Assemblée législative de l'Ontario

PRE-BUDGET CONSULTATION

ORGANIZATION

CONTENTS

Thursday 13 December 1990

Pre-budget consultation

Organization

Adjournment

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

Chair: Wiseman, Jim (Durham West NDP)

Vice-Chair: Hansen, Ron (Lincoln NDP)

Christopherson, David (Hamilton Centre NDP)

Jamison, Norm (Norfolk NDP)

Kwinter, Monte (Wilson Heights L)

Phillips, Gerry (Scarborough-Agincourt L)

Sterling, Norman W. (Carleton PC)

Stockwell, Chris (Etobicoke West PC)

Sullivan, Barbara (Halton Centre L)

Sutherland, Kimble (Oxford NDP)

Ward, Brad (Brantford NDP)

Ward, Margery (Don Mills NDP)

Substitutions: Fletcher. Derek (Guelph NDP) for Mr B. Ward

Also taking part:

Conway, Sean G. (Renfrew North L)

Rizzo, Tony (Oakwood Ind)

Clerk: Decker, Todd

Staff:

Anderson, Anne, Research Officer, Legislative Research Service

Rampersad, David, Research Officer, Legislative Research Service

The committee met at 1532 in committee room 2.

PRE-BUDGET CONSULTATION

The Chair: Since we have the Treasurer here and we have him for a limited amount of time, I would like to call the meeting to order so that we can begin. We have the Treasurer for how long, until we let him go? We will chain him to the chair.

Hon Mr Laughren: No, it is okay. It is just that there is a corporate tax bill in the House this afternoon and I promised I would be back for part of that debate. I am certainly here until 4 pm. I do not know when debate on that other bill is going to start. I will keep an eye on that.

The Chair: Then I would like to call this meeting to order since there are representatives from all the parties. It is a pleasure to have the Treasurer of Ontario here this afternoon to speak to us. Without further ado I will turn it over to the Treasurer for his remarks.

Hon Mr Laughren: It is more of a pleasure than you might imagine for me to be here before a standing committee. Not that you are interested in my history, but I can tell you I am a big fan of the committee system around here. As Chair of one of the standing committees for some time, I appreciate the work that committees do. I attach some importance to your work. I am not just saying that as a government member; I always did feel that way.

I have a particular interest in this standing committee because I felt that in previous years -- I do not think it was a partisan matter -- this standing committee did not play the role that I think it should play in economic matters. So I hope this will work in a different way. That is one reason I am happy that Dave Christopherson, my parliamentary assistant, is on the committee. I will co-operate with the committee as much as I can in the months to come. I want to say a bit about that a little later if I could.

I thought that perhaps I would recap a little bit about where we are at in Ontario, not that there is anything new in the numbers. I think most members understand that we indeed came into a recession in the first half of 1990, that we are well into it now and that it is going to last well into 1991, at least four quarters of recession. That really has hurt us very substantially both in revenues, primarily corporate income tax and retail sales tax, almost $1 billion lower, between those two, than we had anticipated.

By the time all the numbers are in on the welfare case load, it looks like it will be about $500 million higher than was budgeted. Those were honest budget numbers, in my opinion, because they had no idea, and there would be no reason to disguise numbers like those. So you combine the falling revenues plus the skyrocketing costs on welfare and the utilization of the OHIP system as well and you have a problem. That is why we are into the $2.5 billion deficit this year, and it will most certainly be higher next year. I do not know what the number will be, but it will not stay at $2.5 billion next year. We are pretty sure of that.

In response to that we have done a couple of things. One, of course, is the $700-million package, of which about $40 million will be spent this year, we think. It will be more if we can get it spent, but it is hard to get programs like that up and running instantaneously, because the year end is the end of March, and then the balance, we hope, will be by the end of fiscal year 1991-92. That is our hope because we do not want to delay. We want it spent, giving the economy a boost when we think it needs it most, without it being inflationary and lasting beyond the recession. We do not want it to be there later. At the same time, we think it will provide some infrastructure improvements in the province that are overdue.

We really think we are doing the right thing. It is going to add about 20,000 jobs. If you combine the anti-inflationary package, which is about 14,000 person-year jobs -- be careful how you say those words these days -- with a couple of the tax moves that we have taken, which we think will be another 6,000, that is about 20,000 jobs. Without that there would be actual negative job growth, if that is the right term, or there would be job decline, employment decline, next year.

We think this is going to hold it even and that is about it. It is not as though we think it is going to solve all our problems, but on the other hand I really believe that to do nothing would not have been appropriate. Most of our critics would not have been happy if we had done nothing. There might have been some, but I think most people felt we had an obligation to do something to try to cope with the recession. That is what we have done.

We know that the high interest rates and the high dollar are taking their toll. We know that the restructuring under the free trade agreement has taken its toll as well. Global competition is intensifying. That is also having an effect on unemployment. We know that there are a combination of factors that are making it more difficult, and the recession just seems to be compounding that, so we got clobbered this year.

On the other hand, when the Premier and I went to New York to meet with the people who sell our bonds, most observers expressed virtually no concern about our spending, although they will keep an eye on us, there is no question about that. If we let it get out of control. they will be the first to reduce our bond rating. The Ontario economy is not in desperate straits. It is not as bad as it was 10 years ago in 1981-82. The recession is not as deep and we do not think it is going to last as long.

At the same time it is not pleasant trying to cope with falling revenues and rising expenditures at a time when we have been through a process in which a great deal of promises and commitments were made on expenditures.

That is not the opposition's problem; that is ours and we have to deal with that as best we can. I think most people understand that we cannot do everything as fast as we would have liked to have done, or even as fast as we said we would during the campaign. I also think you would appreciate the fact that during the campaign we did not know we were going into this recession. We did not know we were going to have a deficit. I think people understand that and will be patient. I am not talking about the give and take in question period. That is completely legitimate and fair. I am not complaining about that at all. That is to be expected and I have no problem with that at all. But I just think out there in the public people understand that we cannot do everything at once.

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On the budgetary process, I wonder if I could speak a minute about that. There is no grand plan in place here, but I really hope that this committee could help us in the budget-making process. I do not know how we can change much for this year, because I think you would appreciate that for the budget we hope to bring down in April, there is a lot of institutionalized consultation already in place. Historically, the Treasurer met with a large number of groups. That seems to be something that is expected and it is very hard to change it right off.

I would hope that as time goes by this committee could play a more important role in that process and do part of that with us. It should not just be the Treasurer sitting in the boardroom listening to these groups. It should be a broader representation of the Legislature. I hope very much that would be able to happen this year.

Mr Chairman, you will set your own agenda, not me or anybody else. It is too fine and honourable a tradition. I remember chafing under the bit when people tried to set the agenda for us when I chaired a committee, so I would not presume to do anything like that, but I hope that we can share with you the people who want to consult. We can see how many of them will come here and make their presentations to you, if that is what you decide you would like to do.

Again, it is up to you, but I hope we can send that list to you. I would appreciate knowing if you come to that determination. If you do, then I do not want to send these people off on a wild goose chase. For example, if the Canadian Bankers' Association wanted to meet with me, I would say, "Well, look, why not meet with the standing committee and I'll come to the standing committee and be part of the process?" But I do not want to do that if, when the letter comes here, the committee says: "Not on your life. We've got other things we want to do." That is fair as long as we know ahead of time that we are not sending people off to see you when you are not going to see them. I would just appreciate knowing that.

I am not saying that I will come every time if you do that, when you meet with somebody, but that when it is possible I would do that. I think that is a better process. I think it involves more members of the Legislature, including the opposition parties. I do not think it should all be contained over there in the Treasury boardroom.

Another thing we hope to do is to open up the process in terms of budgeting beyond one year. I would like to see multi-year budgeting. That would be, I think, a more meaningful role for the standing committee to play. But once again. that takes time to change. It is almost like a culture that is there now in Treasury. It would be nice to start that as soon as we can. It is very tough to change anything that has become so institutionalized, this year, for this budget, but I hope that you as a committee will talk about that among yourselves and see what your ideas are.

One proposal I would make is that we co-operate on the consultative process leading up to the budget. It has to be done fairly early, because otherwise it is a sham. There is no sense meeting with a group in February and March, when you are writing the budget speech and doing your tax changes. That is a farce and people will see through it, and so they should. If you are going to take part in that process, it would be better if it was done early rather than late so that it is a meaningful process, and then you can, I hope, feed back to us in Treasury the results of the process you have engaged in with these groups or lobbies or whatever you want to call them. So I hope that you will think about that.

The other possibility, and you will have to decide this, is to what extent you wish to undertake specific studies or examinations or travels in the province or whatever on specific issues. I have had members from different parties ask me about issues such as the border shopping issue, gas prices in northern and southern Ontario, the impact of the GST on the Ontario economy, the impact of high interest rates on the Ontario economy; some provincial, some federal mix of things. You will decide that, not me. I hope you will talk about that and let me know, so that we can help you in any way we can.

There is only one thing I would say and it is, I hope, friendly advice. It is that you not engage in wild goose chases that cannot lead anywhere. But you will decide that, not me.

Anyway, that was really all I wanted to say. If there any questions you have I would be quite happy to try to answer them.

Mr Kwinter: First of all, I want to congratulate you on your elevation to the position of Treasurer. I also want to commend you for what I think has been a very fair and evenhanded approach to dealing with the deficit. I was heartened by your remarks, saying that you were not aware of the depth of this recession. As I say, I have been quite heartened by the fact that you have not tried to play politics with this and tried to attribute it to anybody, because I think everybody understands this is something the people in your ministry did not anticipate either, or we would have had a budget that reflected it.

Having said that, I would be curious to know one thing. Some of the comments you have made in the past are that running a deficit does not really scare you too much. Do you have any kind of ballpark figure as to what number would start to scare you?

Hon Mr Laughren: Two point five scares me, which is the one we are into right now. I really do not know what number would scare me. I do not know whether you were in the room: I think you were at the beginning, yes. We know it is going to be higher next year.

Mr Kwinter: Yes.

Hon Mr Laughren: But it is not going to stay at $2.5 billion. There are some built-in costs that are going up; they are built into the system. It does not look like revenues are going to take much of jump next year either; it will be very small, as a matter of fact. So we know it is going to go higher.

First of all, I hope I am too politically wise to commit myself to a deficit number that would strike terror in my heart, only to surpass that number in two years or whatever and end up eating the words. Quite frankly, it would depend too on the depth of the recession. If we are pulling out of the recession next year it is different than if we are still in it and sinking deeper. which we do not think we will be, I hasten to add. Then, of course, a bigger deficit would be something most of us could live with more readily, I think. I am not trying to be evasive, I just do not know the number.

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Mr Sutherland: I was just wondering if you could elaborate on the time line. You said you were anticipating bringing the budget in during April, and just for purposes of this committee meeting with different groups you made the comment that you do not want to meet with them while you are writing the budget. Perhaps you could elaborate a little more on the time-line process that you and the Treasury are looking at so that we know what time lines we have to work with in terms of hearing presentations from different groups.

