the farmer goes to one person and that person brings him all through the bureaucracy. We are looking at ways of doing that.

The other thing we are trying to do with other countries -- we had a meeting with the President and Treasurer of one of the larger eastern European countries, the Ukraine, if you want to be specific.

The Chair: Ukraine, not the Ukraine. It is like saying the Canada. It is Ukraine. That is the name of the country.

Hon Mr Philip: I stand corrected by the Chair, and I hope he will allow me to correct his Gaelic, if he ever tries any.

What I was saying was that often in other countries too what we need is one or two people we can contact and have help us work through the bureaucracies, and it is particularly true in eastern Europe, where some of the bureaucracies are very large.

Mr Carr: Where I am thinking that will be important is that one of the concerns we have, and my feeling, is that we often focus on being competitive with the United States, and quite frankly, the Japanese and the West Germans are being more productive than the US. If we cannot compete with the US, we are in trouble.

One of the big criticisms I have internationally is the situation in Japan. It is very difficult to get in there. Maybe the minister could comment on that. I guess even with the US, when the trade minister down there, Carla Hills, goes to Japan and they get all the right things said and they nod their heads and say, "Yes, we want the markets opened to American product," the fact is that it really is not so, for a number of reasons. Yet they negotiate one on one as governments and say: "Yes, we're going to open. We want more US and Canadian product in here, more imports." It is very difficult.

I wonder what you are doing to crack that very big market in the Far East in Japan. Are there any new programs we are doing to get in there? I will be very blunt. I think you have to open it up with a sledgehammer. Is there anything we are doing in Ontario to assist with that?

Oh, hello. I think we just had the sledgehammer come up here.

Hon Mr Philip: Claudette is my sledgehammer in the Far East. I think she can talk about some of the things. I have only been the minister for six weeks. I did have a fairly long conversation with Robin Sears the other night. He finally found me at home and we were talking about that, and he was quite interested in my going there immediately, like tomorrow, to put together some deals, to which I said: "Maybe not tomorrow but the day after. The House is sitting." But I think you are right; we have to open up those markets. They are starting to open up.

Claudette, do you want to add to that?

Ms MacKay-Lassonde: I can add some comments to what was said previously, because I think they will answer some of your questions. Bottom line, in terms of trade we are doing roughly $65 billion with the US, $3 billion with Asia and $7 billion with Europe. That gives you a bit of perspective on where it is at.

You were talking about the importance of promoting our industries and trying to get them to sell to some market in the US, for example, targeting it. That is exactly what we are trying to do right now, because what we have seen in the past is that the number of calls does not necessarily lead to an actual export. They may be asking for things that nobody is interested in, and quite often, because of that, we may have people running around trying to find a market for something that does not exist.

On the other hand, we also go to the US and look at the demand and try to find where in Ontario we can meet this demand. Right now we are trying to match the demand in various markets with the strength that we have in Ontario. Our task is to act as broker and stimulate that and be very effective in doing that.

We have programs right now that are supportive of that. Promotion, for example, is a very important thing. We are trying to promote Ontario as a place where we have good products and services and where it is good doing business. Also, we are going to provide profiles on industries where we feel we have a chance of penetrating other markets, and we will do a lot of promotion in that area, and that is done from the offices in Los Angeles, Dallas and Chicago.

Another program that has not been mentioned is the trade mission, and I have been on one of them. I have not been long with the government, as you probably know, but this is a very good example of the kinds of things we are doing. We had a number of industries from Ontario that were brought to Dallas. What the people in those offices did was go around and actually look for the companies that had the kind of needs and make arrangements for those companies to make presentations. Before the meeting, they were fully briefed as to the needs and interests, their inclination and that kind of thing. We are actually doing quite a bit in that respect.

Another program that we have is we are preparing directories. Quite often, they will look for a supplier, and it is not a big thing, but they look at that, "Where can you get that kind of product, those supplies from Canada?" Again, our people in these offices go to those industries and say, "We can supply you with these products and services." Very briefly, that is what we are doing right now.

Mr Carr: My feeling is that in order to sell, you cannot wait for people to say, "We need products," because 20 American companies are out there. That is why when you talk about distributorships, that is what is going to do it, because if we just sit back and say, "The only time the Americans in LA, for example, are going to come to us is when they have a book of suppliers" -- they right now probably get called on by 10 or 15 people, saying, "Buy my product, my product is better," and so on. The problem with distributorships, as you know, is that they sell different products, and so you have to be very aggressive. It is not a case of sitting back. We need to be proactive.

Ms MacKay-Lassonde: Exactly. We were talking yesterday about this, the task force that we have done, and that is precisely it. We want to know where we have an edge essentially, and our task is to push it in those markets, being very proactive, doing promotion. We have already started this approach, and in the next few months we are going to be much more proactive and aggressive.

Mr Carr: With the number of people who are down there that we talked about earlier, with some of the distributors in the United States, Americans would normally be selling it and, of course, the people who would be the most aggressive in selling it, although I guess if you give someone the right compensation, anybody will be aggressive for it. The problem with distributorships is they make it very difficult, particularly in complex products. It is easy when you are selling a widget.

Is there any movement afoot or thought, for example -- and I think the minister talked about some of the things the plastics industry is doing -- of being able to say: "Okay, we've got the plastics industry. Maybe it is a good idea to have Canadian salespeeopledown there -- we will help set them up -- who would then be able to peddle some of the plastic products to various companies and be able to say `X, Y, Z has one'?" What is your thought? Will we get more of a bang if we do something like that?

Ms MacKay-Lassonde: In fact that has been debated, and it has been tried again. I think we keep going back and forth between having a Canadian there who knows very well the Ontario market and locally engaged people --

Mr Carr: Who know the US people.

Ms MacKay-Lassonde: -- who know the industry and have the contacts. We really need a combination of both.

Mr Carr: Yes. Good point. Do I still have time?

The Chair: You are out of time, but I do not have any government members -- oh, Mr O'Connor wants to be recognized, so if you want him to do one quick question --

Hon Mr Philip: Maybe the government members will allow Mr Carr to ask another question or so. I think he is on a roll.

The Chair: Actually, I thought he was in his seat. Mr Carr.

Mr Carr: I appreciate it, and I appreciate the minister's comments, because what I hope we will do is attempt to be very constructive. I appreciate the minister's comments because I might, surprisingly enough, even come up with a good idea once in a while that might not be thought of. I appreciate taking a look at it like that.

Just along those lines as well, when we are looking at value for the dollar, do you see us expanding the offices in the United States? Would we be better, keeping in mind we have limited resources, to expand the contact to get more Canadian companies to come and see us or to expand at the other end in the United States to be able to sell more? With the number of resources we have, do we have the right balance now or should we be saying: "Heck, everybody knows we're here now. They're calling us. We don't need the 44 salespeople. What we need is more at the other end"? Where are we at with that right now?

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Ms MacKay-Lassonde: We have not done any evaluation, but certainly being visible in those countries and those markets and doing the push in the proactive, you have to be onsite essentially. I think that is very important. Now the balance, as I mentioned before, I have not been long enough with the government to have focus on the international, to be honest with you.

Mr Carr: On getting to the markets, when I look at some of the offices we have, we have hit the major cities. I guess if you are going to be productive you will do that. Have you given any thought as to how we can service those other markets? As you know, we do not have an office in Toledo, Ohio, and so on. When we are looking at trying to produce the amount of exports that are needed to really capture some of the US market, we are just scratching the surface. I suspect we are probably even scratching it in Los Angeles where we have an office and the Japanese have an office, the West Germans and the French and so on. How do we get to those other areas, when our product that we produce better than anyone else in the world, this widget, is not needed in Los Angeles but is needed in Toledo, Ohio?

Ms MacKay-Lassonde: I think the minister has already alluded to that. We are in the process of examining all our international offices to examine whether in fact they are the best location; whether we have too many or maybe not enough support staff in those areas, whether we want to relocate in higher-growth markets. We already alluded to some of those yesterday.

