Transcription du comité 1991-août-12 | Assemblée législative de l'Ontario

The Vice-Chair: Good morning. I call this meeting of the standing committee on finance and economic affairs to order. We are here in Thunder Bay having our hearings on the budget.

Before we hear our first presentation, I would like to inform the committee that the clerk has received the resignation of Mr Wiseman as Chair of the committee and therefore the first order of business is to elect a new Chair. I ask for nominations.

Mr B. Ward: I nominate Ron Hansen.

The Vice-Chair: Okay. Do we need seconders? We do not need seconders. Are there any other nominations? Seeing none, I declare nominations closed. Therefore, Mr Ron Hansen will be the new Chair and I shall yield the chair to you.

The Chair: Thank you, and I thank my nominators.

1991-92 BUDGET DRYDEN AND DISTRICT LABOUR COUNCIL

The Chair: To start the business of the day, we call on the Dryden and District Labour Council for its submission to the committee. When you come forward, please identify yourself for Hansard. You will have one half-hour and after your presentation the remaining time in the half-hour will be split among the three parties to ask questions.

Ms Wall: Good morning. I am Alma Wall, president of the Dryden and District Labour Council. This is my first term as president and this is my first major submission. I would like to welcome you to Thunder Bay. We are glad to see this government making a real effort to reach out to the people of Ontario by holding these hearings across the province. We appreciate your efforts.

I wanted to keep the tone of this presentation on a positive note, but in preparing this submission I found that although the problems we face in the northwest are much the same as in the rest of the province -- unemployment, plant closures, privatization, etc -- most of our communities are one-industry towns. When a plant closes in the northwest, the community is faced with the challenge of keeping the town vital and viable. The financial and emotional stress placed on these communities is tremendous. We believe this budget is a major step forward in addressing these problems.

This recession is, without question, the worst recession to hit the province since the Great Depression. Job losses in the province have totalled 214,000 in the first year of this recession, compared to 89,000 in the first year of the 1981-82 recession. This constitutes a drop of 4.3% in employment compared to a drop of 2.1% in 1981-82. The number of jobs in the manufacturing sector dropped by 97,000 in Ontario last year compared to a drop of 76,000 in 1981-82. This constitutes a drop of 9.9% in manufacturing jobs compared to a drop of 7.2% in 1981-82. Ontario's rate of job loss accounts for 80% of the national loss in jobs.

Many of these jobs are gone for ever. In 1990, 65% of reported layoffs were due to partial or complete plant closures. In the first five months of this year, 59% were due to partial or complete plant closures. By contrast, in 1982 only 24% of the permanent layoffs were due to shutdowns. The remainder were the result of companies temporarily reducing their number of employees.

Manufacturing jobs are hard to replace. The average wage for manufacturing jobs in Ontario is $630 per week, considerably more than the average industrial wage of $542 per week and the service sector wage of $511 per week, where most jobs have been created in the last decade.

During the current recession, bankruptcies in Ontario, business and personal, have soared. Business bankruptcies increased by 73% in 1990 compared to 1989. In the same period, personal bankruptcies increased by 83%. In the first two months of 1991, there were 24% as many bankruptcies in Ontario as in all of 1990. This indicates that we are experiencing a major industrial restructuring as well as a downturn in the economy. The implications for the future are considerable, not only in terms of levels of employment but also in terms of living standards and social services which we all need.

Brian Mulroney is among those who do not like the Ontario government's budget. "This Ontario initiative represents quite a departure from the policies of most governments in the world in dealing with these kinds of problems," he said. Mulroney is right. Ontario's 1991 budget does try to do something different. As Floyd Laughren said: "We had a choice to make this year -- to fight the deficit or fight the recession. We are proud to be fighting the recession." The Ontario government did not abandon its responsibilities to working people, their families and their communities.

Let's look at what the Mulroney Tories have done for us, or should I say to us. Federal government cutbacks hurt Canadians in all provinces, but they have cost Ontarians the most. Cutbacks to established programs, to the Canada assistance plan and other programs will cost the people of Ontario $1.6 billion this year alone. The result is increased pressure on the provincial programs, such as welfare and social services, designed to alleviate poverty. The freeze on established programs financing could well mean the gradual death of medicare as a national program, enjoyed equally by all Canadians, by the 1996-97 fiscal year.

Three years into the Mulroney-Reagan trade deal we have lost hundreds of thousands of jobs, especially in the highly paid manufacturing sector, and have seen dozens of plants and factories close. Whatever happened to "jobs, jobs, jobs"? Not long ago, I heard someone say that our Prime Minister was looking across the lake to the American shores as he uttered the words "jobs, jobs, jobs." Whatever happened to the training and adjustment measures the Tories promised to help the victims of free trade? So far, all the Tories have done is to eliminate their share of contributions to the unemployment insurance fund and raise premiums for employers and workers.

The same people who brought us the bilateral Canada-US free trade agreement are at it again, trying to integrate the economies of Canada, the United States and Mexico, a trilateral agreement. We in Ontario already know what that means: Lost jobs as manufacturing plants flee south; big business pressure to limit and cut back on social programs that provide a subsidy to Canadian employers; increased pressure on cultural programs and supports; and an overall willingness to have our economic policies dictated from American boardrooms.

They seem to have learned nothing from the devastation of our economy over the last three years. On February 5, 1991, the Minister of International Trade, John Crosbie, stated, "There is no intention to renegotiate the provisions of the Canada-US free trade agreement." However, in testimony before a congressional subcommittee, United States Trade Representative, Carla Hills, had this to say: "Finally, both the United States and Canada agree that the US-Canada free trade agreement sets a floor for commitments between the two countries. Trilateral negotiations will give us an opportunity to improve and expand the US-Canada free trade agreement."

The Ontario government's position is clear. On February 11, 1991, Allan Pilkey, then Ontario's Minister of Industry, Trade and Technology, said, "A possible trilateral trade deal between Canada, the United States and Mexico would be a harmful extension of an already flawed Canada-US free trade deal.... The free trade agreement has not worked for the people of Ontario and we fail to see how the extension of a deal to Mexico can possibly be of any benefit to our industries and our workers."

The goods and services tax is one more dimension of the Tory big business agenda in Canada. It involves a massive shift in who pays tax in Canada, from corporations to individuals. The GST will be paid by consumers to the tune of about $9 billion a year in Ontario alone. Since its introduction, the GST has proven to be more detrimental than first predicted. According to the GST consumer information office, the average family will pay an extra $570 a year in GST, about 50% more than predicted in government studies. The GST is the wrong tax on the wrong people at the wrong time.

Although a provincial government cannot get rid of it, the NDP government refused to harmonize Ontario's retail sales tax with the GST, and refused to piggyback the provincial sales tax on top of it. That decision alone is leaving $470 million a year in the pockets of Ontario's working people.

For years, the federal government has kept interest rates high, claiming this was necessary to fight inflation, to support the Canadian dollar and to attract investment. High interest rates, they claim, are essential to lowering inflationary pressures which, among other things, force interest rates to go up. They have it backwards. High interest rates hurt working people and hurt the economy. They add significantly to business costs by raising the cost of capital.

In the meantime, high interest rates maintain the Canadian dollar at artificially high levels, especially vis-à-vis the United States. This undercuts the competitiveness of Canadian goods and services in the US and adds to the devastation caused by the free trade deal. Amazingly it is the Tories and their big business backers who complain the loudest about Canada's lack of competitiveness.

The sorry legacy of the Tory government in Ottawa is cutbacks affecting social services, free trade with the United States, a North American free trade agreement, the GST, and high interest rates. It is these difficulties working people in Ontario have to overcome. The provincial government budget helps us in our fight.

In the context of recession and federal government cutbacks, the provincial government had to make some tough choices. In putting the wellbeing of people before the deficit, they moved in the opposite direction of the Tories. Mulroney's answer is to raise taxes and cut services, making the recession worse. The answer of the Ontario government is to fight the recession through:

1. Sustaining and creating 70,000 jobs. This means the province lost only 260,000 jobs instead of 330,000 jobs to federal government policy;

2. Undertaking the most aggressive anti-recession effort in all of Canada through increasing overall spending by 13.4%;

3. Creating the $700 million anti-recession program. When combined with the contributions of local government and agencies, total spending will exceed $900 million;

4. Maintaining health care and education, despite cutbacks from the federal Tory government;

5. Responding to the need for action in such areas as worker protection, pay equity, social assistance reform, affordable housing and the environment;

6. Putting spending power in the hands of Ontarians. By not imposing the provincial sales tax on the GST, $470 million will be left in the pockets of consumers in 1991, and enriching the Ontario tax reduction for low-income earners;

7. Creating a $215-million social assistance reform package that is designed to provide benefits for those who are in greatest need, to help people get into the labour force, to increase fairness and accessibility, and to provide further relief to overburdened municipalities;

8. Providing tax relief for the poorest of Ontarians by initiating the largest enrichment in the history of the Ontario tax reduction program. This $50-million enrichment means the number of low-income earners whose Ontario income tax will be eliminated or reduced will increase to 700,000 for the 1991 tax year;

9. Allocating $48 million in 1991-92 to help lay the groundwork for self-government and resolution of land claims for support for research and negotiations; $20 million to be spent on community infrastructure such as water and sewer systems; $5 million for 400 new child care spaces on reserves;

10. Allocating an additional $12 million for new shelter beds and enhanced services for women who are victims of domestic violence, and an increase of more than $8 million to expand and enhance services to women and children who are victims of sexual assault;

11. Making $125 million available to Ontario's transfer agencies -- municipalities, school boards, hospitals, universities and colleges, and other agencies -- to assist them with the cost of pay equity;

12. An unprecedented level of provincially supported activity for the development of another 10,000 non-profit housing units, which will cost the province approximately $150 million in annual operating subsidies when completed.

Big business spokesmen, the media and the opposition parties have all criticized the budget for its deficit. When the NDP came into government, it discovered that the budgetary surplus confidently predicted by the Peterson Liberals was a $2.5-billion deficit. Since then, facing the worst recession in 50 years, it has made tough choices while managing taxpayers' money carefully and compassionately.

In all of the discussion of the province's budgetary deficit, little attention has been paid to its causes. Most of the deficit comes from the financial reality of the recession: falling revenues, increasing costs in health care, social services and education. A very large part of it is the impact of federal transfer payment cuts. The cumulative impact of federal cutbacks in established programs financing -- health and post-secondary education -- and payments under the Canada assistance plan -- social services -- is costing Ontario $3.6 billion in 1991-92 alone.

0850

Last year, provincial revenues fell at the same time as more people required social assistance. Welfare costs have doubled in the last three years. More than half of the people receiving social assistance are single mothers with children at home and people with disabilities who have difficulty finding work at the best of times. Forty-two per cent of social assistance beneficiaries are children. The average stay on social assistance for persons classified employable is 4.5 months. So we say to those who do not like deficits, and we are among them, what would you cut, funding for schools, for hospitals and community care for seniors? Where is the economic wisdom in increasing the unemployment lines and welfare case loads?

Ontario's projected deficit of $9.7 billion is moderate if considered in perspective with the record of recent Conservative governments. The Ontario deficit is comparatively low in terms of total spending, in terms of gross domestic product, in per capita terms with other provinces and with the federal government under Conservative governments. In Ontario the 1991 per capita deficit is $992, in Alberta in 1987 the per capita deficit was $1,713, in Saskatchewan in 1986 the per capita deficit was $1,188, and in Canada in 1991 the per capita deficit was $1,149.

Spending money now is critical to stimulating economic growth, to responsible fiscal management and to helping our fellow citizens in difficult economic circumstances. As the figures above demonstrate, Ontario's spending is not out of control. In fact, it is less than other provincial governments spent to get out of the last recession.

Ontario's public debt charges -- the interest costs of carrying its debt -- are low as a share of its total revenues. The federal government spends 36 cents of every $1 of revenue as interest on its debt, spending which only serves to benefit investors and bond dealers. In contrast, Ontario spends less than 10 cents of every $1 of revenue on interest costs -- less than every province except Alberta and British Columbia. These costs will rise to 11.6 cents next year, still far below the federal rate and less than the debt charges of most provinces. Ontario lost its triple A rating, but so did the Liberal government when it first came to power. It did not regain it until four years later.

In preparing this brief, I have carefully avoided citing any individual cases in northwestern Ontario, as I was only contacted on Thursday and asked to present here this morning. So I was unable to thoroughly research any cases and to be able to answer questions on those cases accurately. However, I have attached a news clipping which relates the story of one small businessman and his family.

Gord and Linda Griffiths took over the running of the Clover-Belt Country Store five years ago. Last fall the gas pumps had to be removed due to age. The removal and disposal of the pumps was expensive and as the cost of replacement was in the neighbourhood of $20,000 the Griffiths made the decision not to replace the pumps. This spring Canada Post decided to change the terms of the agreement for the operation of the post office at the store. The Griffiths were told there would be no negotiation of the six-page contract. As the agreement resulted in a wage reduction of approximately 62%, the Griffiths decided not to renew the contract and to close the store.

The Griffiths family also owns and operates an abattoir and butcher shop. With four federal ministries and four provincial ministries watchdogging the industry, each one imposing their own rules and regulations, the Griffiths family is unsure of the future of the abattoir and butcher shop.

Government regulation, privatization and lack of government funding has resulted in the closure of one business and is threatening the future of another. This is in only one family.

Since the article was published another business just outside the community has assumed some of the postal services once provided by Mr Griffiths and his family. Had the same arrangements been made with Mr Griffiths that were made at the new location, Mr Griffiths would probably have been able to keep his store open and operating and would right now be providing an essential service to a small, rural community.

In conclusion, we would like to thank the government of Ontario for holding public hearings on the budget and providing us with an opportunity to present our views on the economic situation.

In talking with my members, I found they were well aware that Ontario's economy, like others around the world, is undergoing and needs restructuring. Our members want an efficient economy which provides secure, well-paid jobs at high levels of employment. They want an economy which is highly productive, yet is environmentally as well as socially sustainable, an economy in which the benefits of growth are shared fairly.

In our view, the budget is a major step in the right direction. It represents an investment in the people of Ontario to lay the groundwork for sustainable prosperity in the 1990s. The Conference Board of Canada forecasts released May 21 confirm that while Ontario has been worst hit by the current recession, it will lead the country in economic growth in 1992.

Thank you for the opportunity to make this presentation to this committee. The next few years will provide many challenges for all of us. I look forward to working with you in the future.

Mr McLean: Thank you for your presentation. The question I want to ask you is with regard to the gas tax. Do you agree with the proposal in the budget for the 3.4-cent increase in the gas tax?

Ms Wall: I am sorry?

Mr McLean: The budget increased gas taxes substantially and I am wondering what your opinion is on that increase in gas taxes. There were some commitments made that the price of fuel in the north would be levelled out with the fuel in the rest of the province. That has not happened and in fact the gas tax has been increased. I wanted to know what your opinion was with regard to the increase in taxation.

Ms Wall: Gas prices here in the north have always been high. We do not like it.

Mr McLean: I did not see anything in your brief about the details of the budget. That was why I asked the question. I thought to bring that issue up would be important for people of the north because they are very concerned about the price of gas.

I guess I will go on with another question and it has to do with skills training --

Mr B. Ward: I do not mean to interrupt. I just wanted clarification. How much time does each party have, Mr Chair?

The Chair: We have about three minutes for each party.

Mr McLean: The last administration was kind of keen on skills training programs in Ontario. This administration, I have noticed, with Mr Pilkey when he was in the ministry -- and I guess it really comes under Mr Richard Allen, the Minister of Colleges and Universities and Minister of Skills Development. Are there training programs in the north?

Ms Wall: Yes, there are.

Mr McLean: Is it through the high schools?

Ms Wall: It is through the community college, Confederation College, here in this part of the northwest.

Mr McLean: Is it fairly active, with a good enrolment?

Ms Wall: I would say yes. There is a lot of participation.

Mr Nelson: There has been some reduction in services in training workers. For instance, at Quetico Centre they previously trained heavy equipment operators. There was a reduction from 48 prior to 1984. It went down to somewhere in the neighbourhood of 24 and then they eliminated the program at Quetico Centre.

Mr B. Ward: When the budget originally came out there was a large amount of criticism from groups and organizations, but since then there has been more support, especially since these hearings have taken place. We spent a week in Toronto and now we will be touring the north. More and more business groups, social organizations, economists from across Canada, indeed the Conference Board of Canada itself, have come out in support of the budget and said the province is heading in the proper direction during these tough economic times. If our government had not taken the action it did from an economic standpoint in battling the recession and trying to cushion the blow that workers and businesses face because of these tough economic times -- recognizing you are not economists, but working people and you understand things that go on in the north -- if we had not taken the initiatives we did, what do you think the impact would be?

Ms Wall: I shudder to even think of it. What has been happening has not been working and hopefully these measures are going to help us.

Mr Nelson: As was pointed out in the brief, the suggestion of closure of schools, hospital beds and so forth is just unthinkable to the people in northwestern Ontario.

0900

Mr B. Ward: In fact, if our government had tried to answer the critics and had cut back on our health care, cut back on our social programs, cut back on our job creation, things would be worse than they are now, recognizing they are bad.

Ms Wall: I work for a board of education. Things would have been much worse. If we had had any more cutbacks in education, the implications would not have been pleasant.

Mr Nelson: I would like to clarify what I was saying before regarding the program at Quetico Centre. That was under the federal program that cut back that particular training program.

Mr B. Ward: The federal government cut that back.

Mr Nelson: Right. I was not able to complete what I was saying.

Mr B. Ward: Perhaps you could expand. What is this program? It is run by the federal government.

The Chair: Sorry. Mrs Sullivan.

Mr Nelson: I will never get to tell the story.

Mrs Sullivan: I am interested in the emphasis you place on job creation and the sustaining of jobs which this budget includes. I would like to know, specifically from the point of view of this community, where jobs have been created and where they have been sustained as a result of this budget.

Mr Nelson: You are asking the Dryden labour council to respond to what is going on in Thunder Bay?

Mrs Sullivan: In your own community, where have jobs been created as a direct result of this budget?

Mr Nelson: I think they have been maintained in the areas of education, health care and social services. Those jobs that would obviously be cut and no longer exist are there, providing --

Mrs Sullivan: Where did the threat of their being cut come from?

Mr Nelson: As was pointed out in the brief, if you had time to read it --

Mrs Sullivan: Yes, I have.

Mr Nelson: There has been a deficit left over, there have been cutbacks at the federal level, and as a result of that the choice to the government, as far as we understand it anyway, was to either make cutbacks to reduce the deficit or fight the recession. That is what this labour council and the other labour councils are trying to support, that we are fighting the recession versus cutbacks.

Mrs Sullivan: Have there been new jobs created in Dryden as a result of this budget?

Ms Wall: I cannot address that issue.

Mr Nelson: In a small community there probably are not a lot of jobs being created as a direct result of the budget. However, when these people are working, people in other industries benefit and maintain their employment, such as in grocery stores, lumber yards and so forth. If people are working, then as a direct result of being able to work there is a ripple effect on the economy. These other jobs may very well have fallen by the wayside and would not have been there to support the economy of the community. But because of this budget, these people are working and those dollars are in the community instead of unemployment insurance and welfare, which would be a direct drain on the provincial and federal resources.

The Chair: Thank you for your presentation before the committee. It was well appreciated.

RACE RELATIONS THUNDER BAY

The Chair: The next person to appear is Lynne Sharman. You will have 15 minutes as a presenter. Try to leave some time at the end for questions from the three parties.

Ms Sharman: I am here to represent Race Relations Thunder Bay, and I am specifically addressing and supporting the $7.5-million allocation to the anti-racism strategies that were implemented in the budget.

Race Relations Thunder Bay is a community advocacy and lobbying group working to develop and monitor anti-racism strategies in the following areas: We address education initiatives and advocacy; employment equity initiatives -- these are all on a community basis; complaint resolution and advocacy; women's initiatives and advocacy; and media and cultural initiatives. This is in the city and district.

Past initiatives included extensive lobbying of the Thunder Bay Police Commission in 1989-90, particularly with regard to the perception and treatment of Ojibway and Cree residents of this city and the absence of native police personnel.

In 1991 our organization has focused on the review and revision of draft race and ethnocultural relations policies produced by both boards of education. Our recommendations include the introduction of compulsory native studies from junior kindergarten to grade 12, from both a historical and contemporary perspective, with a whole-system recognition of the Ojibway and Cree people, who are in fact the host nation of this region. It is this nation of people who have experienced systemic racism in every conceivable form over the past 200 years -- intellectual, economic, spiritual, physical, emotional and cultural.

In Thunder Bay neither the public nor separate school boards have policies or procedures in place that protect elementary and secondary native and visible minority students from overt or subtle -- hidden curriculum -- forms of discrimination and harassment. At the June Native Community Forum on Education Issues in Thunder Bay, co-sponsored by the provincial Ministry of Citizenship, 60 native parents attended and related their children's stories and their own sense of powerlessness to effect change due to entrenched systemic barriers. Parents described over and over again their children experiencing incidents of intimidation by principals, teachers and peers, originating in the absence of respect for and acknowledgement of beliefs and rights that run counter to those of the dominant majority.

Because the formal mechanism for remedial action does not yet exist on an institutional basis, a parent advocacy network has been formed and funding is being made available to provide the materials and resource persons necessary to proactively create a culturally healthy learning environment for native and visible minority students.

Racism is the root cause of the problems that the provincial government is now addressing, with its allocations to the Ministry of Citizenship, Ministry of Education, Ministry of Colleges and Universities and to the minister responsible for native affairs, on behalf of Ojibway and Cree people. The change is tangible in this region already and it is a positive and dynamic one.

Even to those people who have been living in a recession for many decades in northwestern Ontario, and that includes native people, women and visible minorities, the economic backsliding of the past decade has been disastrous. It is reflected in northwestern Ontario's high incidence of alcohol and substance abuse, domestic and sexual violence against women and children, the high dropout rates in secondary schools and the high rate of incarceration of young native men and women.

If the budget had not produced a financial commitment to the inherent right to self-government of native people, if funding had not been allocated for community infrastructures such as water and sewer services on reserves, if the funds were not provided to the Ministry of Education to address self-identified elementary and secondary school needs in the northern native community, the provincial government would have had blood on its hands, because people have literally been killed by racism in northwestern Ontario, some by suicide, some by escaping into alcohol and substance addiction, and some by committing criminal acts, knowingly and unknowingly. The silent bloodletting has been acknowledged finally.

It is ironic then and perhaps predictable that racial equity should be financially and legislatively introduced to northwestern Ontario now. As a society we are struggling in a post-technological employment era. The training and education that should have begun 40 years ago is being put into motion in the latter stages of post-industrial and post-technological manufacturing and distribution macrosystems. The equity the province is ensuring with this budget is a last ecological and spiritual shudder, and we are relieved that you heard the cry in Toronto. It obviously did not pierce the walls of last week's Conservative Mardi Gras.

In terms of Race Relations Thunder Bay, the $7.5 million in funding announced by the province for anti-racism strategies over a two-year period indicates this government's willingness to adopt a leadership role in the eyes of the rest of the country. There is a sense of vision inherent in this budget, evidenced by the development of much-needed implementation guidelines with the creation of a provincial anti-racism policy, with the public sector anti-racism strategy with increased aboriginal minority representation on government advisory boards, and the creation of the anti-racism secretariat itself. Race Relations Thunder Bay particularly endorses the need for a distinct approach to anti-racism measures for aboriginal people in this and other regions of Ontario.

Many Ojibway and Cree residents are very mistrustful of provincial and federal anti-racism campaigns in which they are visually and representationally absent as active participants, beneficiaries and initiators of anti-racism print and broadcast strategies. This lack of media representation extends to public and private broadcasts and Supply and Services productions by the government itself.

0910

In Thunder Bay we receive two commercial channels from urban Detroit as a major component of consumer service. Regular news coverage on a daily basis from downtown Detroit highlights racial tensions and strife in a major US metropolitan centre to Thunder Bay viewers. This urban racial strife becomes embedded in the consciousness of Thunder Bay residents: population 110,000; 25,000 children enrolled in elementary and secondary schools; 6,000 children living on welfare and family benefits with a single parent; the second highest rate of seniors in Canada after Victoria, British Columbia; a very high rate of illiteracy, alcohol and drug abuse, unemployment, and domestic and sexual violence compared to other centres in the province; and one of the highest rates of disabled persons compared to other centres in the province due to the at-risk former employment, for example logging, and individuals who are injured or disabled moving to Thunder Bay for needed services.

This is not Detroit. However, residents are fed daily the visual and audio imagery of urban and suburban Detroit and assume it as their own. The Rogers media disallow residents from looking at Thunder Bay, northwestern Ontario or the rest of Ontario or Canada, for that matter, in a non-fearful and objective manner.

Nowhere on Rogers cable from Detroit do we see or hear anything about the realities of life on reserves in northwestern Ontario, anything about the fact that between 80% and 90% of native women are survivors of sexual and physical assault, or anything about the fact that northwestern Ontario is a Third World entity in terms of its treatment of Ojibway and Cree people. We do not hear or see anything about the below-poverty-level existence of 6,000 children in single-parent homes in Thunder Bay.

Television is a major activity in a community where poverty is widespread and winters are minus 30 degrees Celsius, to the point where staying inside is not only physically necessary but economically imperative and becoming even more so. Do not underestimate the transformative power of television to aid this government's fiscal and moral vision. If equity is to be understood and assumed as a given in northwestern Ontario, native communication societies must have access to commercial air time as well as the parliamentary channel.

The 7.5 million anti-racism dollars over a two-year period and the pre- and post-secondary education moneys allocated in the budget are essential to offset the post-technological equity backlash that began occurring some years ago. Unemployed young and older males displace their frustration and anger on aboriginal people, women, visible minorities, and by extension, their children.

By protecting all provincial residents equally, including the 40% increase necessitated in social assistance programs, the government of Ontario offers not only a vision but a reality of social partnership, and Race Relations Thunder Bay offers its support. This is not a hostage-taking fiscal plan, nor does it regard the people who are struggling to realign their very ordinary lives, in the midst of unprecedented global economic, ideological, ecological and perhaps unknowing genetic restructuring, as somehow faceless and somehow without as much value as the almighty dollar.