Hon Mr Laughren: You will appreciate the fact that I have not been through this exercise myself, but in the new year we start looking right away at revenues and expenditures. Once the transfer payments announcement is out of the way, which is the last week in January, my understanding is that is when Treasury really bears down and gets into -- not writing the budget; I probably should not have used that phrase -- determining the major components of the budget, revenues, expenditures, tax changes that we are going to make. Of course, overlaid on top of all this is the Fair Tax Commission and what it is going to recommend.

Perhaps this is a good time to tell you that I think there is going to be a delay in the Fair Tax Commission too, because we were proceeding to line up commissioners to serve on the Fair Tax Commission -- I can plead as guilty as you want me to plead here -- without thinking of the appointments process. I mean, technically we still could. I believe we still can because it would not normally be what they call order-in-council or cabinet appointments -- they are Treasury appointments -- and we would not need to go through that process of the committee.

On the other hand, I think Mr Harris put it quite appropriately yesterday when he said it is an important commission or committee, and why would we not subject that group to the same thing? I think that is a fair argument. I have no problem with it at all. But that does slow the process down, even up to a couple of months I gather, so that is a factor.

I still hope we will be able to go ahead and make some tax changes in the budget. That is the long answer to your question, but it means that in one way it is not a big deal in a sense that, so what? We think it is going to take about three years for the Fair Tax Commission to complete the study anyway, so if it is two months later than we planned on starting, I do not think that is the end of the world. There was not enough time for them to do a lot of things for this budget anyway.

I think we will go ahead with some tax changes -- I hope, anyway -- on this budget. I have not made any determination about what they should be. Therefore. I think if you were to do your consultation -- I think that was the thrust of your question -- it would be better if it was in the first six weeks after 1 January rather than the second six weeks after 1 January.

Mr Phillips: I appreciate the chance to chat with the Treasurer. On this year's numbers, just so I have some idea of how you think we will finally end up, because that is the basis we have to be thinking about, whatever contribution we will make for next year --

Hon Mr Laughren: Is that 1990-91?

Mr Phillips: Yes, the one we are in this year. What is your estimate of expenditures for this year? What will we spend this year in the province?

Hon Mr Laughren: Let me think what the numbers are now. I believe it is about $46 billion. I could be out on my numbers here. I have not actually looked at them that way, but roughly $44 billion in revenue and $46 billion in expenditures, in that neighbourhood. I could be out.

Mr Phillips: Are those the numbers? I get a sense that the $2.5 billion is fixed but the other ones flip around a little bit.

Hon Mr Laughren: These are better numbers. Our revenue is $43.6 billion and expenditures $46.1 billion. I am out a little bit.

Mr Phillips: Again, just help me a little bit on this. I am sorry to be on this because I think we want to get on to broader stuff later on, but there are a couple of areas on the expenditures side: the SkyDome and the UTDC. I guess, they are in that $46.1 billion, at some number.

Hon Mr Laughren: Yes.

Mr Phillips: That is $400 million for UTDC and --

Hon Mr Laughren: Be careful on these numbers here. I think you will appreciate this. The UTDC $400 million is being obliterated. That will be paid off. I do not know whether all the bookwork has been done, but it is going to be done like dinner. As we talk, negotiations on the SkyDome are going on. We have had one meeting and I think there is another one shortly.

There are other numbers, though, that went into the whole deficit number and that included things like negotiations with the doctors. That was why we really did not want to get terribly specific on some numbers. because it would say to the doctors, "This is how much we're setting aside in anticipation of our settlement with you." We think that would be a foolish negotiation, so we really did try to -- well, "disguise" is not the right word. We did not want people to be able to break down the numbers, take everything else out and be left with only the doctors and say, "Eureka, that's the number they are prepared to pay the doctors' retroactive payments." That is why. It was not for any other reason.

Hon Mr Laughren: On the SkyDome, I think it is common knowledge that the debt on the SkyDome is over $300 million.

Mr Phillips: I think so, because in your speech --

Hon Mr Laughren: I think that is quite common knowledge.

Mr Phillips: I am just trying to get an idea of how we might end up the year. If the revenues go up, the deficit drops.

Hon Mr Laughren: If the revenues go up -- oh, yes.

Mr Phillips: Over your $43.6 billion.

Hon Mr Laughren: That is correct. To be fair, before you finish your question, let me say this: The numbers are moving around a bit for a couple of reasons. First, the welfare costs continue to rise beyond what anybody anticipated. Even since we became the government on 1 October, the numbers have gone up substantially, plus there are more moneys coming in from the provincial income tax. As you might know, when we put on our tax forms our share of 53% of federal tax payable, because it takes a long time for a lot of tax forms to go through the system, I gather, the federal government gives us money every year and then as the year goes by and the next year goes by. it is readjusting the numbers as it processes late forms and so forth.

It is not unusual for adjustments to be made at least a year late. Right now the 1989 tax year moneys are being adjusted from the feds. Those are up substantially. I do not have a final number. I think that is either the end of this month or the end of January. I cannot remember in which month those numbers are basically finalized. I think it is in the new year.

We think and we hope -- our fingers are crossed -- that this will allow us to stay within the $2.5 billion because of the increased income tax moneys coming from Ottawa, compensating for the increased welfare load. It is a bit simplistic, but that is basically what it is.

Mr Phillips: The reason for my question, of course, is that I know you had to make an estimate on revenue very early on and I said last night in the House -- you happened to be out -- that if you were betting, I am not sure but that the revenue might be closer to what the previous revenue estimates were than the one you made on 11 October. I just wonder what your driving number is, whether it is the $2.5 billion deficit, or is it that you anticipate expenditures of $46.1 billion and if revenue comes in higher then the deficit drops, or should we expect the deficit, come heck or high water, to be $2.5 billion?

Hon Mr Laughren: It is a hard question to answer. We really think we can hold on the $2.5 billion. We really think that because of that strange combination of revenues from the federal government and our expenditures going up.

Mr Phillips: Okay. Just on future things, it would be helpful for the committee, at least I think, at some stage to have your officials kind of scope out for us sort of the overview for the years ahead. You have mentioned your estimate that the number of jobs in the province will, in your judgement, stay about the same next year as this year. If the labour market grows by 75,000 it means unemployment goes up by a point and a half or something like that. which I think are the numbers I remember.

I would find helpful just kind of the global assumptions that Treasury makes in terms of the economy, job creation, the kind of environment you think we will face. As a suggestion, I would not mind having that sooner rather than later; maybe today, I do not know.

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Hon Mr Laughren: I do not think that would be difficult to arrange. I am not sure what you would get that is different than was contained in the economic statement that was made a couple of weeks ago, but if it would be helpful to the committee, it would not be that difficult to arrange.

The Chair: Mr Phillips, on the agenda is a list of members from the ministry, and these people are here. You might be able to grill them a little bit after Mr Laughren is finished.

Mr Phillips: Could I ask one last question? In your statement you mention that you may be looking at a new way of dealing with or reporting capital.

Hon Mr Laughren: Yes, that is correct.

Mr Phillips: It seemed quite interesting to me.

Hon Mr Laughren: I did not even realize that Bob Christie and Bryan Davies from Treasury were here -- Bryan Davies is the deputy and Bob Christie is the assistant deputy minister -- when I was giving those previous answers.

Mr Phillips: Whatever you said is right, though.

Hon Mr Laughren: No, not with these guys. I had better be more careful of my answers.

I think most other jurisdictions separate capital from operating; Alberta does and I think BC and Saskatchewan. US states separate the capital fund from operating because they believe that an investment as capital is different from the ongoing operating expenses of running a government and delivering the programs, that the capital projects are an investment in the future and they should not be lumped together with operating because they are different animals, and that even fiscal conservatives could justify a deficit on capital, when they find it harder to justify a deficit on operating. I think that is fair comment, without trying to put words in their mouths. There are arguments to be made that it gives you a more accurate picture of how you are running your government if you separate capital from operating, so we are looking very seriously at how you do it.

I hasten to add that if you look at the budget papers for the last year or two at least, there is a breakdown there. except that it is a consolidated -- for example, the $2.5 billion deficit this year includes capital, and capital expenditure this year is around $3.1 billion, I think, for 1990-91. If you took that capital out of the numbers, we would have an operating surplus.

I hasten to add that this is not any attempt to pretend we do not have a deficit, and that would have to be made very clear if we do that, but it is a fact that if you took capital and separated it from 1990-91 numbers, we would have an operating surplus of, I think, around $600 million, if you do the arithmetic.

Mr Phillips: I just have a supplementary.

The Chair: I am writing down the order. I have Mr Sterling and Mr Ward.

Mr B. Ward: You can take me off the list.

The Chair: Mrs Sullivan would be after Mr Sterling, and then Mr Kwinter.

Mr Sterling: There are, I guess, two or three things that I would like to get some idea of. One of the concerns I have had as I have seen the governments come and go is the immediate want of a new government to change the style of books; so it is very confusing to the public when the budget comes out as to what is really happening.

I think that the Provincial Auditor in his most recent report criticized the preflowing of funds from one year into the next. Would you be willing to sit down with perhaps this committee and the Provincial Auditor and say, "We are going to keep books this way," and allow the committee to take advice from the Provincial Auditor whether or not that method of accounting was fair in terms of accounting to the public of Ontario?

Hon Mr Laughren: You mean to make a commitment not to do any more preflows? Is that what you mean?

Mr Sterling: I am not talking about the preflows only. You mentioned some things here today. For instance, you hope to keep the deficit down to $2.5 billion on the basis that you are going to get an injection of funds from the federal government, which may not just be the filing of forms, but it probably relates to people who are paying their taxes late as well. Whether or not that is legitimately claimed as a source of revenue in this year, there may be an argument on that part.

You mentioned that this past year there was something like $3 billion-plus spent on capital, but on the other hand you do not mention that there is no negative part on the side of the books as to what are assets, as they are in depreciation. So you can claim all those kinds of things.

I guess what I am concerned about is that over the number of years that I have been here, I think the Treasurer basically gets away with murder, because whatever he says on budget day, nobody goes back and says, "Yes, but there was a preflow of $300 million or $400 million which happened over the last three or four years." We immediately recognize that. We have tried to cry about it, but the press did not understand what we were talking about.

What I would really like is a commitment that the books are kept in some constant fashion which has some kind of independence for somebody outside to say, "This is a fair way to do it." As long as it is costed from one year to the other, you can really in fact compare what governments are doing.

Hon Mr Laughren: My initial reaction is sure, I do not have any problem with that. I do not pretend to be the resident expert either on what is good accounting and what is not. I gather that the Provincial Auditor did not accept the preflows as a good accounting practice. He was not suggesting anything else in his comments. As a matter of fact, he was -- not ambivalent; that is not the right word. What he said was that the Treasury should "consider." He did not say that this is wrong, that we should change; he said we should consider it. I think there is no question that the auditor does not like the concept of preflows. There is no question about that. We will keep that in mind.

