Assemblée législative de l'Ontario

MANAGEMENT BOARD SECRETARIAT

CONTENTS

Tuesday 1 November 1994

Management Board Secretariat

Hon Brian A. Charlton, chair, Management Board of Cabinet

Jim Thomas, deputy minister

David Girvin, assistant deputy minister, technology division

Phyllis Clark, assistant deputy minister, strategic policy division

Richard Lundeen, assistant deputy minister, corporate priorities division

STANDING COMMITTEE ON ESTIMATES

*Chair / Président: Jackson, Cameron (Burlington South/-Sud PC)

*Vice-Chair / Vice-Président: Arnott, Ted (Wellington PC)

*Acting Chair / Président suppléant / Présidente suppléante: Lessard, Wayne (Windsor-Walkerville ND)

*Abel, Donald (Wentworth North/-Nord ND)

Bradley, James J. (St Catharines L)

Carr, Gary (Oakville South/-Sud PC)

Duignan, Noel (Halton North/-Nord ND)

*Fletcher, Derek (Guelph ND)

Hayes, Pat (Essex-Kent ND)

Mahoney, Steven W. (Mississauga West/-Ouest L)

Ramsay, David (Timiskaming L)

*Wiseman, Jim (Durham West/-Ouest ND)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Caplan, Elinor (Oriole L) for Mr Bradley

Cooper, Mike (Kitchener-Wilmot ND) for Mr Duignan

Clerk / Greffière: Grannum, Tonia

Staff / Personnel: McLellan, Ray, research officer, Legislative Research Service

The committee met at 1618 in committee room 2.

MANAGEMENT BOARD SECRETARIAT

The Chair (Mr Cameron Jackson): We are here in accordance with the committee's agenda, as directed through the House leaders, where we are examining for seven and one-half hours the five votes within the Management Board Secretariat.

I'd like to welcome the minister and the deputy minister, but before we proceed I wish to indicate how we're going to order up our time for today. I have been advised that Mr Stockwell, who is the critic for the third party, has a conflict with a committee that he's responsible to upstairs. With the committee's indulgence we will yield that rotational time today and proceed with the time for his commentary tomorrow. Therefore, if the minister is comfortable, he can respond to Ms Caplan and then we'll proceed in rotation for questions. If that's acceptable to the committee at this point, then we will proceed.

Mr Jim Wiseman (Durham West): Just a question: Would the minister then hold some time available to respond to Mr Stockwell tomorrow, or how would that be worked in?

The Chair: If he so chooses. If he wishes to leave a bit of time, that's entirely up to him. Any questions that Mr Stockwell would raise in his commentary we would give the minister the necessary time to respond to. We're a very flexible committee, especially as it relates to working agendas when the House is sitting. If that's okay, I would like to welcome the Honourable Brian Charlton, the minister responsible for Management Board. Minister, please proceed.

Hon Brian A. Charlton (Chair of the Management Board of Cabinet): Thank you, Chair. My deputy is Jim Thomas. I believe you've been provided with a list of officials who will be available throughout the estimates process to answer your questions. Depending on the questions you ask, you may or may not get to meet them all, but they are available and will be throughout the time we spend on these estimates.

Our presentation is a little bit different from the presentations that would come from some other ministries, because essentially Management Board is a central agency of the government and it's also the first agency of its kind in Canada devoted to the internal management of the public service and of government operations.

To put my comments that I'll be making today in some context, I'll talk a bit about the role of the Management Board Secretariat, what we do, the resources and assets that we manage and the customers we serve. I think it's important that the latter point be dealt with because we have a variety of customers we serve that ranges, in some respects, from the general public or at least that part of the general public that gets involved in business with the government. So in terms of some of the letting-of-contract processes to clients that are ministries or clients or stakeholder groups that are bargaining agents, our sense of ourselves and our approach to customers is somewhat different from that of other ministries that are front-line ministries and delivering service, in many cases, directly to individual members of the public. You may have some desire to have some discussion about some of the relationships with our customer base.

I'll also do some follow-up or give some updates on the status of some of the programs and activities that we're involved in. We should probably start by understanding that the Management Board Secretariat, as we're presenting it here today in this set of estimates, because we haven't been in for estimates review for some time, is a different ministry than the one that was last reviewed because it's made up of two ministries, Management Board Secretariat and the old Ministry of Government Services. We'll make some comments and you may again have questions about the amalgamation, the consolidation of those two ministries and what that's led to.

The integration is essentially complete. We took advantage of the integration process to take a detailed look at some things, including just basically trying to look at what our business as a new ministry really was and to think about how we would reorganize and, therefore, how we would do business, having taken some thought about what the business that we really should be in was.

With new organizations come new ways of managing. The approach that we've taken is one that is much more cooperative, consultative and efficient; and it entrenches, I think, a process of negotiation.

I can recall from my own past in the 1970s when Management Board was seen as the authoritarian hammer. It's quite a different organization today than it was 20 and 25 years ago, and again some of that will be reflected in the discussions that we have throughout these estimates. The old way of doing business is, in essence, gone and Management Board is not the same gatekeeper that we knew back in the years past.

The mandate of the Management Board Secretariat is to provide the strategic management of internal government resources and assets, including people, land, buildings, technologies and information. In that respect, the purpose of the secretariat is to provide leadership through a number of different faces: strategic management of the public service, the development and advancement of policies and best practices in terms of how government operates, policy development and implementation for the organization and operations of the government.

If you think about what some refer to as downsizing, what some refer to as re-engineering and what others refer to as reorganization or restructuring how you do work, Management Board, with all ministries, has played a fairly major role over the course of the last four years in developing the policies under which some of that has happened. As well, we get involved in the provision of quality service to our clients and, to some extent, what quality service is has changed dramatically as we've changed our approach to government operations in general.

There are a number of themes that run through all that's happened in the last several years, and most of these themes are and will be ongoing themes for some considerable time to come. When you go through a process of redefining the workplace, when you have a civil service that's as big as the one we started with, you don't go from what you've got to what you want to get to overnight. You've got people to take into account and you work to develop processes that will take them into account as effectively and humanely as you can accomplish.

We also get very much involved in another theme that the government has been involved in generally, which is fiscal responsibility, and in the last number of years that, in many respects, interprets itself as fiscal restraint. That has pushed us at Management Board, not only for and of ourselves but in terms of how we relate to other ministries, to seek out more efficient ways to do business, good management ways to do business and, at the end of the day, to seek out the most cost-effective approach, although you don't always necessarily find the most cost-effective as you move through becoming more cost-effective.

We've been through, as well, a number of processes of legislative change over the course of the last four years that in some respects will change the face and nature of how government operates. We've seen legislative reforms of the Crown Employees Collective Bargaining Act which, from our perspective, although I know everybody doesn't agree, was a move to modernize the labour relations in the Ontario public service. A major part of this reform was the extension of collective bargaining rights to employees who were previously excluded from collective bargaining.

Others would focus on the right-to-strike issue as the major reform of the changes that occurred in the Crown Employees Collective Bargaining Act, but both, from our perspective, are part of the maturing of that labour relations relationship between the employer -- the government -- and the bargaining agents whom we deal with.

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Bill 117 also enhanced political activity rights of crown employees for federal, provincial and municipal elections. Many support the political activity rights changes that we made; others don't. Having said that, though, an interesting part of -- well, maybe I should just step back again for a moment, having been one who many, many years ago got involved in the political activity rights fight from the other side of the fence, as a public servant who was active in politics and had a particular perspective on the issue.

At the end of it all, when we were moving through the process of actually determining the changes we would put in the legislation, interestingly the debate between the employer and the bargaining agents had reached a stage where we were in court, and it was likely that most of what occurred in the legislative changes, although it may have taken two or three years longer, would have eventually occurred through the legal challenges in any event. It's not from anybody's perspective unhealthy, when a debate reaches that stage, to sit down at a table and decide for the final thrust to make the changes in as cooperative and complete a way therefore as you can, rather than to have the courts impose the changes in a way that may be less than satisfactory to one side, the other side or perhaps even both sides.