With the very significant leadership offered by the provincial government in this budget, something will be given in return. As more Ojibway and Cree people in northwestern Ontario become known as educators, broadcasters and political leaders, they will in turn teach us something about democracy that runs parallel with the NDP's vision.

Dr Clare Brant of Shannonville, Ontario, has written in Native Ethics and Rules of Behaviour that the native "ethic of democracy, which underlies the ethic of non-interference, emphasizes the equality of all individuals, encourages economic homogeneity, decision-making by consensus, independence of mind, autonomy and a high degree of personal privacy." Autonomy and personal privacy do not preclude the importance of group survival, which "is more important than personal property. Consequently in native culture, individuals are expected to take no more than they need and to share freely." Your fiscal policies do not rob anyone of their dignity or their self-respect no matter who they are, and we thank you.

The Chair: We have three minutes. Starting with Kimble Sutherland, you have one minute. Make it a short preamble.

Mr Sutherland: I just want to ask you how you thought an employment equity plan would impact. Do you think that would help in improving race relations?

Ms Sharman: It is improving race relations. I think there are going to be two things happening. I would rather speak of it in terms of an anti-racism strategy. I think employment equity is going to create equality down the road, but the introduction of the legislation very much necessitates the need for the funding for the anti-racism strategies because there has been a backlash. There is going to be a backlash, as I said in here. We have already seen examples of the backlash.

Mrs McLeod: Perhaps I can give you an opportunity to expand a little bit on it because my question is in the same direction as Mr Sutherland's. You mentioned the backlash that you begin to see, particularly when there is a large level of unemployment. I have been concerned across the province as well as in the northwest about the backlash against the most fundamental issues of equity that we see in a recession. I wonder if you would comment on whether you have felt more of that backlash in recent months, and perhaps expand a little more on the kind of economic opportunities you think are needed both in native and non-native communities and begin to address those underlying fundamental issues.

Ms Sharman: That is a really difficult question to answer, because again we are in a post-technological employment period now. You cannot look at job creation in any of the ways in which we have looked at them formerly, and there are things occurring locally. It is going to take everyone's co-operation and everyone's concerted effort to look at the changing notion of work and have the changing notion of what work and production are so that they benefit everyone equally in the province.

Mr McLean: You relate to the water projects on reserves. There has been a substantial increase in them and that has created a lot of jobs. Where does the funding come from for those water projects?

Ms Sharman: I am not familiar with this source. I would assume there is a partial contribution from the province through the minister responsible for native affairs, and a partial contribution --

The Chair: Thank you. We have just run out of time.

0920

STEPHEN MCBRIDE

The Chair: We have Stephen McBride to make a presentation. Identify yourself for Hansard. You will have 15 minutes, and out of that 15 minutes, the time at the end will be divided among the three parties for asking questions.

Dr McBride: I am a political scientist who does research on economic policy. I have a forthcoming book and a number of articles on this subject. There is a written version of my brief, which I have passed over to the clerk.

In his budget speech, the Treasurer said the choice was between fighting the deficit and fighting the recession. The purpose of my brief is to argue that in choosing to fight the recession, the Ontario government made the politically and economically responsible choice.

Politically, this is a new government. It had just won an election in which a neo-conservative alternative was on offer from the provincial Conservative Party. The electorate had rejected that alternative. For the new government to then adopt neo-conservative economic policies and put its emphasis on restraining the deficit could only have fuelled cynicism and disillusionment, which are already widespread, with the political process, as well as undermining perhaps the long-term legitimacy of the political system.

Second, again politically, there is a widespread perception that this recession is made in Ottawa and that federal policies of high interest rates, an overvalued dollar, the impact of the GST and the impact of the free trade agreement have generated this recession. Pending a federal election, which is at least two years away, to whom should Ontario citizens look for relief from these federal policies? The logical and long-standing answer in a federal system is to look to the provincial government for relief, and I think in responding in this way the Ontario government has done the responsible thing.

Economically, I would make three points. The budget obviously rejects the currently fashionable monetarist economic theory. This theory is basically an updated version of the doctrine of sound finance, which was fashionable prior to the last Great Depression and during it. Based on my own research, I would say a number of aspects of this theory are either incorrect or they are misapplied to the Ontario situation. For example, monetarist economists believe that the deficit causes high interest rates, but certainly at the federal level in Canada high real interest rates preceded the current explosion of the deficit.

Second, excessive government expenditures are presumed to cause high deficits, but when you look at the facts, it seems the current deficit, federally at least, is generated by a mixture of high interest rates and foregone revenues through tax expenditures, many of which favour business.

Third, whatever one thinks of monetarist economics theoretically, there is no doubt that the fiscal positions of Ontario and the federal government are different. A table attached to the back of my brief summarizes the accumulated debts of the province and the federal government expressed as a percentage of gross provincial product on the one hand, and gross domestic product on the other. Ontario's debt in 1990-91 was 15% of the GPP. The federal debt was 57% of the gross national product. Obviously the room for manoeuvre of the two levels of government is entirely different.

Fourth, it seems to me that critics of the government who wish that it had made reducing the deficit its chief priority fail to calculate and factor in the social and economic costs of failing to fight the recession. For example, there is extensive literature which suggests that unemployment increases poverty rates, increases family breakdown, increases domestic violence and leads to more suicides, more admissions to mental hospitals, greater criminality and more admissions to prison. All of these represent major human costs, but if you start to put dollar figures on them, they also represent economic costs as well.

Similarly, failing to fund education, cutting back on areas like education, would simply produce a future generation, facing an increasingly internationally competitive economy, ill equipped to compete. The position I argue in the brief is that expenditures had to be maintained as a long-term investment in the future.

My conclusion, to leave some time for questions, is that these were not easy circumstances in which to bring down a budget. But in avoiding the pointless and in fact counterproductive path of simply axing expenditures, the provincial government has done a real service for the population of this province.

Mrs Sullivan: Professor McBride, this is a very interesting presentation you have made and certainly a thoughtful one. I would appreciate your comments on a choice the Treasurer has made in the budget, in relationship to the deficit of close to $10 billion, to have significantly more than half of that deficit on the operating rather than on the capital side of the budget. In other words, the Treasurer is borrowing this year for pens, papers and pencils and the gas for highway vehicles and so on and adding that operating deficit to the long-term debt. I would like your comments on doing that rather than making a choice of putting a significant injection of capital into a capital deficit, an injection of stimulus that way.

Dr McBride: I think it is an important question, and if that same choice were reflected in the long term one might have grounds for concern. It seems to me this budget was introduced in the very early stages of a recession and I think the choice made was reasonably logical under those conditions. But in the long run, obviously one should not finance, as you put it, pens and paper.

Mrs Sullivan: What do you see being the long-term effect on the debt, and the legacy that is left for the children of our province if operating deficits continue to be created? Certainly the Treasurer has predicted that this kind of deficit is going to continue for perhaps the next five years.

Dr McBride: I think there are two ways of looking at the long-term effects. One, which is fairly common, is to look at the debts which must be repaid by the future generation. The other, I think, is to look at the costs future generations would incur if spending were not maintained. If we move away from pens and papers towards social assistance programs, it does future generations no good to inherit a deteriorated education system, to have been brought up under conditions of malnutrition. Those programs which the government has maintained, even if they do not fall under the capital portion of the budget, are in fact an investment in the future.

Mr Christopherson: Thank you, professor. I appreciated your brief very much. You touch on something in here -- some of it in the form of just a short question and then a brief answer. In light of the responses you gave to Mrs Sullivan's questions, specifically what sorts of things would a government have had to look at in order to balance the budget this time if one had chosen to go down that other road? What kind of real effect would that have, particularly in a community like Thunder Bay?

Dr McBride: It depends on the scope of the cuts, obviously. Those cuts were not made and they could have been minor or severe. The sorts of things we are looking at are cutbacks in transfer payments to municipalities and to school boards, compounding the underfunding of universities, and to various social assistance programs and so forth. Those are the big items in the budget, so logically those must be the items which would have to be cut if expenditure cutting was the goal. In terms of its impact in Thunder Bay, Thunder Bay in many ways is not dissimilar to the rest of the province. Perhaps some of those social problems are a little more severe here, and therefore one would expect the general impact to be magnified in the north and perhaps in eastern Ontario as well, in the outlying regions of the province.

Mr Christopherson: There was also some discussion about not a lot of the deficit being put to capital works, and I think I would maybe like to correct the record from our perspective. There was the $700-million anti-recession program which basically was of capital intent, and I understand about $32 million of that money has found its way here into the Thunder Bay area. From an economic point of view, does it make good sense? Obviously in terms of generating jobs and local stimulus, it is important to have an injection of money, but does it make sense, from a long-range economic planning point of view, to be putting that money into infrastructure such as roads, public buildings, hospitals, schools, etc, at this time or should we be holding off and should we rather have spent that money at a different time?

Dr McBride: Given the stage of the recession, I would argue that the spending of money per se has a stimulative effect and that is quite positive. One thing that often intrigues me about discussions of the deficit and public debt, especially the accumulated public debt which will of course increase as a result of this budget, is that the debt represents a liability for the government. But people very rarely put forward the other side of that table, which is the assets that spending produced. I think your references to infrastructure and so forth are quite to the point, that much of that debt represents or is offset by the roads, schools, universities, the investment in training and so forth that historically governments have undertaken, including this one.

The Chair: I have to cut you off at that part of the question.

Mrs McLeod: I will very quickly note my appreciation of the tables that reflect the fact there was a good fiscal position and that Ontario did benefit from that coming into this particular budget. But I would suggest that there is a bit of a tendency in your brief to subscribe to what I think is a very arbitrary either/or juxtaposition, that you either have the deficits or you cut back on social programs. The concern we would want to bring forward is that we need to be able to provide for those social programs through real employment generation and real economic development that gives us the revenues to support social programs.

I wonder what evidence you would find in this budget of longer-term economic planning, with more permanent job creation so that we can ensure both a reduction in deficit for those future generations plus fuller employment and revenue for social programs support.

Dr McBride: To be fair to the office of the budget, it probably is an interim and an emergency document but I do find some evidence --

Mrs McLeod: Even with the projections for four years in advance?

Dr McBride: I think the reference is in the budget -- admittedly the programs are not put in place -- for increased training and skills development and so forth, and I think will probably be developed in the future. I am sure if you pose that question to your partisan opponents they will probably come up with a long list of factors but --

The Chair: Thank you, Mr McBride. I am sorry, we are so short on time.

Dr McBride: I hate to go out on a but, but there it is.

Mrs McLeod: I could answer the question for you, Mr McBride.

THUNDER BAY EMERGENCY SHELTER

The Chair: Identify yourself for Hansard, and welcome to the committee.

Mr Milne: My name is Keith Milne. Excuse me for having such a bad cold. I am the manager of the Thunder Bay Emergency Shelter. We appreciate this opportunity to discuss some of the effects of the recent budget and how they have affected our organization and the clientele we represent. The shelter is an organization that is committed to providing food and shelter and the basic needs to disadvantaged persons within our community. Our clients are individuals with very few resources and they are the people who suffer first at the beginning of a recession and will be the last to recover if they ever do recover.

In the last 18 months we have seen a significant increase of people in need of our services. In 1990, we averaged 26.8 people needing overnight accommodation and in the first quarter of 1991 it has risen to 32.25. The people who are using our soup kitchen: in 1990, we averaged 60 people and in the first quarter of 1991 we have seen an average of 81 which is a significant increase of people who really have run out of resources and ended up on our doorstep looking for some kind of assistance for their basic needs.

A few areas of the 1991 budget have proved to be helpful, first, the responsible decision-making which is really an obvious orientation to caring about people, particularly those in the lower income. I think it is very important that as a government makes decisions, it balances its financial-fiscal decisions with the concerns of social implications, and balances the social decisions with the financial implications. I think this government has made an obvious choice that it was necessary to incur a deficit to ensure that the people of the lowest incomes were not impacted as traumatically as if there were no deficit.

The anti-recession employment program -- even though it was not very well publicized, at least from our point of view -- has been very accessible. A concern of ours always is accessibility. A lot of times government policies and programs are made available and yet it takes a great amount to try and access some of that money. But the anti-recession employment program was very successful. We have benefited by being able to hire one person. The one concern about that program is that it is very temporary, and my concern is that we may have a number of people employed for a short term of maybe six months to a year and then we may encounter the problem of unemployment again.

The emphasis in the budget on reform of the social assistance program, which is really an extension of the Liberal program that was started before the election, appears to be making real progress and involves service providers such as ourselves and we appreciate that. I think it is important to take into consideration the direct effect on recipients but also we need to be careful that the province does not abdicate the responsibility and simply pass on the responsibility and the costs to the municipalities.

Reform of the social assistance system needs uniformity so that people are not left vulnerable to the discretion or the whims or the political fancy of municipalities. Of particular concern regarding the delivery of service is those smaller communities and smaller cities that tend to pass the problem on and direct people, or in our experience we have people come to us who have been given a bus ticket from a community farther down the road and they just send them on to Thunder Bay. I think that needs to be taken into consideration, that sometimes smaller communities do not have any programs or do not have programs to help people and so they send them on to the larger areas.

We also appreciate the initiative towards affordable housing. The increase in funds in this area is very needed, and yet we need to be cautioned that the distribution needs to be equitable. Southern Ontario and Toronto are not the only areas with a need for affordable housing. One of the experiences I had when I was living in Saskatchewan was the program of sweat equity. I am wondering if this government might not want to look into that kind of program that would help young families and those of lower incomes to get their own homes. A sweat equity program could also be applicable to people who are homeless even now, as is done with some of the programs in Toronto.

There needs to be more money available for supportive housing programs combining funding from Housing, Community and Social Services, and Health, and due to the heightened process of deinstitutionalization, the funding must be available to provide the supportive-type housing that is needed within the community for vulnerable and disadvantaged persons. Particularly in Thunder Bay we need to see more funding because we have the psychiatric hospital which is downsizing the number of people staying there. It is a concern on a long-term basis that we need to have more funding in that area.

The area of emergency shelters and hostels or temporary housing was not specifically mentioned within the budget. In an ideal world shelters would not be needed, but unfortunately we do not live in an ideal world. I think it would be wise for the government to look at annualized funding arrangements that could be made available to emergency shelters, because they are a necessary last resort for people who are experiencing housing needs and other problems.

If emergency shelters were more focused towards a transitional role, such as women's shelters are, maybe we could see some progress in the whole area of the revolving door where people seem to be coming, leaving temporarily and coming back again and nothing seems to be done for them in the long term.

The money that has been directed towards food banks, or apparently, is appreciated but the fact is the directives from the government in this whole area have been very vague. We would not have known money was available for food banks except someone in the provincial office happened to take me aside and say, "Get a proposal in here for a food bank, because there is money here waiting." We are in the process of trying to put a proposal together, but the whole problem is that it is very unclear what they want to spend that money on and in what areas.

In conclusion I think the budget has taken the recession and the situation that Ontario is in, and has made a very wise choice, because it has oriented itself to the care of people. It is a very difficult situation and I think the government has a great challenge now to try and bring that deficit to a point where we can get back to a balanced budget, because I do not want our province to be caught in the perpetual trap of deficit financing. I think we should see it as a necessary evil, but something that should be done away with as soon as possible, as soon as it has served its purpose. In my reading I am not sure that the plan is really that well.

0940

Mr McLean: I appreciate your comments. They are really down to earth. On the 32 people overnight, does the Ministry of Community and Social Services help fund that facility?

Mr Milne: Indirectly. We are on a fee-for-service agreement with the city social services, so 80% of that money would come from Comsoc and 20% from the municipality.

Mr McLean: Your soup kitchen, do you get funding to help with that and do you get a fair amount of supplies from the community?

Mr Milne: There is no funding available for it, or there is no funding given for the soup kitchen. A lot of our food is donated through the community.

Mr McLean: But there is funding, you indicated, for food banks.

Mr Milne: Apparently.

Mr McLean: That is interesting to hear. Is that in the food banks right across the province?

Mr Milne: We are not really sure. We have been told to get a proposal in.

Mr McLean: Is that through the Ministry of Community and Social Services?

Mr Milne: Yes, it is.

Mr McLean: Thank you, Mr Milne.

The Chair: No more questions from you?

Mr McLean: Not at this time. I will save the rest of my time, if that is all right.

Ms M. Ward: Thank you for your presentation. You mentioned the anti-recession program. A considerable amount of that $700 million was allocated to the north. I am interested in the effect on your clients. I assume they are mostly unemployed people, although there might be some low-income earners too who essentially have to use food banks. If the anti-recession money was not spent and programs were not maintained and the additional assistance were not given to municipalities, what do you think would have been the effect on your organization, which means essentially the effect on the community?

Mr Milne: I have not seen any clients actually benefit from that program.

Ms M. Ward: What I am asking is, do you think your client base would have been expanded a great deal?

Mr Milne: I think possibly, yes.

Ms M. Ward: You would have more people needing your services, needing emergency shelter and assistance with food if the anti-recession program were not in place and more jobs were lost and if the help was not given to the municipalities. A number of people have been moved from general welfare to family benefits, which is completely provincially funded. That has taken some load off the municipalities.

Mr Milne: I think if that had not happened, our numbers probably would have increased. The problem is once that money is used up, if we might not see an increase then. Hopefully things will be better, but it is hard to say.

Ms M. Ward: You are expecting things to be bad for a while then.

Mr Milne: We are expecting things to be bad for another two years as far as what is happening on the street is concerned. It takes that much longer for people to recover when they have hit the bottom.

Ms M. Ward: The housing initiatives will be helpful to the people whom you are attempting to help, non-profit housing?

Mr Milne: There is some building going on in the next year that should help directly some of our clientele.

Ms M. Ward: Both in terms of housing and also there is construction, about 20,000 construction jobs expected to be created there.

Mr Milne: Right.

The Chair: You have fourminutes left.

Ms M. Ward: I did not know if you wanted to rotate.

Mr Christopherson: Come back to us.

Mrs McLeod: Just for the record, if memory serves me correctly I think that the food bank fund is $1 million. That is for all programs across the province. It is a one-year-only fund, so it is available for some specific purposes, a variety of things. I do not think it is going to address the problem which I know the shelter has, which is the issue of core funding. In turn the core funding issue addresses the longer-term role of the shelter.

You have indicated that shelters, like food banks and deficits, are something of a necessary evil at the present time, but not something that you would want to see in an ideal world. In an ideal world we certainly would not want to see food banks continuing, but over the last weeks their use has actually increased substantially. I wonder if you are, first, seeing an increase in the number of people using the shelter. If you are, what kind of people are you seeing? Is there a change in the clientele or is it an increase of your traditional clientele? Then maybe I will ask you a little bit about the transitional role you think shelters should play. Are you seeing an increase in clients?

Mr Milne: Yes, we have seen an increase in clients. I am not sure that we are seeing an increase in the last few weeks, but in the last six to eight months we have seen an increase; not so much the traditional clientele but people who were working and have been unemployed. That is the area I am concerned about that may increase substantially in the next year, especially in Thunder Bay where we have seen so many layoffs and people losing their jobs and when unemployment insurance runs out.

I am a little hesitant to talk about the transitional role because I have gotten myself into some real hassles in the last few weeks about that, but I think there is an area where we can provide a better service. I am not sure whether it should be the shelters or social services in municipalities, or who should provide the service, but in other areas, particularly in the women's shelters, they put a real emphasis on transition and taking people from a shelter, helping them make connections with programs that will help them in employment training, life skills, some of the very basic things that our clientele needs.

I think if those people are given opportunity, then we can bring them back to a point where they can take on a more valued social role within our community. Because we are the organization that deals with these people when they are at the very bottom of their cycle, we can help them access better programs, better education and hopefully then help them with a better future.

Mrs McLeod: That is a role potentially that would always have a place in any particular social structure short of the absolute ideal world. In the shorter term, with the numbers of people coming to the shelter now, are you finding that because of the unemployment people are needing both shelter and food or are they coming largely for a meal? What are the key needs you are seeing right now?

Mr Milne: Right now, there are more people in need of food than of shelter. That could be a seasonal thing as well, but I would say the increase has been primarily in the soup kitchen, people who are coming for one meal a day.

Mrs McLeod: That seems to fit with the trend across the province then, where we see the food bank in Toronto having had its first ever summer food drive because of the sheer numbers of people and the state of desperation they are in.

Mr Milne: Right.

The Chair: Any one else from the opposition party with a question right now? You have two minutes left. I will put it down here and go to Mr McLean with about five minutes altogether.

Mr McLean: Since the SARC report has come in and has been implemented, I thought once that was implemented it was going to kind of help do away with the soup kitchens, or at least keep them cut down. Have you found in Thunder Bay that with the welfare rolls increased some of those people are still using the soup kitchens?

Mr Milne: Yes, there has been an increase in the two soup kitchens we have in Thunder Bay. The Thunder Bay food bank has also experienced a real increase where it is providing hampers to individuals and families much more so than it was before. I think it is still a matter of fact that if you are receiving general welfare, there is more month than there is money. Towards the end of the month they are just running out of money.

Mr McLean: Even with the increase they are getting?

Mr Milne: Yes.

Mr McLean: When we read some of the stories in the paper saying how much more some of these people are making on welfare than what the average working person is making, it is hard to believe there are people out there who should be going hungry, if they are getting their full benefits of what is there for them to get. Obviously, there is a problem.

Mr Milne: Yes, I think there is a problem. I question whether the person on welfare is really receiving an average of what the average working person is receiving. Considering the fact that we have a fairly high cost of living in this area, it is just a fact that people are still in need.

Mr McLean: Is there a home here for battered wives, an overnight residence for battered women?

Mr Milne: Yes.

Mr McLean: Do you know what the average of their clientele is?

Mr Milne: No.

0950

Mr Jamison: Thank you for your presentation. I found it very interesting. I would like to touch on certain things in the budget that I think may reflect on the wellbeing of your clientele; for example, tax breaks to low-income earners. I am sure some of your clientele are low-income earners. You have of course mentioned the provincial initiative for 35,000 non-profit housing units. We would like to see a fair share of that here. There was $32 million allocated for adult literacy, and literacy also equates in the picture, I believe. There was $32.5 million allocated to the retraining of workers who have been affected. These were examples of expenditures by this government in the midst of a very severe recession. What in your opinion would have been the effect on your clientele, both short-term and long-term, basically long-term, if initiatives like this were not presented?

Mr Milne: I think the effect would be that we would have more clients to deal with, more people who would be struggling. I am not sure that the tax breaks for low-income people even affect some of our clientele because I am not sure they even fill out their tax forms. I think the job training, a lot of that is directed to people who are losing their jobs immediately within the short term. Some of these people are long-term unemployed. They have not been employed for maybe two or three years.

Mr Jamison: Some of those people, I think, would potentially end up being on your list?

Mr Milne: Yes.

Mr Sutherland: If I could just pick on what Mr Jamison was saying about the skills training and what Mrs McLeod was saying, I was wondering if you could just identify the type of skills training that would be necessary for a good portion of your clientele. Are we talking about basic literacy skills, are we talking about people who have a grade 12 diploma or do not, or are we talking people with college diplomas, university degrees, who need to be in some programs to refocus into a new area of the economy because their current area is in a major downturn?

Mr Milne: No, I think the majority of people we are dealing with are people who do not have grade 12 education -- literacy training would be very valuable -- and maybe do not have any basic skills as far as employment is concerned.

Mr Sutherland: If I can just pick up on that, what is your sense then, here in the Thunder Bay area, of literacy skills training that is available and how much more do you think would need to be done to start to have a real impact?

Mr Milne: My understanding is that most of the programs -- and there are a number of literacy programs available here -- have fairly extensive waiting lists. When we looked into trying to get some funding for a program about four or five months ago, we were told there was not any money for that, so now we have to try again.

Mrs Sullivan: I have been very interested in your presentation this morning. It tells of a situation here that is not unlike situations in other parts of the province. One of the things that you have talked about is an approach to emergency shelters relating to annualized funding arrangements. Certainly when the Liberal government brought in some SARC reforms, we thought there would be an improvement in lessening the number of people who required emergency assistance over a period of time and we were pleased, frankly, to see some of the initiatives in carrying on the SARC reforms. What we have not seen, and rarely does the suggestion come forward, is that emergency shelters should be funded on a continuing long-term, annualized basis as part of the Comsoc budget. Would you expand on that to a certain extent and tell us how you see that fitting into existing delivery of services? Should it be paid for 100% by the province? Should the delivery be through the municipality? How do you see that kind of approach working?

Mr Milne: I am not sure I have had time to explore it fully, but I do not think it should be 100% through the province. That would probably be the most effective and uniform delivery, if it was through the provincial Ministry of Community and Social Services. I think basically, from what I understand when I call around the province and try to find out funding arrangements for emergency shelters, everyone sees emergency shelters as something that is always going to be with us. There is always going to be a need for that last safety net. Maybe a portion of their budget should be funded in order to give them some stability in their funding situation. We should be looking at shelters as being the place of contact with people where they have fallen through the cracks from the rest of the system. From there, we can help them move onwards.

Mr McLean: I would like to follow up with regard to -- and I mentioned this with the second presenter -- the skills training programs. I would have thought that now would be the opportune time to have that skills department in full force in order to get the people who are now unemployed into some of the training programs we used to have. When we built the 23 community colleges in Ontario, I thought that was really what they were going to do, teach skills to our people who need and want to be taught them. Do you think that should be a priority with this government, to get that program back in full force again? The economist indicated that this will come in time, but I would have thought that now would be the opportune time to do it.

Mr Milne: Probably now or earlier. I think it does need to be a priority.

Mr McLean: I think so, too.

The Chair: Thank you for your presentation.

ENVIRONMENT NORTH

The Chair: Our next group is Environment North, with Don Smith as president. Would you please come forward and make your presentation on the budget hearings to the standing committee on finance and economic affairs. For the presentation you have one half-hour. Out of that half-hour try to keep some time at the end for questions on your brief from the three parties. Proceed.

Mr Smith: I will be very brief, I think. Welcome to Thunder Bay. I do not propose to read through this whole brief since I have the information here that I want to give you on paper. I just want to hit some of the highlights and first of all point out that I am representing an environmental advocacy group that is non-partisan, with people from all different parties. I will not be pretending to be an economist or speaking on some of the more controversial aspects of the budget. What I want to do is give you a bit of an idea of how environmental advocacy groups saw the budget.