Mr Sterling: The second question related to, what can this committee usefully do in the next little while? Quite frankly, I am not interested in spending money and time. because it does cost money to keep these committees going during the break between legislative sessions. What would you envisage that this committee could do which would be of use to you in terms of advice and direction'?

Hon Mr Laughren: This may sound a bit strange, but if we did not have the Fair Tax Commission already struck, I could see the committee providing advice on something like that. It would not be fair to this committee to be asking you to spin your wheels while you have them churning away out there with experts and support staff and all that trying to help us on the fair tax stuff.

If I take you literally in your question of how this committee can help me -- I think this is what you said; "How can this committee help you?" -- it would be immediately in the consultative process, leading into the budget, before the budget in the next little while, and coming back with having heard the presentations from the groups that would come before the committee, if that is what you decided to do, listening to them and making recommendations back to Treasury on that process.

Mr Sterling: Looking at the past list of witnesses that have been before this committee, there have been two kinds of witnesses.

Hon Mr Laughren: Some duplication too, I understand.

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Mr Sterling: Yes. I am not anxious to duplicate if somebody has made the pitch to you. Probably it is better than making a pitch to us, because I think your ear will count more, in the final analysis, than ours.

There are two kinds of pitches you normally hear in this committee. One is an economist or somebody looking at a more global picture about how you approach your overall budget, whether you put more money into resource areas or you shore up the education system or whatever the general approaches might be. On the other hand, we get requests from groups very much self-interested in fattening their share of the provincial dollar. Is there in fact any real use in us listening to the latter group?

Hon Mr Laughren: As I say, I have not been through this process before, but groups do not just come to the Treasury or the committee for a bigger share, do they? Are they not more public-spirited than that? Are they not interested in making the system better in Ontario and having a more balanced tax system? I do not believe the groups out there are motivated in the way you imply they are in your question, Mr Sterling.

Mr Sterling: I wish Hansard could take pictures as well as record words, Mr Treasurer.

The last thing I wanted to talk briefly about is that because we are going through a very critical period in the history of this country and the ties between the various parts of Canada have been economic as well as social, would not a more important function of this committee be to try to make some kind of recommendations to you about how you could make those bonds stronger at this time rather than weaker?

Hon Mr Laughren: It would be hard to say no to that.

Mr Sterling: I thought so.

Hon Mr Laughren: Keep in mind, though, that as we speak the Premier is ruminating on some kind of process vis-à-vis strengthening the consultation as well, so I would not think the committee would want to duplicate what somebody else might be doing. That is the only problem I would have with that.

Mr Sterling: I guess the concern arises from the fact that there have been companies, for instance, that have moved to the United States, to northern New York state, because they could do business more easily from there into the province of Quebec than they could from the province of Ontario. I can actually give you an example of that. If there are a great number of companies where that is occurring, I think it is important for the government to recognize what is happening between the competing jurisdictions that surround us. If we are going to take some kind of leadership role in strengthening the bonds across our country, then that should be reflected in how you shape your budget document.

Hon Mr Laughren: I was just trying to see if I had the list here. When the Fair Tax Commission gets up and rolling, I think we had tax competitiveness as one of the things we would like to have it look at, the whole competitiveness question, because that is quite a serious matter, I agree. But once again, we do not want to encourage the committee to do something that would be duplicated.

Mr Sterling: I just ask you to bear with me for a moment. For instance, I do not know whether your commission is going to look at what happens in the state of New York, for example. In terms of the revenues that the state of New York gathers from its people and how it distributes that revenue in terms of its expenses, how much is it putting into its social portfolio versus our jurisdiction, and how much, then, does it have to go after business and individuals for tax revenues? If you do not identify where the problems might be or where there are significant imbalances, then your mix of how much you are putting into each of those pots may be out of kilter and you may get beyond the point where you can bring it back in line.

Hon Mr Laughren: Yes, and quite frankly I do not know to what extent the tax commission will be looking at something that is very broad that way. You are not just talking about a tax level or a tax rate in another jurisdiction; you are talking about what they do with the taxes when they get them.

Mr Sterling: And how they strike them. In a state Legislature, the whole Legislature is responsible for striking the budget and therefore each and every legislator has to be involved in the process. We seem to be tending over the last three or four years to be progressing down that road where we are trying to give more responsibilities to the legislators to have something to put into it. We are certainly not to the point where we have any responsibility, and I just thought it would be fruitful for us to look particularly at Michigan and New York state.

Hon Mr Laughren: It could very well be. You would not get any argument from me. Once again, I suppose I am in danger of saying things that seem good at first blush but may turn out to be more difficult down the road when I get to know more about what I am doing. I am thinking of opening up the budget-making process so that there is less secrecy around it as well. I do not know how to do that, but I can tell you that that is one of the things we are thinking about, if there is a way to do that. Once again, I do not know how to do it in the immediate, impending budget, but that is something I would like to see. Unless members of the Legislature have a sense of some kind of involvement in the process, why should they feel any kind of responsibility for what happens in the province if they have had absolutely no say in the making of economic budgetary policy?

Mr Kwinter: You want them to buy into the process?

Hon Mr Laughren: Yes. I know that can sound self-serving, but that is not how I mean it. It should be widely shared. You used the American model as an example.

Mrs Sullivan: I am going to start with the last thing first. I am sure that the Treasurer remembers -- I think it was the 1986 budget -- when there was a supplementary document attached relating to the budget process. In fact. it was recommended that this committee deal with hearing from interested parties relating to the budget; the standing committee on finance and economic affairs was seen as a first step in opening up the process. I know your officials are very familiar with that. They may want to look at that further to see what the thinking was then and where it may be able to be moved on.

I am interested in looking at some of the economic projections you have put forward. You spoke about the kind of surprise PIT and CIT revenue for the province for this particular fiscal year. The budget process will be dealing with next fiscal year, and I wonder what your projections are in relationship to the return from the feds for that particular period of time, given that the slowdown in the economy will have increased.

Hon Mr Laughren: For 1991-92?

Mrs Sullivan: Yes.

Hon Mr Laughren: I cannot answer that question, but I can tell you that there is nervousness about the income tax revenues being less -- correct me if I am wrong here -- because we know that, for example, in 1990 we have not had a good year, so there is a possibility that the numbers --

Mrs Sullivan: You have not made any projections, though --

Hon Mr Laughren: Not that I know of, no.

Mrs Sullivan: Okay. I wanted also to follow up on your view of separating capital and operating budgets. I think that is a fine idea, I think it is a very important step to take, but I was also interested in whether in considering that you would also be looking at separating the capital for which the province guarantees debt -- ie, Ontario Hydro and perhaps the water and sewage services corporation -- as part of a whole capital statement in conjunction with the budget. That may be something the committee wants to pursue as well.

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Hon Mr Laughren: That could be. I know there are different models you can use. You can use one model where you set up one capital account that lends the money to the separate corporations. Is that the Alberta model?

Dr Christie: More like Saskatchewan.

Hon Mr Laughren: It is a capital investment corporation that then funnels the money to -- I do not know what we would do there.

Mrs Sullivan: I apologize, because I had to miss the initial part of your statement. Relating to the Fair Tax Commission. I wondered how broad we would anticipate things like, of course, personal and corporate income tax to be dealt with. Would you also be looking at property tax and assessment?

Hon Mr Laughren: That is a good question. For sure we want to look at the relationship between the provinces and the municipalities, and the properties and school boards. The assessment one drives me crazy. That one, boy, I would really want to think carefully about that one.

Mr Sterling: Come out with a poll tax.

Hon Mr Laughren: To be fair, the commission is not struck yet. We have not had a meeting with the people to discuss the specific mandates of how it is going to work and so forth. That is why I mentioned earlier that I had originally thought we could get this thing done before the Legislature adjourned and we could have an announcement in the House and so forth, and now we are not going to do that. As I said earlier. I do not think that is serious. You were not here then, I guess, when I talked about the fact that these commissioners are going to be considered by this committee considering appointments. That is going to slow the process down; they tell me it will be about 60 days by the time that whole thing gets moving. So that is another reason why we have not had a chance to work that out with the Chair or the Vice-Chairs or the commissioners.

Mrs Sullivan: I suppose the same response would follow, because I also wanted to know if you were going to be looking at tax incentives and forgone revenues as part of that mandate.

Hon Mr Laughren: Yes, that I can tell you: expenditures and incentives.

Mrs Sullivan: And forgone revenues?

The Chair: It is indeed fortunate that we have only one delegation today, is it not?

Mrs Sullivan: That is right. Wait until the rest come in.

Completely apart from the budget process, I wonder if the Ministry of Treasury and Economics is reviewing the economic implications for Ontario of a potential free trade agreement with the US and Mexico, whether you see that as being a part of your agenda.

Hon Mr Laughren: I certainly see it being part of our responsibility, so I have no hesitation there. I do not know whether we have people churning away --

Dr Christie: There are people looking at the Mexican --

Hon Mr Laughren: I am sorry, you have to --

The Chair: Come forward, please.

Mrs Sullivan: As the former chairman, the Treasurer is very conscious of when the mike is on.

Hon Mr Laughren: That is right, I am.

Dr Christie: There are people, in Treasury and in other ministries, including Industry, Trade and Technology, looking at the implications of an arrangement with Mexico. The nature of the arrangement is as yet unclear, so any attempt to put numbers on implications is pretty difficult at this point because we do not know what kind of a deal we are dealing with.

Mrs Sullivan: Are officials from your ministry at the table or participating as observers in any of the discussions that are now under way, because certainly there are discussions?

Dr Christie: No one from Treasury is at that table.

Hon Mr Laughren: I do not think so.

Mr Kwinter: Just on the Treasurer's musings, I guess you could call them, about separating the capital from the operating, which I agree is an interesting one, what would your comments be on whether you would capitalize the debt service? Would you keep that as part of the operations or would you --

Hon Mr Laughren: I need help on this.

Dr Christie: If I could try that, by capitalizing the debt service, do I understand you to mean as Ontario Hydro does with some of its interest: not count all the interest as a current expense?

Mr Kwinter: You would take your present-fiscal-period interest as, I assume, an operating cost, but would you capitalize accumulated debt service? I do not know. I am just asking you.

Dr Christie: Normally, in the jurisdictions the Treasurer referred to, in terms of the United States and the other Canadian provinces that run some variant of this, the annual interest costs on the debt are taken in as part of current expense and are not capitalized in the sense of being separated from current expenditures.

Hon Mr Laughren: Your doctoral thesis was not on that subject.

Dr Christie: No, I obviously missed that.