Mr Carr: Minister, if at any time any of this information is available, I would be pleased to receive it. I am one of those crazy people who stays up and reads all this, so it will not be wasted. If there is anything you feel you want to contribute, I would be pleased to go through it.

Hon Mr Philip: I am also looking at the possibility that I want to involve the opposition parties more in looking at trade delegations and possibly joining us in certain select ones.

The Chair: Sounds like a trip to me.

Hon Mr Philip: We would be happy with your co-operation in something like that.

Mr Carr: The reason I am so interested in this part of it is because my background has been in sales and marketing. When I look at it again, going out and seeing the businesses, they are saying to me, "Look, it isn't only that governments have missed the mark on this expansion in the US. We're not blaming the governments. We as the companies are the ones who don't know about it."

My last question, if I have just a little more time --

The Chair: Ask Mr O'Connor.

Mr O'Connor: Are we using up my time right now?

The Chair: Actually, yes.

Hon Mr Philip: It is not your time that you are using. You still get your 15 minutes.

The Chair: No, I think the sidebar, Minister, was that we had that understanding, so I will recognize Mr O'Connor. Please proceed.

Mr O'Connor: Thank you, Mr Chair. I did not realize I was sharing my time quite so freely. Anyway, I am pleased to share it with the member for Oakville.

Mr Carr: Thanks. I owe you.

Mr O'Connor: One of the concerns I have in my riding, in Stouffville -- just past Markham, Don Cousens's riding where you were earlier -- is that there is a pharmaceutical company, McNeil Pharmaceutical, up for sale right now. I know it is not a good picture right now. I just wondered if you could tell me exactly how your ministry is trying to help in that situation, or whether there is any help for the pharmaceutical industry in Stouffville. I think it represents about 80 jobs in my riding, and for that municipality it certainly is going to be an awful burden on the community to have to live with when the pharmaceutical closes if there is nothing else there.

Hon Mr Philip: Let me put it this way: As we look at industries, I think we have to accept that in order to be competitive they have a right, and indeed we should encourage them wherever necessary, to restructure. In the case of McNeil Pharmaceutical of Stouffville, prior to this government taking office -- and I do not say this derogatorily towards the last government, because I am not sure there was anything it should have done in regard to this -- McNeil Pharmaceutical announced that it had to realign its operations with its sister company Ortho Pharmaceutical (Canada), which is located in Don Mills.

It had done a fairly thorough analysis of its operations and trends in the marketplace and it thought that by this realignment it could become more cost-competitive and more efficient. It could blend skills and resources in its pharmaceutical division here in Canada. So it made that decision. It is unfortunate that the plant will be closing in your riding, but at the same time you have to look at the health of the company and the net loss in jobs generally to the company if it did not restructure itself and realign and become more efficient.

I guess you want to ask, "Are the affected employees being fairly treated?" From what we understand, the company has established a job search committee to identify opportunities for relocating employees within Ontario, and also within the Ontario Johnson and Johnson operations where feasible. It is offering an early retirement package that exceeds the minimum requirements of the Employment Standards Act. If you look at it, the company appears to be trying to act as a good corporate citizen. Part of being a good corporate citizen is to be an effective corporate citizen so that you can be competitive.

What is interesting is that the pharmaceutical sector has been a generator of a tremendous number of new jobs and investments in Ontario. For example, on September 12 I attended the opening of a $4.5-million Eli Lilly analytical research laboratory at Sunnybrook Health Sciences Centre here in Toronto. This research-intensive, high-technology sector has increased employment in Ontario during the last few years from 8,609 jobs in 1983 to over 11,500 in 1990, which is an average increase of 5% a year. It is growing. It is important that we work with the industry. I met extensively with representatives of the industry to make sure that industry stays in Ontario -- that is of concern to the Premier and myself -- and continues to expand. It is one of our high-priority industries.

Mr O'Connor: A facility of that nature is fairly modern. You are right, they had been good corporate citizens in the community and have been very open about how the closure process is going to take place. Is there any way your ministry can be proactive in trying to search out new citizens to take over that location?

Hon Mr Philip: We are trying to do that. The deputy might like to answer this more fully. Part of the strategy is to meet with the industry and to develop the kinds of structures that will do that in the ministry.

Mr Armstrong: I will just say a word on that. This gets to an understanding of how our field offices operate. Peter Friedman may wish to supplement this. One of the duties of field officers is to have an inventory of unused or vacant facilities and to be aware of the configuration of those facilities and their capacity. As I understand it, they have an ongoing list of the facilities that might be suitable for reoccupation by new investors either here in Ontario or from abroad. They are working not only with head office but often with our network of global offices to determine the extent to which vacated or unused facilities can be profitably utilized by manufacturers and others, not simply sold as vacant buildings and demolished. Peter, do you have anything further in that regard that you can add?

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Mr Friedman: The only other thing I could add -- I think it was mentioned yesterday -- is that our plant location section has an industrial listing assistance system. When any potential investor either from overseas or domestic says, "I'm looking to locate a building," we try to match it up with this listing system. We act as a broker, because frequently, if you can find a good location for a company, that helps in selling it to come and locate here. So we operate this system. If it is pharmaceutical, that is a very specialized kind of building, usually a high-cost building. You have to have a similar kind of industry to find that.

We do operate in conjunction, by the way, with all of the economic development people in the municipalities. The municipal people, when these listings are available, send them to us. We have a central system and we keep that on a regular basis.

Mr O'Connor: I have five municipalities in my riding and none of them has an overly large staff of people who can be proactive in trying to bring manufacturing-commercial-industrial to that community. Is there a way they could tie into the ministry and try to encourage new investment in their communities? Stouffville is an example I have used, but the further out we go in my riding, the balance that a lot of communities have of commercial and industrial in the tax base seems to slide even more, which puts an awful burden on the local residents.

Mr Friedman: Through our domestic offices we work in conjunction with municipal development people. It is one of the areas we are strengthening. These municipal economic systems are asking the Ontario government to form stronger linkages so that we work together. Our ministry is working at the moment to strengthen that tie so we can in fact work together more closely in that area. If someone asks what areas we are working harder on, that is an area we are strengthening right now.

Hon Mr Philip: We have 29 municipalities now on stream on that listing system. It is a province-wide system, but so far we have 29 on that real estate -- if I might use that word -- facility listing system. It might be useful to give the members the list of which municipalities are on. I do not know if Stouffville is part of that group.

Mr Friedman: I do not have that, but we can provide it.

Hon Mr Philip: Some of the members might like to work with our ministry to encourage their municipalities to get into it, because it is available across the province. We want all municipalities to participate.

Mr Friedman: We are also in the process of computerizing that system so we will be able to do computerized matching. We can provide in writing the ones that are there now, but we are enhancing that system in the whole area of municipal-provincial interaction.

Mr O'Connor: Do you include in that registry a cross-section of value as well as square footage and property taxes, so that when somebody comes in and looks at the facility he knows exactly what he is looking at?

Mr Friedman: Yes. In some instances we even have a photograph of the building. We have some basic information about a building.

Mr O'Connor: Transportation links?

Mr Friedman: Yes. Someone can actually look at the facility in our shot without having to go. One of the reasons for this is that if someone comes in, he does not have to visit 29 municipalities just to see the buildings. They can come to one place and we can give them a reasonable idea. Then they can go out to the half a dozen places that seem to make sense.

Mr O'Connor: That includes transportation links and proximity to different markets and what other facilities are close by so that they may actually tap into different markets that would be applicable.

Mr Friedman: Yes. Maybe not in that particular location, but our plant location group has all that information available. If someone comes in and says, "I'm looking in that area," we provide that information. We bring in other ministries, both provincial and federal. If energy is a big item, we bring in the Ministry of Energy and talk about what energy pricing may be in that situation. Sometimes it is labour costs, so we bring in the Ministry of Labour to talk about what the labour costs may be in a particular area. If it is municipal taxes, we bring in crucial people to provide that information.