There were a lot of positive things in there, but on the whole it was not good enough. We feel, and of course we are a specialty interest group, that the environment is an important enough area, with important enough problems sitting there, that it becomes an overriding kind of concern in the province. We expected to see a lot more effect in the budget of trying to deal with environmental problems.

We do want to commend the government on the initiatives that were in there: additional money to expand recycling and composting programs and to extend the blue box in the municipalities. That is of course particularly important in Thunder Bay, the largest municipality in Ontario that is still not involved in a blue box recycling program. Was it last Tuesday night that they voted to ask the province and Ontario Multi-Material Recycling Inc for the money to put a blue box system in place? Of course, it was a bit of a deathbed change of heart since they just became aware at that meeting that it was going to be mandatory on June 30 anyway. Hopefully, some of that money you have in there, we will still get in the city of Thunder Bay to defray costs.

Another item was increased taxes on gasoline and diesel fuel to promote conservation. We are certainly in favour of that. Global warming, that whole problem, is a very important one. It is one that worries a lot of people. I sort of hate to do this, but coming from the north where we are very dependent on fuel because of distances and whatever, I also have to throw in just a little rider. I think there is a need to equalize across the province, so that when you do this you use some sort of equalizing factors so the north will bear an equal amount of pain as the people in southern Ontario, because straight across the board we would certainly bear a lot more of the pain. I do not think that is fair.

Our overriding feeling is that when you speak about the economy you have to speak about the environment in the same breath. It is that important. That is what we did not see in this budget. We would like to have seen a number of things done that would indicate that the environment was that important to the government.

1000

I will just list these since I think they are fairly important: to carry out research needed to establish baseline data and develop environmental indicators so that change is measurable. Part of the problem is, if you do not have the background information, who is to know when any program you may put in place is helping, is hindering, or what kind of side effects you are having from it? If you do not have the data, you will never know. We feel there should be a comprehensive review of the environmental implications of all existing statutes, policies, programs and regulations and make any changes that are needed.

I am stealing a lot of my background from the information presented to the federal government by various citizen groups in terms of the green plan. One of the points made there was that the federal government was somewhat lacking in that although it put a bit of money into energy efficiency or whatever, on the other hand it has a number of programs in the area of agriculture that are very detrimental to the environment, and that really offsets. So you have to look at all of the programs in every area. That is what I mean by the overriding importance of the environment. A lot of programs that supposedly have nothing to do with the environment are indeed affecting it in a negative way.

We of course want you to examine all new programs to make sure they are environmentally positive before they are implemented. We think you should build environmental accountability into the budget process so that all expenditures are environmentally positive. We could not really see that that had been done. We would like to see established an independent environmental auditing process similar to the financial audit process we now have. I guess once a year at the federal and provincial levels the auditor gets to come in and tell government what it has been doing wrong from the financial-fiscal point of view. We would like to see something similar environmentally. We would like to see you fund pilot projects to test new programs to discover any negative side-effects before you implement them on a large scale.

The next point I want to make is dealing with economic growth. This is a tough area to deal with because it is difficult to suggest to people in this economy that we should stop growth and they should stop the drive to have more and more consumer goods, but our general feeling is that we have to do that. We have to dampen expectations and we have to stop thinking in terms that we have to have more and more growth. So we would like to see a change in the rhetoric, and that is something the government can do, to provide that kind of leadership role. Of course, not only a change in the rhetoric; government can also take solid kinds of actions and be seen to practise what it preaches. You could get rid of all the limousines and drive around Toronto on bicycle. That would be a really symbolic sort of step.

Mr Mahoney: Health care costs would go up because of heart attacks.

Mr Smith: Right. Oh, no, they would come down; exercise is good for you. So government needs to be seen to be taking action in these areas. Fine paper recycling: I assume a lot of that is going on within a lot of your operations. All of the kinds of energy-saving things you should be doing, if you are not doing them yourself, it is pretty difficult to go to industries or to individuals and tell them they should.

The last point I want to make is economic instruments. The one you generally hear about is the whole idea of a green tax. Take something that is particularly bad for the environment -- what, disposable diapers, Tetra Paks, those sorts of things -- and tax them hard so that if people are going to use it they have to pay for it. But there are a whole range of sorts of things you can do. Not just taxes; it can be incentives, it can be subsidies. You could list heavy fines as an economic instrument for companies that pollute. There is a whole range of things and it is a very complex area, so I am certainly not going to sit here and suggest examples, because it is too complex, too difficult.

But what I would like to say is that if the Treasurer has not already directed this particular area to his Fair Tax Commission, then we would like to see him do that so that it gets serious review and a look is taken at the best ways to implement these economic instruments, because I believe that is one of the solid things that government has to do to try to solve environmental problems.

Just to conclude, I would like to say that we believe the time is ripe for government to move beyond -- and all governments, but this one in particular since it is the one I am talking to today -- the lipservice it has been paying to the environment. I believe the vast majority of Ontario residents understand the problems we are in, and they are looking for solid leadership.

Even if I bring it down to a local level I really believe that if we had had to take the whole question of blue box recycling to a plebiscite in this town 75% to 80% of the people would have voted yes, they want blue box recycling. You could hardly have convinced council of that, I do not believe, since it resisted moving this way for three years, and I think a lot of the same sort of thing would go on at the provincial level.

It is not as clear-cut there, but I think that any level of government that takes solid action on the environment will get a lot of support from the people in Ontario, because they understand what the problems are. They want to take solid action and they are just looking for leadership from government.

Mr Sutherland: I want to expand a little bit in terms of some of your suggestions in here. The comment about governments paying lipservice to the environment: I think that is a common view out there and I would suggest that is probably a common view among many environmental groups. At the same time, in terms of balancing that between taking some of the tough action you said, and you are not sure which ones we should -- whether that is heavy fines, taxes or that -- with the ever-growing cry that seems to come from different types of businesses -- they are over-regulated, there are too many things they have to do there -- I was wondering if maybe you would be able to elaborate a little more on what options you feel a government can do so it is doing more than paying lipservice in the eyes of the public yet at the same time helping to ensure that we retain our business and that business stays competitive.

Mr Smith: The first thing that pops into my mind is the point that I made about a solid comprehensive review of all the programs you now have in place. It is not just the environmentalists; it is the press that did a bit of an analysis. There actually was a press -- I think it was Thomson newspapers or Southam -- that got a consultant's group to look at federal programs and to find out that an awful lot of the actual programs that the government had in place in the area of agriculture were detrimental environmentally. I am sure we would find the same thing.

I think it is fair to say the provincial levels, Ontario included, have not come under the same kind of heat that the federal government has, and most of us environmentalists have found the federal government lacking, as you well know. But I am sure that if the same kind of heat, the same kind of inspection was put on the provincial governments, we would find a lot of the same things. So take a good look at the kind of programs you have out there, whether it is spraying in the forests. We had the fight over Bt versus chemicals in the forests, but there are still tons and tons of chemicals being sprayed on the forests and Ontario Hydro is spraying along its rights-of-way.

There are a lot of things going on out there that are very damaging environmentally, and government money is doing it. That is the first thing.

I guess the second comment is the economic instruments. I really do not want to get deeply into that, but I think there is a whole range of them. I think you need strong disincentives, fines for polluters. If you do not have that kind of muscle there, why should a polluter clean up if it can get away with it? So you have to have that kind of muscle there. At the same time you need the carrot. You have to identify the ways you want those industries to go and provide some incentives to help them do it.

Mr Sutherland: If I may just pick up from there, that would lead me to my next question in terms of making the linkage that being environmentally friendly is in the best interest of business. I think of a plant in my own riding, a manufacturing plant that I toured recently, where they went through a complete analysis of the garbage they were putting out and they have been able to reduce their garbage by 80%. They have a painting area, and by purchasing different nozzles they have been able to cut down on the amount of paint they have been using and excess paint. They have actually cut their costs and become more competitive.

It does not seem that we are getting that message out there or that certain industries and certain businesses are responding to that, that this is a way you can be more competitive and be environmentally friendly as well.

1010

Mr Smith: It is going to take a while, but I think that message is getting out. Probably a really good example across the north -- as you all know, pulp and paper is the big industry up here -- is that in the pulp and paper industry the discussion right now is around chlorine.

We are, of course, members of the Coalition for Zero Discharge and we are saying to pulp and paper, get the chlorine out. Zero Discharge says, pay attention to what you are putting in the front gates of the plant and that will solve what comes out the pipe. We are saying, if you do not take chlorine in the front gate you will not be putting the dangerous persistent toxic chemicals out into the water supply.

It is only a matter of years, months maybe, until they will be into that. They are into recycling now and mainly it has been public opinion that has forced them in that direction.

In terms of the whole question of persistent toxics in chlorine, I believe Germany will not import any paper that has been bleached with chlorine. When that sort of thing spreads, and it will, you are going to have almost a consumer boycott situation; that in order to be competitive these companies are going to have to clean up, and they will because they will make the adjustments they have to make to stay alive.

Mr Sutherland: So you are suggesting economics will dictate that they have to be environmentally friendly.

Mr Smith: Oh yes, economics, I believe, will dictate, but I think there is also a real role for government. I do not think the government should sit back and wait for the marketplace to handle all of this. The government should be playing a proactive role and taking whatever action it can to move it along faster.

Mr Mahoney: I, first of all, want to congratulate the government for really ensuring that these hearings are laden with people who share its viewpoints. If you look at the presenters we have had so far this morning and the balance of the list, I think I want to put on the record that this is, quite obviously, a partisan sham.

I do have a question, however, having said that. Recognizing your non-partisan role, even though you were an NDP candidate and you currently work for an NDP member, I appreciate the fact that you are taking such a non-partisan view of an analysis of a budget that many folks think is very damaging and yet we are hearing accolades this morning that really make my stomach turn.

"The companies will make adjustments to stay alive" was a quote that I just heard you say, and I think they will make adjustments. Buchanan made some adjustments and I wonder what you would say to the 1,600 people who felt the impact of those adjustments. Abitibi-Price are making adjustments with some current layoffs and cutbacks and future layoffs possibly to come and, who knows, possibly even a shutdown.

Is there not a need -- recognizing the significance of the environment, recognizing that I think everyone is concerned about the environment -- to somehow balance the situation and come up with a long-term plan that allows these companies to survive rather than coming down with what clearly is a Marxist hammer in your suggestion of curtailing --

Interjection.

Mr Mahoney: Well, there is no doubt about it. In fact, it is scary stuff, I will tell you, when I read headlines, "Curtail Economic Growth."

I am quite prepared to hear your answer. I think I probably know it, but what do you say to the people who have lost their jobs? "That's just too bad, and we'll get you a job raking in the forest."

Mr Smith: I suppose I have a bit more faith in the free enterprise system than you do. I believe they can and they will adjust. Actually, one of our leading council members said to me last Tuesday night that recycling is responsible for the close of Abitibi-Price. I do not accept that at all. I do not believe that to be so. I take it that is the kind of thing you are saying.

Mr Mahoney: Do not put words my mouth. You heard what I said, and I asked you, "What do you say to the people who have lost their jobs?"

Mr Smith: You are suggesting that I, as an environmentalist, should have to answer to the people who lost their jobs, and I am suggesting to you that they did not lose their jobs because of environmental matters, they lost their jobs because --

Mr Mahoney: Economic matters.

Mr Smith: -- of economics, because of a recession that is presently going on, because of high interest rates, free trade. There are a whole number of issues, as you must well know, that are causing the deindustrialization of Ontario, and I do not believe that environmental factors are very high on that list. If you do, then you disprove me.

Under economic instruments I mentioned incentives and a lot of things. There are ways the government can, of course, get involved in helping industry weather the hard times, helping it adjust, and they are kinds of things we should be doing. That is certainly involved there.

Mr Mahoney: I could probably debate with him all day, but I know Mrs Sullivan has some questions.

Mrs Sullivan: I am shocked that any environmentalist can come before any committee of the Ontario Legislature with praise for this budget and I want to talk about some of the reasons and ask for your response.

In your brief you have indicated that you believe the government should carry out research needed to establish baseline data and develop environmental indicators so change is measurable.

I ask you to think about the municipal-industrial strategy for abatement program, where indeed that very process was undertaken. The government has put that entire program on hold, nothing has occurred, there has been enormous capital investment from the private sector, enormous investment of time and effort from municipalities and from the private sector, including the pulp and paper industry, which is very important to the economy here, and now the Minister of the Environment, with no additional funds in the budget, has indicated that she is not quite sure how or if she is going to proceed on that program.

I ask you to try to explain how indeed this budget can be positive. There is no new money for sewerage infrastructure. The water and sewage corporation, which was designed in fact to lever additional money for sewerage infrastructure, has been left out. The user-pay concept for water has been totally left out of this budget. The only initiative is the blue box program. Where is the positive effect for environmental purposes in this budget at all?

Mr Smith: I think you must be talking about a different paper than the one I presented. I thought what I did was quickly list about six of what I would call fairly small items that I felt were positive, and I managed to do that in about eight lines, and I spent the rest of the brief pointing out that this government, like most governments across Canada, are paying lipservice and nothing more to environmental priorities.

Mr B. Murdoch: First, I would like to just echo Mr Mahoney's comments about this being well orchestrated. Either that or the people of Thunder Bay have no problems with deficit funding, because I can see the people who are coming here seem to be set up by the NDP government. That is fine; I guess that is the way these kinds of meetings go.

I have a couple of questions. You are happy with more taxes on our gasoline and diesel. What do you say to the people who need gasoline and diesel, like our farming industry and especially our tourist industry? It scares tourists away if we have these taxes. What would you say to that? Are there tax breaks you would give to them? How would you sit down with the farmer now and say: "We're going to raise your taxes. You're not making any money now, but we're going to charge you more to go out and cut your crops."

1020

Mr Smith: I understand the problems it creates for people when we raise taxes on fuel; we in the north feel it much more than people in the south. But I am speaking here from an environmental advocacy position. I am saying that the situation in terms of global warming and putting hydrocarbons into the air is important enough that we are going to have to make those sacrifices. It is just that we are going to have to do it now.

On the other hand, we may want to put in something to protect certain groups. I guess I did make the argument that the north should not suffer any more than the south, so obviously I would like to see, after you bring in these tough measures to stop putting hydrocarbons into the air, that we also try to make the pain be borne equally. I made the north-south argument. I would be willing to accept the argument there could be other groups. You mentioned farmers. You may want to do something to adjust so that they do not feel the pain any more than somebody living in downtown Toronto. But we believe this is so important that we are going to have to take that action. We have to stop putting that kind of pollution into the air.

Mr B. Murdoch: Another industry would be the trucking industry, which the north depends upon. You do not want higher prices here or anywhere else. That is how our goods get to the north and the trucking industry would be affected too.

Mr Smith: I understand the downside, but it has to be done.

Mr B. Murdoch: I may be wrong, but what I get from your brief is that you have no problem with deficit funding, because you basically would like more money put into environmental programs and things like that, but also then you go on to say we should not be pushing for producing more goods and things like that, we should be slowing down. But then I wonder, how do we pay for our deficit funding? If we are going to be deficit funding for the next four years, if the economy does not turn around, then the government has no way of paying this deficit off. So how do you balance that act?

Mr Smith: It is a tough question and I agree, but I do not really have the answers. I am coming from a special-interest group. I am telling you what I want to see as an environmentalist in there, the kinds of things that I think we need to start doing. I understand there is going to be some pain. There is going to be some pain around Thunder Bay as well as with farmers, but these are things we have to do.

I did not say that I was in favour of a large deficit. You will not hear me saying anything about that in here. I am coming from a group and I do not have any kind of authorization to say that.

It seems to me that if we look under the economic instruments, there were options out there for the government to have collected more money in certain ways. They could have gone after certain items that are environmentally unfriendly and raised some money there. I would have been a lot happier to see them going after disposable diapers or whatever -- put in your own environmentally unfriendly items -- if they had gone after that as opposed to a blanket kind of taxation that catches everybody. That is what we should be doing.

Mr B. Murdoch: What we are seeing here this morning is that everybody seems to want more money, so would there be any areas you would maybe cut then, to help your area, being that you are for a special interest? Everyone here today has said, "Fine, but we want more money."

Mr Smith: I have not done the work to be able to pinpoint for you areas that would be cut, but I am sure there are some. I guess what I am saying is, having looked at the federal area, I am sure there are lots of areas where there are programs that this government and preceding governments have had in place where they are pouring money out that are environmentally negative. Cut them, stop them, after you do a comprehensive review.

The Chair: Thank you, Mr Smith, for appearing before this committee.

Mr McLean: You stole my time.

The Chair: Yes, he did, Mr McLean. Thanks for attending our hearing here. It was well appreciated and informed.

LAKEHEAD SOCIAL PLANNING COUNCIL

The Chair: The next group is the Lakehead Social Planning Council, and Linda Gambee. You have half an hour for your presentation, and any remaining time will be divided among the three parties for the question and answer period. Proceed, please.

Ms Gambee: Good morning. I am speaking today on behalf of the Lakehead Social Planning Council, of which I am secretary on the board of directors. Welcome to Thunder Bay. I am sure you have heard that this morning, but welcome. It is refreshing to see a government that is taking the initiative to reach out to the people of Ontario by holding these public hearings so that we can participate; the provincial government, three parties together, across the province, on something as important as the budget. The budget and the economy are important to everyone. Our members, board and staff appreciate the efforts you took to get here.

The Lakehead Social Planning Council is a dynamic, not-for-profit planning agency which promotes effective, efficient, responsive community services by identifying and researching social issues, providing information and referral services and bringing people together to provide workable solutions to community concerns. The concerns we are working on at this period of time that are important to us are affordable housing, the aging population, unemployment and retraining and poverty.

Our reaction to the budget was mixed. We would like to have seen more funds committed to social assistance reforms based on the Transitions report and that the Transitions report should have been implemented as quickly as possible. At least, more work should have been done towards that end.

Affordable housing is a major problem in Thunder Bay, where the vacancy rate is 0.0% and there are some 500 families on the waiting list for subsidized housing. It is a myth that those who are on social services are all living in subsidized housing; it is about 10%. The rest of them are all paying market rent here in Thunder Bay. To this end, we are pleased with the provision of another commitment of 10,000 non-profit and co-op housing units, although this does not clearly meet the demand.

During the past week, I have been able to participate in a poverty tent city. Most of you might be aware of what took place in Toronto. I was on one here for the past week. I asked a number of the people who stayed out with me if I could look at their homes, to go into their homes they rented in terms of affordable housing. These people are getting $700 a month on social services. They are paying $500 for rent and utilities and what is left over is what they have for the rest of the month. This has to be addressed.

The recent closure of one of the Abitibi-Price plants and the resulting loss of 400 jobs in our city, not to mention all the other jobs we have lost here, adds to the concerns about the growing number of unemployed in our community. In short, from a social service perspective, the announced expenditures do not come close to meeting the needs of the people.

However, we are coming out of a period of recession which has been hailed as the worst since the 1930s. The present government was already faced with an unexpected and severe deficit before setting any budget. The federal government has cut back on its funding for social assistance programs and has cut many federal government jobs in an effort to control its spiralling deficit.

We commend the present Ontario government for not following that pattern by not giving jobs away, giving them up, and for not freezing wages, which would hurt them desperately as well. We have many working poor in this country who are paid at $5, $6, $7 an hour who still participate in food banks and still go to get food wherever they can.

The gap between the rich and the poor in Canada has been steadily widening in recent years. Cutbacks to social programs only serve to widen that gap even more. That is why our organization supports the present Ontario budget in that it has included steps, albeit modest ones, towards employment, job creation and back-to-work initiatives. We believe that the $215 million earmarked for social assistance reform is a legitimate, necessary investment in the future of Ontario's neediest citizens, the poor.

Because of the recession, an unprecedented number of jobs have been lost in Ontario. Had the government added to this number by reducing government jobs even more, people would have been forced on to unemployment and then on to social assistance.

Maintaining and enhancing the labour force adds to the deficit now, but again it is an investment in the future. The anti-recession spending package is bringing many needed services and programs to the people of Ontario and particularly to economically depressed regions such as northwestern Ontario. Yes, some of the jobs created are short-term, but they will allow people to keep working during the worst part of the recession, and coming out of the recession, hopefully they will be able to gain more employment. It also helps in that consumers who are working spend more than those collecting unemployment.

From the perspective of our concerns with poverty, affordable housing and employment issues, we feel the present budget contains positive measures. No one is happy with increasing deficits, but any budget set by any party in Ontario in 1991 would have been a deficit budget. We hope the present government will continue to work towards a plan for deficit reduction which at the same time will diminish the widening gap between rich and poor in our province.

I want to speak a few moments on poverty. The 10,000 new non-profit and co-op housing units to be built, the elimination or reduction of Ontario income tax for an additional 120,000 low-income Ontarians while income tax will rise moderately for those making over $84,000, the commitment not to piggyback Ontario sales tax on top of the federal GST and a $215-million package of social assistance reforms to provide benefits for those in greatest need, which will help people get into the labour force, increases fairness and accessibility and provides relief to municipalities hard hit by soaring welfare case loads.

It is a good start, but it does not go far enough. To be fair, we must stress that we understand that the federal government cutbacks that have tied the province's hands in some cases have hurt Canadians in all provinces, but Ontarians the most. Cutbacks to established programs will cost the people of Ontario over $1.6 billion this year alone. The result is increased pressure on provincial programs such as welfare and social services which by nature were designed to alleviate poverty.

Poverty in Thunder Bay is a subject near and dear to our hearts with the Lakehead Social Planning Council. When people think of poverty, the greatest majority of people thinking of poverty are thinking of those who live in homes, who have places to stay. We have many people, 100 to 200 people, on the streets in Thunder Bay. They live in the parks, they live under bushes, they live under bridges at the creeks. If they are lucky to get enough to get a room, they get that paid and then they get $60 a week to live on in Thunder Bay. That is what they are receiving, $60 a week to live on.

Our social services, because of case loads that are so high, have no movement in terms of counselling. They are no longer social workers; they are intake workers. This has to be addressed. The Transitions report has to be brought in. They have to be given new legislation. It has to be put into place. Poverty should be a number one concern in this city.

1030

The provincial government had to make some tough decisions and choices, whichever government would have been in. It is very pleasing to know that the wellbeing of the people was put first before the deficit. They moved in the opposite direction of any other government. We believe the government made the right choice when it decided to fight the recession this year rather than the deficit. It was the only responsible decision that could have been made by any government.

We would like to thank the government of Ontario for holding public hearings on the budget and providing us with an opportunity to present our views on the economic situation. We all wish to have an economy which is highly productive yet is socially sustainable, an economy in which the benefits of growth are shared freely and fairly.

The budget is a major step in the right direction. We need more. It represents an investment in the people of Ontario to lay the groundwork for sustainable prosperity in the 1990s, and we believe that Ontario will lead the country in economic growth in 1992.

We are pleased that this year you decided to fight the recession in this budget. There are simply too many men, women and children suffering for us to have turned our backs on them.

We brought forth a few recommendations. There are many of them, but we picked out five. The first one is to implement the Transitions recommendations more quickly. Those are not the be-all and end-all, but there are some good things in that Transitions report and they need to be done fairly soon.

We need a commitment to more non-profit housing. The 10,000 units that were given to us are a good start, but it does not nearly meet the demands. We need to put more money into retraining programs for laid-off workers and those on social services. Many of those on social services, particularly single mothers with children, do not have the skills for them to go out to work and that has to be addressed.

We need to put pressure on the federal government to abolish the cap on the Canada assistance plan. That hurts us very badly, and we have to raise the minimum wage much more quickly. We cannot wait for a five-year span for that to come up. It has to be to 66% of the aggregate industrial wage. Thank you.

The Chair: Mr Mahoney has close to seven minutes.

Mr Mahoney: Okay, I will share it with Mrs McLeod. I would like to just ask you some questions on your statements that you commend the government for not following the pattern of the federal government in relationship to its spiralling deficit. Do you recognize that it is not only this year's deficit, which is like an overdraft that gets paid off at the end of the year? The way it gets paid off is that it is put on top of the debt, which is like the mortgage. This government has shown us a four-year plan of deficit financing.

You refer to it as a plan to reduce the deficit. I find that very creative thinking, but it actually shows a four-year plan of deficit financing that sees the debt, the mortgage, for this province going from $39 billion last year to $76 billion at the end of four years, doubling the debt. That is assuming the assumptions the government is making about its revenues are accurate. My sense is it will be $80 billion, $85 billion or maybe even $90 billion in debt that we will inherit.

My biggest concern is that either Mrs McLeod or I would like to be the Premier the next time around and we are going to have to find a way to deal with that debt. How can you say this is a plan for deficit reduction when they are doing it by putting it on top of the mortgage? Are we not, then, going to find ourselves in four years' time in the exact position the federal government is in today, with a mortgage that would choke a horse?

Ms Gambee: As a matter of fact, I did not say this was a budget for deficit reduction. What I said was that it was a budget to help those who needed it the most.

Mr Mahoney: I do not mean to be argumentative, but you say, "We hope the present government will continue to work towards a plan for deficit reduction, which at the same time will diminish the widening gap," etc, etc. You commend the government for not doing what the feds have done.

My contention to you is that if this was a one-year blip in budget financing, perhaps I would not be that concerned, but this government has announced a four-year plan of the same song that is just going to create more poverty. Your children and their children are going to live in poverty because nobody can afford the kind of debt these people are saddling us with. Yet I hear you commending them as being wonderful.

I recognize the fact that you are an NDP supporter and that is fine. No, that is very legitimate. I have no problem with that, and I recognize that fact.

Ms Gambee: I am here on behalf of the Lakehead Social Planning Council. I am not here as an NDP supporter. We believe this budget has helped the poor. We will stick by that as an organization.

Mr Mahoney: So you are not worried about the debt in four years' time?

Ms Gambee: Yes, we are worried about the debt, but we believe it can be handled. If any government had come in -- it does not matter which government -- and had taken over the deficit that was given to it from the previous government and went into a budget --

Mr Mahoney: Absolute nonsense. We will go to Mrs McLeod, Mr Chair.