We expect to see proclamation of the final component of Bill 117 dealing with whistleblowing legislation early in the new year. This legislation will protect Ontario government employees from retaliation for disclosing allegations of serious wrongdoing and will provide a means of making investigative reports into allegations public. It's not a tried process yet and again may not be perfect in its first incarnation, but from the perspective of those employees who legitimately believed in the past that they had issues that should have been brought to public attention and for reasons of their own personal security didn't feel able to do that, it certainly will be an improvement over what we've had in the past.

I'm hoping to be talking to the House leaders of the two opposition parties about short lists of candidates and a process, because this office, as many others we've created, will be a council that is attached to the Legislative Assembly as opposed to a minister or a ministry. I'm hoping in the weeks ahead of us this fall to be able to pursue that.

Mrs Elinor Caplan (Oriole): Days.

Hon Mr Charlton: There's five weeks.

On all of these activities around the Crown Employees Collective Bargaining Act, the political activity rights legislation and the whistleblowing, we're in active discussions with the bargaining agents about the basic implementation of those initiatives. The employer and the bargaining agents are committed to the goals of the legislation and are working in good faith to achieve them.

There is a time frame of three years to implement our employment equity plan and to be in complete compliance with the act. In many respects, for the government the task will be as difficult as or more difficult than for some in the private sector, partly because of our size but partly because we have to be first out of the gate as well. We don't shy away from that, but it is our intention to do the job right, so it is a major task that lies ahead of us.

In terms of restructuring and re-engineering, the issue I referred to earlier as redefining the workplace or looking at new ways of doing work, the OPS is going through a fundamental restructuring, as is in many respects the whole economy in the province and the country in general. I guess, for that matter, it goes even far beyond our own borders and to, at the very least, the traditional western industrialized world. Many of the work habits in Third World countries are adaptations of our old approach, and that's why, in many respects, we're sometimes having to look at the new. But those processes are ongoing and will continue for some time.

We're taking a hard look at the businesses we're in to identify new ways of working and to determine what businesses we should be in to meet the needs of our customers. That's true for our ministry and it will be true for all government ministries over time.

Integration and consolidation have led to the number of ministries being reduced from 28 to 20. Some would suggest that was not much more than politics. Others of us who have worked through those integrations would disagree. We have seen in the integrated ministries a much more flexible potential for coordinating activities, and that's as true in our own ministry as it would be if you had a careful look at Environment and Energy, for example.

Management Board Secretariat supports ministries to help them achieve major business improvements through business re-engineering and service quality initiatives. One of the major roles we have been playing over the last two or three years is working with ministries as they determine what their reorganization should look like, because what works in one ministry doesn't necessarily work at all in another, if the service they deliver or the customer base they serve is substantially different.

In terms of the size of the OPS, the Ontario public service, which is all part in many respects of the same process, in the 1993 budget the government stated that its objective was to reduce the size of the Ontario public service by 5,000 by the end of 1993-94, and we didn't meet that target. We were, as I recall it, about a thousand short at the end of it all. Having said that, our approach was to restate the target and to restate the commitment to meet it by March 31, 1995, for a total net reduction of some 5,000 employees.

I go back to something I said earlier, that the approach we took to that whole process was as humane as we could make it. That's not to say there weren't some mistakes from time to time, but if you look at the absolute net number of people who were actually laid off in all of that process, I think the result was particularly good compared over and against some of the things that unfortunately happened in the private sector.

At the same time, the OPS has taken on more work, we've created new programs. We are in the process of trying to implement some of those programs: employment equity, social assistance review and reform, the graduated licences initiative, integrated safety programs, and there have been quite a number more over the last four years. So at the same time as we've been able to effectively and humanely downsize the Ontario public service -- that's from a number we started with in 1992 -- the net number does take into account a significant number of new positions that were created to deliver those new programs, all of which made the task of achieving the goals that much more difficult.

Despite the reduction in size, the government has been able to realize its commitment to make the best use of redeployment and to minimize the number of layoffs, and again I have to give particular credit to the staff in my ministry, who not only created, on fairly short notice, the whole redeployment section but have made it work, and with some initial resistance from ministries.

Initially, ministries were interested in redeployment as long as they were redeploying their own people internally, and we had a lot of difficulty getting across ministry lines. We've broken down those barriers and today the redeployment process is working extremely effectively right across government. When I say "extremely effectively," that's not to say that from time to time you won't be able to find an individual case that hits a pothole or falls through a crack, and we work as best we can to deal with that when we find them.

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Over the past year, senior management positions have been reduced by 10% and other management-related positions have declined by 7%. So in part, as we've gone through the restructuring, the re-engineering, the redefining the workplace, or whatever else becomes part of the jargon, we undertook a fairly significant delayering as well. Some ministries, for example, have been delayered from as many as 13 hierarchical levels to five and six levels of management infrastructure. That's enabled those ministries, both in terms of their day-to-day operation and in terms of their decision-making and accountability, to do things both more efficiently and more quickly but with less impact on the client base they're trying to serve.

In redeployment, the government's redeployment program is committed to making the best use of our human resources, and again I feel we've done a very excellent job in that respect. I couldn't tell you, although the staff could provide you with numbers, the actual number who have fallen out the bottom of that redeployment system -- in other words, people who have actually been laid off -- but the numbers have remained very small throughout the last two years.

With the help of interministry working groups and ministry staff, we've developed a number of tools to support the program.

To help relocating employees, the five ministries involved in the Ontario government relocation program have recently received approval to offer employees preliminary counselling and assistance prior to the receipt of their reallocation notices. This support will help these employees in their decision-making about relocation and start them in their alternative job searching sooner, if their decision is not to relocate along with those relocating operations of government.

The job trading program for OPS employees has been extended to 1996 and recently we were approved for expansion for all employees across Ontario to have access to that program. It will help non-relocating employees affected by the Ontario government relocation program to exchange their jobs with other employees who are willing to relocate. One of the realities we have come to understand about relocation is that there are some people who are very anxious to relocate out of Metro Toronto and there are others who wouldn't leave if their lives depended on it, so the kind of approach we've taken with the job trading program is a serious effort on the part of the government to match those people wherever we can find them and get them together.

The two joint central redeployment committees, one with OPSEU and the second with representatives from the professional and management associations, have been described as model committees vis-à-vis management and labour relations and redeployment. To date, a number of policies and agreements have been finalized for the benefit of the employee groups represented at each committee.

With respect to the social contract, the overall goal of the social contract in the OPS is to achieve savings while minimizing job loss or cuts in services to the public.

Some have criticized the social contract and, especially in the broader public sector, some have been able to point to some very difficult circumstances that have arisen. Some have been worked out, some are still being worked on. For us in the OPS, it's my view and I think the ministry's view that the process we've been responsible for has, all in all, worked very well. That's not to say that there haven't been some hiccups and some bumps along the way, especially in ministries like Health and Correctional Services where they have large, institutional components where Rae days and backfill became difficult. But through the process of consultation and negotiation with those ministries we've managed to largely resolve those problems.

The goal has been met across the entire public sector and, in particular, in the OPS. We are meeting the OPS social contract target of $210 million in savings in each of the three years, 1993-94, 1994-95 and 1995-96, and we've kept the job losses and the service impacts to an absolute minimum. I don't have the numbers off the top of my head, and they do happen to change daily, but if there are people who are interested in the actual numbers, we can provide them.