Mr Phillips: By the way, I think Mr Sadlier-Brown was going to answer my question. Am I going to get the cost on that?

Mr Sadlier-Brown: There are a lot of different ways to deal with competitiveness. Competitiveness is sometimes thought of as unit-labour costs, but tax competitiveness and even environmental considerations are taken into account. A number of people, including the World Economic Forum, have come up with measures of competitiveness, where they try to weight the various ingredients: labour costs, overall economic conditions and other basic ingredients in the performance of an economy. We have a number of those. I will compile them and give you a package. There is not any one I would say is the definitive way of comparing competitiveness between jurisdictions. Obviously it depends on what weight one would attach to, say, the tax environment or the other things you would count.

Hon Mr Philip: Some of them are done by sector.

Mr Sadlier-Brown: Yes, and simply the different composition of the economy will reflect differences.

Hon Mr Philip: Has the federal one on trucking been tabled yet? Do you know?

Mr Sadlier-Brown: I am not aware of that.

Hon Mr Philip: That is a key one we are waiting for.

The Chair: Mr Phillips, it was your question. I would like you to pursue your question. The minister can check with his assistant on points of interest.

Mr Phillips: Those two things would be very helpful to me. I talked to many business people. I do not think there is a manufacturer in the province who has not done the analysis of the cost; not labour cost but the total cost of here versus other jurisdictions. I do not think there is one of any significant size. Unfortunately, I am afraid we may not compete all that well. You must have this down cold because this is your business. I would like to get that stuff.

The second thing is, I am just looking forward to the job estimates by sector. I would like to know where the 105,000 jobs are going to come from. That will be very helpful for me. I would appreciate that.

The Chair: That is a formal request. You understand the nature of the request and you will have no difficulty with it?

Mr Sadlier-Brown: We will provide that to the clerk of the committee.

Mr Kwinter: There are a couple of items in the estimates that I would like to get some clarification on. I notice that a program entitled the Pacific Rim business exchange program/Tradewinds has been wound down. I wonder if there is somebody here who can just give me a brief overview of what happened in that program, how it worked and why it was wound down.

Hon Mr Philip: I could ask our assistant deputy, but I do not believe she was here when that was wound down. I do not believe this government was here when that happened. Tim, you have been around for years, so you can handle it.

Mr Armstrong: Too many. I do indeed recall the program from the field and I can speak a bit about it from the experience in the field. The Tradewinds program was a program where recent young graduates were placed in companies in Japan, Korea and perhaps one other country.

Mr Kwinter: Hong Kong?

Mr Armstrong: Was there one in Hong Kong? The notion was that they would undergo an initial period of language training, which varied from six months to a year, and then the entire program for the interns lasted for two years, subject to extension.

On the basis of my experience in Toyko, where there were Tradewinds students and interns, I would say it worked reasonably well. In all three cases they learned the language reasonably well, they were accepted into the culture of the firm and they performed a valuable function and certainly learned a lot.

I was not here when the decision was taken at head office, but my sense was that on a cost-benefit basis, it turned out to be an expensive program. Certainly in Japan it was a very expensive program. I think the decision to wind down may have been taken under the previous government, but it was basically on the assumption that one could expend those funds in a more effective way and benefit more people without targeting on such a small number of people for so many dollars. However, there is absolutely no doubt, Mr Kwinter, that for those three interns in Japan, it was a remarkably beneficial experience.

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Mr Kwinter: What has happened to the people who were in the program?

Mr Armstrong: I would really have to check that. One at least has stayed in Japan and is working with a Japanese company. The fate of the other two I would have to check out, but one at least is still in Japan.

Mr Kwinter: The reason I asked the question is that when I was the minister, I had the privilege of sending a group off. It was a program that was conceived before I got to the ministry. I have to admit I was not aware that it was terminated during the time I was there, but certainly the intent was that we would send these young people into companies where they would learn the language, they would learn the commercial culture and they would then come back.

They were not to stay there; they were to come back to Ontario and then make themselves available for employment in companies that were doing business in those particular jurisdictions and that would give them the ability to advise their employers. They could deal with the language and they could also deal with the commercial culture. It sounded like a pretty good idea, and I was just curious to know what happened in the execution of it. On paper it sounded like a great idea.

Mr Armstrong: I will undertake to get for you precisely what the interns in the programs are now doing. I know, for example, the one that was in Beijing was unfortunately there during the Tiananmen Square incident and was one of the ones evacuated from the country during the process. He subsequently returned and worked with the Canadian embassy. I will get for you the history of the ones who participated and you will be able to make a judgement as to what happened. You are right that, in my recollection, the fundamental purpose was to permit these people to be exposed to the commercial cultures abroad and then come back and assist others here in Canada, in Ontario in particular, understand how business was conducted in those jurisdictions and hence build trade and commercial ties. We will get you a list of who participated and what happened to them.

Mr Kwinter: While we are still on that part of the world, I would like to ask you about the Jiangsu-Ontario Science and Technology Centre. As a result of the Tiananmen Square events, there was a decision by all governments, including the federal government, to play down our relationship with China. The deputies and ministers were prohibited from going. Tell me what is happening there. Is it doing anything? I say that advisedly. When I was there the last time I visited, I was not terribly impressed with the activity that was taking place, and I would be curious to know if that has improved, if it has changed, if there is any -- to put it in a cliché -- light at the end of the tunnel.

Hon Mr Philip: Perhaps I would rather handle that directly than my staff do it. Our government and indeed your government when you were in office were quite concerned about human rights issues such as what we have just been talking about. As a result of that, my two parliamentary assistants have been meeting with members both of student movements and of the business community in the Chinese Canadian community, and also such groups as the Canadian Civil Liberties Association. Those meetings have been going on for the last couple of weeks. We are reviewing our policy at the present time.

We are getting mixed messages, I can tell you. Some people in the Chinese Canadian business community in Toronto are saying, "We've made our point and now is the time to move," become normalized, if you want, go back to business as usual or something close to that. Other people are not saying that. Before I make any changes, I want to make sure that I have a feeling as to the sensitivities of all of the people, including the civil rights groups, but also the business community.

I do not think that, as with South Africa, for example, we should as a province take unilateral action unless we are on side with our federal colleagues. I think we have to make sure that our federal colleagues are at least marching to the same drummer as much as possible.

So there is the consultation process. Claudette, how many meetings took place last week and the week before? I met with a few briefly, but it was primarily my parliamentary assistants and you and some others who met with them.

Ms MacKay-Lassonde: We have now had maybe four meetings. Beyond the people you have mentioned, we have also met with a representative from Amnesty International. I thought you might be interested in that as well.

Hon Mr Philip: Right. I am sorry. I said the Canadian Civil Liberties Association. I meant Amnesty International.

Mr Kwinter: Could I ask you what is happening? Is there any activity in that centre? Is it still standing? Are we still paying money? Is there any kind of programming taking place?

Hon Mr Philip: Maybe Tim can bring you up to date on that.

Mr Armstrong: Let me talk a bit about the centre, because, as you say, it was an ambitious program that was undertaken. I think it was officially opened in the fall of 1986 when Premier Peterson went out on his Asian visit to Japan and to China.

The original purpose of the centre was really to showcase Ontario technology and to be a bricks-and-mortar facility where incoming Canadian delegations could exhibit their wares and where frankly we could assist a developing economy in joint venture agreements and technology transfer initiatives.

I think I visited the centre nine times during my tenure in Tokyo. On each occasion I was there in connection with a special event of some sort. In almost every instance, I was impressed by the seriousness with which the Chinese hosts took the particular event and I think many good contacts were established. For some period of time there was an exhibit of Ontario products and Ontario technology on the main floor of the building, which I think you remember well.