Mrs McLeod: Maybe I will take a slightly different approach, and it may be a comment more than a question in the end, Linda, because I approach my concern about the budget sharing the same kind of commitments you have and the social planning council has for the provision of social programs and expanding social equity in our community and across the province.

I completely support the kinds of programs the social planning council is wanting to see enhanced, but as a result of that same commitment, I arrive at a very different conclusion about the budget than you have presented. Perhaps it is because we are looking not just to this budget, which is seen to be a factor of a short-term recession, but we are looking towards future budgets and a belief that we are not in a short-term recession, that we are into some very major changes in our economic base in this province and that these projections of future budgets do nothing to begin to address what is a fundamental crisis in our economic situation.

As somebody who is absolutely committed to the same social programs you are concerned about, that really worries me, and I say that in all honesty. As social services critic for the Liberal opposition, I was very much a supporter of seeing a continuation of the Transitions report, the social service reform, which we obviously were the ones to introduce in government.

The focus has to now be on opportunity planning. That has to be the next step, getting people back to work. But because of the unemployment situation we are facing, as I am sure you know, virtually every dollar, with very few exceptions, is going to just manage the increased welfare rolls of people out of work, so there is not a lot of money to put into the opportunity planning programs other than a little bit of pilot project money that is there.

It is understandable that the money is going to keep the social service network, the security network, in place because the dollars are needed there, but it worries me that if we cannot get the basis for that economic development we will not be able to sustain the social programs we have now, let alone expand them.

That is why I have to, as a social service critic, be concerned about the lack of long-term economic planning, the fact that there is no permanent job creation in this budget or even planned for in the future. It is either job maintenance in the public sector, tax-supported fields, or it is one-term-only, sector-specific job creation for this particular budget period. That worries me as somebody who is concerned about the social programs.

Ms Gambee: I agree there should be long-term jobs there, but jobs that are there for short periods or for contract jobs or whatever, are better than no jobs at all. That is one of our major concerns.

Mrs McLeod: If I could just comment, I think it is so important that none of us be drawn into that arbitrary either/or choice. If it is either/or, something is going to get lost and that is frightening. There has to be long-term job creation. If it does not happen we are not going to be able to support the life this province has come to know.

Ms Gambee: But given that we are in a recession, we are not able to say there will not be any long-term jobs that will be given. We cannot project that at this point.

The other thing is, when we talk about social programs and we are worried about the future, well, we are worried about the future but we are worried about the present as well, and it has to be addressed now. We cannot say, "Let's go for four years and let's not help the people who need it, because we're going to worry five years down the road." That is baloney. Let's do it and let's do it now, and they did that. I do not care which government it is. They looked after the people who needed it. We still have to tax corporations, we still have to get money from other people, not from the people who are on the streets.

We have people who do not work because there are no jobs. We have people who have no homes, they have no running water, they have nothing and they need to be looked after now and this budget is addressing that.

Mr McLean: I certainly sympathize with those people in Thunder Bay who are living in poverty. I want to ask you a very simple question: Do you believe that the 5.7% increase the civil servants got -- and some of them got 11% -- is right at this time?

Ms Gambee: Yes, I do.

Mr McLean: So then you want to give to the rich and not look after the poor, the ones who you have very well indicated need the help.

Ms Gambee: The other thing is, they got an increase, but their unemployment premiums went up, which helps those who are unemployed as well. Those types of things give more money to the system. They have been without increases for -- decent increases. There are a lot of people who may get 5.7% but they are not making a lot of money; 5.7% of $20,000 or $25,000 is not a heck of a lot of money when you look at the cost of living, and many of them do not have cost-of-living clauses.

1040

Mr McLean: In that theory, then, why would it not be better to give them 15%, because then there would be more money to go into the welfare and the unemployment. Maybe 20% would be better, would it?

Ms Gambee: You are getting ridiculous.

Mr McLean: No, you are the one who is ridiculous.

Ms Gambee: No, this is crazy.

Mr McLean: You agree with the 5.7% raise. We have not had one for three years.

Mr Mahoney: No, we did not get one.

Mr McLean: And besides that, I am a farmer.

Ms Gambee: You are making a lot more than someone making $10,000.

Mr McLean: One of the previous presenters had indicated there should be an increase in gasoline tax and diesel fuel to promote conservation. Do you agree with that theory?

Ms Gambee: From an environmental point of view, I do; from a poverty position, it is difficult. But on the other hand, those who are living in poverty do not have vehicles. They are lucky to have enough money to catch a bus. So, yes, I do.

Mr McLean: You agree it is a proper thing to increase fuel tax. What do you say, then, to people, the tourists, and specifically farmers -- I am one, and I do not know whether you know what farming is like these days, but people who put the food on your table, I think, should be rewarded instead of penalized. Do you agree farmers should be paying more for their gasoline in the form of a tax?

Ms Gambee: I guess, if there are circumstances like that, our farmers need to be protected. There may be something that could be put in place to help farmers. I am not sure. I really do not want to comment because I really do not know a lot about the farming aspect.

Mr McLean: Food does not come from Loblaws.

Mr B. Murdoch: I know in here you congratulated the government, and you and many other ones here today have also congratulated it for bringing this budget on the road, you might say, so that you could comment on it. I would like to point out it took a month of hammering heads against the wall to try to get them to do this, and you may want to put your congratulations somewhere else next time.

Ms Gambee: In all fairness, yes, I agree there was a lot of table slapping or whatever it was to get this to go on the road, but the government did not have to. They have a majority government and --

Mr B. Murdoch: They did not have to, yes, but I wanted to put that --

Ms Gambee: No, I understand that. I think I did congratulate everyone here for bringing it, as well.

Mr B. Ward: I find these public meetings very informative. We are getting a good cross-section of the community coming across and expressing their views. I really appreciate your taking the time to do this, because I recognize this is your own time and you did not have to.

For the new members of this committee, even though we may disagree with the point of view -- and I am sure I will eventually disagree with someone, but I will still treat them with dignity. I think the questions should be pertinent to the presentation, rather than getting off track.

We had a week of meetings in Toronto. Provincial organizations gave their views and quite a cross-section of the province has come out in support of the budget, business organizations, social organizations, environmental organizations, labour organizations, and I am finding that in Thunder Bay as well; a good cross-section of the community that perhaps has not had the opportunity to voice its opinion on the budget is in fact coming out and saying we are heading in the right direction.

If in fact we had listened to our critics and had slashed social programs, education standards, health care, and we still had these public meetings, and the social planning council had come out at that time -- and depending on where the cuts took place, but assuming it is across-the-board social programs and housing, etc, you would have been here to condemn the government, would you not?

Ms Gambee: Absolutely.

Mr B. Ward: From a social planning standpoint. So you do support the initiative. Perhaps you could expand on your views, to a degree, in answering the critics that in fact we took the wrong direction, that we should not have maintained our social programs, our health care, increased the affordable housing units across the province. Could you expand on how you would answer those critics at this time?

Ms Gambee: Let me just get this straight. What you are asking me is if the critics were to say we are not going to give affordable housing; we are not --

Mr B. Ward: What the critics are telling us is that we should have balanced the budget and reduced our social spending, reduced our health care, reduced our education standards.

Ms Gambee: My first remark would have been for those critics to be out on this poverty line with me for the last week, with the people who shared the week with me and finally had blankets and pillows, finally had some food to eat, eggs and things that they have not had in years when they were with us.

The other thing, I guess to the critics, just from a heart point of view, is that they have to open their eyes. You have to look at what is there. You cannot look at us in nice clothes and suits. You have to look at what you do not see, and you do not see those who are living in poverty. You have to look at the housing. You have to go into their homes. Take a look at them. Do not just listen to people. The critics come at it from a purely economical point of view and not from a point of view of need and, really, that addresses everything.

Mr B. Ward: This budget is for the fiscal year 1991 and part of 1992. There has been some criticism about potential future budgets. Say our next budget is May 1992, do you anticipate that all of a sudden our social problems will be gone, that we will have full employment, that in fact the problems we are experiencing now will evaporate, or is there going to be a little bit of a continuance -- because I know the federal government is calling for a 10% national unemployment rate for the next two years anyway?

Ms Gambee: No, it is not going to go away. It is going to be there. In fact, when the next budget comes up, we will be looking for more, even more than we got in this budget -- I like that look -- because these things have to be looked after. It is the people of the country, the people of the province who pay for the programs, and if they are not working, if they cannot get employment, if they cannot get the skills, they are not going to be able to participate actively in the province's economy. It is not going to go away. It needs to be looked after, and we will always look for more -- like any other group that is here; they are always going to be looking for more. We look at it that the people, the human resources of this province, have to be the number one priority.

Mr B. Ward: Do you not think it is a good investment for long-term economic growth to begin to rebuild our infrastructure, our public buildings, maintain our education standards and, in fact, improve, if possible, so that we have an educated mobile workforce that is highly skilled and, at the same time, attempting to cushion the economic blows that average people are experiencing? Is that not good investment in our future for potential economic growth -- infrastructure, education?

Ms Gambee: Education is probably the number one issue that should be addressed, even in terms of poverty. I mean, our children going to school who are malnourished usually drop out or turn to crime, or those types of things, so the structure of education is the number one issue in poverty, besides being able to feed and clothe these people. There is nothing you can say, other than that infrastructure has to be put into place and has to be built on, even more than what we have now. We cannot afford to cut back on education. We just cannot.

Mr B. Ward: That is the key to our future, is it not?

Ms Gambee: It is the key to any economic growth and future, absolutely.

Mr B. Ward: And you cannot really get a handle on the direct benefits that has, but if we do not do it, we are going to be in trouble more so than we are.

Ms Gambee: Yes and no. You can get a hold on it in terms of we are becoming more of a technological society, and those who are dropping out of school, particularly because of poverty, are not going to have that expertise, so therefore our welfare load will just increase, increase, increase, whereas if persons can be educated, then they can get a job -- maybe not all the time in what they went to school to get, but they still get a higher-paying job.

Mr Sutherland: I just want to say that there are people who agree with you that no government would have been able to bring in a budget without a deficit, and even Mr Mahoney's colleague, Mr Conway, said in the Legislature that he did not think they would be able to bring in a budget without a $7-billion deficit.

I guess what we are trying to get is a sense of putting a real face on the recession. You can talk statistics; you can talk recovery, but can you give us a real face on what you see?

1050

Ms Gambee: I am not quite sure I understand the question.

Mr Sutherland: Rather than the statistical perspective, the real impact of the recession on people in their everyday lives.

Ms Gambee: Certainly. I can tell you that a number of people, not only just the last week -- I also participated in two forums with the Minister of Community and Social Services and talking to people who are on the system. There are people on this system because of the recession; they have lost their jobs due to federal cutbacks or freezes in jobs or those types of things. They have lost their homes; they have lost their cars. Many of them, because of financial obligations, have lost their wives, or their husbands, their children, and now they no longer live in housing at all. Many of them are in the streets; some of them are in rooming homes.

If you want to put a face on recession hurting, that is not just one or two or three people. We have many, many people.

Mr McLean: Mr Ward has indicated to you that the opposition parties wanted to slash education, slash social services -- the opposition people and critics, which was indicated very strongly on this side of the table. Do you believe that would have happened if any other government but the NDP was in power, that they would have slashed all those programs?

Ms Gambee: I think that is a hypothetical question. I am not sure whether they would or not. I do not know if they would have increased it. They may have maintained it at the same level, which is not good enough.

Mr B. Murdoch: Well, I just heard "all these critics," and I wondered where they came from because I did not hear the critics that Mr Ward must have heard, that we are going to slash all these programs.

I did hear critics say that they did not think that deficit funding was the way to go, and that there is enough money and enough revenue being brought into the government that if it is properly spent, programs could maybe be expanded, but not by deficit funding. I think that is what the critics said. He must not have been listening to this well enough. I think that all the governments had been looking after your programs and trying to do the best they could, but I just wonder where do you think this money is going to come from to pay? As you have heard, they are going to double, in the next four years, the deficit. Do you think that by making more poor people we are going to be okay?

Ms Gambee: I am not an economist, so I am not particularly aware of budgets or those types of things. But when you look at a teller who pays more taxes than a bank, there is something wrong in this country. There are obvious places to go and get money. One of your comments I agree with wholeheartedly. Many programs out there could not only be expanded but joined together to eliminate duplication of services. I very wholeheartedly believe in that. There are many programs that duplicate their services that can be joined together so that money could be freed up for somewhere else, but that still is not going to be enough money. I am not an economist. No matter what you say, money had to spent on social service programs, and it had to come from somewhere.

Mr B. Murdoch: There never seems to be enough money for everyone, as you have probably heard a few other people say here today. Everyone seems to want more money, and that is fine. I guess that is their prerogative. But I think the critics were telling the government that there is money coming in. If it was spent more wisely, they might be able to do a better job.

Ms Gambee: That goes for any party that is in.

The Chair: Thank you for your presentation. Time has run out and we appreciate your attendance here.

IWA-CANADA, LOCAL 2693

The Chair: The next group to come before the committee is the International Woodworkers of America. Would you please come forward and introduce yourselves to us and for records for Hansard. You can begin your presentation. You have one half-hour, and right after your presentation, there will be a question and answer period, depending on the length of your report.

Mr Lorenowich: Mike Skaley was to appear with me, but unfortunately he could not make it. I am John Lorenowich, first vice-president of Local 2693, IWA-Canada. It is not International Woodworkers; it is IWA-Canada.

I welcome this committee to Thunder Bay.

IWA-Canada represents 3,500 working people in northwestern Ontario who harvest the province's forests for the pulp and paper industry and for the sawmilling industry.

Our union and the working people that it represents are extremely pleased to see that this government is showing a concern for the people of Ontario, and we believe that holding these types of public hearings across the province is evidence of that concern. My members accept your conduct as an example of the one element that has been lacking in previous provincial governments, previous provincial budgets, and certainly what is totally lacking in the federal government. You have inserted into your very responsible budget the element that has long been lacking, and that is, compassion.

Our industry faces a number of problems, created largely by the policies of the federal government. We are facing the worst level of unemployment that we have had in the last 50 years. We are facing plant closures in various communities, including Kapuskasing, Thunder Bay and Pine Falls, Manitoba. These have been caused directly by the federal Tory government policies of artificially maintaining the value of the Canadian dollar at a high level so that we cannot export our products into American and world markets at a competitive advantage. The Tory government has done nothing to remove the 15% surtax on our softwood lumber products, which has directly forced the closing or cutback in many sawmills. We accept as a fact that Ontario has faced and is continuing to face the worst recession that has occurred in this country in 50 years. In the last such major recession, the federal Tory government showed no compassion. They have not changed on this occasion. The unemployment in northern Ontario, being far above the national average, has caused and is causing a great deal of hardship to individuals and to families. We applaud and thank you for having the compassion to include in your budget the expenditure of moneys that will prevent the economy from causing further hardship and to prevent the hardship from causing greater misery. We appreciate the employee wage protection fund to protect employees who lose jobs and require severance pay or termination pay. Regarding the $57 million provided for in the budget to assist small business firms, there are sawmills in our area that would not have remained in business had these funds not been available. There are members of ours who are working today directly as a result of the assistance that your budget has given to permit these firms to continue in business.

Our members have been the beneficiaries of the $32.5 million in additional funding for the training and assistance in finding work for laid-off workers, as well as the $32-million item in the budget for the funding of adult literacy programs. Our members have been the beneficiaries of that item also.

The children of our members can continue to obtain a higher education as a result of the $36-million increase in the budget for the Ontario student assistance program. We thank you for the government policy of conducting an audit of Ontario's forest resources and embarking upon a sustainable forest policy. My members are aware that the Bay Street friends of the Tories have embarked upon a very expensive campaign to attempt to discredit your budget, but we are also aware that many economists have stated that the NDP's $9.7-billion deficit is not a monster. We are also aware of these economists who state that because of our recession, that is outside of any government's control, any Ontario government, regardless of stripe, would have had to run a deficit or dramatically slash programs. We are grateful to you for not slashing programs and thereby creating further hardships. As stated by Nancy Riche, executive vice-president of the CLC: "Since 1984 we have had a market economy based on a Conservative agenda. It has not worked."

You have presented a budget that has not followed the Conservative agenda, and has attempted to minimize the hardships that have been created, and has started this province on its path out of the recession. The news media and various pollsters have indicated that there is a crisis facing various politicians in this country; that Canadians are looking for leadership that will restore their faith in a widely discredited political system.

The Ontario budget, which has shown that one can balance the need for fiscal responsibility with compassion, will go a long way to eliminate the crisis of confidence, at least in Ontario. The 3,500 members that I represent will not soon forget the efforts that this government has made on our behalf. I thank you.

1100

Mr McLean: The audit for the forestry industry: Give me details on that, if you could.

Mr Lorenowich: It will show what is available, and hopefully it can be retained on a sustainable basis once you know exactly what is available. It can be distributed among the companies that normally harvest this product, and it can be retained on a sustainable basis once they know what is out there.

Mr McLean: Is the forest industry planting three for every one tree that they cut now?

Mr Lorenowich: Not quite. They are on the way to that, but they are replacing one for one.

Mr McLean: Is our forestry being maintained? Are we losing it or are we cutting it faster than it is reproducing?

Mr Lorenowich: At the present rate, they are cutting faster than it is reproducing. They are increasing their tree planting. Their silviculture programs are increasing on a yearly basis. It is just about up to where it should be. It is not quite, though.

Mr McLean: How many forestry workers have been laid off in the last two or three years? Is it substantial?

Mr Lorenowich: Probably about 500 or 600 in our local, mostly through automation and sawmills shutting down.

Mr McLean: You say 500 or 600? So there is $32 million for laid-off workers, for help for them? Is that what you had indicated in your remarks?

Mr Lorenowich: Yes.

Mr McLean: How much would that be for each person who is laid off, on average?

Mr Lorenowich: That is not just for our people; that is for throughout the province.

Mr McLean: Oh, okay. That is right across Ontario, not only for forest workers.

Right. The other question I have is with regard to some of the larger mills. I was reading somewhere not long ago -- maybe it was in a magazine -- that people have been laid off from different mills and the number who have been rehired in some places is pretty near nil.

Mr Lorenowich: That is correct in the paper mills, yes. There is one right in Thunder Bay that is shut down at the present moment.

Mr McLean: The large mill out here, is it? The large one.

Mr Lorenowich: Not CP Forest. CP Forest is running.

Mr McLean: Has their labour force been substantially reduced?

Mr Lorenowich: Not substantially, to my knowledge anyway. We are not connected with the paper mills per se. We are the woodlands. We supply the raw material.

Mr B. Murdoch: I have just two things. One, I remind you, do not give government too much credit for bringing the budget on the road. They did make the final decision, but it took quite a bit of head-knocking to get them to do that. I just thought I would remind you, do not give them all the credit.

You mentioned something in there about the small business grants?

Mr Lorenowich: Yes.

Mr B. Murdoch: Could you elaborate a bit more on that? Because I have been looking for small business grants for a lot of businesses that are going out. I thought maybe you could help me. You did mention it in there.

Mr Lorenowich: We did have a sawmill in Sapawe that was shut down. It was shut down for about seven or eight months. There was no way it was going to reopen. We had a number of meetings with the government people. We did receive money. We received -- not the local itself, but the company -- $1.5 million from the Ontario Development Corp and $2 million from the heritage fund. That sawmill is now working. That money is being used to revamp that mill into metric. They have to look for an overseas market. Because of that softwood lumber tax, they cannot compete with the United States, so they have to look for overseas markets. This mill is now running and there are 144 people employed there. That was lost. It was gone.

Mr B. Murdoch: When you mentioned that, I thought maybe there was a new special fund put up for small businesses.

Mr Lorenowich: No, I think the fund has always been there, but it has been maintained.

Ms M. Ward: Thank you for your presentation. You mentioned you had 3,500 members. In response to Mr McLean, you said about 500 or 600 have been laid off. When?

Mr Lorenowich: Over the last three or four years.

Ms M. Ward: You also mentioned the tax on the softwood lumber. That was really part of my question. You have been feeling the effects for a while, since the free trade agreement probably -- or before, because that tax actually came in prior to the free trade agreement.

Mr Lorenowich: That is correct, yes. We have had two sawmills in our jurisdiction that have closed, both Kimberly-Clark sawmills.

Ms M. Ward: Has your membership declined also?

Mr Lorenowich: Yes. We used to have about 4,000 members in this local about three or four years ago.

Ms M. Ward: Do you ever expect to get back to the point where you were in this industry?

Mr Lorenowich: Not in this industry. We have to get out and organize it better.

Ms M. Ward: Yes. The training programs and the adult literacy program should be a fairly substantial help to your members. Actually, some of that is being delivered through unions -- the workplace literacy programs and the skills training. The labour movement is quite involved in that.

Mr Lorenowich: You are talking about the basic education for skills training program? We have had that going in two locations and we are looking at starting it up in three or four other locations, right on the work site.

Ms M. Ward: So your members will be learning new job skills because there basically are not those jobs to go back to. You do not expect that you will get back to your previous state?

Mr Lorenowich: That is correct, yes.

Mr Jamison: I would just like to come back to where you said this one mill that was helped through the ODC and the manufacturer's recovery program had to retool to metric. By that, you had indicated you are looking at other offshore markets for that wood.

Mr Lorenowich: Yes, European markets.

Mr Jamison: Obviously we are into a free trade agreement, if that is what you want to call it, but in this particular area, with the 15% tariff that is placed on your product, what is the effect on your industry here? What is the difference? What difference does that make? Put it that way.

Mr Lorenowich: It makes a big difference. When it first came in, the dollar had a lot lower value. Now you have added the 15%, plus the dollar has gone up a danged 11 cents. That is like putting an extra 25 cents on the dollar on the cost of our product on the American market. They just do not buy it at that price. They have, in turn, reopened a number of their mills that were shut down over the last three- or four-year period and they have just run us out of the market. We have still got about, I think, a 23% share of the American lumber market, but it was up to about 28% or 29% before free trade. It has dropped dramatically, and with that drop there have been a number of closures, not just in Ontario but right across the country, of sawmills.

Mr Jamison: To go on from that, you talked about this plant that was refurbished and over $3 million invested in new technology and retooling that plant.

Mr Lorenowich: That is right.

Mr Jamison: You also talked about the adult literacy. I want to talk about the workforce for a second. Obviously, like any other workforce, you have a mixture of people there who have different ethnic origins and different educational skills. People who have been there a great number of years may not have their education up to standard for industry, because there seems to be a grade 12 standard across the board now. Especially in the area of literacy, with the introduction of technology, these kind of things, without those programs, the training and adult literacy programs, would your workforce have been able to adapt, for instance, in the position of this mill being retooled and technologies being brought in?

Mr Lorenowich: Most of them do adapt on their own, but there are small pockets in each group that just do not adapt unless they are taught. These are the pockets we have been working on at the present time. It has not occurred in that particular sawmill. It has occurred in our woods operations, where we have a number of different nationalities who have taken it to learn just basic English, the rudiments of reading and writing, just enough, as you say, to get along to technological change. We have a number of changes in the woods. Where it was the bucksaw and the horse skidding the wood out before, years ago, now you have fantastic pieces of equipment out there that are worth millions of dollars each. You have to know how to run them.

Mr Mahoney: Just to clarify this -- I think there was an attempt to clarify it, but I want to make sure it is on the record as being clear -- the sawmill did not get saved by the $57 million in small business money. The sawmill was saved by the Ontario Development Corp, more specifically the Northern Ontario Development Corp, by a program that was put in place by the previous government. I do not mind at all that you are supportive of this government, but I just want to make sure that when you give it credit for something, it really did it. In this case, they did not. Having said that, I am delighted that the sawmill has been saved. I think that is the important issue and the bottom line.

With regard to the budget, we have yet to hear the details of how that $57 million will be spent or made available to small business. That information has not been made clear and it would appear that there is some wrangling going on. Perhaps the parliamentary assistant and the advocate for small business could tell us exactly when the money is going to start. He got it in his briefcase. He is now going to release it. Wonderful. This is progressive government at its best. They are just flowing the information out in mounds and mounds of paper.

1110

Mr Jamison: The brochure has been out for four months.

Mr Mahoney: But you will admit that program did not save the sawmill, I am sure.

I want to question you on the OSAP program, because the head office has been moved here, which again was implemented and initiated by the former government. OSAP is a tremendous program, but we all recognize that there was an 8% increase by this government, contrary to the promise that it had made in the agenda for power that was put out prior to the election -- I am sorry, it is the Agenda for People. There was an 8% increase in the tuition fee. How does that relate, in your knowledge, to the increase in the OSAP funding?

Mr Lorenowich: I do not have too much knowledge on that. What we are saying is that programs, as you say, may have been in place prior to this government taking power. Now they have kept these programs. They have also expanded on a good number of these programs, rather than making cutbacks. I have a son who works in that very building you are talking about. I am very pleased that he is working and he got into that building.

Mr Mahoney: I am sure you are. There was an increase in tuition fees of 8%. That was part of the budget announcement, contrary to what had been promised.

Let me ask you now, as the vice-president of a union, of a local -- and I have some understanding of this because my dad was national director of the steelworkers for 26 years and a vice-president of the Canadian Labour Congress. I grew up in the labour movement. I recall the days of Bill Mahoney and Johnny Barker and Larry Sefton and a lot of those good folks when they were very pragmatic in their approach to dealing with the corporations, when they recognized that the best way to protect the jobs for the rank and file in the union, in the local, was to ensure that the company could open its door on Monday morning and perhaps make a small profit on Friday afternoon. The workers would then have a place to work and they could participate and should be paid fairly.

The business community, both small and large, looks at this budget and the long-term debt financing of this government, the projection to double, perhaps more than double, the total debt in this province, the projection to take the debt service, which was at nine cents out of every $1 under our administration, up to as high as 20 cents, approximating the federal problem, which is now, we all know, totally out of control at 35 or 36 cents, the business community, notwithstanding all the accolades we are hearing from the predetermined deputants here this morning -- with all due respect, I appreciate your coming -- well, you can wave if you like, but it is pretty obvious when you look at the list here in every town we are going to that this is just a cooked deal going on. That is fine. I think the government is smart for doing it, actually.