Now we are working with the social contract bargaining agents in the OPS on achieving permanent savings of $210 million by 1996-97 through operational restructuring and efficiency gains. It's my hope, and I think the hope of those who work in the ministry, that we will have a jointly agreed process in place very soon through which bargaining agents will have real input into the savings proposals and to the implementation process. It's also our hope that for the first time probably, at least in the public sector of Ontario's history, we will have bargaining agents actively involved in helping us to redefine the workplace and the jobs their members will do.

Last April, the government reached an agreement with OPSEU to establish a separate pension plan for OPSEU members, and there was again some criticism around that initiative. The agreement is an outstanding example of how the government is working in partnership with its bargaining agents to achieve success in both fiscal management and labour relations.

Without spending a lot of time on details, I just reassure the members of this committee, as I did the members of the House during the debate on the budget bill last June, that all of the pieces of the plan are sound and intact and that nobody's pension is in jeopardy and that both of the plans will be viable plans. As a matter of fact, we've had some indications from some of those who had critical comments just a few short months ago that they're now interested in sitting down and beginning the process of talking about some of the remaining pieces.

The agreement benefits both employees and taxpayers. It allows the government to use the gains being generated from the public service pension plan to achieve $300 million in savings in each of the three fiscal years, this one and the next two.

The agreement prepared the ground for a new working relationship with OPSEU. OPSEU and the government now have joint control over the pension funds of OPSEU members, something the union has sought for the past 20 years. The new joint board of trustees has been appointed, and I was very pleased and proud to participate in the final signing of those agreements with those board members just a week ago. The new plan will be in operation by January 1, 1995.

Members should understand that one of the things that happened in this negotiation with OPSEU was that joint trusteeship in this particular case means both joint benefit and joint liability into the future. The government retains sole responsibility for the unfunded liabilities that were identified up to the point of the agreement, as was the case in 1989 when the pension act was changed and the 40-year amortized payment of the unfunded liability was set.

We retain full responsibility for that unfunded liability, but all future gains and liabilities against the plan will be jointly shared by the employer -- the government -- and the employees. It's a particularly responsible, if not somewhat frightening, position for any union to move into with a pension plan that size, but they've done it, and done it, in my view, in an extremely professional and responsible way.

I move now to talk for a few moments about the Ontario Realty Corp, which has had some comment from a variety of perspectives in the Legislature. The Ontario Realty Corp is helping fulfil the government's commitment to do business differently and to create jobs through infrastructure development.

The corporation's mandate is to hold, dispose of, develop and finance provincial land and buildings. By the end of the 1994-95 fiscal year, the corporation will manage a real estate enterprise with assets in excess of $1 billion.

The corporation will finance and manage some of the province's biggest capital construction programs, such as the Ontario government relocation program, making significant contributions to Ontario's infrastructure and creating more than 12,000 full-year construction jobs. The Ontario government relocation program alone will bring an annual payroll of approximately $140 million into five communities.

The Ontario Realty Corp is also coordinating court consolidation for the Ministry of the Attorney General. The new courthouses are to be built in Windsor, Hamilton, Cornwall and Brampton, representing about 5,300 full-year construction jobs.

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Taken together, these nine development projects represent a capital investment of approximately $470 million, with about half of this amount as payroll for local construction workers.

The realty corporation is also involved in leasing services. A new lease management system has helped us to contribute to a saving of $70 million in lease renewals over the last two years. This is a computer-based system that provides on-line access to current data on the government's 1,800 leases, with an annual rental cost of more than $200 million. It's a particularly costly government endeavour, the leasing of office and other kinds of space across the province, and $70 million in savings out of $200 million in expenditures is I think an admirable record which I'm very proud that the staff in the ministry were able to deliver.

I'll try and wrap up fairly quickly.

The government's mail service: We negotiated a one-year contract with a private sector mail-processing company to barcode our mail. Barcoded mail is delivered more quickly and with less cost than our former operations. This will save about $200,000 this year in postage on external mail.

The ministry's central collection service has collected more than $17 million in 1993 in money owed to the government. This is a centralized debt collection service to ministries, agencies, boards and commissions. On average, for every dollar spent on staff and resources, the central collection service has collected $7 owed to the government, money that otherwise wouldn't have been realized, and I might just add that our rate of return on collecting those debts has been better than that of private agencies that have done similar work for us.

Led by the MBS green workplace program, the OPS cut its garbage in half in the three years ending in 1992, three years ahead of target. In 1993 the program Maximum Green was launched. Three buildings, including the MBS-occupied Ferguson Block, piloted Maximum Green, a program to reduce waste by half again, this time in three months.

I won't go into all the detail in my notes, but I'll just flag this issue for you in terms of agency reform. We've done a considerable amount of work looking at specific measures to amalgamate or consolidate regulatory or adjudicative agencies, or their administrative functions at least. We are, as you are aware, proceeding with some of those initiatives in Bill 175, which is presently before the House. As that work continues into the future, we will see a fairly significant drive for efficiency in that respect, hopefully with the full approval of the public, as we hope to maintain all the services those agencies, boards and commissions deliver to the public without all the bureaucracy, necessarily, that's been associated with them in the past.

In terms of information technology, IT helps to reshape government, improve customer service, reduces costs and addresses duplication. It's an area where Management Board has been doing significant work, not only in terms of understanding what the government has now but in terms of working with ministries to create new systems as work changes and the demands of work change.

We'll develop a framework of corporate principles for information technology in the Ontario government, a view of the future of information technology in the Ontario government, and a set of information technology initiatives to achieve this view will be created in this process.

The key component is GO Net, the telecommunications common infrastructure. GO Net is the government of Ontario wide-area network service. GO Net is set up to provide ministries with high-quality telecommunications services by consolidating existing networks and services at a cost lower than they could obtain on their own.

Again, if we would like to go into some in-depth discussions of the information technology services during the course of the estimates, we'd be happy to do that. I've got a number of other comments here I could make, but in view of the time, I'll skip over some of them.

In terms of the financial information system, we've decentralized the accounts payable process to 15 of our highest- volume offices. This cut the processing time needed to enter payment information into the financial information system. Now staff in these district offices directly access the central financial information system and process their own accounts payable.

This has led to a very dramatic reduction in the kinds of complaints that we heard for many, many years about people, companies, businesses doing business with the government and not getting paid, in some cases for many, many months. Again, I'm very proud of the work that our staff has done to ensure the kinds of matter-of-days turnarounds that we now have in that respect.

The new service that we introduced at Management Board allows computers to exchange standard business documents and forms with both internal and external clients. This will result in many purchase orders being sent electronically to vendors, eliminating another paper form used across the ministry.

This basic system resulted in faster, more accurate payment to vendors. A survey of five sites showed a 215% improvement in on-time payment to vendors and a 100% boost in accuracy. With this initiative, we estimate that 1,000,000 pieces of paper per year were saved. Again, they're all small pieces but they're all part of an overall strategy that seeks to pursue efficiency.

In terms of strategic procurement -- and this is the last basic area that I'll talk about and then wrap up -- it's estimated that $25 million in saving is possible through consolidated purchasing agreements. The first of these agreements, dealing with the purchase of photocopiers, is already in place. Streamlining makes it easier for suppliers and would-be suppliers to do business with the government. The consolidation means the government can buy goods or services with significant saving by taking advantage of volume buying.

In the process of pursuing questions of strategic procurement, we have been very careful to consult with both small suppliers across Ontario and communities across Ontario to ensure that we don't end up with a system that will be totally based in Toronto and that there will be some sensitivity to the ability to locally purchase and so on. Although it took us some time to develop because of the consultation aspects of what we went through, it's a system that is now working in some respects and we will continue to roll out new portions of over the months and years ahead.

In conclusion, as we approach the end of this century, we're basically working on all fronts. I tried to give you a smattering of examples. There are dozens more that we could go through and discuss during the estimates. We're trying to change the way we carry out business, to streamline how we do things, to take a more non-adversarial approach to, and at the same time preserve, services and jobs, and to do all of that in a more efficient, cost-effective way.