In candour and honesty, we had a concern, and I think you and I remember this, that to some extent the benefits were not always reciprocal. The Chinese wished to get as much technical information and access to our technology as they could, and the extent to which it was actually aiding our exporters was a matter of some dispute. I think as we attended successive management committee meetings, I can remember both of us emphasizing the point that in order for this to work, the Chinese would have to recognize that we would expect them to be aware that we have products to sell to them; it was not a one-way street. I think we made some progress in persuading them of that necessity.

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The entire operation was to some extent disrupted by the unfortunate events of June 1989 in Tiananmen Square. You will remember we had a resident co-director who was living and working in Nanjing, where the centre is located, and after June 1989, and in accordance with I guess both the federal policy and the policy adopted by the then government of the province, it was determined that we should reassign the co-director to Hong Kong. That is where he still operates and he visits the centre on a monthly basis, works with the centre staff for perhaps a week of every month. The centre staff I think is approximately 20.

Although we still pursue, as the minister says, the policy of the previous government in terms of official visits by ministers and deputies, there are a number of trade missions that go on their own to Nanjing and other places in China, and my information is that when they pass through they use the facilities of the centre.

Having said all that, as part of our China relationship review, I think it is important that we do make a determination, five years out, of the value of that facility and the extent to which we can improve it as a facility to aid in trade and investment promotion, and indeed if there is some doubt about its usefulness, take whatever tough decisions have to be taken to terminate the operation.

The Chair: I believe Mr Phillips wanted to just put briefly on the record a question, which we might get back on the loop, if you want to do that now. If not, I would like to move to Mr Carr.

Mr Phillips: Yes, I do. Fundamental in the next 12 to 24 months to MITT is job creation in the province. I am very interested to know the tracking you do in terms of capital investment. I am interested in the measurements you have for capital investment, inquiries for capital investment from other offices, and just whatever confidence we can take in terms of, "Things are turning around and here is the evidence." We might not have time for an answer, whether I get it now or in writing, of how you track it and what the current state of affairs is.

The Chair: The deputy is making a note of that inquiry.

Mr Phillips: He is not writing.

The Chair: You can always tell how serious the deputy is by the worried look he wears on his assistant deputy minister's face.

Mr Carr: I guess this question would probably be best directed to the minister. I wanted to see with a couple of the major situations we are looking at now, Algoma and de Havilland, if you could let us know how much has been spent already with regard to those two particular issues, and also exactly how it was spent. I know we had some discussions yesterday about where the money is going for that. I suspect there are some things that are being looked at through consultants taking a look at it as the whole package is put together. Again, this might take a little bit of time, so it might not be for now, but I was wondering if we could get some idea of a breakdown of what the government is looking at in terms of cost and where it is allocated. It may be difficult to do off the top, because obviously some of the costs are probably still lining up.

I wanted to see if we could get that, and then also some indication of what your thoughts are -- because both those situations I know are very detailed -- about how much you see we will end up spending with a couple of those ventures and where you see it will be. Will it be in terms of loan guarantees? Will it be in terms of direct investment, therefore taking a percentage of the company? If you could basically give us a snapshot of where we are at with it and where you see us going, we can all plan to be constructive in this.

Hon Mr Philip: As you know, we are in the process of speaking to Michael Wilson about developments just this morning with one of the companies, and indeed the Premier is speaking to the Prime Minister. I have nothing further to comment at this point in time, other than to say that everybody is being contacted with regard to de Havilland. We still have not received a readable transcript of the decision. We do know it was a vote by one, nine to eight, which is very, very close.

With regard to Algoma, the deadline is the 28th, is it not?

Mr Armstrong: The 31st of October.

Hon Mr Philip: The 31st, by which time we have to have the proposals for the bank. With regard to the actual cost, that would have to be broken down in terms of consulting fees. We did hire in the case of one the firm of Tory, Tory and -- are there three Torys or only two Torys?

Mr Carr: Two here right now.

Hon Mr Philip: Jim Tory was handling it, and there are consulting fees. The Canada Consulting Group is the other company. We will have to provide that for you.

Mr Carr: I see. It would have to be financial.

Hon Mr Philip: A lot of the cost too was of course being borne by the federal government, which has been involved very closely with us. They have been doing studies as well, and we cannot put a figure on their work.

Mr Carr: Yes, although the more you can get them to pay for, the better. With regard to that, I take it, just on that process, that these things happen very quickly. What is the process when all of a sudden you need something? If Algoma needs to have a detailed analysis done, is it based on a tendering process? Do you automatically go to the Canada Consulting Group? Are they number one, or do you say no, the best one is the XYZ company?

Hon Mr Philip: In some cases we go after the best negotiator we can find. Tim has been involved with Algoma because it was prior to my taking over in this office. It was the Premier rather than the minister here who was handling it. I am now fairly closely involved with it, but maybe Tim can answer that.

Mr Armstrong: Each one of these varies slightly, but in the case of Algoma, the Premier established a task force. I think it was about a day after I became Prime Minister --

Interjections.

Hon Mr Philip: This is the guy who, at my first public appearance as the new minister, introduced me as the Minister of Labour.

Mr Armstrong: Having elevated myself to that lofty position --

Hon Mr Philip: He'll never forgive me for telling about it.

Mr Armstrong: There was earlier reference to the Prime Minister, as I recall, and I was still contemplating that answer and reflecting on its likely results.

In any event, just about a day after I became deputy minister, I was asked to chair this particular task force, which is comprised of representatives of the steelworkers of Algoma, Dofasco and of the community. The task force in turn engaged the services of consultants, in particular a company called Beddows and Co from Pittsburgh and London who are, I guess, the world's foremost authorities on the steel industry. They have been the principal consultants. That contract was tendered. In fact, in these restructuring activities, all contracts except legal services contracts are tendered -- all, in accordance with the Manual of Administration, under the watchful eye of Mr Wood, who makes sure these things are done properly. I can assure you they were in each case.

Hon Mr Philip: Under the even more watchful eye of Douglas Archer.

Mr Armstrong: As far as legal services are concerned, the Ministry of the Attorney General has to approve the contract which is entered into with the outside legal firm, Again, in the case of Algoma Steel, it is the Stikeman Elliott firm; in the case of de Havilland, as the minister says, it is the firm Tory Tory DesLauriers and Binnington. So we are well served by our consultants, both legal and industrial consulting firms.

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One could go on and on about the state of play in each of those major restructuring efforts, but it is almost like collective bargaining. I do not want to appear to be engaging in non-disclosure, but some of these discussions are at a very sensitive stage and I think it would be prejudicial to talk in detail about them other than to honestly say, from my involvement, that the spirit of co-operation among the parties is extremely high.

That is true in both Algoma and de Havilland. As the minister said, we have now a new element over which we have very little control. The European commission has made a ruling and we now have to make a determination as to the effect of that ruling on our effort to bring a successful conclusion to the de Havilland problem.

I may say that we have been in communication with the European purchasers, Aérospatiale SA and Alenia SpA, saying that in the light of the commission's determination, it is imperative that we meet to assess the ramifications of that decision and to see if there is a way in which we can somehow recast the application before the European body to make it clear, as a result of the Premier's announcement, that Ontario intends to be an equity participant, that there is a different configuration in so far as the prospective purchasers are concerned, and to argue that this has a different significance in terms of the competition issue.

I would be less than candid if I told you that we were not somewhat concerned and perplexed by this unexpected development.

Mr Carr: The next question I had was with regard to the Ontario Development Corp. Last year I received -- and I was trying to dig it out -- a complete list, one that I suspect was sent to all MPPs, of the various companies around Ontario. I believe it was a computer printout that had the amounts of money received and I think even some of the terms and so on. Would I receive that?

Mr MacKinnon: Yes. We table such a list annually in the Legislature.

Mr Carr: That is coming due fairly soon?

Mr MacKinnon: I believe it has already been submitted and it is in process.