But how does the business community, at such odds to what we are hearing here this morning, such total disagreement to what we are hearing here this morning -- surely to goodness there has to be some kind of middle ground that says this government is not the latest, greatest saviour of the economy in Ontario. Why are people so afraid of this budget and where are your men and women going to work in the next five years when the debt chokes the life out of the province?

Mr Lorenowich: I do not know how you can say that when James Frank from the Conference Board of Canada says this budget is a confidence builder.

Mr Mahoney: Do you want a list of the guys who are apoplectic over this problem?

Mr Lorenowich: A University of Toronto economist says there is nothing wrong with this budget.

Mr Mahoney: Where are your men going to work, sir? That is my question. Where the hell are they going to work when the sawmills are being shut down? They are going to be on government assistance, for God's sake.

Mr Lorenowich: The sawmills are not being shut down by this budget. The sawmills are being shut down by that 15% tax of the previous government.

Mr Mahoney: This budget stops it, right?

Mr Lorenowich: It has not been stopped as yet.

Mr Mahoney: Open your eyes, sir. With due respect, open your eyes and stop letting the NDP dogma cloud your thinking on this budget. It is an absolute disaster.

Interjections.

Mr Mahoney: If there is a little pain over there in hearing this stuff, then squirm in your seats, guys.

Mrs Sullivan: Mr Lorenowich, you have indicated that the wage protection fund has already assisted some of your workers. To my knowledge, that wage protection fund is not up and running. The legislation has not passed. Indeed, there has already been an announcement from the minister that changes the provisions of the wage protection fund that were announced in the budget. I would like to know how in fact you believe the wage protection fund has assisted your workers.

Mr Lorenowich: I did not say it has assisted them at the present time, I said we appreciate that being used to protect employees who lose jobs.

Mrs Sullivan: Do you understand how the provisions of that have changed?

Mr Lorenowich: No, I do not. If there has been a recent change, I do not.

Mrs Sullivan: I think you will find it is less helpful than you thought it was going to be.

Mr Lorenowich: It appeared to be very helpful there when it first came out. If there have been some changes, I am not aware of them.

Mr McLean: There was 28% being exported from the province. We are now down to 23%. You indicate we are depleting our forests more quickly than they are being regenerated at the 23%. We would have been depleting them a lot faster at 28%, so therefore the forest industry would have come to a standstill closer, years down the road, to an end. Basically, we had an environmentalist here this morning who indicated, with regard to the chlorine the mills are producing -- have our environmental policies had any detrimental effect or caused any closing of the mills?

Mr Lorenowich: They have not, as far as I am aware, actually closed strictly because of that issue, no.

Mr McLean: But he indicated this morning they are really going to make this happen, they are going to make the mills take that chlorine -- I guess it is coming from the forest before it goes in the front door. What do you say to that comment?

Mr Lorenowich: That is in the paper mill itself. They use chlorine in the process, right in the paper mill. That has nothing to do with the woods itself.

Mr McLean: But it comes out into the stream, does it not?

Mr Lorenowich: I guess it is discharged into the lakes or streams or wherever they discharge it.

Mr McLean: But if he gets his way and tries to stop that from happening, what do you put in place of it? I do not know, I am just asking.

Mr Lorenowich: Apparently there is a new system. I do not know if there is anyone here who represents paper mills who is going to appear before you, but there is a new product at the experimental stage right now that will get rid of the chlorine. They will not have to use it. It is only used for whitening of the paper, I believe, for the bleaching process.

Mr McLean: Is the other method a lot more expensive?

Mr Lorenowich: It probably is. Initially, they all are.

Mr B. Murdoch: From your brief I am led to believe that you agree with this budget, so you must agree with deficit funding.

Mr Lorenowich: Short term.

Mr B. Murdoch: How long do you think your mills could operate in the same sort of manner and stay alive?

Mr Lorenowich: In the short term they can. You cannot do it over the long haul, and hopefully this government will not have budgets like this over the long haul.

Mrs Sullivan: They have already said they will.

Mr Sutherland: Short term.

Mr B. Murdoch: Unfortunately, they sit for the next four years. They have already presented it, so if you agree with this budget, they also present at the same time that their long-term goals for the next four years would be to double it.

Mr Lorenowich: Four years is not long term.

Mr B. Murdoch: So you think your mills could probably go on for four years deficit funding and stay alive?

Mr Lorenowich: Yes, sure. They have up to this point, the ones that are plainly losing money. If you look at Abitibi, they claim they have been losing money for 20 years and yet they have just been hauling it out of the country apparently.

Mr B. Murdoch: In the meantime you say they have been laying people off, so that is okay, too, I guess; deficit funding and lay people off.

Mr Lorenowich: Our people are getting laid off through technological change. They are still producing the same amount of wood.

Mr B. Murdoch: Not because the companies are losing money, then?

Mr Lorenowich: No.

Mr McLean: I appreciate your comments this morning. The first job I ever had was working in the bush and I can tell you it was not with a power saw.

Mr Christopherson: Mr Lorenowich, I want to thank you very much for your presentation. Unfortunately, we are seeing a little bit of what we saw in Toronto. I thought we were coming out of that, badgering witnesses and trying to discredit them, either saying their political support for one party or another is motivating them to be here and therefore negates anything they might have to say, or trying to portray witnesses as having no idea of real economics and not understanding the issues.

I think it is important to understand that there is a balanced debate taking place in this province about whether we went down the right road. There is not only the Conference Board of Canada, which you have talked about so rightly, but there are 59 other economists who signed a statement that started these hearings, saying they supported where we were going. Michael McCracken of Informetrica, who is a very well respected economist in this province, has also supported the direction in which we are going. It is really not a question of any kind of whacko economics, which is how some of the opposition members would like to portray it, but rather a real, decent philosophical debate on what is important for the people of Ontario and what direction we want to go in.

Having said that, I would just like to correct the record that, to the best of my knowledge, there is nothing in the budget statement that talks about a 20-cent servicing cost on the debt. We are talking about it rising to 12.4 cents, which is quite a bit different from the 34 cents we are now seeing with the federal government.

In light of the two directions that are available, the Mulroney approach to economics and the Ontario NDP approach to economics, there has been some talk here about long-term benefit. What about the long-term foundation and infrastructure of Ontario's economy? I would like to ask you, on behalf of your members, which long-term approach you think is going to serve your members in the final analysis?

Mr Lorenowich: As you are aware by my presentation, we are in favour of the budget. People who are on welfare do not pay taxes. It is as simple as that. If they are out of work, they are not going to pay taxes, and what is the government going to do then? That is the way we see it.

The Chair: Thank you for presenting your brief to the committee.

1120

NORTHWESTERN ONTARIO WOMEN'S DECADE COUNCIL

The Chair: I would like to call on the Northwestern Ontario Women's Decade Council. Please identify yourselves for Hansard. Welcome to the standing committee on finance and economic affairs on the budget hearing. You have one half-hour. The time left over after your presentation, up to a half an hour, will be question and answer period from the three parties.

Ms Untinen: Good morning. I am Leni Untinen, co-ordinator of the Northwestern Ontario Women's Decade Council, and this is Brenda Cryderman, our chairperson.

The Northwestern Ontario Women's Decade Council is a non-partisan, volunteer-based organization, composed of members of district women's groups as well as individuals. Its main goal is to improve the quality of life of women in northwestern Ontario in all spheres, economic, social and political. For the past 15 years we have worked on issues and concerns of northern women.

The state of Ontario's economy and the April 29, 1991 budget which addresses the economy is a major concern to area women. For our definition of economy, we would like to quote from a publication called Getting Started on Social Analysis in Canada. It is attributed to the United Church of Canada. It reads:

"The economy is something we share in common. It is the way we put together human and natural resources for the good of the common life. It is a vast collective enterprise and is the domain of no particular subgroup in society. It must be marked by justice, participation and sustainability. It summons us in the time of our stewardship to be good gardeners and partners.

"There is no doubt that we are in a changing world, no longer in a manufacturing age. The information and services sector is growing in size and dominance. Natural resources, once taken for granted and abundant, have now become scarce and are recognized to be finite. Global competitors are making strong inroads into once-secure markets. Small business development is now seen as the panacea for local economic problems and the federal and provincial governments are offering a multitude of programs to train and finance individuals wishing to establish small business. Entrepreneurship, diversification and long-range planning are the key words in current economic development jargon. The emphasis is now at the local level. Communities are encouraged to take local responsibility in addressing their own concerns. Large-scale foreign investors are no longer considered the answer to local economic woes and recognition, access and use of local resources are being encouraged. In such a framework the voice, participation and involvement of women may be given greater credence and attention."

It is with the voice of women that we speak to you today. In order to understand the present status of women living in northwestern Ontario resource-based communities, we offer the following 1989 statistics, based on our research with 956 women from 16 communities throughout the area. Sixty-one per cent of the women were in the labour force full- and part-time; 90% of the employed women work in the traditional female occupation sectors of sales, services, health and education; more than half were high school graduates, with 28% having earned a post-secondary degree, certificate or diploma.

In the previous year, 40% had taken a course related to employment or further education; 56% of the employed women earned less than $20,000 per year, with only 17% earning more than $30,000. Eighty per cent of the women were married, with 67% of their partners employed in the community's primary industry, and 84% have children. The traditional picture of the family in northwestern Ontario, as in Canada, is changing. The husband-wife family with only the husband working accounts for only 27% of domestic relationships. The husband-wife family with both spouses working now makes up more than 50% of all families. The single-parent family, 82% of which are female-headed, make up 13% of Canadian families. In the 1990s, one marriage in two will likely end in divorce. Four tenths of families headed by women are poor, compared to one tenth of the families headed by men, and over 72% of the elderly poor are women. Well over a million of Canada's children live below the poverty line.

As the above statistics indicate, many women already live in poverty and many more are only a circumstance away. Economic planning must take into account the changing reality of families in the 1990s, and not be based on the assumption of the traditional family of past generations. Employment and Immigration Canada's report, the Ontario Labour Market, November 17, 1990, states that "Ontario's seasonally-adjusted unemployment rate was 2.1% higher than in November 1989. Since November 1989, nine out of 10 jobs lost were accounted for by men, reflecting the severe downturn in the male-dominated manufacturing and construction industries." These figures may be viewed as a trend.

This is substantiated by Employment and Immigration Canada and the Ontario Ministry of Skills Development, both of which project that, while the labour force is growing at only half the rate it was during the 1970s, women's participation will increase and account for half of the workforce within the next 10 years. There are severe consequences to this trend, bearing in mind that women earn an average of 65% of male earnings, and 61% of women with at least one child under six participate in the labour force and face costs of up to $6,000 per year for licensed child care. The shift in male and female workforce participation rates, the disparity in earnings and subsequent disparity in taxable and disposable incomes, and the fact that more women will become the primary income earners, have serious financial and systemic implications for women; for both traditional and non-traditional families; for the community; for the region; and for this province.

Despite many concerns from across the country, the federal government entered into the Canada/US free trade agreement. Its intent was to improve the economies of both countries, to strive for full employment and improved living standards, and to strengthen both countries in the international marketplace, with both countries' ability to take measures to safeguard public welfare fully preserved.

1130

The agreement appears to be falling short of its goals. Canadians were promised jobs, jobs, jobs, and the best adjustment programs in the world which, to date, have been undelivered. Ontario's unemployment rate continues to creep higher. The unemployment insurance legislation, Bill C-21, has resulted in replacing insurance protection with the welfare system. In Thunder Bay this past winter welfare payments were up 53% and the case load up 46%. This is consistent with increases in district communities.

Outshopping has become a new Canadian word. The Pigeon River border crossing, which serves the relatively small portion of Ontario residents in northwestern Ontario, reported that $19 million in declared goods were brought across the border in a one-year study period ending July 1989, and it continues to increase. Manufacturers and retailers press for additional concessions in their attempts to compete. Canadian and Ontario companies attempt to negotiate salary and benefit freezes or reductions.

In the meantime, northwestern Ontario women and their families are forced to live with the impact of Ottawa's present economic policies, such as: decreased disposable incomes; the decline in the softwood and pulp and paper markets and subsequent downsizing of the male labour force through layoffs and closures, resulting in the loss of primary income; the necessity for more women to seek employment, and their subsequent transition to the role of primary breadwinners, often on under $20,000 per year; the social ramifications of the stress of economic crisis in terms of violence, alcoholism, and barriers to participation in community activities due to costs; and the shift in the tax burden from the federal level to the provincial level, and further to the municipal level, coming at a time when the commercial and industrial tax base is declining and is resulting in cutbacks to community-based support services. We submit to the standing committee on finance and economic affairs hearing that northwestern Ontario women are very aware of present realities, policies and practices.

Families among the rising welfare recipients, families who with recent business and industry downsizing and closures are experiencing having to rely on the very public assistance system they have for years criticized, know the severity of the recession. Families who are faced with women necessarily becoming the primary breadwinners are beginning to understand that this is not a temporary crisis but a restructuring of our economy along with a restructuring of their family unit. Families where women face barriers to re-entering the workforce due to the high cost or unavailability of child care know the frustration of the recession. Families where the primary male income has been replaced by a primary female income averaging 65 cents on the male dollar know the harshness of recession reality and are now understanding the necessity for pay equity. Middle-income families know the decrease in disposable income that comes with a 42% tax bite out of every additional dollar earned, and a further 8% to 15% added to most goods and services purchased. Families who are forced by necessity to leave the community where they were raised and anticipated remaining, know the pain of the recession.

The Northwestern Ontario Women's Decade Council submits to these hearings that women do not make budget and social spending demands because we do not know, but because we do. Each of us in our daily lives is called upon to balance our incomes and expenditures and to decide for which investments we are prepared to incur debt. We understand the consequences of not adequately budgeting. We also understand, within our family units, which individuals are disadvantaged and dependent and where and why we must share our resources. We are capable, with complete and correct information, of applying that knowledge to society and deciding where we must spend, where we must save, and where we must share.

Women can no longer afford to subsidize the economy through low wages. Pay equity and employment equity are no longer only desired as wage and employment adjustments to ensure women receive equal pay for work of equal value. They are not benefits for what was once considered the secondary labour force, but in fact adequate and just remuneration for the primary labour force.

Pay and employment equity are the cornerstones of Ontario's commitment to equal opportunity and to valuing our labour force. Pay and employment equity are mandatory to the preservation and protection of Ontario workers, Ontario families, and Ontario quality of life.

The Northwestern Ontario Women's Decade Council congratulates the Ontario government for this step, outlined in the recent budget, and it is only a step towards pay and employment equity for all Ontario workers. It comes not at a time when we cannot afford it, but at a time when we cannot afford not to have it in practice.

The people of Ontario spoke to their desire for social assistance reform through the Social Assistance Review Committee's 1988 report Transitions. The report was clearly aimed not only at assisting those who are in need but at ensuring that individuals are able to make the transition from dependence to autonomy and from exclusion on the margins of society to integration within the mainstream of community life.

Recommendations from Transitions offer alternatives to continued crisis management. We have nothing to gain by waiting to institute these initiatives. The present financial burden of social assistance expenditures only demonstrates that the folly was in having waited as long as we did.

It is difficult to associate the situation of the homeless with the picture of Ontario that is portrayed to the world. The Ontario government must continue to set affordable, adequate housing as a priority. The development of 35,000 units of co-operative and non-profit housing is urgently needed to provide Ontario citizens with their basic need for shelter.

A just and humane society cannot condone or ignore the physical and emotional abuse targeted at three quarters of its population: its women and children. Violence against women and children persists because of unchanged historical attitudes, unequal economic status and unequal power relationships. Women and children must be protected. The government of Ontario must allocate resources and call on the expertise of all who are in a position to assist in order to eradicate male violence against women and children in our society.

The time frame to institute pay and employment equity, adequate child care, affordable housing, social assistance reform, and protection of women and children from violence is not negotiable. The time is now. Fortunately the architects of the 1991 provincial budget chose not to ignore the human toll of the recession they were faced with in preparing their economic blueprint.

We wish to state that we did not find the 1991 budget a particularly encouraging document. It is difficult to respond to with enthusiasm. The Northwestern Ontario Women's Decade Council is extremely concerned with the size of the anticipated deficit and with contributing factors. The inherited $3-billion deficit following announcements of a balanced budget scarce months before, along with cutbacks from the federal government, left little room to manoeuvre. We are further concerned by increased taxes, which will finance only a portion of the deficit. We are not unsympathetic to concerns and criticisms made by interest groups, including many individuals, organizations and small business. It is obvious that the entire budget process and the strategies in terms of both income and expenditures are inadequate to respond to the realities of the 1990s.

The Northwestern Ontario Women's Decade Council believes that the provincial budget must reflect the environment in which we want to live. We further believe that the budget must be fair to all Ontario citizens.

Moreover, we are concerned with the time and money that has been allocated to this process of responding to a budget that will proceed despite these hearings. We are convinced that resources allocated to this process of criticism could have been far better used for proactive strategies such as the Fair Tax Commission and to develop a better process of consultation and input for future budgets. Let's get on with it.

1140

Ms M. Ward: Thank you for your brief. It sounds like you have a very interesting organization that does some very good work in terms of research. I do not know of any similar organizations, although there may be some.

I was interested in a comment on page 4, "Families among the rising welfare recipients, families who with recent business and industry downsizing and closures are experiencing having to rely on the very public assistance system they had for years criticized, know the severity of the recession."

Obviously you are talking about people who have never before been in the situation of having to rely on welfare. There is a great deal of criticism of welfare recipients as being lazy and undeserving and so on. That is not the case then?

Ms Untinen: This is true.

Ms M. Ward: And you have seen a lot of that, people who previously had good jobs, possibly?

Ms Untinen: Yes. In the past winter our welfare officers were telling us that people who never, ever dreamed they would be relying on social assistance were showing up. Situations were such that their UIC had now run out, or they were waiting to qualify for UIC, or that there were women coming in saying that they were separated, because there just was not any money. The welfare officers were quite sure that that probably was not the long-term situation, but forced by economics and needing to feed the kids, that is what ordinary, traditional families were reduced to doing in order to survive.

Ms M. Ward: I do not know whether you have had the same thing here or not, but in Toronto, in certain parts of the press, we have had a great deal of welfare-bashing. One particular columnist and two papers down there have published a series of articles claiming that a family of four would have to make $45,000 to get the equivalent of what they would receive on welfare, which was not true, as another newspaper pointed out.

I do not think I have too much time.

The Chair: You have about a minute and a half.

Ms M. Ward: I would like to comment on your closing remarks too, about the resources allocated to this process. To a certain degree I agree with you, but we are hearing people, and it is information that is not going to go to waste. I think the Treasurer has indicated that he is interested in looking at a better budget process -- the parliamentary assistant here might want to comment on that if he has time -- to make it more open, less secretive.

We did have pre-budget hearings also. We were not travelling at that point --

The Chair: Ms Ward, is that part of the question?

Ms M. Ward: It was not a question. I wanted to comment on that. I am glad to see your support for the Fair Tax Commission, and we certainly hope there are some changes by that.

Mrs Sullivan: Ms Untinen and Mrs Cryderman, I think this is an excellent brief you have prepared. I am familiar with the work of the council in various areas where you have made presentations to government and committees in the past, and I am very pleased to see this.

One of the things that really struck me in your brief was the indication that there is, probably in this area, a heavier impact because of job loss, which is predominantly male, leaving the income source for the family's female, earning lower-level incomes. One of the things that has not come up at these hearings -- I think you are the first group to raise it -- relates to the question of cross-border out shopping. We know that out shopping is not a new thing for Fort William, but it has certainly been significantly increased in the past. What we also know is that women tend to be working in the service sector retail operations which are affected by the out shopping issues.

One of the things that we see in this budget are increases in gas, liquor and tobacco taxes that are triggers for cross-border shopping, and I would like some comments from you on where you see action that could and should be taken by the province to deal with the out shopping issue and comments you have in relationship to the effect on women.

Ms Untinen: This is my personal concern about out shopping. I cannot criticize anybody who is going to shop anywhere they are going to get the best bang for their buck. Where I do have a real concern is that people are not paying their provincial tax on those goods they are bringing back, and they are the people who need those services in place, so I think that is one area that is within the provincial jurisdiction where something can be done to adjust that particular problem.

I also think that we need some of kind of resources or impetus to local business people, some kind of assistance to helping them look at whatever sort of unique and different ways they can compete. There certainly are maybe some cost differences there that cannot be adjusted, but I do not believe that everything everybody picks up in the United States is the bargain they went for. There are a whole lot of other concerns and reasons.

I also think that the free trade agreement was the thing that gave the big publicity to people to go across the border and shop. It was mostly always there anyway, but all of a sudden it was promoted, almost, as some kind of guiding thing for families to do because of the free trade agreement. Whether or not that boils down into the reality of what is happening is another matter, but people got this impetus from saying, "We can run across the border and get all these bargains."

Mr B. Ward: You mean in effect it encouraged it?

Ms Untinen: It is more of a perception of what is out there than reality of what is happening.

Mrs Sullivan: Do you think that the province should in fact draw back on increases on gas, liquor and tobacco tax? Would that be an assistance?

Ms Untinen: It is a tough one. If you have to get the money somewhere, particularly on liquor and tobacco, both of which I pay my tax on, I would rather it was there than on something that would particularly hurt people, that they were necessity items that were being increased.

Mrs Sullivan: But what if it means that your stores are closing and people are no longer working in them?

The Chair: Excuse me, Mrs Sullivan. We ran out of time. Mr McLean.

Mr McLean: It is a excellent brief and one of the better ones we have had today. I have a couple of questions on it. Do you have a battered women's facility here in Thunder Bay?

Ms Untinen: Yes, we do.

Mr McLean: What would be the average use of it, overnight stay?

Ms Untinen: Overnight stay? There is a maximum use of six weeks' stay if women need to find additional housing. I think the average is around 90%, but often it is over capacity; it just depends.

Mr McLean: What numbers does it hold?

Ms Cryderman: It is licensed for up to 19, and that is including women and children. In the last year it has always had a waiting list, so it has always been at capacity. With change to legislation that they can get priority on housing, we usually have women in and out in six weeks.

Mr McLean: We had some statistics this morning with regard to the use of the soup kitchens and the food banks, and you give us a lot of percentages, but there is none in here which would indicate to me what percentage male or female would be using the food banks. Would it be the single mother? Do you have any idea?

Ms Cryderman: I do not have statistics on food banks, but I do know that many of the women who come in to our transition house, until we got them a priority on the housing list -- and some of the fund-raising we do, we keep them in groceries. We add to their groceries for the first year they are out there.

Mr McLean: But it is mostly females, is it?

Ms Cryderman: It is females with children. There are many male children.

Ms Untinen: That we are seeing. However, I also understand there is a high population of youth and male youth who also use the food banks because there are not jobs for them.

Mr McLean: Would the majority of the soup kitchen be male?

Ms Cryderman: I do not think the majority. I do not know this from Decade, I know this from my work. I used to be a supervisor at family and children's services and we ran the street program. I would say that the soup kitchen and the kids on the street who are getting that thing, still the highest percentage of the people out there are female. I do not see the highest percentage of them being male, but I do not have the statistics and research on that.

Mr McLean: The final question is the increase to the civil servants, some 5.7%, some up to 11% in the budgetary policy, in times such as we are. Do you believe that would be a proper move at this time, for a government to increase salaries of all the civil servants?

Ms Cryderman: I am not going to speak against increasing salaries of civil servants. I am not a civil servant, but I think you have to look at what their salaries were. It is a collective bargaining issue and you negotiate it.

The Chair: Thank you for appearing before our committee. It was quite informative.

Because of the limited time we have this afternoon and our flight to Sault Ste Marie, the best course would probably be for everyone to check out during the lunch hour so that the group is ready to leave without delay when we finish at 3:15. Checkout time is 1 o'clock. The luggage can be stored at the front desk. There is a room up there.

We will dismiss this committee. It resumes at 1 o'clock sharp.

The committee recessed at 1153.

AFTERNOON SITTING

The committee resumed at 1312.

DOUBLE RAINBOW EXPLORATION SERVICES INC

The Chair: Please identify yourself for Hansard.

Mr Laws: My name is Greg Laws and I am the president and co-owner of Double Rainbow Exploration Services Inc.

The Chair: Carry on with your presentation. At the end, there will be questions divided equally among the three parties.

Mr Laws: My wife and I are co-owners of Double Rainbow Exploration Services. This small business provides computer-related services including word processing, computer-aided drafting and consulting.

Since we rely on contracts principally from the mining industry, the profit and loss statement did not look too good in 1989-90, our first year of operation. In 1990-91, the statement improved for two reasons: One, we were successful in bidding on the contract for services in Sioux Lookout, Red Lake and Kenora; two, we did not pay ourselves any salary. However, we are looking forward to the 1991-92 fiscal year as we have already paid off our Ontario New Ventures loan and repaid some of our shareholder loan.

I will be speaking today in favour of the budget which has come under fire for one reason, the deficit. I will be speaking from the perspective of the small business co-owner who understands the successful use of deficit financing for growth.

There are three key topics I would like to discuss with you today. The first topic is the content of the budget address, some of its futures and its direction. The second is the setting up of a capital fund as outlined in budget paper D. The third topic will be the content of budget paper E, "Ontario in the 1990s."

To summarize, the budget address was all about fighting the recession, not the deficit. The fiscal policy of the federal government is partly to blame for the deficit situation we face in Ontario. Projections show that federal transfers to Ontario in 1991-92 will be $1.6 billion below previous commitments. The Ontario government had several options to reduce the size of its deficit. Which programs to shut down? How many hospital beds to cut back on? Which shelters to close? By what amount would they have raised corporate or personal income tax? The decision was to maintain the level of services and not to raise corporate or personal income tax.

The provincial government also decided to invest in the future of Ontario, an investment in capital towards infrastructure and assets when other governments in Canada are cutting back.

This decision is similar to that of a contrarian investor. The expectation of a high return in the future motivates the contrarian to invest. I believe this contrarian investment strategy will pay off, that with the co-operation of all the partners involved, the future Ontario economy will be one of the most competitive in Canada.

This budget and its content in style is similar to a business plan. There are two other elements of the plan in addition to long-term fiscal planning. They are setting up a capital fund and goals for the future.