Mr Sterling: I have a supplementary on just that particular part. When you pay off a debt or part of a debt, you pay out $100 and $70 of that is interest and $30 is principal. Is it all counted as $100 and that is all we see? Does the government get any credit for the $30 of capital it is paying back?

Mr Kwinter: The other question is, are you paying any capital or is it all just pure interest? Other than this year, with the $500 million that went to paying down the debt, I think it is all just straight interest.

Hon Mr Laughren: I do not think we can answer your questions today. We would be quite happy to come back to you on that stuff, though. The other thing is that the first thing that struck me when people started talking about a capital account was -- I hate to use this word -- the optics of putting in a capital account when you are at a time of deficits. You have to be very careful and very clear about the purpose of setting up the capital account. There is enough cynicism out there now about governments and policymaking and budgets and deficits without adding to that by making it look as though we are trying to pretend we do not have a deficit or a smaller deficit.

Mr Conway: I wanted to raise three or four points, some of which have to do with information, and the answers I would not expect today.

One of the things I would be interested in getting from Treasury would be its best estimate of the annualized cost to the provincial government of the full implementation of the Social Assistance Review Committee phase 1 proposals. I think that might be very useful in light of now the presumably mature implementation of phase 1 and also against the current climate. It may not be possible; it may not even be something you want to talk about -- I can certainly understand how the latter might be true -- from a Treasury perspective. But if it were possible, it might be useful, to help focus at least my mind, to get by later in the winter Treasury's best estimate of the annualized cost of a full implementation of phase 1 of the SARC proposals, that is, the cost to the provincial government and -- I do not suppose it is fair to ask, because some of us might even remember -- what that number might be in relation to what the expectation was. That would be one of my requests.

The second one -- you probably, I think, answered this someplace publicly -- again, not for today, but perhaps for a time at some point in the winter, is an indication from you as to what you might expect to have to set aside, again on an annualized basis, for the doctors' fee settlement. You may have given that estimate, but --

Hon Mr Laughren: You mean --

Mr Conway: Well, as I think members will know, there are ongoing negotiations with --

Hon Mr Laughren: Right. We talked about that earlier.

Mr Conway: That is correct, and I probably missed that.

Hon Mr Laughren: What I said was that I hoped I would not have to talk about that number --

Mr Conway: I can appreciate that.

Hon Mr Laughren: -- because of the negotiations. That was my problem. But your question is somewhat different, is it?

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Mr Conway: This has to do again with the budgetary planning you are going to be leading. Of course, any settlement in that respect is going to be viewed with a great deal of interest across the broad public sector, which you will lead in this respect. I would be interested to know at what point you think we might have some public indication of what the cost of that settlement is going to be to the provincial Treasury on an annualized basis.

Hon Mr Laughren: Oh, I see. Okay. If it builds into the --

Mr Conway: That is correct. There is a third point. something a couple of the members were talking about earlier -- again, it takes me back -- and that is the whole business about the best guess as to the Ontario return on personal income tax from Ottawa. I have a great respect, more than words can convey, for the people who work in the Ministry of Treasury and Economics. They are extremely professional people. One of the things that has really struck me over the years is the difficulty with trying to predict that. I understand why.

If the truth were told, a lot of the free spending -- in the minds of some -- that a previous government engaged in was paid for to an extent that I would not ever have imagined possible by the growth on that account. Certain people wearing nice blue blazers would come in and announce happily that instead of $X billion it was going to be $700 million more, and there was just sort of potlatch written over all the social ministers' faces, I being one of them, and we attacked.

I guess what I would say -- you touched on it earlier, Treasurer -- is that I remember a time, and I have a lot more appreciation now than I did seven or eight years ago, for one of your predecessors particularly, the former member for Muskoka, who was budgeting in exactly the reverse context, where the news from Ottawa was infinitely worse than anybody predicted. I think it was the fiscal year 1981-82 when it must have been horrible to have been either Treasurer or Deputy Treasurer, because the news just got worse by the hour.

I was out last night with some people who have much more business association than I do, and I was absolutely astonished at what they think is going to happen over the next year. I am sure they are wrong, not being a naysayer, but one of the concerns I have is that if they are anything like right -- maybe somebody from the back could perhaps focus our minds and tell us how bad "bad" was in 1981, 1982 and 1983 in terms of what did not come in in relation to what was expected, because I can remember budgets that were just a sea of red ink and it had very little to do with expenditure, but much more to do with just the collapse of revenue.

I guess the main point is that as I look at the next budgetary cycle, I see a number of things. I see a perfectly understandable tax expenditure of $500 million, occasioned by the passage of Bill l; perfectly legitimate it seems to me. But that is none the less from your point of view the surrender of $500 million worth of traditional revenue that presumably you, more than any of the rest of us, are going to have to worry a little bit about. If we add to that a very significant collapse in those revenues that have been particularly buoyant in the last number of years -- I cannot remember a time in the last five years when the payback from Ottawa on those accounts was not hundreds of millions of dollars higher than the very able and conservative estimators in your and my employ suggested. If you marry those two things, it seems to me one has shark-infested waters.

Hon Mr Laughren: A cause for concern.

Mr Conway: A final point that I will just make is this: It seems to me there are two or three other things that are occurring and are occurring with amazing speed. I noticed, and my friend the member for Wilson Heights was pointing out, in the financial press today just what is likely going to happen as a result of the collapse of the Uruguay round of the GATT negotiations. I will tell you, farmers in Ontario are going to be horrified. I suspect that before the snows of this winter melt, there may very well be some things that have an enormous impact on things like supply management. I do not mean to be gloomy, but I am sure that you, with your com flakes, read the Financial Post summary of what the Americans are planning, and that appears to have very immediate potential on the Ontario agricultural sector.

I was very encouraged, I might say, to see the Premier on television a week ago Sunday night with Angelo Persichilli in which he seemed to be well advanced on the brief of the US-Mexican free trade agreement, so I am sure that in Treasury and in the Ministry of Industry, Trade and Technology the Premier's suggestions and commitments to Angelo are being acted upon in full --

Mrs Sullivan: Post-haste.

Mr Conway: Post-haste.

Mr Conway: It seems to me that the failure of GATT and what that is going to mean, for example, to supply management in Ontario agriculture is going to be enormously important and is going to act out over the course of the coming months. It is not going to be five years down the road. It appears in the course of recent indications that this is going to be a factor in the next 6 to 18 months. I know that in my area -- to some extent I would suggest in yours, Treasurer -- what is going on in the Ontario forestry sector is absolutely astonishing. It is not just a lot of the international conditions over which we do not have much control, but in the most patriotic way I can put this, I see, for example, in northeastern and my part of eastern Ontario some very significant effects of major changes in the province of Quebec. I see a much more integrated industry in Quebec, and integrated in the sense as well of business, labour and government much, much more together on what the objectives are, the establishment of some very significant and powerful interests that are now beginning to play themselves out in a dramatic way in Nickel Belt, in Parry Sound, in Cochrane, in the Tri-town area, all through my part of eastern Ontario.

I am very concerned that one of these days, as the unemployment in that sector rises in your area and mine, a lot of Ontarians are going to awaken to what has happened. That is a restructuring, a critical part of which is occurring on Ontario crown land. I just do not want to have to go back home, or I do not expect you want to go back home, having to explain some of that restructuring for which we do not appear to be in a commercial or in an economic sense nearly as well prepared as our friends in the Quebec Federation of Labour, the Quebec federation of business and certainly the Quebec government.

So in that area, those two parts of our resource sector, it seems to me, are things that are going to have a very significant effect on a lot of the financial and budgetary climate of the next year or so, and certainly in agriculture and forestry I expect -- well, it is happening now -- but the pace of that change is certainly going to accelerate.

Hon Mr Laughren: I do not want to get into anything, but I just got a note saying that Bill 10, which is the corporate tax bill, might be up in 10 minutes. So I would appreciate it if I could leave in the next few minutes, but if you want to complete some --

The Chair: Mr Phillips, if you have a very quick question, then we will give you some time to wrap up.

Mr Phillips: A really quick question, and I do not mean to sound partisan on this, so I will try to walk very carefully.

Hon Mr Laughren: I would be so disappointed if you are not.

Mr Phillips: The Treasurer has indicated the recession, in his mind -- probably halfway through next year we will start to move out of it, I think. In An Agenda for People, it said Ontario is in a recession. I am just trying to get a fix on -- well, it does say that. So the promises made in An Agenda for People assume the recession. I gather the recession may be a little bit worse than you thought when you made that, but I am just trying to get an idea of the difference between what you estimated when you wrote An Agenda for People and what you see now. I realize we are going to be saying to you that these are your promises to the people of Ontario and you want to keep them. You are saying there is a difference between the recession we saw in August and the recession we see now. I am just trying to get a feeling of the magnitude of that difference.

Hon Mr Laughren: I think it is a trick question. It is safe to say, when that Agenda for People was being worked on, that we had -- I do not think you will see any numbers there. We did not know the numbers on the depth of the recession. I am not talking about the numbers on the programs that are proposed --

Mr Phillips: Yes, I know.

Mr Sterling: Were there any numbers at all?

Mr Phillips: Oh, at the back there are.

Hon Mr Laughren: Oh yes, that was researched extensively. Anyway, it is safe and accurate to say, though, we had no idea of the numbers; we had none. To be fair -- I have said this before and I say it again -- I do not believe that Bob Nixon knew those numbers either when they changed so dramatically.

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Mr Phillips: On the recession?

Hon Mr Laughren: Yes. I have said that before. I might quarrel with a couple of factors, such as something not being in the numbers such as the SkyDome or UTDC. I might quarrel with that, but I would not quarrel with the fact that I do not think Bob Nixon knew that we were in the kind of recession we are in and what the numbers would be until it was too late. I certainly did not. If he did not know, how would we know? But I will tell you, though, that there were all sorts of people starting to predict that we were heading into a recession at that point. That was just another example of a farsighted document that was, just coincidentally, put together during the election campaign.

Mr Phillips: I think that you said it is a shallow recession and you predicted a recession; so there must be a relatively narrow range between the recession you saw then and the recession you see now.

Hon Mr Laughren: But even I, as Treasury critic back in those days, could not have told you or even imagined that between corporate income tax and retail sales tax we would drop almost $1 billion in revenue. I could not have told you that if I had been under threat. I mean, I had no idea. I had no idea that our welfare case loads would cost us $500 million more than it was budgeted for. I think that is about right, for the year. I do not think that anybody had any idea the numbers were that serious.

Mr Conway: I think you are going to take Frank Miller out for lunch.

Hon Mr Laughren: I already did once.

The Chair: Is there any summary you would like to present at this time?

Hon Mr Laughren: No, other than to say that I look forward to helping in any way we can with the committee, keeping in mind, as I said at the beginning, that it is your committee collectively, not ours, and if you do want to take part in the consultative process of hearing people who want to make appearances before this committee and/or Treasury that you will let us know because a lot of the requests come right to Treasury, so we can then set up a mechanism with you as to who hears whom and to determine how we work out that sharing of listening to groups.