We need to be the bridge for employees and the organization to reach this new future successfully. I'm convinced from the last year and a half I've spent in this ministry that the best way to proceed to approach all of these questions is in an open way, in a consultative way, and to be prepared to negotiate almost all aspects rather than to simply make arbitrary decisions.

We've had some wonderful surprises over the course of the last six, eight, 10 months as we've gone through the same shivers as probably many of our predecessors went through about telling bargaining agents or others what our intentions were and what their response might be. We're all particularly proud of the way that everybody has responded and come to table after table to try and work with us to define ways to resolve major problems with as little disruption and human impact as is possible, and again I think we've done a good job of doing that. Nothing is ever perfect and we seek on a daily basis to find ways to improve the things that we did well yesterday.

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The Acting Chair (Mr Wayne Lessard): Thank you, Minister, for your opening comments. I'm turning to the Liberal caucus and would ask Mrs Caplan to respond on behalf of her party. Mrs Caplan, you have 30 minutes to speak.

Mrs Caplan: Thank you very much. I have no intention of taking 30 minutes. I thought because of the fact that the minister's here it might be more beneficial to use the opportunity to actually engage in some dialogue. I have a few questions that I'd like to ask, but I thought, first, if I could, I would just make a few comments.

I found it interesting that you mentioned several times that you were considering what business you should be in. I'm familiar, as many of you know, with the former role of the Management Board of Cabinet, as well as the Ministry of Government Services, and I have followed with interest the reorganization that took place where the Ministry of Government Services and Management Board became one entity and treasury board became a separate entity.

I found interesting that, I believe two or three times, you said that you were still thinking about what business government should be in, what business you should be in and, given the fact that we're in the fifth year of your mandate, I'd like to know what conclusions you've come to about what businesses you think you should be in and what businesses you should not be in.

Hon Mr Charlton: Do you want me to pick it up there and make comments now?

Mrs Caplan: Yes. I'd be happy to go on, I've got a number of questions, but that was the first one, because it seems to me --

Hon Mr Charlton: Okay, let me make a few comments and then my deputy may want to comment and we may elicit some comment from staff. We've already made some changes in terms of the business that we do. I mentioned during the course of my comments about the old gatekeeper role versus a much more consultative, hands-on, go in and help ministries do things.

On many occasions in the past Management Board just sent out directives and then sometimes they happened in ministries, sometimes they didn't happen in ministries. We've taken to working with ministries to try and ensure that things happen and that we can then take what we learn from one place and use it in another.

I guess most specifically in terms of what you learn both about yourself as a ministry and about a number of things that government in general does is that what was truth in 1979 is not necessarily any longer truth in 1993. For example, for the first time in 1992-93 we undertook a major study with the union of contracting out. That was a huge study because there's a lot of things that government does that is contracted out where we've never had employees do that work or we haven't had employees for some, and we're going through a process now of looking at all of that. So we're looking at some of the businesses we're still in, we're looking at some of the businesses we've gotten out of.

For example, in Correctional Services they went through a process about a year and a half ago of contracting back in services that were contracted out in the late 1970s, for the most part, foodservices in their correctional institutions. Where they found in 1978, 1979, 1980 savings by contracting out those services, we in fact found that we could deliver those same services in 1993-94 for about 60% of the cost of what we were paying for contracts to deliver those services.

There's a whole constant re-evaluation of everything that we do on the margins, if you like. There are some very fundamental government services that will always be required in the public sector, but there's a range of things around the large waste of government that will always be subject to the potential for doing it better another way, and those are the kinds of things we're looking at in terms of what businesses we're in and what businesses we should get out of and perhaps what new businesses we may want to take on.

Jim would probably like to add something to that.

Mr Jim Thomas: Yes, I think, as a person who's still a relative newcomer to the ministry, I can say that it's a surprising array of customer services that we provide, that you might call baseline services, whether they be collections or mail or whatever. I think that the test we're applying to them -- are they cost-effective and are there ways that we can either be doing them more effectively in-house or outsource? -- is a question that's a two-way street.

The other question is whether or not we're better off doing the services within Management Board Secretariat or within ministries. So there's a question about whether we ought to be centralizing or coordinating the delivery of some of our services or leaving them to be done at the ministry level. There are a whole lot of questions that will be ongoing for a long time to come around what are the best ways to be doing our baseline services.

The only other comment I might make is I think there's a new business, and the new business which has come up over the last few years is helping ministries to re-engineer, to figure out how to do things better as ministries. The downsizing exercise that the government has gone through the last few years has been a very, very difficult exercise. We've had to learn new skills. We've had to learn new ways of doing things and we've tried to do it in a way that's minimized the impact on staff.

I think the stats bear out that we've done it that way, but there's a learning curve that all ministries have to go through in terms of being good at re-engineering and being good at downsizing in ways that preserve customer service and minimize impact on staff, and that's a business that we're getting into partly because we need to do it ourselves and we are doing it ourselves, but partly because we also need to be able to help ministries.

Mrs Caplan: It's interesting, because I think it is an important question about what businesses government should be in and what businesses government should not be in, and taking that kind of a look is important before you even begin re-engineering. What is the point of spending your time and effort reorganizing and re-engineering a function that has no value any longer, or could be better delivered by someone other than government? It seems to me that before you begin you really have to have some understanding of not only what businesses you're in but what businesses you think you should be in.

I'm a little concerned that it seems to me that the priorities haven't been established clearly even around some basic government services. I haven't heard you define what you feel are those basic government services and I understand the problem that you're in because ideology clouds that. I'm aware that it all depends on how you look at things as to whether or not the cost-effectiveness arguments are met or not.

I find interesting and somewhat encouraging discussions around appropriate outsourcing or the ability to have competitive bidding on services which have traditionally always been provided in-house by government. I think that's the kind of new thinking that is part of a rethinking of how services are going to be delivered in the future.

I am interested in Management Board's role around good management practices and I've been thinking of some examples that the Provincial Auditor doesn't consider as particularly good examples of good management practice. I'm thinking particularly about what Management Board's role has been in the new realty corporation as they have purchased government buildings such as the Whitney Block and Macdonald Block, all the buildings down here, and we've seen a cash transfer, which the Provincial Auditor has not allowed as legitimate, good management practice.

How does the Management Board Secretariat justify those kinds of activities as good management practice, whether it has been the sale of railway cars in GO Transit, buildings in the realty corporation and even the delay of pension contributions, those kinds of accounting practices which the Provincial Auditor has said are bad management practices, and yet Management Board is out there advising ministries on good management practices even though your hands have been slapped by the Provincial Auditor? How do you justify that?

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Hon Mr Charlton: Let me start out by saying that I'm not aware that the Provincial Auditor has said anything yet about the payment of the pension liabilities.

Mrs Caplan: You're required to add that back in to the numbers and say that you could not.

Hon Mr Charlton: No. All of the changes in the bookkeeping have been accomplished. As the Minister of Finance said in the House this afternoon, that is a standard process that is going on right across the country; it isn't unique to Ontario.

Mrs Caplan: What is unique, with respect, Minister, is that no government before has ever sold buildings to themselves; no government before has ever sold rolling stock cars from GO Transit and then bought them back on the same day. That's new, and the Provincial Auditor has said that's not good management practice.

Hon Mr Charlton: My point, Elinor, is that I'm not aware that the Provincial Auditor has said that's not good management practice. He said it was not good accounting practice the way that the old bookkeeping system worked, and we have made those changes. You'll notice, though, we haven't shut down the ORC and cancelled it because of the accounting changes -- and I emphasize accounting changes -- that the Provincial Auditor recommended.