Mr Carr: So we will all be getting copies of that.

The Chair: Just so I understand clearly, it is submitted where?

Mr MacKinnon: It is submitted to the Legislature under section 12 of the Development Corporations Act. Our understanding is that it has either been formally submitted or is imminent. It has been prepared by us.

Mr Carr: It is just in the process of being submitted at the moment?

Mr MacKinnon: Yes.

Mr Carr: Okay. So we will be receiving that through the regular channels?

Mr MacKinnon: Yes, it will be distributed in the Legislature in the normal way.

Mr Carr: Because that was fairly helpful, and if we do not get it, could you make a note to make sure I get one? I even read it last year.

Hon Mr Philip: You will get it, but we can get you a second copy.

Mr Carr: Okay, good. With regard to that, in similar discussions the other day you were saying that, if memory serves, you are looking at about $930 million outstanding right now. That is over what period of time?

Mr MacKinnon: That is the total activity base of the corporation at the moment, including loans outstanding, guarantees outstanding and other such measures, and that is a snapshot picture of this moment in time. It varies, of course, year by year and month by month.

Mr Carr: It is always difficult to compare, but with that, what are you looking at in terms of the percentage you write off to bad debt of the total outstanding? What percentage are we looking at? I know it is rolling, but --

Mr MacKinnon: Perhaps I can set that in context. The percentage that we generally work with is that we write off about 5% of our own loans, that is, the loans that the development corporations make in their own name, which is a portion of the total each year, and it varies up and down. For the last several years it has been lower, and it is now of course starting to rise.

By comparison, to help illuminate what that figure means, if you are running a large chartered bank, you would write off about 1% of your loan portfolio per year. If you ran much more than 1.25%, you would be in grave difficulty.

The other people in between -- the Federal Business Development Bank; Roynat, which is a private-sector term lender, and so on -- would be in the range of 2% to 3%. What they are at any given point in time, I am not certain. As I mentioned, we are up around 5% of our own proprietary loans.

Mr Carr: On a yearly basis that works out to what approximately?

Mr MacKinnon: I can give you the exact figures for a couple of years. In 1989-90, for example, there was an $8.6-million loan loss, which was 3.8% of the portfolio. In 1990-91, partly because of the recession but also because of a couple of large transactions, that rose to $14.8 million or 6.5% of the portfolio. Back in the mid-1980s, it was up around $23 million and 8% or 9% of the portfolio. It has been substantially below that level ever since.

Mr Carr: And the reason for getting it back down from the 8% or 9% was what? Tougher criteria? New standards?

Mr MacKinnon: There are several factors at work, first of all, the economic environment. Generally speaking, they track the economic environment.

Second, there has been much administrative change within the corporation, which affects it. For example, we have computerized our operation of the portfolio. This allows us to get a better handle on problems before they develop, which in turn reduces ultimate loan losses. That factor has also been at work.

Third, there have been some accounting changes within the government. At one point, this figure was essentially negotiated as a budgetary item and did not bear directly on the number of loans that were actually in trouble. Several years ago, with the basic change in policy, that was changed and there were high levels of write-off for a couple of years, and then the total was lower because we did not have accumulative baggage coming due.

Those are the factors which bear on it. Those three factors bear on it at any given year, but the most important, of course, is the environment.

Mr Carr: But as chief executive officer, you compare versus what? The other sectors that you mentioned, the bank and so on, how would you judge where we are at now with it?

Mr MacKinnon: The last complete year for which I have figures -- and these would have changed, although I do not think our relative position would have deteriorated -- in the 1990 fiscal year compared to 1989, our overall level of loan losses rose 148%, largely in response to the recession. That is somewhat higher in that year than the Bank of Montreal, which rose 118%, and the Bank of Nova Scotia, which rose 108%. In the first quarter of this year, our rates of loan losses actually, as I mentioned the other day, rose at a rate lower than an average of the major schedule 1 chartered banks.

In general, given that we do a riskier type of loan, we think our performance in 1990 versus 1989 was comparable and reasonable in relation to the chartered banks, and in the early part of this year was substantially better. I would not anticipate that this positive trend of the first quarter would continue in the face of the current economic conditions we are dealing with.

Mr Carr: What are the objectives? What are you doing to improve it again? What type of programs are we looking at? How would you say you are attacking it to make it improve regardless of whether it is good, bad or indifferent?

Mr MacKinnon: If I can comment, we do not want to be too good in this one. If we are too good, why have us, in a sense? We generally tend to run a little bit longer with some of our borrowers and some of those that are in most need than the bank down the street would. If we were consistently well below a chartered bank level, I am not sure we could be seen to be doing that.

There is a balance to be achieved there. If we are too tight, we may not be doing much in terms of job creation and development or we may be interfering where it might occur. On the other hand, if we are too loose, obviously it is costing money unnecessarily.

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Mr Carr: Just along those lines --

The Chair: This will be your last question, Mr Carr, in respect of the time.

Mr Carr: The time goes fast. I wondered if I could get from you some of the criteria. I think the other day you said you basically give guarantees to one in five. I wanted to see if we could get from you, whether it be your policy manual or criteria, what some of the criteria are that you look at when you are making the decision if I come in with my widget company and I lay out what I am going to do and how I am going to do it.

There are a lot of factors that go into it. It is not like a bank where they look at it and say more from the safety aspect of protecting the loan. I wanted to see if you could lay out the criteria. Maybe if you could do it now and then if it is more detailed --

Mr MacKinnon: I can do it very briefly and then perhaps you can let me know if you wish it in greater detail. The first thing we would look at if you walked in the office is you.

Mr Carr: I guess I am in trouble now. I would never get it.

Mr MacKinnon: The second thing we would look at is the business. The third thing we would look at is the possibility of long-term development to that business in relation to competitive factors such as the market, other competing technologies and so on. We would go right through a list of those sorts of things and we would evaluate them in much the same way that any lender would evaluate, although we would take a higher level of risk.

That is typical of our lending to small business. If we are making a larger loan at the request of the province, then that works in conjunction with the Ministry of Industry, Trade and Technology itself and it goes to cabinet. A variety of factors are looked at with a greater degree of intensity.

The fundamental thing we are looking for is, will this business develop in the future in a satisfactory way and will it contribute through job creation so that we can more than recover the original public investment we make? Of course, there is a cost to that investment.

I did explain this matter in some detail to the standing committee on government agencies some time ago, Mr Carr, about six weeks ago. If you wish, we could make sure that a transcript of that discussion, which was very extensive, is made available to you.

Mr Carr: I would be pleased if you could. I would say more, but we will get it in next time around.

Hon Mr Philip: We have copies available if you would like to hand them out to the committee.

Mr G. Wilson: I would like to turn to an area that Mr Carr raised yesterday, although he did not pursue the idea. In fact, I thought he dropped it with a note of disapproval. He had a flyer here advertising a program, I think sponsored by McMaster University, involving several groups in the community.

As you know or maybe you do not know, Kingston is the home of one of Canada's most acclaimed universities, Queen's University. It is certainly one of the oldest. It is celebrating this month its 150th anniversary. It did raise in my mind the extent to which a ministry like MITT is using our universities to be aware of the most recent ideas in the business field and in the areas of technology and seeing where advances can be made. That is the first part of this question. I was wondering if you could respond to that, Minister.

Hon Mr Philip: Your question is very broad and I was wondering if you wanted --

The Chair: You can say some nice things about Queen's.

Hon Mr Philip: I can say all kinds of nice things about Queen's. It has an excellent transportation technology centre and I would be pleased to give the Minister of Transportation's answer on that as well.

Mr G. Wilson: I guess that is part of it, but specifically I was wondering whether there are arrangements with various departments in universities for studies that could be used to develop various industries and areas of technology.

Hon Mr Philip: Of course, our centres of excellence are a good example of how we are able to work between Ontario industry and the universities. As I have gone around the province talking to the business community, it is very favourable towards what is being done in the centres of excellence.