Mr Kwinter: Just as clarification, when you started out, you said that you really encouraged this consultation process and that there should not be duplication, but you also implied that it was probably too late for this year's budget. What I would really like the clarification on is, is it too late? Should we be seeing people now, or will it have any impact?

Hon Mr Laughren: I do not believe it is too late but, as I said earlier, that would be based on the assumption that it starts fairly soon so there is feedback to us. I do not think we can change the whole opening up of the budget process this year. I think it is too late for that. I think it is too late to have a different approach to budget in terms of secrecy. I have a feeling that this is going to take a lot more careful thought than simply jumping into a committee and starting to share numbers that have not previously been shared. I really want to do that carefully, but in terms of meeting with the groups that want to meet with Treasury and/or the committee, it would not be too late.

The Chair: On behalf of the committee, I would like to thank you for spending this time with us this afternoon, Treasurer. I found it very interesting and I am sure the members of the committee appreciate the sentiment you have that this committee can play a real role in the formation of budgetary documents. Before you go, could you introduce the members of your staff who are here so the committee can have a name on all faces.

Hon Mr Laughren: Yes. Bob Christie is assistant deputy minister, and Bryan Davies is the Deputy Treasurer; then there is Steven Dorey, Qaid Silk, John Hoicka and Simon Rosenblum, who works with me.

The Chair: We just wanted to have some faces to names so that we know who to invite to grill next.

Hon Mr Laughren: You know Serek Ferguson, do you not, to help us out with deficit numbers?

The Chair: Thank you very much for coming.

Hon Mr Laughren: Thank you very much. Good luck.

The Chair: Would the committee like to have the ministry staff stay for a little bit? We could invite them. Do you have any more questions for them? What is the pleasure?

Mrs Sullivan: No.

The Chair: They have other business to conduct? All right. They can have a nice afternoon then.

ORGANIZATION

The Chair: I think we should move on to the second part of the agenda, and that is the organization and the consideration of a report from the subcommittee on the committee business. I will give you a couple of minutes to read over the recommendations of the subcommittee.

Mr Christopherson: Was it not possible for this material to be circulated prior to the meeting? Did your subcommittee just meet before this one?

The Chair: I received this package about three hours ago.

Mr Christopherson: We all understand things come at the last minute, but normally there is an attempt to try to get material out so that you are not looking at it very, very quickly. I just want to make the point early in the game, so that where at all possible we recognize the need to get this material in our hands beforehand. That is all.

The Chair: I will take that as a notation. and thank you.

Mr Sterling: In defence of the clerk, in the normal procedure of committees in the past this kind of information dealing with advertising and our budget usually is given to us at the meeting because the clerks have found that most members omit to bring the material to the meeting.

Mr Christopherson: I do not want to make a federal case out of it.

Mr Sterling: No. In most cases the clerks are very good.

Mr Christopherson: Until it is routine for all of us, it would be nice to get it so that we can establish that it is routine.

The Chair: With my classes, I used to give it out and take it back so that it was there for the next class.

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Mr Phillips: It looks to make a lot of sense to me. Could you just perhaps orally give us a little bit of explanation on it? What this suggests is that we would plan to meet for three weeks continuously as of 28 January. Is that right?

The Chair: Is it the 28th or the 21st?

Clerk of the Committee: If I could, in the draft advertisement you see in front of you, I just picked those dates out of the air. They do not have any particular significance. They are just there to fill the space. The times that are allotted to the committee by the House leaders to meet would affect the dates that go in there.

The Chair: I think we have to be cognizant of the time frame that the Treasurer indicated. For us to have a really meaningful input into the budgetary process, we would have to complete and have the document to them in the first six weeks as opposed to the last six weeks.

Mr Phillips: I am just trying to get an idea. Is it three consecutive weeks? This suggests the expectation of the committee that they want us to travel, or do we do all the hearings here? I am just trying to get an idea of what the committee thought we would be doing and when.

The Chair: My sense of that was that we would do two weeks here, and then there would be a period of three or four days, and then we would travel if that was the determination of the committee, if that is what the committee decided to do. I am trying to remember if it was discussed in total. Maybe the other members of the subcommittee could help me out on this one. It was felt that if we had those two weeks of intense hearings and then we had a period of time to digest the information and then if we had decided to travel, we would be able to do it, having had time to digest some of the presentations that have been given to us.

Ms M. Ward: I did not catch what the clerk said there when someone was asking about dates, because I had a question about the second point. I think you said you just picked some dates as examples. Does that apply to the second point of placing the advertisement in the last week of January?

Clerk of the Committee: The advertisement could go in virtually any time. Our advertising agency can generate these ads and get them placed usually within a week. I explained to the subcommittee that usually it is of marginal benefit to get an ad in just at this time of year. The pre-budget consultations fall at a bad time of year. Just before Christmas and between Christmas and New Year's Day is traditionally a bad time to try to get the best response out of an ad. So it was my recommendation to the subcommittee, but the committee can decide what it likes, to try to get the ad in very early in the new year. say during the first week of January.

Ms M. Ward: So these dates all were just sample dates; you had not fixed leaving it that far in the future?

The Chair: No, I do not believe we as a committee can set them in stone, because the party whips will get together and decide that.

Mr Kwinter: But in that item 2, that the ad be placed in the first week of January was the point the clerk was making.

Mrs Sullivan: What dates did you submit as a request to the House leaders? From the 21st?

Clerk of the Committee: We asked for the last two weeks in January and the first week in February.

The Chair: That will be subject to some consultation, because some of the other committees have also been set in that time frame.

Mrs Sullivan: I think one of the things the House leaders take into account is whether there are members who sit on competing committees. If that does not happen to be the case, we may well get the dates that were requested and we should probably put them in pencil in our books now.

Mr Christopherson: What are those dates?

Mrs Sullivan: The last two weeks in January and the first week of February.

Mr Christopherson: That is just for those three weeks. The budget seems to show six.

Mr Sterling: That is for later on in the year.

Clerk of the Committee: This budget in the amount of $72,112 makes provision for three weeks of meetings. The separate line items are the per diems to which members are entitled when a committee meets. There were a few weeks of per diems accounted for there, travel expenses for members for those same three weeks, meal allowance for those same weeks, transportation. All of those items refer to the same three weeks of hearings the committee would hold.

Mr Christopherson: But the first one shows -- oh, 15 days. Okay, I thought it was showing a payment of $78 twice for three weeks, but where it says three weeks of meeting, when you look at it, it is actually only 15 days and six days.

Clerk of the Committee: The 15 days would be five days in each of three weeks that the members meet here at Queen's Park and the six days would be a day at the beginning and a day at the end of each of those same three weeks when members travel to and from their constituencies.

Mr Phillips: Whether I am here or if I get downtown tomorrow.

The Chair: If you want to discuss remunerating some of these budgetary moneys, maybe we should deal with this item by item and then we can resolve this in some kind of logical fashion. I think we need a motion to actually proceed with the pre-budgetary consultation.

Is there any discussion to the motion about having a pre-budgetary consultation period? Are you moving the adoption of the subcommittee report? I think we had better do that first.

Mr Fletcher: What is the motion? What are we voting on?

The Chair: The motion right now on the floor is to adopt the report from the subcommittee.

Mr Christopherson: Under point iii it says that the committee may invite. What is the process of determining who gets invited and who does not?

The Chair: The subcommittee had some discussion of that when it met on Tuesday. It was of the opinion that, as opposed to giving an indication that everyone who responded to the ad would automatically be given a chance to appear before the committee, given the limited amount of time available to the committee, only three weeks, it may be possible there would be more requests than could be accommodated. So the subcommittee wanted to reserve to itself the ability, if it had to, to pick and choose from among those groups so that it would be a representative cross-section of all the requests.

Mr Christopherson: I appreciate and understand the rationale for the wording and for the caveat. I was more questioning how the determination would take place. You are suggesting to me that it would be the subcommittee. Now what I am unclear on is, is it the subcommittee recommending to this main committee or is it the subcommittee being empowered to make that decision?

The Chair: In the fifth paragraph of the subcommittee report, the subcommittee is asking the committee for permission to give it authority to finalize the committee's agenda. After the ad ran and the list of requests to appear was assembled, the subcommittee would meet and, having been given authority by the committee to do so, would finalize the committee schedule of hearings.

Mr Christopherson: Four on the subcommittee? Who is on the subcommittee?

The Chair: Mr Hansen, Mr Kwinter, Mr Sterling and myself.

Mr Christopherson: With four members, what do you do in the event of a tie?

The Chair: In the event of a tie, it comes back to be dealt with here by the committee.

Clerk of the Committee: Normally, the Chairman would not vote unless there were a tie on the subcommittee.

Mr Christopherson: You will not get a tie with only three members voting.

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Clerk of the Committee: The three members vote and no one can be missing from the subcommittee, because its terms of reference, which were adopted last week, require all three members to be in attendance.

Mr Christopherson: If that is the case, I would have to express some concern about that. Obviously, the people or the groups that are invited are an important element of this whole process. I think that something this important is best brought back to the full committee for consideration, so that if there needs to be a vote taken in making a decision, it can be done with all of the members of the committee. I would like at the appropriate time -- I would seek your guidance as to when that would be -- to move that amendment. I believe it would be to point iv, but I would seek assistance from the clerk also, in ensuring I have the right clause.

The Chair: Just on advice from the clerk here, his indication is that this committee as a whole cannot meet outside the sitting of the House and cannot meet outside the time allocated to it by the House, which is determined by the whips. The subcommittee can meet outside that and make a determination and can make some of those decisions and bring them back to the committee.

Mr Christopherson: I am sorry. I must be me, but I did not follow that fully.

Mr Sterling: It means that before the first meeting, there cannot be another meeting to make the determination of who is going to be a witness and who is not going to be a witness.

Mrs Sullivan: The first day of meetings of the whole committee that will be authorized by the House leaders and scheduled would then become the first day of the public hearings.

Mr Christopherson: But if it was decided by the committee, we could at least make the request that we be allowed that opportunity. I have a real concern about this. I do not do it lightly. I really think it could be problematic to let it go the way it is. I really would like to see that list come back to the full committee for approval.

I am willing to be flexible if the subcommittee would like to circulate the list and then, only at the request of the given number of members, would we need to. That is fine. I mean, not having been through this process, I have to ask the indulgence of the members opposite in that, if this is making a mountain out of a molehill, I apologize, but I do have to feel comfortable every step of the way. I think one can see the obvious concerns here.

The Chair: I understand your concern. What I would look for now is some kind of a mechanism where we could work through this kind of process so that when we do meet, the first meeting would actually be hearing people as opposed to a business meeting.