The Ontario Realty Corp is a corporation that is set up on good and sound business principles. The board of directors of that corporation is made up of private sector business people whose reputations depend on them running a good, clean business, and that's exactly what they are doing and what they intend to do.

In terms of this question of the Provincial Auditor's raising accounting practices versus the approach to good business practices, the ORC is much more than just the government selling properties to the ORC and then leasing them back. It is part of an overall efficiency strategy that is designed to start making us deal with the real estate assets that we have in an efficient, businesslike way.

One of the problems, and this is just one of thousands, that government ministries, agencies and boards across this province have had forever is that if they happened to be in government-owned spaces that have leased space, private sector leased space, they didn't pay any rent. They didn't have to operate on a business basis and they didn't have to worry about giving up space when they in fact downsized. They just kept the extra space for the fun of having all that nice space to utilize, because it was all in government-owned facilities. We're changing all that.

The Ontario Realty Corp is a corporation that, with respect to our own facilities, will be running those own facilities like a business. Ministries, at the end of the day, will get forced to deal with the accommodation space they use in government-owned facilities in the same way as they get forced in the private sector to deal with the lease costs that they have to pay to the private sector landlord so that we can in fact start to get at some real efficiencies in terms of how we operate that huge real estate portfolio.

Mrs Caplan: One of the questions I'd like to talk about is human resources. As I start my questioning, I'd like to state very clearly -- and I see some of the people here today that I worked with -- that I have still today enormous respect for the non-partisan professional civil service that worked with me over the years that I was in government, and the questions that I ask are in that spirit.

As the ministry with responsibilities for the old Human Resources Secretariat and human resource policies and practices within the government, I'd like to know your assessment of how you feel morale is within the civil service today?

Hon Mr Charlton: I think there is still some anxiety in the civil service about the security of positions. I would suggest that anxiety is probably 80% lower than it was a year and a half ago. There was, I must admit, a really high level of anxiety and bad morale -- low morale, I guess, is a better way to put it, in the months that straddled the final negotiations of the social contract and the commencement of its implementation. I think that the process that's ensued has helped significantly to start to alter the fears that in people's minds were legitimate fears.

For example, when Fred Upshaw was able to stand up on March 31 of this year and say, "By God, working with these guys on the joint central committees and in the negotiations around Rae days, we not only got the days down but at the end of it all there were only 21 layoffs in total." Fred was able to stand up and say that with a lot of comfort that wasn't expected at the start of the whole process. If you recall, some of the big numbers that were being thrown around in the summer of 1993 were 3,500, in that range.

I think we've come a long way to start to re-establish some of the relationships, and even more than re-establish those relationships, to move them beyond a point that I believe they'd been stalled at for about 20 years. That's not to say they were bad relations, but they weren't going anywhere in terms of the labour relations relationship with the employer.

The pension deal we were able to negotiate with OPSEU last spring in three weeks. Nobody believed we could accomplish that. We didn't, but we went to the table and did it. The CECBA changes and the way in which the bargaining agents have come to the table around the right-to-strike questions and starting the process of defining essential services and so on and so forth -- it's really heartening to see the honest and responsible way that all of that is rolling out.

Mr Thomas: I might just add that morale, I think, is always a challenging problem whenever an organization, whether it's public sector or private sector -- and I've worked in both -- is engaged in a downsizing exercise, and so it is something that one has to be aware of. I think it's an important question that is certainly on the minds of all deputies who want to make sure that we do all we can to try to make the workforce feel secure. It is difficult to do that, even though I think the statistics show that there have been really only a few dozen people in the Ontario public service over the past year or so who have actually involuntarily had to leave the Ontario public service.

Also OPS, over the past few years, has gone from probably an 87,000- or 88,000-person Ontario public service to about an 82,500-person Ontario public service, and during that time we've taken on a variety of new work and additional workload situations that have put additional pressures on other employees to sort of pick up slack. That is a reality that I think you face when you're in a downsizing mode with new programs coming on stream. Actually, I think that people are working very hard at it, but I would be wrong if I didn't say to you it's something that we have to keep working on, and it is a good thing that we have a relationship with OPSEU that I think is a fairly healthy one at this point because it has allowed us to continue the dialogue on some of these very difficult issues in a fairly positive and constructive way.

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Mrs Caplan: The comment that I'm going to make now I want to make in the context of during my time as Chair of Management Board as well as time in government between 1985 and 1990. I always felt that I had a constructive working relationship with the unionized employees. I find it, however, particularly interesting that in response to my question about employee morale, you made no mention, Minister, whatever about your managers. Your only frame of reference in this discussion around morale in the civil service related to the unions and unionized employees, and I think that that is unforgivable, particularly at a time when you have been going through the kind of restructuring and the dependence that you've had on the managers in the civil service. On their behalf, I think you owe them an apology.

I understand that the morale in the management class in the civil service at this time is more than fearful. In fact, since the appointment of David Agnew, I think that there has been a politicization within the civil service that has been unseen since the darkest days of the Tory regimes of several decades ago, and I know that there is also despair and concern and that your whistleblowing legislation did nothing whatever to ease those kinds of concerns either.

So, as I said, on their behalf, and I'm not going to say anything further about it, I do find it objectionable that your entire frame of reference is your relationship with unionized workforce in the OPS.

I would like to go on to some discussions about --

Hon Mr Charlton: If I could just take a moment to comment on that, because it's a fair comment in the context that I didn't mention the managers because I used the bargaining agent as an example of a public response, and generally speaking, the managers in the OPS have always been professional enough not to make those public responses.

On the other hand, I have no doubt whatever that -- these are all of the managers in the ministry sitting here, and I have no doubt that there's probably one or two of them who (a) think I'm nuts, (b) are frightened about their future. But I think the vast majority of them, if you went out and had a drink with them and had a personal chat with them, would tell you that in the last -- I can't speak for all four of the years, but the last year and a half, or year and a half and a bit, that they've had a greater ability to put their thoughts on the table in an open way than probably at any time during their careers, and one of the reasons why we were able to do some things that nobody else has been able to do, like the pension deal that we negotiated with OPSEU last year to both of our substantial benefits, was because we were able to sit down and look at each other eye to eye and talk to each other in a very open way that is reflected in comments that you made earlier about their ability to deal in a very professional and non-political way.

Mrs Caplan: You mentioned going out and having a drink or a lunch. I heard from a colleague today, and I must admit this was not from Management Board Secretariat, that senior civil servants in many ministries are afraid to have a conversation or be seen talking with a member of the official opposition because of the politicization within the civil service and the change of attitude towards senior management.

I know that many are not only fearful about their own future and their own jobs but they are afraid to come out and just have a drink and sit down and have a chat for fear that there will be a reprisal or retaliation that would jeopardize their job.

Hon Mr Charlton: I absolutely reject the comment about politicization. These are all of the same people who were here before I got here, and I haven't done anything that I'm aware of to change their politics in a personal sense or to politicize the way that they do their jobs.

They come to me with policy recommendations and/or implementation recommendations that I deal with, and sometimes I accept holus-bolus, sometimes I reject, sometimes we do a mix and match and make changes, but at the end of the day they do the same jobs that they've always done, perhaps in a new way, because their section's been reorganized out from under them or around them or whatever the case happens to be. These people are people who still do their jobs in their own right. Nothing I've done or Bob Rae has done has changed the political atmosphere in which they work.

Mrs Caplan: As I say, I'm not referring specifically and only to the Management Board Secretariat. I can tell you -- perhaps this is something for you to look into if you believe what you just said -- the number of appointments into ministries across this government that have not been through the merit system of proper competition, those who have been placed, particularly at a time when the government is downsizing -- as you say, you didn't meet your targets, and there have been a number of new positions that have been created where people have been waved into those positions -- has created a tremendous morale problem within the civil service, particularly at the management level.