Three parts of the budget address which are of particular interest to me include the incentives announced for northern Ontario, the creation of a Fair Tax Commission and long-term fiscal planning, as I have mentioned.

Budget items important to northern Ontario residents include the allocation to us of 30% of the anti-recession program budget, the intention to sign a new $30-million five-year federal-provincial mineral development agreement and the addition of $3.4 million more to improve the health travel grant program.

These items will result in direct and indirect benefits for northern Ontario's small business owners. The allocation of 30% of the anti-recession program spending will have positive impact on many of the economies in northern Ontario communities.

Similarly, the signing of the new Canadian-Ontario mineral development agreement will benefit the mining industry, which is very important to my future. The discovery of new mineral deposits results in many economic spinoff effects.

Finally, a healthy labour pool is an essential ingredient to the success of all small businesses. Increases to the funding of the travel grant program will provide more of the workforce with access to health care.

The creation of a Fair Tax Commission is an important step in a successful economic and social budget for Ontario. The commission will be undertaking the first major review of Ontario's tax system in 25 years. Co-operation from all partners in the process will be crucial. Of interest to all business owners is the proposed minimum corporate tax for Ontario. In fact, perhaps no other issue is more important to us. I would encourage all business people to participate fully in determining their future and not to let differences and opinion interfere with their input.

Fairer taxation also requires acting to prevent false large-scale property value increases through speculation. An Ontario land speculation tax would be important to thousands of prospective entrepreneurs purchasing land or renting property. Action taken in the budget illustrates the social democratic idea of fairer taxation. People at the lower end of the income scale will have their personal income taxes reduced; people at the higher end of the income scale will have their taxes increased through an increase in the personal surtax rate. This should come as no surprise. It is a basic principle for social democrats that those most able to pay do so.

In co-ordination with the budget initiatives comes long-term fiscal planning. The key items in the creation of a long-term fiscal plan for Ontario are the setting up of a Treasury Board whose mandate would be to carry out multi-year budgeting; the introduction of an expenditure review and evaluation process; the co-operation of the public and private sector in the creation of the fiscal plan; and the co-operation of the public in the form of consultations such as the one in which we are participating today.

All these elements of long-term fiscal planning are familiar to business owners in one form or another. A successful business must have a person responsible for its day-to-day management. This person reviews the expenses and this allows strategic planning to take place. Internal and external co-operation, particularly with your banker, is important to a successful business.

Finally, consultation with your clients on their concerns is essential if the business is to succeed.

1320

Setting up the Ontario capital fund will provide the Ontario government with a new approach to capital investment planning. Budget paper D outlines two types of capital: physical capital, the investment of dollars to create tangible assets; and human capital, investment by the government in its people, particularly through training and education programs.

Physical capital investments are essential to a healthy provincial economy. This budget proposes to invest almost $1.1 billion more than the interim budget in physical capital expansion. This investment represents about 16% of the total 1991-92 deficit.

Some of the investment will be targeted for the following ministries: Transportation; Colleges and Universities; Health; Environment; Industry, Trade and Technology; Housing; and Energy. What responsible business owner could disagree with the need for these capital investments in Ontario?

There are many examples of how investments such as these benefit Ontario and its businessmen. Investment in transportation allows for more efficient and lower-cost transportation of goods and services. Similarly, the servicing of land lays the base for more housing and industrial growth.

Finally, public capital spending provides direct stimulus to the private sector. This would include increases in employment within the construction and trade sector, as well as the engineering and services sector.

Human capital investments are more difficult to measure in dollars. However, as outlined in the budget, the key to growth and prosperity is an educated, adaptable, motivated and skilled workforce.

This brings me to some statements on what is probably the most important section of the budget, the Ontario government's goals for the future, as outlined in budget paper E. This document outlines the path by which the Ontario government will achieve fiscal and economic success in the 1990s.

The budget paper outlines two approaches to structural change. The federal government approach to change includes privatization, deregulation, tax reform, such as the GST, and the free trade agreement. According to the budget paper, this path is leading to neither higher incomes, nor to an enhanced capacity to adapt. The provincial government approach, as outlined, will be to play the role of a facilitator of structural change. Further, it will promote development of high-value-added, high-wage jobs through strategic partnerships.

The Ontario government believes that increased equity and co-operation are necessary for sustainable prosperity. The paper identifies the key to competition in the 1990s as gaining strategic advantage. Gaining the advantage involves introducing innovative processes and products. It further identifies the important, long-term competitive challenge for Ontario. This is the province's ability to address the gap in productivity growth between it and its major trading partners.

The paper goes on to outline Ontario's economic strengths, including its economic foundation, its socially progressive attitude and the quality of its workforce. It also outlines its weaknesses in productivity, innovation and technology development. It points out that strong growth in investment will be necessary, especially if Ontario is to keep pace with technological changes and realize the associated productivity gain. The investment by the government of $32 million in the technology fund represents the first step in this process.

It concludes by stating that sustainable prosperity is achievable if we consider the growing interdependence of technological, economic and social change. It states clearly for us that a new economic strategy for Ontario must be based on broad social partnerships, and it emphasizes that the government requires the participation of labour, business and community groups for a successful, co-operative approach.

I have spent the past few minutes outlining the content of budget paper E for two reasons: One, its structure and outline puts to rest any suspicions of a secret agenda to destroy Ontario's economy; two, it is in the back of the budget document and it might have gone unnoticed. Some people may not have read past the words on page 3, which state that the government will have an operating deficit of $9.7 billion. It is these words which have dominated the debate on Ontario's budget for far too long. I urge all Ontarians, and especially all business people, even Conrad Black, to read on past those words on page 3 and take a careful look at the ideas expressed in the various budget papers. Take time to constructively criticize them. Finally, participate in the process which will carry them out. Join in partnership now for a better future.

Finally, I have three recommendations related to small business for your consideration.

Startup incentives for small business operators should be easily available. Special programs and incentives must be available to women, native and disabled entrepreneurs.

Small business loans should be available for startup, operational and expansion purposes. The interest-free period should extend for five years, or until the business is making a profit.

Educational programs must provide managerial and corporate training, in addition to skills training or retraining. Aid in the form of grants or loans to cover the expenses of the educational programs should also be available. Workers, students and unemployed persons who can produce a business plan should be eligible.

As a small business co-owner, I would like to thank the committee for allowing me to appear before it today. Copies of the summary of my brief today and the recommendations presented are available from the clerk.

Mrs McLeod: I will just take a moment, actually, to make two points of record and turn the questions over to my colleague. It is a little bit difficult to know where to begin, and I would be curious to know the source of much of the information which has been presented.

I would like to concur that there should be a focus beyond the $9.7-billion deficit, which is the operating deficit in this year's budget, to look beyond that to recognize, with all of the people who have made presentations today who have said there should be a short-term deficit only, that with the most optimistic projections of the government the operating budget will not be balanced until 1997-98. So I agree with you that we should look beyond the first few pages.

The record I would like to note is that when you refer to the technology fund, which was perhaps the one focus for longer-term economic planning that we can identify in the budget, the technology fund was in fact established by the Liberal government. I happened to be part of the council that established it, and the fund was actually reduced in this budget.

With that, I will turn it over to my colleague for some questions.

Mr Mahoney: First of all, business must be fairly slow for you these days, is it? I have looked through this budget, and it would take an incredible amount of time and knowledge to prepare the government's defence as eloquently as I think you have today. I am quite impressed. If you actually did that on your own, you are a very talented young man.

Mr Laws: Thank you.

Mr Mahoney: God would wish, along with I, that you were right, but I have some reservations about it.

If you were to take your business and over the next four years multiply the debt load and the debt service of your business by two, double the amount of capital that you would borrow, assuming you would be allowed to -- because governments, of course, do not need permission from anyone other than the Legislature, and if they have the majority of members, they simply do not need permission from anyone, other than themselves, and that is a reality -- but if you were able to double debt principle amount and your debt service, is that something you would find intelligent or something you would do?

Mr Laws: I think it would be something I could use right now. Certainly we need to expand and be able to provide services to a broader group of people. That type of thing would be of use.

1330

Mr Mahoney: Would you have any concerns, though, about the ability to pay it back? The reason I ask the question is that it is obvious if we were to stop at page 3, as you have pointed out, in this budget, it might not be that bad, actually. If we were to say there is going to be a $9.7-billion deficit this year, we fully recognize that there were many items in the recession, in the ongoing difficulties of the overall economy, many of them created by the federal government, and any government would have faced some serious deficit problems in this province.

But to project it for four more years at an annual -- it is very interesting that they keep on saying it is a plan to reduce the deficit, and yet after year one they take the $9.7 billion and they pay it off by putting it on top of the debt and the debt goes from $39 billion to $48.7 billion. It is a fascinating way to balance a budget. Then they create a new deficit for the following year, and then at the end of the year they balance that by putting it on top of the debt and the debt is now up in the $56-billion or $57-billion range, and they keep doing this and they are borrowing to buy the groceries. How could you possibly survive in the business world if you borrowed capital dollars to run your operational expenses? How could you? Do you understand that is what they are doing?

Mr Laws: To borrow money to pay for groceries?

Mr Mahoney: They are borrowing money to pay off the deficit. If you run an overdraft in your business or a line of credit in your business -- you would understand that, being a businessman -- at the end of the year, if you went to your banker and said: "I can't afford to pay off this line of credit. Put it on to the capital debt load of my company. Add it to my debt service and give me another line of credit," what do you think your bank would say to you?

Mr Laws: They would probably not accept that.

Mr Mahoney: They would probably not do that. That is the long-term fiscal planning this government is showing you, and as a small business man you support that, sir? I am astounded.

The Chair: Mr Mahoney, time is up on that.

Mr McLean: I just want to ask some questions with regard to your recommendations, sir. It says, "What business owner could disagree with these recommendations?" I do not think there is a business owner who would disagree with those recommendations at all, but I ask you, where is the money coming from to pay for them?

Mr Laws: At this point in time I do not see revenue being generated for this type of expense, but I would anticipate that to pay for this type of initiative the government would have to generate more revenue.

Mr McLean: You said startup incentive grants for small business operators should be easily available, and then you go on and you want loans from Ontario New Ventures and five years interest-free. Could you just imagine the number of people who would be jumping to get hold of those loans and grants? The question I have is, this is hundreds of billions of dollars. Where is the money coming from to be able to give this money, the grants and the five-year interest, to these entrepreneurs?

Mr Laws: I do not think it would be just handed out to anybody who came off the street. I think they would certainly have to prove themselves in terms of having a viable business plan, having some business background. I do not think it should be a sort of a welfare payment program; it would be a situation where qualified business people with a plan could apply for those types of things.

Mr McLean: I am pleased we got that clarified, because you had indicated that the program should be available to workers, students and unemployed persons who can produce a business plan. You have clarified that by making sure they are qualified and would be able to have some assets, I would propose, to borrow against, or would you think that they should be able to get this plan without having assets?

Mr Laws: Certainly not, no. When I came forward to my bank with a business plan, I had to produce a statement of assets and liabilities for myself as well as for the home, and that sort of thing would be required.

Mr B. Murdoch: Just to carry on with that, I notice it says, "The interest-free period should extend for five years or until the business is making a profit." Do you mean you would continue on for ever if you are not making a profit?

Mr Laws: No, I guess it should be and/or in terms of five years or until they make a profit. If they are making a profit in the first two years, then that interest-free period would be withdrawn.

Mr B. Murdoch: Okay, and you have no problem with making a profit. That word is okay in your vocabulary?

Mr Laws: Oh, yes.

Mr B. Murdoch: I just wanted to know, because in some vocabularies at Queen's Park the word "profit" is like a swear word.

Mr Sutherland: I wonder whose.

Mr Jamison: A profit is a profit is a profit.

Mr B. Murdoch: I wanted to make sure that was okay with you.

Mr Jamison: I noticed that you participated in the startup of your new business in the New Ventures program. That was initiated under the previous government. I wondered, because it is the area I am very interested in myself, about your experiences in dealing with the New Ventures program. Of course you have gone on with other recommendations. Have you any suggestions on how to improve that particular program beyond what you have already said?

Mr Laws: It worked fairly well for us. We only had a small loan from them. The largest portion of the capital loan was the federal small business loan, but we paid it off, as I say, within two years. I think the program works very well. The interest-free period, one year, worked out to just about what was good enough for us in terms of we were making enough money to pay it back within the first year.

Mr Jamison: As a small business person, an entrepreneur, do you feel the budget we developed was sensitive toward the needs of small business in the way that there really were no direct tax increases levied on business at that level? Do you feel there was a recognition on the part of government that business and small business was coming under heavier and heavier pressure?

Mr Laws: No, not really. I think it addressed a lot of issues, a lot of key issues, perhaps more important issues, but I would hope to see more programs directed directly towards small business in the future.

Mr Jamison: There is a diverse kind of conversation really going on here and one thing in it deals with the budget. Of course, the opposition is saying there are ways that we should not have spent $9.7 billion. Regardless of how we look at it, there was only $1.5 billion of new spending, and that was under the direction of the Treasurer to fight the recession. I have been having difficulty in really getting specifics from the opposition, but are there any particular areas where you feel cuts should have been made that would be specific on figures, like in costs? We have not been able to get that out of the opposition at all when they talk about the budget being at the $9.7-billion level.

Mr Laws: That is the one thing, people pick up on the $9.7-billion number and really it is only $1.5 billion in new spending. No, I do not see within Ontario room to make significant cuts in any of the services. Ontarians have come to expect a certain level of health care and those sorts of things, so I do not think there was much room.

The Chair: Mr Laws, I would like to thank you for appearing before this committee. Time has run out and we are a little bit behind as it is. Your presentation was very informative and thanks for attending this committee.

1340

LAKEHEAD UNIVERSITY STUDENT UNION

The Chair: Could we have the Lakehead University Student Union? Welcome to the committee. Would you inform Hansard who you are, please?

Mr Middleton: My name is Ian Middleton. I am the president of the Lakehead University Student Union. I represent both full- and part-time students at Lakehead University and we have approximately, next year, 4,800 full-time and just over 2,500 part-time students. We are also affiliated with the Ontario Federation of Students and we are Local 32 of the Canadian Federation of Students.

First off, I would like to say that it is good to see a past president of a student union sitting on the committee. It gives me some encouragement that there is life after student politics.

Mr B. Ward: Right party.

Mr Mahoney: We will give you a second opinion on that.

Mr Middleton: I am sure.

The primary focus of my presentation will be on the post-secondary educational system in Ontario, in general across the province and specifically at Lakehead University. There are a few areas of concern. The first is underfunding of the colleges and university system and the second is the increase in tuition fees.

The university system in Ontario has been grossly underfunded for a number of years through successive governments. Enrolment has been increasing; we can look at the levels in 1978 and then at present. In 1978 there were 185,500 full-time equivalent students. This year there are over 250,000. If you look at the amount of funding each full-time equivalent student receives, it is in real terms $2,273 less than it would be if it had kept up with the rate of inflation. This year the university system, to restore operating grants to their 1978-79 level, would require $613 million in increased funding, and for colleges the amount is $130 million. It amounts to about a 30% gap over that period of time.

This lack of funding has had serious consequences on the university system. Ontario, as one of the wealthiest provinces in Confederation, has one of the worst records for funding on a per-time equivalent basis. As I mentioned previously, this is over $2,000 less. It is $800 less than the national average.

At Lakehead University this has created a legion of problems. There is a freeze on the hiring of new faculty, and to quote an internal university study that is being presented to the president of the university: "You will note that our position on budgeting for our human resources needs this year is status quo. This will not be popular, but with our concern for inadequate funding in 1992, we cannot recommend anything further. Obviously, where a number of academic departments are looking to expand, we must seek offsetting reductions elsewhere."

It should be noted that Lakehead this year is expecting record enrolment for the 1991-92 academic year with a freeze in the hiring of new professors. What does this mean? This means we already have a larger portion of our students being instructed by sessional lecturers as well as graduate students, not by full-time professors.

Buildings on campus are falling apart. Cuts had to be made to renovations this year, for instance, to our health services department at Lakehead University. Classrooms are literally bursting at the seams. We also have students sitting in the aisles and standing in doorways for far too many of our classes being offered. What makes Lakehead University one of the fastest-growing institutions in the province is its reputation for offering a high quality of education in an environment where small class sizes are the rule and the professor-student interaction is high. It is becoming more and more difficult for that reputation to be maintained.

We have heard the media talk lately that university graduates do not meet the needs of businesses today in this hypercompetitive marketplace. How can we when some of the equipment students are using is older than I am, and I am 25? An engineer going out to work in the high-tech marketplace today might well have to go through extensive training because she has not had the equipment at her university on which she needs that training. The Treasurer himself has recognized this fact. To quote the 1991 budget, the Treasurer states that, "Public policy that encourages an organizational culture supportive of technology and innovation in the workplace and in society at large will have a positive impact on the province's economic performance."

This must include universities and colleges both in material as well as in human resources. By the year 1999, OCUFA, which is the Ontario Confederation of University Faculty Associations, and the Ontario Federation of Students estimate that 25% of all faculty will be at retirement age. If things continue as they are now, these staff will not be replaced. This is happening at Lakehead currently. You may not see it, but we are in a crisis situation. The average student may not see it, but when they come into my office and talk about not being able to find the resources in the library they need to do their research, when they talk about equipment that is outdated and outmoded as well as unsafe, then they realize the effects of underfunding on the system.

The second element of the university funding crisis I wish to talk about is tuition fees; in other terms, a user fee. Over the last year, despite New Democratic policy, we have had an 8% increase in tuition. This comes on the heels of above-the-rate-of-inflation increases for numerous years before. For instance, over the last three years, tuition has increased by 24% while the consumer price index has increased at a rate of only 16%.

One of the things I, as well as my colleagues across the province, have been calling for is a freeze in tuition fees. The students face a crisis. Students face higher than average inflation for books. We have to rely on public transportation. There are also elements for students in northwestern Ontario that are not faced by other people across the province. People in Geraldton and Ignace cannot attend post-secondary education in their own communities. They must leave. We do have, through the OSAP system, a northern travel subsidy grant, but it does not meet the real costs, nor does OSAP address the real costs students face in today's world.

It comes down to a level, at least with tuition, that is both philosophical and economic. If you believe universities should not be élitist and only open to the rich, then I think you must support the eventual abolition of user fees.

Education is an investment. It is a long-term investment in the future of this province. We have heard arguments today about who is to pay. If you look at who are the largest wage earners in this province, they are the people with a post-secondary education. By increasing the pool and by increasing the number of people who have those skills, then you increase the tax base of this province. Furthermore, you also increase the ability of this province to compete.

If we continue with user fees we decrease the amount of accessibility for people from lower economic backgrounds, aboriginal students, not to mention people of colour. If we continue, the situation is going to occur where Lakehead University is going to have to refuse qualified applicants here in Thunder Bay and also from out of town. I do not want to be the person who has to go to those people and say their son or daughter cannot attend university simply because the university system has not been maintained. It is your duty to do that, and I challenge you to do that.

It is a situation now. It is a crisis. It is pathetic when students come in and have to drop out, go to part-time because they cannot afford to continue. One of the ways, and perhaps the only way, is the eventual abolition of tuition fees.

The New Democratic Party reaffirmed at its last convention its commitment to freezing tuition fees and their eventual abolition. It is you people who will be making those decisions, and I ask you to consider that seriously.

If you look at the situation on my campus where it comes to capital improvements, it has not been able to maintain and keep up with the needed repairs. Ask any disabled student what it is like to get around Lakehead University. They have to use the freight elevator to get to the cafeteria. This is an unacceptable situation. It is barbaric in a society that has reached our level of development.

I congratulate the government for some of the initiatives it has taken. They have addressed some of the needs, but it is not yet enough. Security on campus and other aspects, and guaranteed funding for some repairs have been needed and have been appreciated, but much more must be done. We have to look to the future. We have to see that the only way we are to succeed as a society is through the education of our people, and I do not see why it is arbitrarily decided that once you reach grade 13, that is the end of your ability to be educated and that you must therefore pay for it.

With plant closures across the province, we have an increasing demand for retraining by workers. We have to retool, and yet we are not doing it. If the government and this committee continues with an attitude that students have the ability to pay and have the money to pay, then we are going to be doing ourselves a disservice, and in the long run the only people they are going to be hurting are the people in Ontario.

Mr McLean: You did not mention anything about 60% funding, which was to be reinstituted. What are your comments with regard to that? I remember very clearly that one of the things we have to do is to get back to 60% funding for our education.

Mr Middleton: I am not quite sure what you mean by 60% funding.

Mr McLean: It is amazing how that has changed, because one of the people who was put on the Fair Tax Commission, a former board chairman of Metropolitan Toronto, was very clear that they wanted 60% funding. But when I asked the question in committee, what 60% funding she wanted, she did not know what it was all about. I guess nobody really knew what the 60% was all about, because you are unaware of it. Is that right?

Mr Middleton: I know there was a report issued by the Council of Ontario Universities, which is made up of the presidents of the various universities in Ontario, which had called for an increase in tuition fees to 40% of the actual cost of universities.

1350

Mr Sutherland: On a point of order, Mr Chair: I believe Mr McLean is referring to funding for the public secondary education system as a 60-40 between the provincial and municipal, and 60% does not apply in post-secondary education, where it is roughly already 80%.

Mr McLean: I do not think you are quite right, but anyhow I am not about to question you. I am more interested now in dealing with the fees that have gone up 8%. There was a commitment that they would be balanced and over time done away with. That is not happening.

Mr Middleton: No, it has not happened.

Mr McLean: What would you say to somebody who told you they would do that and in turn put on an 8% charge?

Mr Middleton: I have choice words and I have used them in the past. A breach of faith I think is probably the most diplomatic way I can put it. We had a great deal of reason to be delighted in September when the election occurred, but we were quickly disappointed. We realized that words and actions are not always the same thing. There was a great amount of disillusionment among university students with the entire system when we had a very strong commitment in policy in something a party had been saying for a great many years and it did not come out in --

Mr McLean: The other question I have is about young students. What emphasis would you place on our skills training?

Mr Middleton: A very high emphasis.

Mr McLean: Yes, I do too. I know when the colleges were instituted, skills development, skills training, was supposed to be one of their main thrusts. What is taking place in this area with regard to skills training?

Mr Middleton: It has become a very difficult situation for the colleges. For instance, at Confederation College they have had to eliminate some programs in computer skills development, and one program in particular that was extremely difficult to see go was for students with disabilities. That program had to be eliminated. It is impossible for universities and colleges to address the needs of society if they are not able to alter programs and to implement new programs. The only way you can do that is by properly funding the system.

Mr Sutherland: It is good to see you again, Ian. The last time was in Thunder Bay, when Lakehead was hosting the Ontario Federation of Students. I am glad to be back here. I should let you know that actually OFS is meeting with the Premier this afternoon to discuss the issues, and I think your comments about the system being underfunded are very accurate. You are reflecting a view we have heard in other presentations regarding post-secondary education, and we are hearing about a lot of issues. We have made some steps but there is still a lot more that needs to be done.

I think the commitment is there in terms of accessibility which, I think we need to remember, is a lot of issues. It is not only financial issues, it is also, as you mentioned, about disabled students and the barriers in terms of physically being able to get around a campus. It is the question of personal security in terms of women feeling safe walking around a campus at night from night classes. Those issues all come into it. It is in terms of having role models with faculty such as for engineering students.

I wanted to ask you a couple of specific questions. First of all, what percentage of students at Lakehead receive student assistance?

Mr Middleton: The last figure I saw, we had the highest percentage in the province. It is very close between us and Laurentian University in Sudbury, and it is approximately 55%.

Mr Sutherland: Okay. The other thing is, as you may be aware, the minister is currently undertaking a significant review of the assistance program and hopefully we will be able to build on some of the changes we saw previously, such as the removal of the primary residence in the calculation of parental resources and input into those decisions. Can you give us a sense, in your time at Lakehead here, of what the difference has been in class size, its increasing nature and maybe a few more comments on its impact on the quality of education?

Mr Middleton: For instance, it is an extra $131 this year to attend university, just at Lakehead. That is what the 8% means to students. If you look at the job market that we face as students, the jobs are not there. They do not have the ability to go out, work during the summer and save enough money to pay for the rest of their academic year. If you take a full course load it is almost impossible to hold a part-time job, although many do, and what suffers is their academics.

I have seen a change since I have been at Lakehead, and before that at Carleton University. It is becoming much more difficult for them to make ends meet. You have them dropping down to part-time to be able to supplement their incomes so that they are able to attend university. I was extremely pleased to see under the OSAP system that it is no longer available only for full-time students. It is now available for part-time students. That was an absolutely necessary change, but it still needs more work and the OSAP review -- the committee has not submitted its report yet, but it is a very encouraging sign that they are looking at and dealing with some of these issues in the OSAP system.

Mr Sutherland: Could you just comment again on the student-teacher ratio and the growing class sizes, what you feel the impact is on the actual quality of education? Are we seeing here, as we are at other colleges, that you do not have essay-type --

Mr Middleton: It has become absolutely fundamental for a professor to be able to test so you must have a multiple-choice-type question. There is a professor here who can attest to that as well. For a first-year sociology course where you have 250 students it is impossible for those people to go through an essay type of question. So you have a standard, rote, multiple choice and the learning experience is diminished.

Mrs Sullivan: How widespread is that?

Mr Middleton: It is quite widespread.

Mrs McLeod: I have a number of questions. We could spend a long time with it, Ian, and of course I am very familiar with the per student funding issues, having struggled with them for some time myself. There is a fundamental question there about the dollars per student and the size of the enrolments. We have experienced very large increases in enrolment without attempting to limit that. I wondered whether or not the OSAP is keeping pace. As I recall, if the OSAP funding was included in the per student funding, Ontario was actually first or second highest. Do you know whether or not that continues to be the case?

Mr Middleton: There was only a 7.6% increase in funding for the OSAP system last year, and an 8% increase in the actual level of tuition. So it is falling behind, and I have statistics to show that it has not kept up with the rate of inflation. For instance, the Ontario Federation of Students has figures showing that for OSAP to meet the actual needs of a student you need to have on a weekly basis $233 as the base funding level and it is much lower than that currently. So it is not funded to the level necessary to sustain students. It has improved slightly, but it is still not there yet.