Mrs Sullivan: Perhaps I could be of some help. If, by example, the committee is granted the days that have been requested which are the last three weeks of January from the 21st, what we will be looking at probably is to close off invitations for requests for oral submissions on about 16 January, which is a week before the committee actually sits. That would be a time when the subcommittee would convene to review the submissions, to check for overlap which frequently there is in terms of the nature of the submission and so on.

Every member of the committee, of course, also receives written briefs that are submitted. Perhaps the subcommittee would agree to advise the rest of the members of the committee that they will be meeting to discuss those issues. The members of the committee would of course have to recognize that those would be dates on which they would not receive members' allowances for participating, but they may want to participate as observers at those meetings.

Then the invitations to interested parties who wanted to appear before the committee could go out in a reasonable period of time so that any oral brief which may differ in their presentation from the written briefs could be prepared.

Additionally, I think it has always been the expectation that in fact written briefs are received through a lengthier period than even oral briefs are presented. That too is something that we can keep in mind. If committee members are doing their homework, there can be follow-up on the written briefs as the report is being prepared as well.

The Chair: Any controversy over who should be included and who should not be included could possibly be dealt with in a short meeting after some of the early meetings and that can be done by this whole committee.

Mr Christopherson: I appreciate that and again I do respectfully acknowledge that I may be seeing things that are not here, or concerned about things, but I still have some difficulty with that process. I appreciate the opportunity to be given the chance to give advice. What I am seeking is a chance to have a say, and as just one member, I consider that to be an important part of all of this and would like an opportunity to have a vote.

I am precluded from that if I support what is in front of us. There has to be some mechanism -- now if the majority of the committee disagrees with me, and that is quite possible, I have not heard from everyone, I will respect that, but at this time I have to say that I am not satisfied and I am not comfortable with this and cannot support it the way it is.

Mrs Sullivan: Who is on the subcommittee?

Interjection.

Mr Kwinter: The committee is representative. You have to decide whether this is a committee of the whole and it makes all of the decisions or it is representational. I would suggest that sort of solution could be something that my colleague here has suggested, that the subcommittee structure the first meeting. I may be wrong. but it seems to me that your concern is that some people who you would like to have on may not get on as opposed to some getting on whom you are happy with. I think that it is a matter of who does not get on as opposed to who does get on.

Mr Christopherson: I think that is obvious, yes.

Mr Kwinter: The point I am making is that you would have no problem with the first day's official session if the subcommittee picks some names that had made submissions. Your concern is that some people not be precluded from appearing. Then what we could do is meet after the hearings -- it would be part of that day, everybody would be in -- and we could take a look at structuring the next days.

Mr Christopherson: I am comfortable with that. If I can just throw it back so that I understand it, you are suggesting that the committee then would be empowered to arbitrarily choose for the first day those who would come.

Mr Kwinter: Or maybe even the first two or three days.

Mrs Sullivan: There are two weeks.

Mr Christopherson: That is fine.

Mr Kwinter: Yes, it would have to be the first couple of days, because there are two weeks of hearings. We would have to get the thing going.

Mr Christopherson: I understand that.

Mr Kwinter: At the end of the day we would then meet as a committee of the whole.

Mr Christopherson: How much time are you suggesting would be locked in prior to that discussion by the committee?

The Chair: Let's hear from Mr Rizzo.

Mr Rizzo: I have a question. Is it possible to change the number of members in the subcommittee at this stage?

The Chair: No, those are already determined.

Mr Jamison: I think that it is an important part or makeup of this committee that the committee members at least have a sense that they have input at all times into where the information is gathered and how it is gathered. To start off the committee in a vein that in my opinion really does not allow, for example, my input -- because I feel that I am put here to do exactly that, to have input on whom we would hear and whom we feel it would be more important to hear and so forth. I understand, Mr Kwinter, the context of what you are saying, but I do feel that it is important that we as a committee of the House. as a whole, have the ability, each and every individual one of us, to speak about the concerns as the committee goes on, as to who we hear and what our agenda not only is but will become as we carry on, because obviously we have a vast number of people to speak to.

I want to be part of that process and if I have a concern, I do not want to have a situation where I have no possibility of vetting it. In my mind you have offered a constructive approach to my concern and I think my colleague has asked an appropriate question, what time frame we would be looking at as far as having that full consultation and an ability to have input take place is concerned.

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Mr Hansen: Mr Chairman, I would appreciate it if you would put the names down in order so that people do not jump in. I thought that was why we put our hand up: to take turns.

Maybe I need a little bit of history here. How much is short-listed from the very beginning of the applications that are coming in? Just give me a fast bearing on that. In other words, if you have 100 applicants -- I think this is the concern of the other members on the committee -- who want to speak orally, you say, "Well, in that time frame we will be allowed only to have 75, and 25 will have to turn around and put in a written submission." Am I correct on this?

The Chair: I am going to turn the answer to that question over to Anne Anderson.

Ms Anderson: In pre-budget hearings in the past, they have always heard from all the witnesses over two weeks or three weeks. They have been able to fit them in, if necessary by giving them a shorter period of time. So they may have had only 15 minutes a group for the small groups and half an hour for the bigger groups, but they came and have generally been heard.

Mr Hansen: Am I correct in saying that there is a written submission before the oral submission on every one? It says "oral" and "written" here, but is there also a written one that comes in ahead?

Ms Anderson: Not necessarily.

Mr Hansen: Not necessarily.

Ms Anderson: Some groups send in written submissions ahead. A lot of them bring them in at the time and distribute them during the course of their briefing. Some do not have any written brief at all, and then there are groups that only send written briefs and do not wish to appear.

Mr Hansen: When some of them come in, we have a clear mind. We do not even know what they are here for until they wind up standing up and speaking to us.

Ms Anderson: That is right.

Ms M. Ward: I agree basically with what David was saying about his concerns and probably what I was going to ask has been answered, but part of it has been further confused.

In section iii we are saying that all submissions are invited in writing and that some groups may be offered the invitation to present orally. You are saying that in the past you have not necessarily had a written submission with every group that appeared. Is that correct?

Ms Anderson: That is correct.

Ms M. Ward: My question was partly whether or not this sort of filtering that was recommended in here applied to written submissions, assuming that you might have a number of groups submitting written material and only some of those might be invited to appear to make a presentation in person, whether or not there was also that filtering intended concerning the written submissions that we would deal with. Is my question making any sense to you?

Ms Anderson: I think everybody would receive the written submissions.

Ms M. Ward: Yes, we receive them. but would we necessarily deal with them all, or would that subcommittee, the way this was originally intended, have the authority to determine that, no, perhaps we were not going to deal with those written submissions either?

The Chair: Perhaps I could ask the clerk at this point to explain what has happened in the past.

Clerk of the Committee: When written submissions come in, they are distributed to all the members and they are made available. They are made an exhibit of the committee's proceedings and form part of the official record. Often groups that have submitted written submissions will also appear before the committee to present those submissions orally and to answer the committee's questions about their submissions. The written submissions are not dealt with per se other than being given to the members, forming part of the record and being available to anyone to scrutinize. Usually the committee asks that a summary of all the main recommendations in all the submissions be prepared by the legislative researchers. and that document also forms part of the committee's record.

Ms M. Ward: Would we not have some debate, discussion or deliberations on those submissions as a committee?

The Chair: Perhaps we need a further explanation of how the subcommittee worked in the past and how these lists and decisions were made in the past.

Clerk of the Committee: In the past it has been extremely common practice for subcommittees to be given these kinds of powers and to deal with the kinds of issues that are dealt with here. The main problem is the timing if the committee does not have the ability to meet as a whole prior to the beginning of the hearings, so a mechanism is needed to arrange the hearings, schedule the witnesses and structure them in some way that makes sense when the witnesses do appear.

I suggested to the Chair that one way we might be able to work around this would be if the total list of requests to appear before the committee that the subcommittee would consider and decide on could be distributed to all of the committee members a couple of days in advance, or as far in advance as possible, of the subcommittee's meeting and those members who have a specific interest in any of the requests on the list could let the subcommittee know that they would like to have this group or that organization appear before the committee.

Mr Kwinter: Let me give you a little bit of the background of where I think this thing is coming from. Let us say this ad is placed in the media and we get 15 people requesting either written submissions or oral submissions. Obviously we would listen to them all. We would be not only listening to them, we would try to keep them there as long as we could so that we could find something to talk about.

On the other hand, it is also quite possible, if you take a look at some of the people who submitted representations last time, that there are individuals who may have some idea of how they want to impact on the budget. They may want to declare all of Canada a GST-free zone or something, whatever it is. They may have some idea and you may get thousands of them for some reason. So there has to be some mechanism to be able to limit that. There had to be some way of saying, "We physically cannot hear everybody if they all decide to descend on us one at a time."

The whole purpose of putting that provision in is to reserve the right to say, "Just because you make a submission, we may not be able to have an oral presentation." That is really the purpose of it. There is no other implication.

As I said, I think a solution is to let the subcommittee pick the first people so that we can get the thing going, and then take a look at it and have everybody have some input into it to deal with the time that we have and the number of people who are requesting an opportunity to appear before the committee. It may be strictly academic and we may not find that there are enough people to fill the time we have allotted, or there may be 100 times more than we can accommodate. Somewhere along the line that decision is going to have to be made.

Mrs Sullivan: I can understand why there have been questions relating to these issues and they sort of are becoming clearer as the discussion goes on. I think that as we look at the role of this committee, what we are doing is ultimately attempting to come together in a kind of nonpartisan way to present recommendations within the economic context of our times, relating to priorities that we as a legislative committee, separate from the Treasurer, ought to be considering for inclusion in the budget, whether they be revenue moves, whether they be expenditure moves, whether they be in relationship to debt management, whether they be thematic, for instance recommending emphasis on certain themes, whether it is social care or economic themes.

The Treasurer, in his shop, will also be conducting quite intensive briefings with his ministry officials. The input in those circumstances may well be the same document that goes directly to him as comes to us. We may see it, however, in a very different way and we will not go through, to as specialized an extent, the depth of analysis that his officials may go through with the entire Treasury bureaucracy. But there may be thematics from some of the presentations that we may wish to balance against other groups and organizations, or that we see as themes that should be followed.

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One of the things that we will see, particularly I would suggest in this period, which is quite a different budgetary context than the last two or three years where we were in an expansionary period, probably is similar themes from many groups. I would suggest that, by example, the Ontario Federation of Agriculture may be expressing quite similar concerns relating to the economy as several other groups might do. In discussions, if there are competing impacts that are identified by different groups, we may want to balance or even draw out further information from other groups.

If we have the freedom as a whole committee to get the standard and usual 40 or 42 groups, whatever it was that appeared last year, before the committee, they will tend to be the larger groups, the groups which are the umbrella organizations, against which you can ask questions, one presentation of another. There may be follow-up work that the committee research service would be asked to do on behalf of the committee.