The university research incentive fund is designed to encourage co-operative research and development between universities and the private sector. For those of you who may not know, the fund matches investments made by the private sector in university contract research. To date, over 470 projects have received funds. That program is delivered by the Ministry of Colleges and Universities.

We have the centres of entrepreneurship offering training courses in innovation and entrepreneurship. There are six centres being established in post-secondary institutions across Ontario and the program is set up for a sunset review in 1991. So we will be evaluating them.

We have also provided grants to universities through our regional offices in small business Ontario for certain types of projects. We have provided a grant to operate a centre at Sir Sandford Fleming College and the centre provides for information and training for CEOs and middle management. We have the university small business network program, which enables businesses to obtain low-cost consulting services from graduate and senior undergraduate students under the guidance of faculty members. We also provide ad hoc grants to universities in support of specific projects. Maybe my staff can outline just a few of those projects.

Before I ask them to do that, something I am really excited about and the president of the University of Toronto was absolutely glowing about is the International Space University. I held a press conference at the University of Toronto, at the planetarium. We are going after, in competition with a number of other jurisdictions which we think cannot provide nearly as good a facility, having the International Space University. We have competition from the States, from France and there is also competition from Quebec, but we are hoping that Quebec will be co-operative.

I am in the process of contacting each of the provinces. We have already had initial, very positive support from western provinces and we are hoping that we are going to win it. The largest percentage of space-related companies is located in Ontario. Notwithstanding certain tendencies by our federal government to favour another province not far away from us in terms of these things, we think we are in a much better position.

If you want more information on that particular initiative because it is the most recent one, Claudette, would you like to elaborate a little bit on that?

Ms MacKay-Lassonde: As you were talking about the issue and when you brought up the ISU, I thought this was the best example of co-operation not only with universities but industries through the centres of excellence and the Institute for Space and Terrestrial Science. I am not quite familiar with all those names now, but certainly it is a very good example. We have the space industry certainly very supportive as well as universities.

One of the them is the University of Toronto, and we have York University. If we get co-operation from Quebec, we will certainly have McGill University involved. So I think there is a lot of potential. We feel very strongly that we have a very good position with respect to winning the bid. I myself visited the headquarters of the International Space University, which is temporarily located in Boston. Their indication was that Toronto is a very attractive location because of U of T, York, multiculturalism, the space industries and other things.

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Hon Mr Philip: I believe the Chairman has asked if he might have permission of the members to ask me or Claudette a question on that. I try not to argue with chairmen, so maybe we can be gracious and let him have a question.

The Chair: Is there any difficulty with that? Agreed.

My question is on the minister's point with respect to the bent of the federal government. I wondered if outstanding matters that were policy matters for the new government prior to it arriving as a new government are still on the books or part of the decision-making process. For example, the position taken on Litton industries and the kind of activities surrounding Litton industries in this province, the very clearly enunciated policies for the New Democratic Party and the clearly enunciated policy at its conventions. The other was the nuclear weapons-free resolution for this province, which Mr Johnston, formerly of your caucus, sponsored and I assisted with.

Both of these have implications in the context of interprovincial competition. I wondered if these matters had been relieved as a potential cloud to the issue, because they do speak to the issue of a bent, a government persuasion and an environment where we would accept the space industry in Ontario but not if there was a nuclear component to it or if there were any military applications in the specifications. That would have been a question.

There might even be another one further with respect to certain content for production in co-operation with other countries. I just wondered if that is still on the books or if you are relieved of that as the minister. That would be helpful in Ontario competing.

Hon Mr Philip: ISU is an educational institution that is dedicated to the peaceful use of space. I think that is a key point. Litton industries, which happens to be located in my riding, produces a lot of peaceful technology in addition to whatever may have been used for various other purposes. Certainly with the ISU we do not see any of these space programs to be used for military purposes, so it does not pose any problem for us. It is not an issue.

Where we get into some problems occasionally -- and my policy is to talk to the federal government about it and often we can get an interesting compromise and understanding; I have found them quite co-operative -- is if there is a problem of armaments technology, that kind of thing. We have been fairly successful in dealing with that with our federal government. I do not want to mention which companies might be involved, but the federal government has been very supportive of trying to make sure that we are shipping materials that are going to be used for peaceful purposes. I would rather not name the companies, but there are some where we have been able to work out things.

The Chair: I want to thank the committee for allowing my indulgence.

Mr G. Wilson: As long as it was at the expense of somebody else's time and not ours.

Hon Mr Philip: No, he did not cut off your time. He has assured me of that.

Mr G. Wilson: There was another aspect I wanted to address as far as universities go. In a way it is highlighted by the mention of the ISU because, as I mentioned, Queen's is 150 years old. Obviously things change at universities and it is a good reason for making sure they are well funded to keep up with the latest thinking. I do not want to see them simply in terms of creating well-trained workers. What we want is well-rounded graduates who can move into society at large.

What makes me think of this is your contention that there has to be co-operation among the leading participants in the economy. I am thinking, of course, of government, business, labour and the community at large. I was wondering whether you had some comments about well-rounded graduates from universities who do not see themselves as simply cogs in the system and poorly paid at that. In one scenario there is the pressure on wages and concessions, that workers give up wages to make industries competitive, as opposed to something you mentioned earlier, the value added jobs that require well-trained people as well as thinking people.

I was wondering whether you would have some idea about how the universities could play a role in that and just generally the co-operative model you are suggesting for the upward economy.

Hon Mr Philip: I think the co-operative model was beautifully outlined in an excellent speech yesterday at the Canadian Club by the Minister of Research and Technology -- you go from government to government and they change titles -- of the Republic of Germany, Dr Heinz Reisenhuber. He spoke for 45 minutes, with only a few handwritten notes, very eloquently in absolutely perfect English, and held the whole audience captive. Basically, he said that knowledge is universal and knowledge should not be used by a country exclusively for its own financial gain. I think that was the theme of his message. The moment that a country starts to use knowledge or research exclusively for its own financial advantage, then it is in deep trouble. I think that was his message and I very much agree with it.

You have to have basic research in order to have the practical research that follows. Countries that do not invest enough in basic research do not have the practical research. So it is not either/or; it is both. I would be very much opposed to a university becoming so restricted in its research that it then becomes obsessed with patents and that kind of thing when it comes to the basic research. We are in a global village and we should be sharing that information. Advances have to be spread from one country to another. I wish I had a transcript of his speech. It was not written out, so we do not have a transcript.

Mr Kwinter: If I could just comment on this space university, I do not want to be a pessimist, but I would be very surprised if that facility wound up in Ontario. I lived through a similar situation when we talked about the space agency. I met with the federal authorities and they told me outright that, as far as they are concerned, Ontario has the automobile industry and Quebec is to have the aerospace industry. The minister is correct in saying about 52% of the industry is located in Ontario, but They are unanimous that at the very least the centre should be in the national capital region. If they want to put it in Quebec, put it in Hull. The words that were said to me were: "If we put it in Hull, it would be exactly the same thing as putting it in the middle of the river. We want it in Quebec and we want it to be perceived as being in Quebec. That is why it's going to Montreal."

The minister approached me during the election and asked me if I would, in the interests of keeping the country together, support the idea that the space agency should be in Quebec. I cannot believe, if the federal government is participating, having made the decision after a great deal of acrimony from the industry and from everyone else to put the space agency in Quebec, it would support the space university anywhere else but in Quebec, which would then solidify and buttress its position to make Quebec the space centre of Canada. That is just a comment. Take it for what it is.

I can tell you through experience and through lots of consultation with the industry that this is just a fact of life. They may be kidding the troops and they may be telling you certain things, but when it comes to the crunch, the Quebec caucus is going to be there. If they are participants, if that university comes to Canada, it will go to Quebec. That is just my personal opinion. When the decision is made, if it comes to Canada, it will be interesting to see what the --

Hon Mr Philip: Would you like a response to that one?