I tell you that. It's up to you if you want to do anything about it. But we are aware of it and we sympathize with those within the civil service who believe, as we do, that the civil service should be non-partisan and professional and should feel free to have conversations, a lunch, a drink with a member of the official opposition, free of any intimidation or fear of reprisal or that their jobs will be in jeopardy.

I'd like to go on if I can, having made that point. I'm very interested in GO Net and the use of information technologies. As one who had responsibility a long time ago now, almost nine years, for the establishment of the common architecture across the provincial civil service, I know how far we've come since those days of information technology policy development. I'm also aware how rapidly things have been changing and I know how much flexibility you need to be able to respond to the rapidly changing information technology in both the hardware and software world.

The point I'd like to make is that I find it frankly shocking that members of the Legislature, members of the opposition, are not connected to GO Net. I would like to have your comments and know what your plans are for having members of the Legislature, who serve the public, hooked up to GO Net, the government of Ontario network. We are not connected.

Hon Mr Charlton: I have to be honest. This is one we should better defer to staff on.

Mrs Caplan: Do you think it's a good idea? It's a policy I'm asking you about. Do you think all members of the Legislature should be connected to GO Net?

Hon Mr Charlton: Absolutely.

Mr Thomas: I wonder if I could ask David Girvin to assist Mrs Caplan with respect to that question.

Mr David Girvin: In response to your question, Mrs Caplan, there are two basic areas of GO Net in terms of the basic infrastructure: one is on voice and the other is on data. Then on top of that broad-band infrastructure, you have a variety of value added services in terms of electronic commerce and gateways, Internet and all of those items. The Legislature is connected obviously on voice in terms of reciprocal arrangements on the OCN, the Ontario communications network, as far as the long-distance service.

Mrs Caplan: That's the telephone service.

Mr Girvin: That's correct, on voice, and with regard to ICN, which is the capacity to dial in relative to a constituency office etc.

The Legislature itself, to the best of my knowledge, has the opportunity to acquire our services. We are in a fee-for-service chargeback proviso other than for voice. We receive a budget on vote and estimate of approximately $16 million, of which $2 million is around policy, the information technology directions committee, and the management of information technology with regard to Management Board of Cabinet, and the remaining approximately $100 million is on a full recovery basis for services that we provide in a quasi-private-sector, fee-for- service, competitive mode. The breakout of that on a distributed basis is approximately $30 million for processing and $70 million for telecommunications and the value added services.

So there's nothing that is restricting a ministry or schedule agencies, the ABCs, from acquiring our services. The Legislature has that right to acquire our services or provide their own with regard to their infrastructure. As you know, the Speaker and the infrastructure of the Legislature is somewhat separate from the centralized systems that you may or may not see in terms of Management Board and treasury board.

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Hon Mr Charlton: If I could just pick up on that, Elinor, and add a little bit to the perspective --

Mrs Caplan: The Board of Internal Economy, which is controlled by the government, makes those decisions.

Hon Mr Charlton: But which sets its own estimates. I'm just being frank with you. I've been at the Board of Internal Economy for a year and a half now as the House leader. The issue has never been raised by anybody, albeit not by me, but it also hasn't been raised by either of the opposition parties. It would be simply a matter of us at the Board of Internal Economy in our estimates process this year making some decision to seek out to buy the service on behalf of the members of the Legislature. It's an issue that's never been raised with me before. That's why I had to defer to staff, because I didn't know if in fact there had ever been any discussions with the ministry.

Mrs Caplan: Is there any ministry in the government -- I'm not talking agencies now, I'm talking formal ministries -- that are not part of GO Net or have not subscribed to your service?

Mr Girvin: Well, I think that there's a breakout with regard to what I would call the hard infrastructure or the management of the wide area network, which has a variety of components and mobile voice and various switching technologies that are there as far as the wide area network. That basically is either on what we would call a preferred service -- you have to make the case that you're a one-off situation in a ministry, that there are cost or technical reasons that don't make that competitive -- but in the majority of those hard infrastructure areas, it is mandatory in terms of packet switch etc. What we --

Mrs Caplan: Say that again? It's mandatory for ministries to be on a network?

Mr Girvin: On the -- and that is --

Mrs Caplan: I think that's good policy.

Mr Girvin: That is not a hard decision on the voice side, because it is paid for as far as a vote and item. The challenge is to ensure that it's used for voice and that people don't load data which is normally on a recoverable on the so-called free system you're providing from an infrastructure point of view.

I think where it becomes more on a voluntary or closer to a preferred basis is when you're dealing with the value added services that are based on that wide area network around electronic commerce: credit card functionality, electronic data interchange, electronic data transfers, the Internet connections, gateways, voice messaging, a variety of what I would call value added services that are connected there.

They are not necessarily on a preferred basis; they're on: "Here's our service, here's our cost infrastructure, here's our timing in terms of delivery. We would like your business, but it's not mandatory." And it isn't mandatory relative to the individual ministries on some of those value added services.

What the deputy made reference to was the discussion you had earlier around the centralization, decentralization; the centre delivering versus individual ministries and/or the private sector and strategic partnering are some of the discussions that are ongoing.

The Vice-Chair (Mr Ted Arnott): Mrs Caplan, I just want to indicate that your half an hour has concluded, but we have departed from our usual procedure so far because of the unfortunate absence of the Conservative critic. The minister could respond, if he chose, to your broad 30-minute statement --

Hon Mr Charlton: I don't want to take up half an hour responding.

The Vice-Chair: -- or we could start into rotation, in which case I'd recognize you to commence questions for a 25-minute period.

Mr Wiseman: Don't question this, Elinor; just do it.

Mrs Caplan: I feel like I'm Alice in Wonderland. My time is up, but I now have more time.

Mr Wiseman: Don't question it.

The Vice-Chair: Aren't you happy with that ruling?

Mrs Caplan: The minister said the old way of doing business has gone. I think many in Ontario would agree, and if they're watching this committee they'd wonder whether it was good or not.

The Vice-Chair: I'd not sure how many are watching, but I now recognize you in rotation.

Mrs Caplan: Thanks very much. How much time do I have?

The Vice-Chair: You have 25 minutes.

Mrs Caplan: The question I have is, do you know why, on the requirement for mandatory participation in GO Net, the Ontario Legislative Assembly was not included?

Hon Mr Charlton: It's not part of the government.

Mrs Caplan: Say that out loud.

Hon Mr Charlton: It's not part of the government. The Legislative Assembly is an independent entity that's run by the Board of Internal Economy, does its own estimates, is not part of the government estimates process, does not have the status of a ministry, is not under the jurisdiction of a minister. The government has an arm's-length relationship with the Legislative Assembly.

Mrs Caplan: Except for the fact -- and what I'm about to say is accurate -- the Board of Internal Economy is controlled by a majority of government members.

Hon Mr Charlton: That's correct.

Mrs Caplan: I really am Alice in Wonderland. It is arm's-length, but controlled by the government.

Hon Mr Charlton: You know, Elinor, what the traditions on the board are.

Mrs Caplan: Of course I know.

Hon Mr Charlton: That the government very rarely ever uses its majority on the Board of Internal Economy for anything --

Mrs Caplan: That I don't know.

Hon Mr Charlton: -- that in fact we attempt on 99% of occasions to reach consensus, including the estimates of the board.

Mrs Caplan: This is not a criticism. Don't be defensive.

Mr Wiseman: We were born that way.

Mrs Caplan: I'm just exploring how the policy evolved and why the mandatory nature of participation in the government of Ontario network would not have included members of the Legislature. I agree that members of the Legislature are not formally part of the government and not a ministry, although certainly some would think they have a significant role to play in the development of public policy, perhaps in advocacy for their constituents, keeping the government on its toes, all those important parts of it. It just seems to me that a policy that would not include the mandatory nature --

Hon Mr Charlton: But that is something David's not in a position to speculate about, what did or didn't happen at a Board of Internal Economy meeting. I've suggested to you that in the year and a half I've been on the Board of Internal Economy, the issue has not been dealt with by anybody. We haven't raised it and neither of the opposition parties have raised it. I don't know whether the discussion ever occurred before I got there; I can get you an answer to that question, which might help you to come back in on this issue at some later point in the estimates.