Mrs McLeod: Let me ask about another part of the access question, whether there is a perceived limitation on the enrolment that is effectively taking place. As I was leaving, a study was going on for a new funding formula for the universities, corridor funding, to use the technical term, and I am wondering whether you see that as having had an effect of limiting enrolments either at Lakehead or other universities.

Mr Middleton: I believe it has fundamentally, because corridor funding creates situations where universities try to juggle their numbers and their BIU. For instance, at Guelph they are actually looking at trying to decrease enrolment by 15%. At Lakehead it was recommended that we cap enrolment at 4,500 students, but fortunately they did not cap it at 4,500 students because they want to keep their base income units, the BIUs, at about 8,000. So it creates a situation where universities do compete with one another and it also limits access to certain programs because universities receive more funding for more specialized and different types of programs. So if you wish to have a liberal arts education, then universities do not like to see that many liberal arts students come in because it is not counted the same as, say, an engineering student or a graduate student.

Mrs McLeod: I know that OFS will want to watch those per pupil figures very carefully because if there is an effective limitation on enrolments taking place, the per student funding figure will start to look much improved, when in fact it is a limitation on accessibility. You raise the issue of part-time students and that many students are having to work part-time and supplement their income.

You could argue the other side of that as being a positive trend for people to be able to access post-secondary education at the same time that they are in the workforce, and that this is a positive direction we are going to see more of in the future.

I have had some concerns all along that continuing education students and part-time students are really marginalized in the post-secondary system, so I am encouraged to think there is beginning to be more of that and I am wondering if there is real access for those students in the system as you see it?

Mr Middleton: I think it is still very difficult if you are an individual who wants to come back, say a mature student coming back into the system. The university system was designed not to meet the needs of those people. It was designed to meet the needs of somebody immediately leaving high school, going to school for three years and then getting out.

The realities have changed. The student population has changed. The demographics have changed. People are coming into the system for different things, and because of the structures that are still in place it is very difficult for those people to actually access the type of education that they need.

I would agree that they are being marginalized to a certain extent, although you might think that it is encouraging that people are able to work and go to university at the same time. If you want to get the most out of a university education, then I believe you should treat it like a full-time job because that is the amount of work it demands from you. Actually, it demands more than just eight hours a day. You should be able to do that, and the reality is that some people just are not able.

The Chair: Thank you for your presentation.

1400

THUNDER BAY CHAMBER OF COMMERCE

The Chair: I call on the Thunder Bay Chamber of Commerce to come forward, please. Would each gentleman identify himself for Hansard. We have a presentation for half an hour. After your presentation, there will be a period for the three parties to ask questions. As I noticed you just walked in and to give you an idea, if you talk for the 30 minutes there is no time for questions at the end. Welcome.

Mr Ringius: On behalf of the chamber, we would like to thank you for the opportunity to be here today and to give you some input, some thoughts from the northwestern Ontario business community.

I would like to introduce my associate, Jack Mallon. He is vice-president of finance for the chamber this year and will be making the bulk of the presentation. If there is something I can help with, I will be jumping in. Our presentation will not take up the half hour. It will follow probably good business guidelines.

Mr Mallon: Hello, everybody. I always try to thank people that come up to our fair community and take a look and see what we are all about. I know you are all busy people, I know this is a mandated thing, but it is nice that you are here and I hope you get to see what Thunder Bay is all about. We up here in the north are always having to inform, shall we say, the rest of Ontario and the rest of Canada just what we are all about. We are a pretty good community and we are pretty interested and a pretty integral part of the provincial Ontario government. So thank you for taking the time in coming up.

We are going to deal with maybe four or five topics. I must also qualify that David is in the insurance business and he is the president of the chamber, and I am in the advertising business, so finance is not what we do everyday except maybe read statements from time to time and hope that they are black and not red in our businesses. As part of our role of going through the executive and part of the training of representing the business community here in Thunder Bay, we take on these roles.

We want to start right off, as we have done consistently with anybody that we have had the opportunity of talking to about the finances or this type of topic, that we are part of the 280,000 business members of the Canadian Chamber of Commerce across this country, which at our convention last year in Edmonton adopted a policy that we are against deficits of any size with any form of government, municipal, federal or provincial; therefore, we feel as a chamber that you cannot spend your way out of things and that you have to live within your means.

Therefore, we have a program called the Deficit Diet Plan, and if you have not already received that document or heard about it, if you will let us know we will make sure that you get a copy of it. It is a complete program that has been endorsed by all the chambers of commerce across the country and all of its members. It has been going on for a year and it is just a crusade to tell people that deficit diets, or deficits, are just not the way to go.

With the current situation in Ontario, I know you all have your cases for it, but we just cannot endorse that and we just ask if you can start to work towards non-deficits, because sooner or later these things have to be paid for and our biggest fear is they are going to be paid for by our children and our grandchildren. It is not fair that we enjoy today and penalize the future generations. We are just totally against that as business people. We ask you emphatically, strongly, any way you want to put it, that you please consider that. Deficits are not the way to go. We have to live in this country and definitely in this province within our means. That goes for all forms of government and for all parties.

David, unless you want to add something. We have a complete kit on it and we would be happy to get it to you. I believe we even have a videotape on it, and it is growing quite well and gaining a lot of recognition across the country.

Just maybe one last point. I like the words "living within our means" and that seems to be the message that we are trying to put out. We have got to learn to live within our means. We cannot be pledging the future debt to our children.

I am sure you have heard this next point which is, I wrote down here, taxes. Obviously, I think we have just about had enough of taxes at all levels from all bodies, from municipal, federal, provincial, God knows who else. We have just about had it with the taxes. We, in the chamber, are a lot of the business.

In Thunder Bay we have a membership of around 900 businesses in a town that has about 4,000 registered businesses, and that includes -- I own three businesses, but I only have one of mine joining. We feel about 35% to 40% of the chamber of commerce is made up of the local business community. What we are saying is that the taxes are just getting to the point that when new people come to us they say, "Why should we get into business?"

We believe that small business especially is the future. That is what generates the jobs, and I think the statistics will bear that out, and when they start to understand the taxes and their business plans before they go out and get financing or equity financing or whatever, and they start to understand the employer health tax, what is going to come with the OHIP and what is going to come with the high personal taxes and tourism taxes and gas taxes and liquor taxes and everything else, it is just not being as well received or tolerated, I think, as it used to be.

We up here, especially in Thunder Bay and northwestern Ontario, depend a whole lot on the tourism and convention business. The fact is you are sitting in one of the main properties that benefits from that. These taxes are deterring -- we are only 43 miles from Minnesota, which is a market for us of a million to two million people, and we are only 500 miles by car from Milwaukee and Chicago, so tourism is very important to us, and these people, when they all of a sudden cross that border they start paying for our liquor and our gas and our hotel and the taxes that go along with it.

I know there are rebates, but how many of those things are actually utilized? When I sat on the tourism development committee for Tourism Ontario, it was mind-boggling to me how few people sent in for rebates on the provincial sales tax that they paid.

We just ask you to watch the tax situation. We hope that you understand that we are at the limit. David, do you want to add to that?

Mr Ringius: Northwestern Ontario Chambers of Commerce is an association of over 22 chambers in northwestern Ontario, and we meet at least once a year with cabinet. That has been a tradition for close to 50 years. We have met before. Time and time again that point comes forth, the gasoline tax.

In northwestern Ontario, road transportation is our only connection for a number of areas, and that is an area we would certainly like looked at. We were quite surprised after some consultative process that we thought was happening through Northern Ontario Remote Area Communications and Transportation that we have been listened to from that side. That budgetary item that increased the gas tax was certainly a setback to the business community, particularly the tourist industry.

1410

Mr Mallon: Just to add a couple of specifics to that: One of our vice-presidents is involved with transportation and each meeting that we go to, executive meetings and board meetings, it is amazing. Stuff coming from the west to go down to southern Ontario -- they are now shipping it right through the States just to avoid the taxes and the high cost of fuel. It is just now happening.

We all know that CP Rail has made a deal in the States and is bypassing Thunder Bay. Transportation is a pretty important part of our situation. Those are facts and we can verify them. That is what is happening with these taxes. The free entrepreneurs, the business people we represent always seem to find a way around this. I think it is awful that they are finding they have to go through the States and avoid spending their money here.

The other thing that I am not sure you are aware of: In the United States, the way we understand it, the transportation committee of our chamber has discovered that when they pay fuel taxes down there, the money actually goes into road improvements and bridges. We do not do that. It goes into the general fund in Canada and in Ontario.

We have been led to believe that along the lower part of Lake Superior -- if you have ever heard of the Lake Superior tour -- they are now building a super highway from Duluth, Minnesota, right over to Sault Ste Marie, Michigan. So the tourists that we have been enjoying, coming up here from Ohio and Illinois -- and they now come from as far away as Florida, to get away from the heat down there -- will they come to Thunder Bay? Will they stop at Duluth and take the super highway across? That is something that is starting to happen, and that has us very concerned as a tourism industry. David is going to handle the next part about the PST and the GST.

Mr Ringius: We certainly applaud the attempt by the government to look at collecting the provincial sales tax. Unfortunately, the route we are taking is probably going to be more cumbersome than it is for cost recovery.

We would like to see, and we encourage the government to investigate a way that the PST, when harmonized with GST, could be revenue-neutral. I know the GST touches a much broader base than the PST does, but I believe eventually, if the GST is here to stay, the quicker the provinces get on side and harmonize the quicker the whole issue will be passed. I think there was a political opportunity to implement it some time ago, and now it is going to be most difficult.

To try to collect it by sending bills in the mail I do not think makes a lot of sense, and I tend to agree with the mayors' meeting along that line. But we certainly would like to see the harmonization of the PST. Hopefully it will help level the playing field a little bit on the cross-border shopping issue. That is also an Ontario Chamber of Commerce policy. It was passed at the Peterborough, Ontario, chamber meeting in May of this year. I would think that would be consistent with the Canadian chamber meeting that is coming up in September. We would like to see harmonization of the PST.

Mr Mallon: It has become very obvious, I think, to the majority of Ontarians that GST is a fact of life. It is bad enough standing at the border. I cannot believe that people are actually -- I think they said they were going to hire 10 new people to give the rebates back or collect the PST. Who are we kidding? Let's get the thing blended. Let's start getting into the 1990s. I think that has to happen.

The next item we want to talk about is your credit rating as a province. Obviously, it is a bit of a spinoff, we think, from the deficit situation. I hope you people realize, and I am sure that you have heard this before -- if you have not you are going to hear it from us now -- that when your credit rating gets affected, so does ours; in a big way. Not only is it just the credit rating that we get, whether it is prime plus one, or prime plus three quarters, or prime plus one and a half, it also makes it more difficult for small business to go to banks and get dollars, especially in northern Ontario.

We get the spinoff. If the confidence is not there in the credit rating of the motherlode, the province, how can you expect it to be there for the business person? So it has an impact on us. I am just reinforcing that deficit thing. We are all in this together, and if we could just demonstrate the fiscal responsibility that goes along with running a province, I think we would all be a lot happier. David, do you want to add anything to that credit rating statement?

Mr Ringius: No, I guess it might tie in to the next part of the presentation which is about the consultative process. We were looking forward to some input. I do not believe there was a lot of input from the business community on the budget. As we found out in an all-party justice committee meeting last week, to which we made a presentation, the chamber of commerce was involved, and the fact was mentioned in the act, but we were not even consulted on that.

There were some ramifications there that made us a little leery because it put some importance on the chamber and its role in justifying what qualifies as a tourist operation or tourist business that could stay open on Sunday, and whether or not we would vote for a member or a non-member. The chamber's policy is that they would vote for a member only. It would have meant that we would be in some difficulty with non-members for not playing equally. So we ask that this consultative process continue and that it happens before the fact, and not after the fact.

Mr Mallon: The last item is competitiveness. As business people we understand what competitiveness is all about. We want to compete with each other, we want to compete with our American friends, and we want to compete in the marketplace, wherever that is. With high taxes and all these things that we are talking about, competitiveness is our future. It is what is going to create the jobs, or certainly a part of it.

I think it just adds to what David was saying. When you are going to do these kinds of things, if you could maybe consult. I do not care if it is the Ontario Chamber of Commerce, or whether you have these kinds of things, but listen to what we have to say. Hear us. We may not be right, but we would like to get some input into the competitiveness discussion. The last item we wanted to talk about was the handouts, the grants situation. David, did you want to lead into that?

Mr Ringius: Our position is that we think we can live without the grants, or at least have them capped. Luxury once enjoyed becomes a necessity. Once people are used to grants, they do not seem to use some of their own initiatives to get things rolling. The only type of grants we would like to see are those that are directly related to the creation of permanent jobs. If that can be qualified and analysed, then I think we could accept it. We would certainly like to make sure that any grants are of that nature.

Mr Mallon: We also realize there is another component: There are interest-free loans, or those where you do not pay on the principal, to start up new businesses. I think the Nor'Wester Resort is in that situation. I guess they will be creating 100, 150 jobs out there. It is a loan, but they do not have to make any interest payments for a year or two, to get them up on their feet. That makes sense to us. That has some permanency to it. We think that is the way you should be dealing with your grants or your handouts, rather than just giving money. They should be really thoroughly checked.

The other thing is the process. You really have to be involved with that in our business to appreciate how long it takes to go through the bureaucratic nightmare of trying to get a grant. "Really, if you can't afford it," we tell our clients, "Please, don't even do it, because the process is just not there to work with a person."

When I walk into a bank on Monday morning, and I want to talk to them about a program, I give them an outline, and I give them a business plan; I tell them what I am going to do, and what we are going to put in, and what this is going to generate for us. The bank I deal with, which happens to be the Royal Bank -- if they went any longer than 48 hours, I would probably go to another bank. But with you people, it is letters back and forth, and "He's on holidays," and "I can't get there."

It is the same thing with your licensing when new businesses are trying to open up. It is just incredible how long it takes. Not only are we against giving out money just willy-nilly -- I think you should take it more seriously, because you are part of the business community. When you start to work and get involved with businesses and development, you are a part of their business. So rather than have one or two people covering the whole north, why do you not put in some people who are involved -- maybe take a page out of the Federal Business Development Bank; they have advisors, retired people who can come in and work.

It is just a suggestion to you. We need each other. We are working together. We will create the jobs, you help us, and I think we will all win.

Mr Ringius: On the recessionary funds that are around to kick-start the economy, I talked with the construction association this morning and their feeling is that the timelines are too restrictive. They have not been receiving any bids for contracts at all because of the time constraints. I asked for the facts on it and they were not able to give me any, but I do not believe recessionary funding is producing the results you wanted from it. I would like you to reassess that, and make sure that those funds are there and that those timelines are not too rigid.

Mr Mallon: That is it.

1420

Mr Christopherson: I want to thank you very much, gentlemen, for your presentation. We do not always necessarily agree with chamber of commerce presentations, but we always enjoy the manner and the tone in which they are presented, and the professionalism.

My question is along the lines of the last issue that you touched on: the anti-recession program initiated by the government. As you know, we maintain that any government that took over and wanted to at least maintain the existing levels of programs and support services in this province was in for arguably between $7 billion and $8 billion. Only $1.5 billion of the deficit is actual new spending by our government.

Within that is the $700 million for the anti-recession program. You have already mentioned the time limits and the constraints, and we will follow up on that to see if there are any snags or bureaucratic problems at our end.

In light of the fact that Thunder Bay received a little over $32 million of that recessionary money -- and I understand it went for things like the Port Arthur General Hospital which got over $200,000; over $1 million to Old Fort William; almost $400,000 for Algonquin Avenue School; and a number of other major programs -- we have maintained that spending that money kick-starts the economy, but it is an investment in the future. It is an investment in the infrastructure we need to survive in the high value added economy that we are going to be fighting in globally down the road.

In light of the fact that you feel deficits should be avoided at all cost, from the Thunder Bay point of view, do you believe we should not have spent that kind of money here and that it would be more important to maintain a balanced budget or have a reduced deficit, as opposed to spending the money in the areas where we have spent it, with the goals we are trying to achieve?

Mr Mallon: That is a no-win answer, is it not?

Mr Christopherson: I tried not to frame it in a way that is unfair, but it really reflects the approach we have taken and I would like to hear how you would respond to that.

Mr Ringius: I guess our philosophy is that if it is being given out, we want our fair share. It is infrastructure that is being put in place, whether it works through transfer payments to the provinces or how it gets there.

Some of these things, particularly on the school side, are important. And Old Fort William, the investment in tourism, is long-term. However, that gets back to my earlier comments on the funds. Are they doing what they were set out to do? Are they being spent? My understanding is that they are not going to meet the guidelines and therefore the money is not going to be there anyway.

Mr Christopherson: I am not sure that is necessarily the case. We will check that, and if you are correct we will do everything we can to correct it. But assuming that is not the problem, philosophically, what is the priority, the $32-million investment in the infrastructure of Thunder Bay or fighting the deficit?

Mr Mallon: Since the number was $700 million, we just got our share at the $32 million. What were you going to give us, nothing? You put the $700 million out on the line; that is our share. There are a thousand things you could have put it into and I do not think it is fair that we name whom you give it to.

The fort happens to be something that I spent a lot of my company and my staff time at. The old fort is an organization that has been looked at by all members of Parliament and all different parties over the years because it generates a lot of jobs. The money that went in there fast-tracked some items. If you really want to look at the old fort, $1 million is just a pimple compared to what it really needs.

I guess really what we are trying to say is, let's not go back on the $700 million that you have spent. Let's just not do it any more. We cannot afford it. Or if you are going to do it, somebody has to pay for it sooner or later. It is a no-win thing for us. Please just do not throw out the dollars. Sure, we need the stuff. We could give you a list here of a thousand things that we need -- the other hospitals, our sewage treatment, our blue box, those kinds of things. There are a lot of good, worthy things that need the dollars. We cannot afford them in this province.

Mrs Sullivan: I was very interested in some of the things you talked about in your brief, including the effect of the gas tax not only on freight but on personal travel in the north. I think that is something we have not had too much information about this morning and it was useful to have it on the record.

I am wondering if you see anything in this budget -- you talked about competitiveness -- that provides incentives for new capital formation or incentives for increasing productivity or incentives for business development or for permanent long-term job creation, and will have a significant effect in this community over the longer term.

Mr Mallon: Can we get back to you on that? David, did you want to add anything?

Mr Ringius: No. I thought I had something circled on that. Primarily we are concerned about the deficit and we are concerned about the effect of the gasoline tax on the tourist trade. We thought that was a disincentive. We did not see any capital-intensive program there, and again, with the incentives that were given out on the recessionary funding, that is it. So I do not have a comment on that.

Mrs Sullivan: You talked about the effect of taxation. Are you concerned at all about the government's proposal for a minimum corporate tax?

Mr Mallon: Absolutely.

Mrs Sullivan: Would you like to speak about that?

Mr Mallon: I have a question. This is your livelihood, this is not our livelihood, so we took these five and --

Mrs Sullivan: That is fine.

Mr Mallon: Would the minimum tax be on someone who does not make a profit? If I did $1 million in sales and the minimum tax was 5%, would I get a bill for $50,000? Is that what you are saying to me?

Mrs Sullivan: We do not know.

Mr Mallon: Whether I make money or lose money?

Mrs McLeod: It has not been decided.

Mr Mahoney: But that might be.

Mr Mallon: I think the structure we have is that if you make profits and you do not reinvest them back in or whatever, you should pay taxes on your profits. I think that is the free enterprise system and it has to be sensitive to income.

I am talking as an employer. I just signed a cheque today. I cannot believe how much it has gone up this year and I cannot believe how many cheques I am signing to all levels of government. It is incredible. It really bothers me. I have never noticed that before. I am proud to pay corporation taxes. In the 21 years that I have run a business -- and I have 15 people -- we have not been able to pay taxes every year. I consider it a victory when we can. I would be proud to pay taxes.

Mr Mahoney: Just on that line, the standard NDP rhetoric, both before the election and even now, is that there are corporations that are not paying taxes for various reasons. They do not discuss the reasons: deductions or research and development or any of that kind of stuff. How does your group react to that kind of statement, that they can get all the money they need out of the corporate sector?

Mr Ringius: Certainly we would not want all of the tax money to come out of corporations, because it is just passed down the line to the consumer and the consumer is going to pay anyway. Taxes are part of your cost of doing business and they affect your bottom line. In discussions at the board level in the chamber was that they were not totally opposed to having some minimum tax, provided there was a baseline. We do not mind paying a fair share, but it certainly would have to be reasonable, and not all of the sourcing of new tax revenue -- that should be looked at by reducing programs.

Mr McLean: I think what you fellows should do is get a copy of Hansard today, because there are very few people in this area who agree with your philosophy. We have had a businessman who has appeared here and wants grants for small business, he wants new venture loans, he wants five years with no interest. What percentage of business people do you feel you represent?

Mr Mallon: I said that we have over 900 businesses that are registered. Using the economic development corporation's mailing list, there are about 4,300 or 4,400 businesses that are on the tax rolls, but a lot of them are owned by the same person. You may have a business to own the building and one to own the operating company. So we have pegged ourselves at about 35% to 40%. I wonder if that person was a member of the chamber.

Mr McLean: I have no idea.

I want to say that the gas tax is another important item. We had a person here this morning who indicated that he sees no problem with raising the gas tax and diesel fuel.

Mr Mallon: Who was that?

Mr McLean: We wanted to indicate to him what he thought about the tourism business and about the transport business, but he is an environmentalist without worrying about tourism. So there are some real concerns here and I am glad to see the cross-section of delegations we are getting, because it certainly is an eye-opener. That is what this process is all about.

1430

Mr Mallon: Those two people you refer to, do they have the 900 businesses behind them to support what we are telling you today? That is my first question. I would like to get their names so we can go have a talk with them and maybe we will learn something. We have committees, by the way. What we are giving you is what our transportation committee, what our finance committee, what our environment committee -- we have committees with people who are involved on both sides of the tracks, so we would be happy to put those two together.

Mr B. Ward: Do you have an environmentalist group?

Mr Mallon: We have an environment committee.

Mr Ringius: We certainly are sensitive to the environmental issues. There has to be a tying or a correlation between business and environment. After all, we are citizens first. I think every one of us takes the environment seriously, but we also have to stay in business. I can well accept the fact that we as Canadians are probably the highest utilizers of gasoline. If one way to curb that is to drive the price up, I do not know. I think there have to be other developments in transportation that will take the vehicles off the highways. We do not have that infrastructure. Until we have that type of infrastructure in place we have to use automobiles and trucks to get around, and in northwestern Ontario it is trucks.

Mr McLean: It was interesting today. With regard to the increase in gasoline prices that have come along, there has not been one person who has said that the north is being challenged, it is being unfair. I think one person said it should be equalled across the province, but very few people have said anything detrimental with regard to the increased taxation on gas.

Mr Ringius: We have, certainly, through our tourist committee. One of the statistics that we have is that intertravel in Ontario is down. I believe that has a lot to do with the gasoline tax. People are not travelling because of that.

Mr Jamison: What about right here?

Mr Ringius: Tourism is up at the border slightly, 21%, but you have to understand where it came from. It does not take many more vehicles to bring it up 21%, so that is a highlight. But that is Americans coming here. What we are talking about is the intertravel from Ontarians to Ontario.

The Chair: I am sorry, gentlemen, but time has run out.

Mr Mallon: I am sorry, you can turn this off, but on the tourism component, our city and the MTR have to be given a lot of credit, because we have a very focused plan now for increasing tourism and it is working.

Mr B. Ward: Up 21%, that is great.

The Chair: We appreciate your presentation here. Thank you very much.

CITIZENS OF ATIKOKAN

The Chair: Do we have the Citizens of Atikokan present yet?

Mr Lindsay: Yes, I am from Atikokan. My name is David Lindsay. This is my brother Bill. I want to thank you for having us here and allowing us to speak. I have to apologize, because I am totally unprepared. I did not find out until Thursday that I was supposed to be here on Monday. I worked Thursday, Friday, Saturday and Sunday, about 14 to 16 hours a day. In other words, I am completely and totally unprepared, but I am going to try to say what I have to say.

The reason I am here is because I am very annoyed. If I have a slip of the tongue occasionally and I say a foul word, forgive me, but I have been working on the water for a long time around men who are more concerned with content as opposed to the quality of their speech and it rubs off on me. I really wonder why these committee meetings are being held. What is the problem with this budget? I have never seen a budget in this entire province that has caused as much trouble as this budget seems to have. The media seems to report every time somebody complains about the thing.

I was not ready to come here on Thursday when I found out about it and I was going to pass it up, but the reason I decided to is because there are some things I want to say that I have to say. What I would like to do right now is just ask a simple question to anybody: Why are these hearings being held?

The Chair: I would say that when it comes to question period you can reply to the members in the three parties, unless you want to go right into question period now.

Mr Mahoney: I think it is a good question.

The Chair: Okay, we will have each party give one definition of it then.

Mr D. Lindsay: Would you like to answer it, Mr Mahoney?

Mr Mahoney: I do not have an answer. I think it is a waste of time, a waste of money. I agree with you. I am here doing my job, but I do not think we should be here.

Mr B. Ward: I think what happened is in the Legislature the Conservatives were having a filibuster which was holding up legislation. They were playing by the rules, because it is allowed, but they were holding up legislation and to break that filibuster -- and you can correct me if I am wrong, Bill -- it was agreed that these hearings would be heard and we would go throughout the province over the month of August to listen to people's views about the budget.

Mr D. Lindsay: This was just to get the Legislature back on track. Forgive me for asking such a rhetorical question, but the truth of the matter is, there are some things that have to be said. For starters, I work damned hard; I work damned near seven days a week, approximately 16 hours a day. I will give you a quick background of me.

I spent nine years in the service of my country. When I got out of the Canadian navy I found out that it was a lot tougher outside the business than it was inside. I ended up going into business for myself and right now I am a businessman, entrepreneur, whatever you want to call it. I am one of my town's few exporters. I produce a good product and I introduced a new industry to northwestern Ontario and I have taken it from there.