Mr Kwinter: Sure.

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Hon Mr Philip: I recognize and indeed I appreciate your experience and I enjoyed our private meeting the other day in which you shared some of these experiences.

I have the feeling -- maybe I am wrong and maybe I am overly optimistic -- from my meetings with Mr Wilson and from the feedback I have had from the Premier's meetings with Brian Mulroney that maybe the federal government is becoming a little bit more flexible than it may have been in the past. I do not know whether that is just because they are being more realistic or whether it is a fear not of this political party, the NDP, or even the Liberal Party, but maybe of another political party that might use some of these things in a way that may not be all that constructive.

I like to think it is because they are realizing that you cannot be one-sided. It is not good politics, for one thing, but it is also not fair. If they were as rigid as you seem to be painting them, I do not think Michael Wilson would have been willing to pour $151 million into de Havilland. That is the aerospace industry. The aerospace companies I have talked to have put a lot of trouble into this bid to bring the university to Ontario and I do not think they would have put in that kind of work if they did not feel that we stood a chance.

Let me give you one other reason why I think we stand a chance. I believe -- I think the federal government realizes this and hopefully Quebec will realize this; I am sure they do -- that if both Quebec and Ontario go after the space university, probably neither of us will get it. The French or somebody else will get it. There is every reason, now that we are both in the game and we both have strong bids, that we can start co-operating and maybe we can share the university.

Quebec certainly has the International Space Law Society. There is no reason why that should not be at McGill University. The Institute for Space and Terrestrial Science is strongly supported by industry and it is behind this bid, so I do not think that we have lost. What I would hope is that we are willing to be flexible and we are willing now to co-operate with Quebec. Maybe together, along with the persuasion of the federal government, we can come up with one bid that will be a winner for both Quebec and Ontario. Then we are on our way to winning this.

Mr Kwinter: I agree that if you could come up with one bid that was an accommodation between Quebec and Ontario and it was backed by the federal government, you would have a good chance. I would not say you had a 100% chance. But if two bids go forward, again I am prepared to put on the record that I would be stunned if the federal government would support Ontario over Quebec in a bid for a space university. It would really set them up for saying: "You made a mistake in putting the space agency in Quebec. Why are you not at least being consistent?" So I just put that out as a suggestion. We are not going to resolve it in this discussion, but I just wanted to throw that out as a caution to you.

Hon Mr Philip: My feeling is that if there are two bids, it does not matter a whit who the federal government supports. The fact that we have two bids will mean that our chances will be greatly diminished and we will both lose. The federal government could support either side in that case then. It is not going to make a bit of difference.

Mr Kwinter: Turning to the estimates book, I would like to get from the deputy or from Mr Wood or somebody the broad categories dealing with the $21,536,000 for services in the trade and international relations operating budget. Just very broadly, where does that money go? I have a reason for asking that.

Mr Armstrong: Which page is that?

Mr Kwinter: That is on page 34.

Mr Armstrong: Where is the breakdown on that? Brian, can you speak to that?

Mr Wood: Well, $23 million goes directly to the offices.

Mr Kwinter: What I want to know is the breakdown of how much goes to what offices.

Mr Wood: I can provide that.

Mr Kwinter: As I say, just in broad terms. I want to know how much is spent on our American offices, how much is spent in the Pacific Rim, how much is spent in Europe.

Mr Wood: What number did you say?

Mr Kwinter: I said $21,536,000.

Mr Wood: Actually there are three categories. The major component is services, but you have to add up the three categories of services, transportation and supplies and equipment.

Of those three areas, to the American branch, which is the six offices of Atlanta, Boston, Chicago, Dallas, Los Angeles and New York, $9.4 million goes to cover off that operation. Within that operation there is some program delivery of that operation. For Europe, the Middle East and south Asia, the offices of London, Paris, Frankfurt, Stuttgart, Milan and New Delhi, it is $9.6 million. Again, that is the three, and that includes salaries, by the way. I can break it down further and give you the exact figures. For the Pacific Rim of Tokyo, Korea, Singapore, China, Hong Kong and Taiwan, it is approximately $7.9 billion, almost $8 million.

Mr Kwinter: That is fine.

Mr Chairman, could I also confirm our trade figures worldwide? I do not know what they are currently because I do not have access to the information, but certainly when I was the minister, the feeling was that we did about 90% of our trade with the United States, 4% with Europe, 4% with the Pacific Rim and 2% with the rest of the world. Is that still pretty well the way it is? Does anybody here know?

The Chair: Whether these statistics are done annually, at what point and when the last update was would be helpful to the committee.

Ms MacKay-Lassonde: I do not have the percentage per se, but I can give you the dollar value. The latest dollar value is $65 billion, Latin America, and $64.5 billion of that is with the US; $3 billion with our Asia branch, and $7 billion with Europe. I know 85% is essentially roughly with the US.

Mr Kwinter: The point I am making is that when you are allocating resources -- and what you are doing is you are allocating resources almost equally among the three major areas -- there is a bit of a discrepancy. One is at $9.6 million, one is at $8.9 million, $9.4 million, but basically you are taking $21 million or $22 million and dividing it three ways among three major areas of the world.

Although I am an absolute advocate of diversifying our business, I have a major concern. Unfortunately, I came to this realization fairly late in my tenure as the minister that when you have such a huge business that takes place in the United States, and if you were to increase that by 1% or 2%, you are talking a very large number. If you were to take the Pacific Rim business or the European business and increase it by 1000%, you are talking about a very little number. So what you have is an equal allocation of resources for a very unequal return on your investment.

One of the major complaints I kept getting from the US sector was that the offices were funded, the people were funded, but nothing else was and that there was no money there for them to go out and do anything, to go out and really run programs, to create some incremental activity that is going to be of great benefit to the province. Again, as I say, all you have to do is have a very small increase in the business that we do in the United States -- 90% of our business is there -- whereas you can be out there -- and again I am not saying you close down the offices -- banging your head against the wall for 20 years in the Pacific Rim and in Europe and, if you get 100%, 200% or 300% increment, you are getting very little real-term increment. I was just wondering whether you have been taking a look at that and what you feel about it.

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Hon Mr Philip: I do not doubt that from your perspective when you were the minister and from the data at that time, that may have made sense, but I think that since you were the minister a number of things have happened. We have had the recession, we have had free trade and we have had restructuring, and I think you cannot just take a simple figure like that without taking into account the events in the world. You have to say, "Where are we going to be or where do we want to be in 10 years' time?"

Right now we are looking at where our offices are and where maybe they should be and where we should maybe have arrangements with other people, maybe not offices. For example, where is the African continent going to be, particularly after South Africa hopefully becomes democratic and more open and the world starts to recognize it and maybe there is a change of government or whatever?

I think you have to take that into account. I do not think you can just measure it in terms of what has happened in the past. If you follow what you said to its illogical conclusion, and I know you are not implying this, then why not put everything into the United States, and then if you really want to follow that to its illogical conclusion, why bother having an independent country of Canada? Why not just join up with the United States and be part of its global market instead of worrying about being an independent country that is trying to develop a more flexible set of markets and that kind of thing?

I do not think it is just a dollar kind of analysis, to say 85% of our resources should go into the US since 85% of our present sales do. Hopefully, there are some really good markets. Times are changing, governments are changing policies and we have to be in there early. Sometimes you can invest for five or 10 years before you start getting a return on that investment.

I have had people tell me, "If you are not positioned for when South Africa comes back into the fold, you're in trouble." I have had that from so many people of different political persuasions, people from the very left-wing business community to the very right-wing business community. What happens then when China comes back into the fold? You have to be in there or you are not in the game.

The Chair: That is a very interesting question. I know I have still kept eating my Granny Smith apples. I cannot do without them, even though I know we have been boycotting certain things from South Africa.