But I would suggest to you, just in the context of how I have seen a number of other things occur at the board with an issue like this around an expenditure of new dollars, which is what it would've been for the Board of Internal Economy to proceed with implementing GO Net and paying the service fees required, if either of the opposition parties had disagreed, then it is unlikely that the government and the remaining party would've imposed it because of the political nature of how questions would move from the BOIE into the House and so on. That's been the basic tradition there, especially around the expenditure of moneys, both for members' services and for their office services, that it's been a move to consensus before anything is implemented.

Like I said, I can't guarantee that there wasn't a discussion in 1990 or 1991 or 1992 before my arrival there, but it's quite a different process from what the government does in its relationship with its various ministries.

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Mrs Caplan: I know that Management Board Secretariat is interested in good business practice and greater efficiency; we've heard the presentation. The story I'm going to tell you is true. It has nothing to do with information technology, but I think it's the sort of thing that does drive taxpayers crazy.

What you have just described is the separateness of the Legislative Assembly and the inability of ministries to work with the Legislative Assembly, and I'm going to give you an example that still today makes me shake my head when I think about it, because it is such a waste, an absolute waste.

I had a computer table in my office here in the main building of the Legislature that I didn't need in this office -- we decided to put the computer on an existing desk -- but I did need this little table in my constituency office. All we wanted to do was get some help moving the table from the office downtown to the constituency office. So instead of getting a few people to help us put it in the car and move it -- which in hindsight is what I would do if I had to do it over again -- we made the mistake of phoning the people here who have responsibility for moving things.

Hon Mr Charlton: Management Board.

Mrs Caplan: That's right, Management Board. We asked if they had a truck that was going north, because my office is at Don Mills and Esterbrooke, and if on the way they could just take the table for us because it was a little bulky. The answer was that there was no way they could take the table because the table belonged to the Legislative Assembly and the constituency office was in a separate envelope, a separate vote, a separate budget. However, they would pick up the table and take it to surplus and order a brand-new table for the constituency office.

I went to our House leader, I went to the Clerk. I tried to get this whole thing stopped: "Leave it alone. We'll move the table ourselves. Forget it. I changed my mind." They were very efficient. They came, they picked up the table, they took it to the surplus storage place where it is probably sitting today, unused, and a brand-new table arrived at the constituency office very rapidly, except that I didn't need a brand-new table. What a waste of expenditure, simply because one arm of the government, one ministry, one department cannot talk to another.

Hon Mr Charlton: Remember that they're not both arms of the government.

Mrs Caplan: When people think of the government of Ontario, I think they think of all your ministries, they think of the Legislative Assembly, they think of agencies, boards and commissions and they think of the 82,000 public servants, regardless of which ministry, agency, board or commission. They also think of all 130 members of the provincial Legislature. The fact that you can't get one department to transfer a table to another department, to me is not only wasteful government expenditure, it is inefficiency and it is the sort of thing that drives taxpayers nuts.

Hon Mr Charlton: I don't disagree with you that the structure here that separates the Legislative Assembly from the government is a confusing one to the public. It is, however --

Mrs Caplan: It was confusing to me, and I've been here nine and a half years.

Hon Mr Charlton: No, no. When we set up the Provincial Auditor, who does the Provincial Auditor work for? Does he work for the government? No, he works for the Legislative Assembly.

Mrs Caplan: If you were to ask the people of this province who the Provincial Auditor works for, they would say he works for the government.

Hon Mr Charlton: I agreed that it is confusing to the general public. I asked you, Elinor, what do you know about the system?

Mrs Caplan: I know he reports to the Legislative Assembly, but I believe he works for the government --

Hon Mr Charlton: Well, he doesn't work for the government.

Mrs Caplan: -- because I believe the Legislative Assembly is part of the government. If we deny that --

Hon Mr Charlton: No. The Legislative Assembly is 130 members.

Mrs Caplan: Then, Minister, I have to criticize you during these estimates for not being willing in your new thinking -- you used the words; I wrote them down several times -- that you are "re-engineering, redefining, rethinking." Some very fundamental questions about how government relates to itself have to be answered if you're going to have true efficiency.

Hon Mr Charlton: I know, and I can tell you right now, Elinor, what the response of your respective leaders and House leaders would be if this minister even dreamed of doing anything to take control of the Legislative Assembly and its expenditure habits. I would get shot, drawn and quartered, and then fired.

Mrs Caplan: No one is suggesting taking control. You used the word "cooperation." It's not a question of control, and I'm worried when you confuse control with cooperation or getting people to work together efficiently.

Hon Mr Charlton: Elinor, you raised with us the specific example of your desk here that you wanted to get to your constituency office. I don't know when that happened, so it's difficult for me to comment, but I know that nobody from your caucus raised it at the Board of Internal Economy in the last year and a half, because if they had we would have dealt with it. Secondly --

Mrs Caplan: It happened so quickly that it was actually done and finished before the next Board of Internal Economy meeting, but Murray Elston, who was our House leader, was aware of it.

Hon Mr Charlton: Secondly, as you've said, although the staff who provide the services here in the Legislative Assembly in terms of the moving of furniture and the maintenance of this building in fact work for Management Board and are on contract to the Legislative Assembly, the Legislative Assembly has on many, many occasions, even though it has very strict and sometimes dumb rules -- strict rules are sometimes dumb; sometimes they're right on, as you well know -- the Legislative Assembly has on many, many occasions over the 17 years I've been here made precisely the kinds of special arrangements you're talking about when the right questions were asked at the right places.

I'm not familiar with when your case happened or whether it was raised with the board. I just don't know what happened there --

Mrs Caplan: It was.

Hon Mr Charlton: -- but I'm aware, for example, of three cases we've got on our next agenda, all of which are anomaly cases that don't fit the normal rules and all of which we will sort out at the Board of Internal Economy.

But having said all of that, that has very little or nothing to do with my direct responsibilities as the Chair of Management Board. That's an issue for your House leaders and me, wearing my other hat as government House leader, to deal with at the Board of Internal Economy, because it is Legislative Assembly rules that caused the problem, in spite of the fact that technically they are Management Board staff who would have actually picked up the desk and carried it. When they work here, they're directed by the assembly.

Mrs Caplan: The other area I'd like to talk about is the area of joint management agreements you have in place. I know there's a lot to talk about on information technology and I'd like to do it at a time when perhaps we have a little more time to talk about that, but I thought I could take more of a scattergun approach today during these first discussions.

The joint management agreements that you have I find interesting, and I have to tell you that I'm very supportive of the notion of joint management. The concern I have about them -- and you referred to one with the pension plans with OPSEU. I'm watching that very carefully. I don't start from the notion that it's not a good idea. I know there's always been a lot of resistance to the notion of joint management. But the question I have about it is, what provision do you have when you can't agree and you are talking about huge amounts of dollars that the taxpayers and therefore the public have an interest in? What would happen if you can't agree? Whose will prevails, or is the management of the plan stagnant because you can't agree?

Hon Mr Charlton: Do you want to jump on this one, Jim, or should we ask Phyllis to do it? I once knew the answer to this too, Elinor. I just can't remember what they finally decided was the best mechanism. There were about three that got looked at.

Mr Thomas: First of all, before Phyllis gets into some of the details, I've had experience in negotiating the teachers' pension plan arrangement that happened several years ago, and one of the things I learned there and that staff said also happened when they split the government pension plan into the OPSEU part and the non-OPSEU part is that finding yourself responsible for a multibillion-dollar asset is a sobering experience.