As well, with all of the written and oral presentations, there will be a summary of what has been presented to the committee, in terms of major recommendations, in terms of minor points. The committee members take those into account in discussions in committee, sometimes in camera, sometimes in the open, of what specific areas they want to follow up on. They may also want, say in the last few days of the committee, to extend their hours instead of closing at 6 or something and perhaps ask people to come back -- that has been done in some committees -- or ask additional people to come on, or in fact ask that an extra day be added to the committee's schedule within the context of the three weeks that the House will allow us to sit.

I think there are methods for all committee members to participate in the selection of people and interested parties and groups and organizations that will appear before the committee. The other thing we have to remember is that the arguments are no less strong because they are presented to us in writing. As committee members, it is incumbent upon us to look at the written briefs and to take those into account as much as we do the oral material.

Some of the stuff will be very complicated. At the end of the discussions, we may want to have Treasury officials come back to discuss some of the impacts that have been presented to us before we even sit down to think about where we want our report to go. There usually is, in all committees, as I recall, a fair amount of discussion among all of the committee members about what the nature of the final report will be, how that report should be drafted and where the emphasis should be in the report, and that is usually a pretty frank and open discussion. There is a good deal of interchange between the members as to what the priorities for attention should be.

I think you will find that it is a healthy process. I think you will also find that there is opportunity to say yes, let's bring in this group or let's get reconfirmation of information that they presented as it fits in, say, with another presenter.

The intervenors for the most part will have been before legislative committees before and some of them will be emphasizing the particular needs and demands of their own organizations. Others will be looking at the economic needs of Ontario, as they see it, in a broader context, rather than, say, be specifically sectorally oriented. I think that as things unfold you will feel more comfortable with the process.

Mr Hansen: Maybe this is a question for the clerk. Let's say the Action Committee on Tourism in 1989 made an oral presentation. Is there any indication before it makes its presentation in what area it is going to be talking on?

Clerk of the Committee: It is normal practice for clerks of committees, when they are dealing with witnesses, to suggest to them that it is most helpful to the committee if they are able to submit their material in writing in advance of their presentation. Many do, some cannot or will not, and others do not. It was pointed out that often groups come with their presentations at the time. Where we are able to secure those ahead of time, we will.

Mr Hansen: Okay. I do not want Arthur Murray's Dance Studio to show us how to waltz on top of the tables feeling that this will create a lot of employment here in Ontario and embarrass the committee, so I would just like to know ahead of time that some of the people who are appearing will not embarrass this committee. I have seen it done before and I just do not want to be in the process. I would like to know ahead of time exactly who is appearing and on what areas, and possibly have an idea -- are we allowed a flow of questions to a presentation?

Clerk of the Committee: Yes.

Mr Hansen: Okay, fine. I thought maybe we sat here on our hands and let them speak, and then afterwards we meet about it, but I would feel better; I would be able to be a little bit prepared before these people appear.

Mr Christopherson: Very briefly, I concur very much with Mrs Sullivan's comments. I think that it needs to be said, though, that a certain amount of profile is or can be given to groups that are coming and making oral presentations. There may or may not be media coverage. There is perhaps more interest from other members of the Legislature by virtue of being able to come here and listen to it at first hand.

I want to focus on the non-partisan comments because I agree with that. I really do. This committee needs to be working independently of the Ministry of Treasury and Economics, and I say that in full recognition of my role as the Treasurer's parliamentary assistant; it needs to in order to have the Legislature work the way it should.

I think we do that best by making sure that the process is thoroughly debated and that everyone is comfortable with that. When process is set and everyone feels comfortable that fairness is part of the process, then it lets down the partisan guards and allows us to move forward as a group as cohesively as we can. That was why I raised it. I was trying to prevent and head off problems that I could see coming, and that is why I raised it.

I am fully prepared to close. I am fully prepared either to move a motion of my own or to second one placed by Mr Kwinter that would see the subcommittee empowered to set the first five days of hearings to get the ball rolling, as he has said, and at the end of our first hearing day we would consider the recommendations of the subcommittee for the balance of the hearings, at which time those finalized decisions would be made by the full committee.

I think that is perhaps the compromise, if you will, that we were looking for. That certainly satisfies my concerns, and I think it will allow us to move. Mr Chair, I am prepared to either move or second, whatever you are most comfortable with.

Mr Kwinter: I have no problem with that at all. I just want to make a comment to address the concerns of the Vice-Chairman. The concerns that the Vice-Chairman has are exactly the reason for that provision, so that if there is someone who everybody acknowledges is just off the wall, you are not obligated to make sure that he has a hearing.

The other thing you will find -- we are just at a temporary disadvantage in that all the members of the subcommittee, the ones who have been on them, are on this side and there is nobody on that side who has, and I understand that -- is that some of these oral presentations are just the reading of the written submission. They come and they read it. They say, "Thank you very much," and that is it.

You have no way of knowing that, but it is really what it is. These people will come along and they will go through the whole thing. Some of them -- I am not trying to be sort of critical -- are very inarticulate. They really barely get through reading the submission and then when you ask them, they have no response. I am not saying that is typical, but it does happen. It is interesting. I have no problem, and I certainly feel that is a reasonable resolution of this discussion.

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The Chair: Could I have the clerk read the amendment to section iv?

Clerk of the Committee: An amendment to section iv of the subcommittee report, which I think would accommodate Mr Christopherson's concern, could now read:

"The subcommittee recommends that it be authorized to review all submissions and to finalize the first week of the committee's scheduled hearings by confirming those groups, organizations and individuals who will be invited to present their views to the committee orally. The committee will direct the subcommittee on the scheduled hearings for all remaining meetings."

Mr Christopherson: I am comfortable asking the subcommittee for its recommendations. I would like to see it do the work Mr Kwinter talked about, so if you want to include that they will recommend to the full committee the schedule for the balance of the two weeks.

Mr Kwinter: Why do we not put it that the final period, other than the first five days, will be the recommendations of the subcommittee, subject to the approval of the committee?

Mr Christopherson: That is fine, and it gives you all the authority you need to move ahead.

The Chair: Is there any discussion on this amendment? All in favour? Carried.

We need a motion now to present the ad. We should include some discussion on how long the ad is going to run. I have just been advised by the clerk that it is customary that it run for one day. Of course, as we have just broken new ground in this committee in the last amendment, who knows what we will do with this one? Could I have a motion to present the ad? Mr Sutherland moves that we present the ad. Now we can discuss.

Mr Sutherland: I do not think there is a lot to discuss; I think that issue has been resolved. Actually, I guess there is one issue that comes up which is kind of related to the budget. If we are going to advertise, are we going to hold all the hearings here at Queen's Park or are we going to hold some hearings around the province? I am sure there are many groups which do not have the funds to get to Toronto from the north, the east and the south, and should we schedule a few days in some of those areas to allow people to make them? I would certainly like to see some discussion on that issue, because I think that type of information should be in the ad so those people will decide whether they want to come personally or send written submissions.

Clerk of the Committee: In the package of material you have a copy of the advertisement that ran last year in both French and English. You will note that in the first paragraph it says "and other locations, as determined." I had not put that in this ad. I can if the committee wants me to. I did not because the committee did not get enough interest from those regions to require it to travel outside of Toronto. Most of the interest was Toronto-based and the hearings were able to be held here. But if the committee would like to leave its options open --

Mr Sutherland: If I can just clarify that, is the history that the majority of the organization would be the provincial organization, and therefore it might be the Ontario Mining Association we have rather than the local miners' group in Sudbury and that type of thing? Is that usually the traditional way we have done it?

Clerk of the Committee: It is often, as Mrs Sullivan mentioned, that the larger umbrella groups that tend to be Toronto-based are quite able to travel to Toronto to meet with us here.

Mrs Sullivan: Just on that point, where there are groups and organizations from outside of the area who may have a particular statement but do not have funds, there usually is a provision in the budget, and I believe it is here under "witness fees and expenses." to assist them with the cost of their travel to Toronto. That is usually offered after discussion with the committee when the witness indicates that they might not otherwise appear. Given that there are specific requests from the committee for them to appear, the decision to invite them and to assist them with their expenses is an appropriate way of doing that. I think the budget that is included here for the advertisement is adequate, and the practice in the past in terms of placement of the advertisements is one we can simply follow for this session.

Mr Fletcher: I was wondering about the ad. Is the ad French-English? Does it appear in any other ethnic papers or any other language?

Clerk of the Committee: It can if the committee wants it to. Normally, when any committee is doing its standard advertising program it will advertise in all the English dailies in Ontario in English and in the French daily, which is the Ottawa Le Droit, in French for one day. The cost of doing that sort of thing, depending on the day of the week and the position in the paper. is usually between $10,000 and $15,000.

Mr Kwinter: The point I wanted to make is that maybe we could leave our options open. I do not see any great harm in having the same ad we had the last time, where it says, "and other locations, as determined." We may determine there are no other locations.

The Chair: I do not know if it is appropriate for me to -- probably not. Mr Conway made an interesting comment about the relative comparison of the northern region with Quebec and this location. It is up to the committee, of course, but we may want to think about moving around a bit.

Mr Hansen: I have to agree with Mr Kwinter, because I feel that the people in the north might feel left out of the process if the hearings are going to be only in Toronto, even though in the past it has been that way. I think it should be left open that it is for the province of Ontario and not just to meet here in Toronto. I hear it all the time even though I am from the east, as I camp up there, I have a cabin up there. I hear it in the north all the time that everything centralizes around Toronto. I think we have to get that image away; this is a whole province, not just Toronto.

Mr Fletcher: You will never get rid of that image.

Mr Hansen: I know.

Mr Sutherland: I think that issue has been adequately addressed, the concern I had. If we determine to move it around or whatever, or fly them in, it is perfectly fine that we wait until that time. I would suggest that we go to a vote on the advertising.

The Chair: Is there any other discussion? Calling the question on the advertising, all those in favour?

Motion agreed to.

The Chair: The budget is next. This is going to raise some of those questions about whether we -- it is going to have Jim Wiseman's name on it this time.

Mr Christopherson: I move the budget.

The Chair: My question is, which budget are you moving?

Mr Christopherson: How many are there?

The Chair: If you notice the budget, it does not have --

Mr Christopherson: Which budget'?

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The Chair: The one you have. It does not have transportation or costs for travel. Mr Sterling had suggested that this committee consider whether it should travel to Albany, New York, Lansing, Michigan, and Quebec, some combination of or one of those, in order to gain an appreciation for their process and for whatever changes we can make. We need to discuss that.

Mr Sutherland: My personal feeling is that I like what Mr Sterling has been saying about looking at the processes. For the public of Ontario, I think the current process is not the best; it needs to be more open. Given the time lines we are all facing, I am not sure whether this committee is going to be able to do that process for this specific budget. That may be something we have to take up after this current process is completed for this specific budget and then go from there.