I am afraid I have to recognize Mr Carr because I either have to have everybody return next week to do 15 minutes' work or else call the votes at approximately 5:53. I am in the committee's hands, but I sense that we can quickly resolve that we would like to move into the votes in about 10 minutes, no later. If that is the concurrence of the committee, I recognize Mr Carr.

Mr Carr: I was interested in some of the situations with Ortech. I do not know who is familiar with that. I wanted to know the number of companies they would have contact with on a yearly basis.

Mr Corcoran: I have not got the answer, but I will get you the answer. The thrust of the thing is they deal with a great number of small businesses, small contracts which are not very profitable, but I must say they are helpful. I will get you that stuff.

Mr Carr: How many people are employees?

Mr Corcoran: Do not hold me to it, but it is not far off 325.

The Chair: The deputy has pulled out the minister's briefing notes on Ortech International. This should be quite enlightening here.

Hon Mr Philip: Maybe Mr Corcoran would like to have the same briefing notes that I have, and then he could answer the question.

The Chair: He probably prepared them, actually.

Hon Mr Philip: We are not going to give them to him, but we are going to give him a test next week on it. I am sorry, I am just putting him off. He has a lot of knowledge in his head about all of these things.

Mr Carr: I just wanted to see the main thrust of where some of the smaller businesses are saying they need assistance. Has it remained the same? Is it changing? Are they saying it is in the area of transportation? What are we hearing from the business community?

Mr Corcoran: Their thrust is transportation and automotive, but I cannot say if that is the same thrust in the small businesses. Your question was, is the thrust in small businesses the same as what their major thrust is?

Mr Carr: Right. With the amount of time being spent, where is the major area that it is being spent?

Mr Corcoran: Transportation, automotive -- there is a third thing.

Mr Carr: Environmental?

Hon Mr Philip: I did not hear environmental research being mentioned at all.

Mr Corcoran: The member informed me it is environmental. I appreciate that.

Mr Carr: I just wanted to see if it was changing.

Mr Corcoran: No.

Mr Carr: So the thrust has been pretty much the same.

Mr Corcoran: It has not changed. They had new management come in there and they have continued the business. My sense is they seem very upbeat about it.

Mr Carr: Just along those lines of the automotive, the minister will be aware of the award for quality that the people in Cambridge won at the Toyota plant up there. I sent them a little note of congratulations and I had planned a tour to go up there, but I had to cancel it because it fell on the day that I am going to be over at the Constitution convention.

I was just wondering, and maybe the minister would like to take a look at this, obviously we are looking at a situation where North America-wide we in this province have been able to compete and show the rest of the world what they have done up there. What are we doing to take some of that expertise and be able to transfer it to other people in that area? Is there anything being done in that area?

Hon Mr Philip: We have an industrial -- what do they call the program? Transfer?

Mr Armstrong: Industrial support for the capital projects. Peter Friedman is --

Hon Mr Philip: No, he is talking about the transfer of the technology and expertise that we have paid for in Cambridge to others in the industry and what kinds of programs we have to do that.

Mr Carr: How much is it? How much time?

Hon Mr Philip: The technology personnel program was one that slipped my mind at the time and I think that is part of the way in which we are doing some of that. I have also met with the auto industry and suggested that we have to look at ways in which the larger companies can work with the government to develop more competitiveness among their suppliers. I think we can do that sectorally.

Mr Carr: What I am getting at with regard to that is, rather than us as the experts in government saying to business, "Here is how you should be operating," obviously we are looking at a facility that has been very successful, that might be able to say to the government of Ontario and the ministry, through its various programs: "Here's what we've done. Here's how we've been successful." "Here are some of the programs." We can then take -- and it might not just be automotive-related -- some of the factors that made them successful. I just use them as an example. There are others as well.

What are we doing to take some of that expertise and management style, philosophy, good things, to be able to then incorporate them into a package, to be able to then go down the road to XYZ company and say, "Here is something that has made this company successful"? Is there anything being done in that regard?

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Mr Friedman: In terms of quality control specifically, we are holding seminars around the province to help teach smaller manufacturers about the methods of quality control. In that process we are bringing quality control experts from various large companies who have specialized in certain quality control methods.

We did four last fall and we are doing another four this coming spring, where we gather together in certain communities. The speakers at those seminars would be people from various companies who have done significant things in quality control methods. We are teaching smaller businesses quality control methods specifically.

In terms of other technology-related things, the minister talked about the technical personnel program. There we are offering assistance to bring in technical specialists. We pay 50% of the cost in year 1, 25% in year 2 and so on, when a company requires a technical specialist in its firm. These are small and medium-sized companies only. If they wanted to carry on a project, whether it is a capital expenditure or quality control system, they would hire that person, who would put that stuff into their system.

Just one last small point on this area: In Hamilton-Wentworth there is a business advisory centre that has been operating with our assistance for over 10 years. Specialists from large companies are volunteers and go into smaller businesses to help with problems they have in the areas of very practical things like quality control or technical problems regarding their paint systems or other things. Large companies have specialists in almost every area. We have tried to bring those volunteers into the smaller businesses in Hamilton. That kind of volunteer mechanism has been spreading to other communities in the process.

Mr Carr: How many people would have been served by some of these companies? Are we talking about thousands or a couple of hundred?

Mr Friedman: I do not have the figures for the four seminars. I can give you those. I believe about 50 companies attended each of the four seminars in the quality control area.

Mr Carr: What I was going to ask is whether they are solicited or whether we are proactive towards it.

Mr Friedman: We are proactive.

Mr Carr: How do we do that? Do we sell through advertising?

Mr Friedman: Yes, through advertising and through the field organization. We would go out and publicize through clients that we are going to have a quality control seminar in their community and tell them to come if they are interested. We promote that through our network and through advertising.

Mr Carr: But we are only hitting --

The Chair: Mr Carr, at this point, if I may, and I apologize, but in order to be finished by 6 of the clock, at this point I would like to allow the minister to make a brief statement recognizing the completion of this portion of the estimates if he wishes. I would like to move into the vote within the next few minutes.

Hon Mr Philip: I just want to add that the technical personnel program is a five-year program worth $38 million.

I thank members of all three parties for what I thought were some really interesting questions. I thank my excellent staff who were here for the estimates and you, Mr Chair, for conducting this set of estimates. I have been asking the questions for 16 years and I think it is a lot more fun answering the questions, quite frankly.

The Chair: Mr Kwinter, did you want to make a brief statement?

Mr Kwinter: I would like to echo what the minister said. I thank members of the staff and the minister for being open with us and discussing it. As I said at the beginning of these talks, I wish him well in his portfolio.

Mr Carr: I want to thank all the staff. There is a tremendous amount of expertise. I think everybody recognizes the more we hear from them, the more we realize what quality people we have working for us. I also thank the minister for his time. We are going to be able to work together in the spirit of co-operation.

In trying to be helpful I will be asking a lot of things of the minister. We would like to continue that and work with the people out there because, as I said earlier, this ministry is the one that is going to have to generate a lot of the revenue that is so badly needed over the next little while, and the jobs and everything else. We look forward to this being just a start.

The Chair: The staff are still present and are aware of the outstanding matters that have been requested by the committee, and that they are to be forwarded to the clerk of the committee, who in turn will distribute them to all members of the committee.

Mr Phillips: I just want to make sure my final request was noted, the indicators of investment and of business confidence.

The Chair: I believe that has been put on the record and acknowledged by staff.

It may be deemed by the committee that we have completed the time allocated for the estimates of the Ministry of Industry, Trade and Technology. It being nearly 6 of the clock, I shall now move the following votes.

Votes 2201 to 2203, inclusive, agreed to.

The Chair: Shall the estimates of the Ministry of Industry, Trade and Technology for the fiscal year 1991-92 be reported to the House? All those in favour? Those opposed?

Agreed to.

The committee adjourned at 1756.