I try to keep up with politics; I try to keep an eye on what you people, our representatives, are doing. From what I see of this budget, this budget is probably the only budget I have ever seen that has actually anticipated what is going to occur. It looked at a recession, it realized that there was going to be a lack of income and that the output for social services would have to be increased. They anticipated it.

A couple weeks ago I heard Don Mazankowski complaining that the reason the federal government was looking at a record deficit this year was because it failed to anticipate the lack of income and the extra payouts in social payments. But there was not one person who argued about what he had to say. There was nobody who complained.

This budget came down; it was totally complained about; the Legislature was stopped. How much money did that cost our government? This is the point I am trying to make. There are certain things that have to work here and there is a smooth way they have to be brought about. I feel that the issue of the budget has been totally blown out of proportion. I do not know who is to blame for that. I suppose it is the media for paying so much attention to it. But I have looked at this budget as closely as I can with as much expertise as I have, which I have to admit is not as much as some economists might have.

I was lucky enough a few months ago to read an article by John Kenneth Galbraith in the Globe and Mail. He praised the budget. This is a man who has counselled American presidential administrations on the economy. He is a professor of economics at Harvard. I am sure this fellow knows what he is talking about and he praised this budget. There are a lot of petty complaints occurring because of this budget. This pettiness is being blown out of proportion and it is costing me, a taxpayer, a lot of money.

I see people complaining that there is too much money being spent for social reasons. All I know is that when I was trying to introduce this new technology I deal with in northwestern Ontario, I did not get anywhere. I did not get any help from the Ministry of Northern Development; I did not get any help from the Ministry of Industry, Trade and Technology; I did not get help from any of these provincial or federal agencies that purport to do that.

1440

I ran into a confrontational system. I beat it, but I beat it at a cost to my family. I had to run my family into poverty for over three years to get my business going, because I was not going to let go of the damned thing. I had to go on welfare last fall, that is how bad it got, and I ran into a welfare system that was totally confrontational and antagonistic.

I see this budget, and part of the money for this budget is to reform the system. Now how the hell are people like me supposed to drag ourselves back up on our feet and introduce new business to this place, introduce economic vitality to this area?

Let me tell you about this area, for you guys who are not from the north. This is the Third World up here. It is. You guys can sit around in Thunder Bay or wherever, but you go out of Thunder Bay 30 or 40 miles and you are in the Third World. You are looking at a Third World economy where big money comes in, extracts our resources, leaves, and leaves nothing behind.

I live in Atikokan. Atikokan has two of the biggest holes in the ground that exist in the entire world as testimony of this. They do not even have a park in that town for women to take their kids to in the summertime. That is what we put up with up here.

I have looked at the different social aspects of this budget, where people have complained that too much money is being spent on social spending, and from what I see, the reform that is going to be made because of this budget and the extra costs that are going to occur because of this budget are to help people like me. I am a Canadian. I believe in this country. I am going to stay here and I am going to fight it out. If not, I would have gone to the United States long ago. I have had offers to go to the States and work, but we have a good country. I seriously believe this budget is in the right direction.

Another point I want to make is that if I were to use an analogy, I would look at all the people of our province as a family, and there are so many mouths to feed. Suddenly, the amount of income that you are used to is cut off or slowed down and you have to make some hard decisions. What are your options? First, you have the option to stop feeding certain mouths. With hard, stone-cold people, it tends to be the smallest and the weakest members of the family who are kicked out and told to fend for themselves. Or you could reduce everybody's feeding and share it. Or you could go into a deficit position and just keep feeding everybody and keep them healthy and keep them strong, because you know that the family, if it is held together during this rough time, will stay strong and carry on for the future. It is as simple as that.

When I look at this budget, that is what I see has happened. The government that is in place right now has chosen to help the people of this province during a rough time in hopes of better times. Whether those better times come or not, I do not know. I have been reading some pretty dark and gloomy things about this recession and how it has been carrying on. I have been reading that companies that are shutting down and layoffs that are occurring are not temporary, that these things are really permanent problems and that we are going to have to get around them.

I am at a standstill here. Give me a moment to refer to my notes. These notes here are not really notes, they are just chicken scratches I threw down on my way here.

The Chair: What we could do is, the three parties can ask questions and you can give the replies of how you feel and different particulars. We will be asking the questions and maybe that will get you on track, because we have five minutes for each party for asking question on all of the budget effects. That was the idea of these hearings when we did come out: How does the budget affect you?

Mr Mahoney: For someone who was not prepared, I think you articulated your concerns and your positions quite well. Let me just expand, if I can, on the comments about your first question to us: Why are we here and why are we spending all this money talking about the budget? We, as a party, orchestrated our own tour of the province through our own caucus services facilities, went out and talked to people and invited people from all walks of life to come and talk to us. I think we wound up publishing a report which was very substantive and helpful for us to understand the budget and for the people we talked to to express their concerns and/or their support. We actually looked for both and found, in some cases, that there was both.

I want to take your analogy of the family a little bit further, though. You say you do not understand what is wrong with the budget and you were not prepared until somebody called you on Thursday. Who was that, by the way, who called and asked you to appear?

Mr D. Lindsay: I am trying to think of her name right now. I cannot. She was from Toronto.

Mr Sutherland: Monica Marshall?

Mr D. Lindsay: I think it was a McLean-type name.

Mr Mahoney: Al McLean? Somebody from Queen's Park called and asked you. Why would that be?

Mr D. Lindsay: I was at a social gathering a few months ago.

Mr Mahoney: A political gathering?

Mr D. Lindsay: No, it was social. Somebody who I suspect was probably pretty political approached me and we started talking about the budget. He pulled this out and said, "If you have something to say, here, sign this and I will send it in for you." That is what occurred. I had kind of put it behind me because I am going through some very difficult times in my business right now.

Mr Mahoney: With that aside, let me ask you then about the family analogy. How long can you carry on with that? One of the real concerns I have is that notwithstanding the fact that I think we could be doing more productive things for the people of Ontario than what we are doing on this tour, notwithstanding that fact, now that we are here, we should try to accomplish something.

One of the big concerns I have about the budget is the fact that if each year you ran your business the way this government is planning its years in office, your business would not be around at the end of that term. Plain and simple, what they are doing is taking the deficit, which is an overdraft, and, at the end of each year, paying that overdraft off by putting it on top of the debt, which is the mortgage, and then they are borrowing some more on an overdraft and doing it again next year. The total debt the provincial coffers face will rise from $39 billion up to a minimum of $76 billion, unless their revenue projections are high, which I think they are, and then it could be $80 billion or $85 billion. You could double the debt in the first term of this government.

Then there is your debt service. You understand. You are a businessman. You have to pay the loans, you have to pay for that debt, so in four or five years you are going to go from carrying a $39-billion mortgage and the payments that takes to carrying an $80-billion mortgage and the payments that takes. It is double.

Mr B. Lindsay: May I say something?

Mr Mahoney: Is that good long-term fiscal planning and is that how you would run your business? I do not mind if one or both answer the question.

Mr B. Lindsay: First of all, an analogy should fall on friendly ears to work. Second, I think we made that clear in that this government's budget has prepared for these things, has prepared for recessionary times, has prepared for a deficit.

The present government in Ottawa and other provincial governments which have jumped on this budget-cutting bandwagon have not prepared and are showing up now with "unforeseen" deficits which have to be taken care of exactly the same way your projected deficits for this province will have to be taken care of. So our question is, which is better?

Mr Mahoney: Oh, I do not use the federal government as an example of fiscal responsibility, believe me.

Mr B. Lindsay: It would be unwise to do so.

Mr Mahoney: I certainly do not, but what you are facing with this is the same kind of mentality, with huge deficits each year being paid off by simply placing them on the capital debt of the province, gentlemen.

1450

Mr B. Murdoch: First of all, I would like to say I do not think it is a waste of time being here and listening to you people and all the other people who have been here today.

You asked a question to start. I felt it was better to answer it when the questions came up than get into a discussion then, but Mr Ward basically explained what happened. Our party did not go along with deficit funding and we felt it was not a good budget. We felt the people of Ontario should have a chance to tell us whether they felt it was a good budget or not, when it was such a drastic change from what we had been used to.

This is the process by which you bring government to the people. That is why we do have committees, and this committee is here to hear the concerns of the people. It is ironic enough that at least five of the presentations we have had, five or more, have all congratulated the government for doing this, so some people do like the idea of this coming here. Whether you do or not, well, that is your business. But that is the reason we are here.

Government costs money. That is understandable. If you are going to have government, you are going to have to pay for it. If you have democracy, democracy is not free either. It costs money to bring committees out to Ontario. Ontario is a big place. That is the reason we are here.

I would like to ask you, though, just to go back to what Mr Mahoney said, could you run your business in a deficit every year? Is that good fiscal responsibility? How would you stay in business? I would like to know, and I am sure this government would like to know also, how you are going to stay in business if you run a deficit every year.

Mr D. Lindsay: I have been running a deficit since I got out of the navy seven years ago. What results is you pay your debts off when you get the chance to pay them off, and the way you end up paying them off is by reducing your spending elsewhere. You start driving an older car instead of a new car. You start driving less far and less extravagantly than you did before. You start eating moose instead of beef. You use firewood instead of oil or natural gas. All of these things contribute to a lower standard of living.

What I have watched in our government is nothing but extravagant spending ever since I became politicized. I never became politicized until I got out of the navy and I wanted to know why the hell I could not get a God-damned job. It was as simple as that. I also wanted to know why there were so many damned poor people in this country. I was wondering why I was becoming one of them very quickly.

Mr B. Murdoch: That is what we wanted them to do, you know, to look at their budget. They bring lots of money into Queen's Park. We are saying they do not have to go into deficit funding and they could have kept up the same programs and maybe looked at what they were doing, exactly like you said. Unfortunately, down our way moose would cost more than beef in Toronto, but other than that, I think we could have done some of the things you are talking about. But they chose not to do that. They chose to put more money into the budget and deficit funding.

Mr D. Lindsay: This still does not detract from one of the original things I said. This is going to be a deficit budget, yes, but they have anticipated that and they are preparing for it. There is not a government in this country that I have seen that has done that, that has come out and said, "We're going to do this." What we have is a federal government that says it is going to GST us and that is going to be used to kill a deficit, but the deficit is increasing at a record rate this year.

In regard to government spending, the example I tried to show you was that if I have to reduce my spending to pay my debts, then I start driving older vehicles and I start doing more manual labour and things like that. That is where we have to cut. We have to become more efficient. What I see in our government, what I have seen, as I said, in the past seven years is the fact that there are a lot of very inefficient uses of money in the government.

Mr B. Murdoch: I agree with you.

Mr D. Lindsay: I have talked to people from SARC, because they were concerned with what I went through, because I had one hell of a time with the welfare system. My family was down and out. We tried to get welfare and all they said to us was, "Sure, go ahead and sell your business and we'll let you go on welfare." I had $150,000 worth of fish sitting in the water and this is the way they looked at it. The fish were unsellable because they were too small, but that made no difference to them. They were very antagonistic towards me. These are the things that have to be changed.

There are training programs that exist in this province and in this country which are nothing but a façade. They are posters on the wall and they do not go any further than that. I am serious about that. I came out of the navy and I was trained to the degree of damned near an engineer and I could not tap into any one of those programs to get training. It was as simple as that. I had to revert to minimum wage jobs, working on dangerous sites.

When I look at this budget I see that all these problems I ran into while trying to survive in this country since I left the skirt of the Canadian navy, which had taken care of me all these years -- and when I say survive, I mean it; survive; I ran into all those problems -- when I look at this budget, it appears most of these problems are going to be addressed.

If you want to judge the budget, you have to turn around and wait for a few years and judge it then. But as for right now, as far as I can see, it is a good budget. As for the deficit, this government seems to be on the right way of reducing the deficit and the cost of government. I am sorry; I should not say reducing the deficit. I should say reducing the cost of government.

The Chair: We have to get down to the last questions from the government.

Mr Christopherson: Thank you, gentlemen, for probably one of the most passionate, articulate presentations that we have had so far. It is certainly heartfelt, and we thank you for that.

I think it is also important to clearly establish and to recognize, in terms of how we got here, that while it was the third party that held up the House to ensure it got its demand that these budget hearings take place, it is interesting to hear the official opposition now take such a strong line on whether they should or should not. At the time, I think they were balanced nicely on the fence and were not taking a position.

We make no bones about the fact that an arrangement was made. The Tories had a legitimate legislative right to do what they did, but they have to bear responsibility for that. We then negotiated that a number of other pieces of important legislation would be moved through the system and that we would go into these hearings.

I would say they probably did the right thing for the wrong reason, because in the final analysis, most people coming in are saying they appreciate the chance. I think all of us from all the parties will reflect, when we are done, on whether this is something we should do after every budget, whether there is an actual return. I think we need to be open-minded about that and set aside the politics of the issue.

My question to you, sir, is very direct. The philosophy, obviously, that we have followed is what is called Keynesian economics, where you increase spending during rough times to feed the family, to use your example. The other side of that equation is that once you are through the rough times and there is enough income to ensure that the basic needs of food, etc, are met, you begin to cut back on some of those other areas where you now can do so without hurting people.

In your opinion are Ontarians, particularly those from the north and the northwest, prepared to accept, as we start to strengthen as an economy, that those kinds of cutbacks will take place? And do you think they are prepared to accept that from an NDP government?

Mr D. Lindsay: I believe so. The only example I can point to right now in this short time is that I come from the Attorney General's riding, and he had an article in our paper mentioning how he had cut back in his own ministry. I believe he saved the province about $7 million by cutting out free executive lunches and free chauffeur service to Supreme Court judges. I applaud him on that. We do not need that kind of extravagance during these kinds of hard times. I am sure there are a lot of other teak and mahogany offices that could use a bit of plywood in them too. It is as simple as that. This is where the money has to be saved.

Mr B. Lindsay: There is a lot of chipboard in this riding.

Mr D. Lindsay: I guess that is all there is to say on that point.

The Chair: You have two minutes left.

Mr Mahoney: Have you guys got teak and mahogany in your office?

Mr Christopherson: No, we have just got too much Mahoney.

Ms M. Ward: There is a lot of sound and fury about the deficit and you are saying, basically, "What's it all about?" I wonder if you are aware, and you probably are, that the Liberal and the Conservative governments ran deficits throughout most of the 1980s -- 1982, 1983, right up to 1988 and 1989. Why they are making so much sound and fury, as I say, about this now is rather questionable. Do you have any comments on that?

Mr D. Lindsay: I think it is just a simple case of trying to destroy the character of a government before it even gets started. Like I said, I was politicized through a very mean system. I am serious. There are a lot of people who have gone through what I have gone through. The only difference between me and them, I think, is I am a little bit more resolute and I am a little bit tougher. I think it probably had something to do with some of the people I had to put up with when I was in the service.

I have a lot of farmer friends and I have watched what has gone on in places like Saskatchewan. I have watched the deficit grow there during a non-recessionary period, when the present government took over from a balanced budget. What I do not understand is that the Premier of that province stood up in open criticism of the Premier of this province when he brought down his budget. To me that is complete hypocrisy. It is grandstanding and it serves a purpose. I think the only purpose it stands to serve is to set up headlines and to try to misinform a general public that tends to be kind of apathetic about what their politicians do. I am very serious about that.

The Chair: Okay, sir. We have run out of time. We appreciate the presentation you have. Even though it was not all written out, you had it all memorized, what you wanted to say.

Mr D. Lindsay: I fumed about these things over and over again, many times.

The Chair: Thank you very much for attending this standing committee.

Mr D. Lindsay: Thank you for having me.

Mr Mahoney: The government would love to have you on its team, guys. You did a great job.

Mr B. Lindsay: Thank you very much. Maybe we should talk later.

1500

DAVID RAMSAY

The Chair: David Ramsay, come forward, please. Welcome to the standing committee on finance and economics and the budget hearings. You have 15 minutes.

Mr Ramsay: I will talk fast.

Ontarians face serious economic challenges. With the loss of an estimated 250,000 manufacturing jobs in the last few years and a projected loss of 184,000 manufacturing jobs in this year alone, with over 10,000 business and personal bankruptcies in Ontario in 1990 and huge increases in individual and family need for social assistance -- for example, in my community here in Thunder Bay, there has been a 47% increase in welfare recipients from last year -- the challenge to know how to best respond must be truly staggering for those of you in government.

I join with others who applaud this all-party committee of Queen's Park for its interest in hearing citizen reaction to the 1991 Ontario budget and their evaluation of how well this blueprint will meet the challenge of providing essential services to the public while at the same time not destroying the means by which the money needed to fund these services is created.

The general malaise experienced by many people who feel they have elected politicians who ignore them once they have gained power is counteracted, I believe, by this precedent-setting action of debating the budget with us, the public. If after this consultation you as politicians demonstrate how this has impacted on your actions, you can be credited for contributing to the restoration of democracy our society currently lacks.

Allow me to put my comments in context. Through a Canada Employment seat purchase, I have been employed by Confederation Community College to provide life skills and job readiness training for the past six years to people in our community who for a variety of causes are unemployed. When I read the 1991 Ontario budget, it was with their interests and their needs in mind, and these provided the criteria by which I evaluated it.

The other influences I am moved by are the imperatives that my Christian faith demands. I concur with the statements issued by the United Church and the Canadian Conference of Catholic Bishops in recent years regarding the immorality of fighting inflation or deficits by neglecting the basic human needs of those who are poor among us, and all governments' refusal to address economic, structural injustices that create poverty. Not only has the gap between the poor and the rich increased, with those of us who are rich controlling more and more of the nation's income -- and I put myself in the category of the rich -- but there are still a considerable number of poor people, even with our increased income-producing programs.

The myth that people are poor because of their own mismanagement, just like that of people being unemployed because it is their fault, has been proven false by many social scientists. The National Council on Welfare, a citizens' advisory board to the Minister of National Health and Welfare, has completed many such studies, which I have cited in the appendix to this document. My own experience and contact with over several hundred unemployed people during the course of my work provides me with further evidence that unemployment and poverty are largely results of government policies that place a priority on deficit reduction and budget balancing, rather than on the dignity, health, education and skills development of our most precious resource, that of human beings.

As a province, we cannot run a budget the way a business firm has to. To cut production costs, it has to find a way to reduce its largest expense, which is either a worker's salary or position when the maximum efficiency is achieved. A government that has undertaken to look after the care and feeding of all its citizens, such as I believe Ontario has done, cannot dismiss its workers to have someone else look after them. The government is that someone else.

I judge the budget, then, not by whether it is politically feasible or acceptable, whether it conforms to economic principles or even to my own partisan views, but its contribution to the advancement of human values, dignity, development of human resources and security of both the individual and our communities.

To make the deficit the priority seems logical in that to spend more than is made does not balance the books. It also appears moral in that no one wants to saddle a future generation with debts. However, I ask you, is it moral to deny a family member an education, health care, or income to purchase basic necessities like food and shelter in order to balance our books? Who among us would do this to someone we are responsible for? Is it logical to make balancing the books the first priority when to do so means creating more unemployment, or to not help small businesses avoid bankruptcy due to high interest rates and thus lose revenue raised through taxes?

A report of the 1987 Senate subcommittee on training and employment, a document that I have with me, found after extensive consultation with business, labour, educators in Canada and in West Germany, France, Britain that: "It costs more to keep someone unemployed than to create a job for that person where they produce a needed good and/or service. In 1985 alone, unemployment cost governments in Canada $26.28 billion, or approximately $14,600 for each jobless Canadian."

I believe we must remember history in order to avoid repeating fatal mistakes. From 1942 to 1945, Canadian government spending increased to 30% of the gross national product, which is equivalent to approximately $150 billion today. Federal budget deficits averaged 21% of the gross national product, the equivalent of deficits today of over $100 billion. In 1945, the national debt was four times what it was in 1939, which is equivalent to a national debt today of over $800 billion. These deficits, however, reduced unemployment from 22% to nearly zero. The years following this deficit, 1946 to 1970, if you carefully explore the history books, prove to be the most prosperous and stable in Canadian history due to low unemployment and higher productivity of goods and services. As a matter of fact, the first Bank of Canada governor, Graham Towers, stated in 1942 to his boss, the minister of finance, that government war expenditure on a sufficient scale can produce full employment.

1510

This is not an argument to put the economy on a permanent war footing in order to create employment. Anyone in this room who knows me knows I would never argue that. The United States and Soviet economies, which are so structured, are evidence enough to convince us that economic growth, sustenance of basic services or maintenance of employment cannot be obtained in this way. We see the collapse of these economies every day.

Instead, I would concur with the 1987 Senate subcommittee on training and employment when it recommended a program of job creation plus training. I think this is a very significant difference from what we have had with the Canadian jobs strategies, to revitalize our economy, to reduce unemployment and create increased needed goods and services. Job creation, plus training, is successful if it results in the development of a clear, useful end product or service and helps workers to produce useful skills. The 1982 Economic Council of Canada report says that job training without the possibility of employment at the end only leads to frustration, cynicism and no increased productivity. The last presenter, I think, made personal reference to his own experience. It must be done in the context of job creation where meaningful, useful work produces needed services and products.

I have a list of examples to give you. We need construction of low-cost housing; we need to restore existing housing stock; we need to restore our infrastructure in our cities, our watermains and roads; we need to increase our tourist facilities; we need manpower for reforestation, for repairing and double-tracking railroads and highways, for home care, for eradication of illiteracy, which some of you undoubtedly know is now at 20% of our adult population, for provision of day care, for environmental restoration and yes, for training of peacekeeping forces.

In addition to the economic value, a job-creation-with-training approach not only lowers the unemployment rate without increasing the deficit, increasing inflation or the tax rate, it prevents the social costs of unemployment as well. The senators' report, after reviewing the available literature, concludes that there is a measurable causal link between unemployment and mortality, suicide, family breakdown, alcoholism, violent crime, juvenile delinquency, cardiovascular disease and mental hospital and prison admissions. My own work with the unemployed can also testify to this link.

The Senate committee, certainly no bastion of socialist thought, since I do not believe any socialist has ever been appointed to it, the Economic Council of Canada and Informetrica tested out this idea in a computer-simulated program. The model assumed created 900,000 new jobs in 1985, thus dropping the unemployment rate from 8.5% to below 2% in that year. It determined that consumer consumption, business investment and the gross national product would all increase and that there would be no significant inflation as a result of these proposals and importantly, no addition to the deficit since government revenues would increase while government expenses would decrease. I have submitted with my report the appendices from these two institutions indicating the computer model's findings.

This computer model experiment also coincides with the findings of MIT and Harvard economists Blanchard and Summers in their studies of western European economies that "each 1% point reduction in unemployment in Europe would make possible a reduction of 4% in tax rates because of the reduced need for social welfare expenditures and the enlarged tax base as output expanded." That article is also appended.

Improvements to the budget: First of all, I would make you aware of the famous Pogo dictum that has often been quoted, "I have seen the enemy and it is us." I apologize to the cartoonist if I have not quite got it right, but I think you catch my drift.

What I mean by this is that I have a responsibility to contribute in creating more revenue for the provincial government to make use of and coincidentally, check those personal choices I make that place more demand for government income or services. It is clear to me that outshopping is devastating my local community tax base, my retail neighbour and eventually the employability of my children. This is something I have in my control, to shop whenever I can for Canadian produced goods and services.

My own wage demands can be restricted to fair requests. As a member of OPSEU, the Ontario Public Service Employees Union, I am paid directly from government revenue. Although it is tempting to follow the example of the 1974 federal parliamentarians who voted themselves a 50% increase -- which was passed, by the way, by all parliamentarians saving Stanley Knowles -- I can begin to distinguish between my needs and my wants. I have thus written to my provincial union executive proposing that we as a bargaining unit this year reflect on the adequate income and benefits we enjoy and place our demands in the context of the needs of our community.

In my profession we enjoy the highest average income, which is $45,409 in this community, and in my particular workplace over 50% of my fellow faculty members have an average salary several thousand dollars greater than this. I believe it is time for us to say with all honesty, "We are rich enough," and that more does not equate to a better quality of life.

Second, I urge the provincial government to redress those structural deficiencies it has constitutional power to do so. By eliminating provincial income tax for those 700 families earning less than $22,500 is one such measure. To shift that cost to those of us who could well afford to make up for the lost revenue is an act of justice.

The Vice-Chair: Mr Ramsay, could you bring your remarks to a close. I am terribly sorry, but we are running out of time.

Mr Ramsay: The government needs to do more. The federal Nielsen task force revealed that in 1984 to 1985 corporations received more from government than they paid in direct taxes on profits. I suggest this has to be redressed. You well know the figures, the corporations and the numbers that have not paid on their profits in this past year.

Third, more rent-geared-to-income housing is urgently needed; 35,000 units do not go far enough in meeting the need. Increasing welfare where people pay 70% for their rent only to have it increased by their landlords reduces their raise to zero. Rent geared to income for single people is critical.

Finally, job creation with training is needed; 70,000 jobs falls 100,000 jobs short of the losses expected this year in manufacturing alone. Do not look to the federal government for help. In a Chronicle Journal report of this year, the chief analyst for Statistics Canada stated that all gains in employment is part-time jobs and in one industry, the lowest-paying industry in the economy, which he called the McJob syndrome.

Thank you for the opportunity to share these thoughts with you.

The Vice-Chair: Thank you, Mr Ramsay. Unfortunately, we do not have any time for questions from the three parties, but again we thank you for your presentation and bringing that information forward.

Ms M. Ward: Mr Chair, could we ask if the presenter has copies of the brief?

Mr Mahoney: Hansard has it.

The Vice-Chair: Yes, Hansard will have copies.

Ms M. Ward: It is usually quite a while before we get Hansard on committee.

Mr Ramsay: I will make copies available tomorrow.

The Vice-Chair: Okay. If we can have a copy left, that would be terrific. Realizing the time of the day, this committee is now adjourned until tomorrow morning.

Mrs McLeod: In terms of the expectation of Mr Ramsay to provide copies, is that not something the committee can do itself?

The Vice-Chair: If he can supply us with one copy, we will take care of it.

Mrs McLeod: All right, with the appended material.

The Vice-Chair: Yes. If we can get the original, the rest is okay. This committee is adjourned until 9 o'clock tomorrow morning in Sault Ste Marie.

The committee adjourned at 1520.