Mr Kwinter: I am speaking to the suggestion made by Mr Sterling. It would seem to me that it does not make any sense if we identify Lansing, Albany and Quebec unless we have an idea that there is some benefit for 13 of us to go there to talk to one person or two people when we can bring those two people here to talk to us. It makes no sense to me unless there is some major reason why we should pick up this whole operation and move it somewhere, there is going to be some benefit. It would seem to me that if there was a need to talk to those people and it was felt it was important that we have person-to-person contact, we should look at putting in some kind of figure to bring them as witnesses to this committee.

He seems to be -- the word is "fixated." He keeps mentioning, every time we meet, that he wants to go to these places. I personally do not see any great attraction -- well, Quebec City is not bad; but I just do not see the efficacy of doing that. It does not seem to make any sense unless, as I say, there is some genuine reason it would be beneficial that we all go to a particular location.

The Chair: Perhaps I could give some information on that. If the whole committee were to go to Albany, it would add $10,200 to this. If the whole committee were to go to Lansing, Michigan, it would add $8,170 to this. If we were all to go to Quebec City, it would add $10,800. If we decided that we would go to all of them, the budget would swell to $101,282.

Mr Jamison: I agree wholeheartedly with Mr Kwinter. We could have the ability to decide to go somewhere as required, but certainly it is much more reasonable, to say the least, to bring one or two individuals here if required to speak to the committee. Reasons why this committee may have to travel may develop, but they are certainly going to have to be better than just to go and see someone. I would rather bring one person to see 13.

Mr Hansen: I think you should have related the point that in our subcommittee discussion we had already decided it was too expensive; what we would find out from Lansing and Albany would be too expensive and it would be better to have a witness come here. That was already discussed. We did not take a look at bringing the whole committee of 13 to those areas. The only one left open as an option that possibly we would take a look at was Quebec City, that possibly we could look at the upcoming GST, the effect in Quebec and some ramifications here in Ontario also. That was the only reason, that the whole committee could investigate a little more up there.

Mrs Sullivan: I think there is a consensus here that we do not need to travel for this particular phase of the mandate of the committee; that is, particularly relating to pre-budget considerations. Perhaps with a different mandate and summer activity we may want to make a very different recommendation, but these budgets do not exist with our decision; they have to go on to the Board of Internal Economy and be defended there. What I am suggesting, by way of motion, is that the clerk adjust the budget to include a reasonable number of dollars for travel within Ontario for use as necessary to meet with groups who cannot otherwise meet us in Toronto and that that be the only change to the budget.

The Chair: This budget is until 31 March.

Mrs Sullivan: We will only be authorized for the three weeks of sittings.

Mr Christopherson: I need a clarification on the travel-transportation mileage, $2,500 per week. What is that for?

Clerk of the Committee: When members travel to and from Toronto to attend meetings of committees held here, they are entitled to claim mileage in their private cars, or their bus, train or airline travel; $2,500 a week usually will cover all of those expenses for all the members.

Mr Christopherson: Do we not get that anyway?

Mrs Sullivan: You do not pay for it. You do not charge it back on your other allowance. You charge it through committee.

Mr Christopherson: I see. Any idea what kind of money we are talking about?

The Chair: For that kind of travel?

Clerk of the Committee: I would think it would be similar to the amounts that would be required for the committee to spend a day away in, say, Quebec City. That was estimated at about $10,800. If we were to go to Thunder Bay, I would expect the cost would be in that range for airfares and overnight accommodation for one day.

Mr Christopherson: I have another quick question. I would ask the veterans to help out here. From the time that our hearings are completed, say at the end of the first week in February if we meet that time frame, what happens then? What happens at the end of the hearings? We have heard the last person. They walk out the door. It is the end of the first week in February. What happens next?

The Chair: I will let Anne answer that question.

Ms Anderson: The amount of time that the committee has allocated for hearings includes the amount of time you use for the report writing so that at the end of the three weeks the report is complete.

Mr Christopherson: So we do not have a full three weeks for hearings?

Ms Anderson: Not necessarily.

Mr Christopherson: What does this committee do from the end of the first week in February? What happens then?

The Chair: If I have read these reports correctly, there will be hearings and then there will be the writing of the report with the recommendations in the report, and then this committee will come back to consider the recommendations. Some of them will be unanimous, some of them will not be unanimous. Some members may seek to write minority reports; that is up to them. But if I understand this correctly -- correct me if I am wrong -- there will be a process where we debate the recommendations of the report.

Mr Christopherson: All that happens within three weeks?

The Chair: Yes.

Mr Christopherson: Then what picks up this committee again after that?

The Chair: I believe we revert to regular meetings during House sittings.

Mr Christopherson: Nothing happens, then, until the House sits. Then what happens? Are things referred to us from the House? Do we generate work? Or both? What do we do?

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The Chair: If I understand the reading of those rules correctly, the House may pass something and say the standing committee on finance and economics affairs will look at this, and we will. If they do not and if we have time, the steering committee or the committee as a whole can branch out and become independent and, if I understand this correctly, can look at issues of interest to the committee as a whole.

Mr Christopherson: I am sorry you have to repeat things but I would just like to get this through my thick head. At the end of the first week of February, this committee's work, for all intents and purposes, will end and nothing happens with this committee until the House resumes.

The Chair: Yes.

Mr Kwinter: I just want to elaborate. The committee meets with the approval of the Board of Internal Economy. What happens is that this budget goes forward and gives us funding to allow us to do what we do for that three-week period. When the House is not sitting that is the only time you can sit, because there is a financial cost to sitting, and if every standing committee in the Legislature went its own merry way, it is an open-ended situation and the costs are horrendous. As you can see just by this one committee for three weeks, we are talking $70.000 or $105,000, depending on the scope of what we are doing.

Once the House comes back into session, then on a regular Thursday basis this committee meets. It either deals with items that have been referred by the House -- for example, every time a bill finishes second reading, if it does not go to committee of the whole it is referred to a committee and it could be referred to this committee. This committee then meets and deals with it. If there are no bills referred to it, it structures its own agenda. We sit down and as a committee say: "We should be looking at cross-border shopping We should be looking at the impact of Canada-Mexico free trade." We look at all of these things. We do that as long as the House is sitting.

When the House adjourns again in the summer, we will be in exactly the same process as we are now. We will make application to the Board of Internal Economy to do whatever we are doing to have sittings beyond the time that the House is sitting.

Mr Christopherson: While the House is sitting, do we only meet on the Thursday?

The Chair: Thursday at 10 until noon and Thursday from 3:30 until six.

Mr Christopherson: The work we take on, then, has to be achievable within that time frame. In other words, you cannot meet more than that, but we could set aside a project and say we are going to do this in the next recess; this looks like free trade or the implications of GATT or whatever. That can then become the mandate, as Mrs Sullivan said, for the recess period and we submit a budget for it.

Is it very often rejected by the Board of Internal Economy? Do they have final say? Do they recommend back to us what they would like to see or do they just decide?

The Chair: I cannot really comment on that, but I can say that this budget, as it stands now, seems to be considerably less than some of the other budgets from some of the other committees.

Mrs Sullivan: What they will ordinarily discuss in detail in relationship to the action of the committees, having sat on a board, usually relates to travel. If there are clear examples of travel that the committee has requested which the board does not think necessary to fulfil the mandate, it will likely reject the budget, which means that some of the activities of the committee that were put forward have to change. That is usually where the board would intervene in the activity.

Mr Hansen: There are a lot of new people on the block here. We are called seals out there, but new pups in here. I do not know whether you like being teacher or if we can meet with the clerk and discuss a lot of these things. I see Norm Sterling left, but I guess he did not leave just because he got bored. In a lot of these areas, there are a lot of questions. Monte, maybe you would like to get back to the House and listen to Norm speaking. If we spend all this time going over history, maybe we can get some history lessons --

Mr Kwinter: No, I think it is important.

Mr Hansen: If you do not mind, I just take it that sometimes you have been over this maybe 10 times.

Mr Sutherland: Can I suggest we get a vote on the budget? I have a sneaking suspicion that we are going to be called for a vote some time soon.

The Chair: We might need an amendment to this budget to include the contingency that Mrs Sullivan has suggested. Could we have a motion?

Mrs Sullivan: Did the clerk draft it?

Clerk of the Committee: Mrs Sullivan's amendment was basically to accept the budget as is, with an additional amount to be added by me to cover the cost that might be associated with the need for the committee to travel during its pre-budget consultations. As I indicated, I would not expect that would be more than $10,000 or $11,000.

The Chair: Is there any discussion on that?

Mr Jamison: You have a consensus.

Agreed to.

The Chair: This is starting to move nicely. There is one last piece of business. What we are going to do next Thursday? Does the committee feel the need to meet? Would you like us to invite somebody to come'?

Mrs Sullivan: I wonder if it would be useful at the next meeting, perhaps in the morning session, if the research officers and the clerk reviewed the kinds of presentations that were made to the committee in the last budget session. We all understand that the economic situation has changed since then, but it might be useful to have an overview of what the requests were and what the interest points were at the last pre-budget session. Additionally, we may want to have further discussions on the operation of the committee, such as we have had now.

Mr Jamison: We could try to evaluate as a committee the degree of importance one contributing factor may have over another and by that evaluate possibly some future direction on free trade, trilateral free trade, federal policy, whatever, that has an impact on the budget. Possibly we could define better our direction on where we go from the hearings stage, to prioritize what we want to talk about as a committee. It is important to know where we are going and it allows us all to do a little homework on our own, too.

Mr Sutherland: I do not want to totally toss aside Mr Sterling's suggestion. I do not know whether other members of the committee are interested, but I was wondering if we could get from research some basic background on other budgetary processes, of New York state, Michigan state, possibly Quebec. As far as I am concerned, maybe we need to look at other Commonwealth jurisdictions, how you do it within a parliamentary tradition versus the state legislatures.

The Chair: Forget it. We cannot go to Australia.

Mr Sutherland: I realize that. I do not think we necessarily need it for next week, but maybe if research could get that for us, it would help us establish some clear direction on how we deal with Mr Sterling's issue.

The Chair: We would like to meet next Thursday morning, and in this meeting we would like to have an education component from the researcher, we would like to have some kind of discussion about the direction of this committee with respect to this trilateral trade that Mr Jamison brought up, and we would like to have a continued discussion about the mechanism of the committee and how it works and how it can function better. If that is the agenda, then, did we want to meet Thursday afternoon of 20 December?

Mrs Sullivan: The House is supposed to sit till midnight that day, so we might as well keep it on the agenda.

Mr Christopherson: What we were talking about earlier was meeting in the morning session.

The Chair: Yes, the morning session.

Mr Christopherson: Now the suggestion is that we meet in the afternoon.

The Chair: We can determine that after the morning session, if we feel that an afternoon session would be worth while.

Mr Christopherson: Sounds good.

The Chair: Are there any questions or any discussion? Can I declare the meeting adjourned? Thank you very much.

The committee adjourned at 1800.