It doesn't matter whether you're on the employer side or the union side, or the association side in the case of the teachers: You take a different approach to managing things than you might have if you were across the table from each other in a collective bargaining situation. I think you start with the proposition that everyone comes to the party. If they didn't come to it with a sense of being very careful about fiduciary responsibility, they soon pick it up. I say that because for the most part the decisions get reached in a consensus way very, very rapidly.

My understanding with respect to the OPSEU pension plan is that there's a provision in the agreement that if the parties can't agree on a particular issue, there's a person who can go out and appoint someone who in effect becomes a dispute resolver, whether it's an arbitrator or whichever word you want to use. I'm not sure what word's in the agreement.

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The Vice-Chair: Could I just ask the staff to identify themselves for the purposes of Hansard before they start answering questions.

Ms Phyllis Clark: I'm Phyllis Clark, assistant deputy minister, strategic policy division. I've got Richard Lundeen here as well, an assistant deputy minister who has worked on the pension deal.

Jim is exactly right in terms of the structure of how disputes would be resolved should they sit at the board of trustees. There will be someone who would be appointed called an 11th trustee. This would be a person who is appointed to the board itself so will have fiduciary responsibilities with regard to the plan. I think you know that means all stakeholders' interests have to be considered while a decision is being made. So only in instances when a tie is arrived at with regard to the plan would this person be brought in. The person is a fiduciary, is a member of the board of trustees and has to make a decision in that context. We are arriving at a list of people we will agree on between the government and OPSEU of potential people to come in, and we will work our way through that list on a rota basis.

Mrs Caplan: One of the concerns I had when the deal was announced was that that list had not been arrived at prior to the agreement. How far along are you now in getting agreement on the list?

Ms Clark: We've now established the trustees and we will work to establish the list in that arrangement, but also you have to note that the framework for the agreement of the pension plan itself is not established by the trustees. The trustees are the administrators of the plan as it exists, so they don't reach agreements you would have to arbitrate because it will be in the context of what the plan is as it stands with the trust agreement and the sponsorship agreement. I believe we do have the time to select those people, because we have not reached a stage of disagreement over administration.

I think the other thing to note is that the deal is set up so it's a partnership arrangement with 50-50 sharing of risks and rewards, a feature we didn't have formerly. This in itself acts as a natural check on anything, from both sides, to enrich the plan beyond what people feel the means of the people supporting the plan is.

Mr Thomas: If I could add another point, I think one of the things that's interesting about the structure is that there are co-chairs.

Ms Clark: Chair and vice-chair.

Mr Thomas: Chair and vice-chair, and there isn't a person in the middle there, the way there would normally be in a bipartite board with a neutral. This way, it seems to me, having the 11th trustee, you end up being able to make sure there isn't a chair who gets burned by having to make a decision on one side or the other. You have a roster you can go to, and they are a fiduciary.

Mrs Caplan: The concerns we expressed at the time were not because we were in any way opposed to the concept of joint management; in fact we had had those discussions way back when, around the development of a joint plan management on the teachers' fund. Unfortunately, we were not successful, because when it came down to the question of what you do if you can't agree, the mechanism that would ensure that the public interest on a fund, which at that time was something like $20 billion, and it's probably that and more now -- ensuring that the public interest test was there.

So I watched with interest the development of the joint management plan. I don't start with any negative views, just the concern as a legislator who is elected to ensure that the public interest and fiduciary responsibility are being properly attended to. It's in that spirit that I ask the question. When do you think you're going to have the list of the 11th trustee available?

Mr Richard Lundeen: I'm Richard Lundeen. Just to give a sense of the timing, in fact the board of trustees had its first meeting yesterday. It doesn't officially take over responsibility for administration of the pension plan until January 1. In the meantime, the existing arrangements carry on.

The second point is that in the event that a dispute arises, that a tie occurs at the board, the nature of the person chosen to be 11th trustee will depend to some extent on the issue that's in dispute. It isn't just a roster where the next person on the roster comes up regardless of the issue; there will be a group of people identified jointly. We're planning to have that in time for January, but with the nature of the issue determining who is actually chosen as the 11th trustee.

Mrs Caplan: Have you evaluated the value of the plan?

Mr Lundeen: There has not been a re-evaluation of the plan. What we have done is taken the valuation of the public service plan, the last one which was done, as a starting point, and there is now a process under way, being done jointly with the union and with the administrator of the public service pension plan, to roll forward the assets and roll forward the liabilities to calculate the actual assets as of January 1.

Mrs Caplan: AMAPCEO had some concerns about the duplicate administrative costs their plan would have to bear as a result of the splitting of the plans. Have you been able to work that through with them to their satisfaction?

Ms Clark: Actually, I'm not sure they raised concerns about the duplicative administrative costs, but we are undertaking to meet with AMAPCEO on these kinds of questions. We had extensive meetings with them around the same period of time as we reached the agreement with OPSEU, and they signalled their willingness and desire to continue with those discussions and we're going to be re-entering those discussions quite soon.

Mrs Caplan: So you haven't met with them yet. I know they expressed a number of concerns about the splitting of the plan. One was the viability of their own plan, which is a very legitimate concern that anyone would have if they were split off from a bigger plan, but they had also mentioned to me the concerns about the cost of the duplicate administrative structure. I just tell you that so you can prepare for your meetings with them, and I hope it's able to be resolved in a way which ensures the viability of the plan at a cost which is reasonable, given the fact that they shouldn't have to pay a higher price simply because the plan has been split.

Hon Mr Charlton: We don't disagree in that respect at all, Elinor. One of the things we said in correspondence to all the members of the OPS plan at the time we announced the agreement we'd reached with OPSEU was that, first of all, nobody's pension would be affected and, secondly, that nobody's contribution rate would be affected as a result of the decision to split the plan; that all of their benefits were protected and that any costs associated with the splitting of the plans would in fact be paid for, in essence I guess by the OPSEU plan itself.

Interestingly, when you spoke earlier about some of the specific questions around the splitting of the OPSEU plan, we're either at or very close to reaching some agreement around the CAAT pension, the community college teachers' pension, which has traditionally been not OMERS but in OMERS, as in managed by OMERS for them. We're in the process of finalizing -- we may not have crossed all the t's and dotted all the i's yet -- a joint trusteeship plan with them as well.

Mrs Caplan: And they would withdraw from OMERS?

Hon Mr Charlton: They will withdraw from OMERS over time. I think in the short run OMERS will continue to manage, but in the long run they will create their own management.

In any event, I only raise the issue to say that you've raised a number of issues that are important in joint trusteeship around the public interest, especially in public pension plans. Each of these plans will have a slightly different face that's suitable to the nature of the bargaining unit and the nature of the employers involved, so the CAAT plan will be slightly different than the OPSEU plan, which is slightly different from OMERS, which is slightly different from HOOPP and from the teachers and so on. But the minute you get into, as Phyllis has said, the question of joint responsibility, both around the gains and the liabilities that will accrue in the future, it's a very quickly sobering experience when you then have to sit down and agree on the structure under which that plan will operate, that plan that in fact could reach very deeply into your pocket on either side if you haven't made the right decisions about what the structure should be. All of that, in all cases, is being done very carefully.

We may have negotiated that agreement with OPSEU in a record three weeks last spring, but my staff will tell you that some of them are still working until they're blurry-eyed as they go through the process of clarifying all the operational detail of what that board will look like and how the plan will operate.

The Vice-Chair: Thank you, Minister. It's 6 o'clock, and about one hour and 42 minutes have elapsed. We will resume sitting again tomorrow in room 151 to continue dealing with the spending estimates of Management Board Secretariat. This meeting is adjourned.

The committee adjourned at 1801.