CONTENTS
Thursday 31 October 1991
Organization
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
Chair: Vacant
Acting-Chair: Wiseman, Jim (Durham West NDP)
Vice-Chair: Sutherland, Kimble (Oxford NDP)
Christopherson, David (Hamilton Centre NDP)
Jamison, Norm (Norfolk NDP)
Kwinter, Monte (Wilson Heights L)
Phillips, Gerry (Scarborough-Agincourt L)
Sterling, Norman W. (Carleton PC)
Stockwell, Chris (Etobicoke West PC)
Sullivan, Barbara (Halton Centre L)
Ward, Brad (Brantford NDP)
Ward, Margery (Don Mills NDP)
Substitution: Akande, Zanana L. (St. Andrew St. Patrick NDP) for Mr Hanson
Clerk: Decker, Todd
Staff: Anderson, Anne, Research Officer, Legislative Research Service
The committee met at 1109 in committee room 1.
ORGANIZATION
The Vice-Chair: We have some issues of business to take care of.
We have received a letter of resignation as the Chair from Ron Hansen, so we will be having an election for Chair at our next meeting. I am going to be chairing today. I have to pop out at 11:30 for the diabetes press conference and then will come back.
We have had put before us an agenda regarding some of the issues. That was done up in this order for now. Maybe if we go to number 3, is there a consensus that we are not going to do a report to the House on the summer budget hearings, since they have passed by? Is that fine?
Mr Kwinter: Yes, that is fine.
The Vice-Chair: Okay, so we have that taken off.
Mr Sterling: Just before we begin, Mr Chairman, I think we were planning to meet this afternoon. I understand we are going to be discussing Bill 85 in the Legislature, the Fuel Tax Amendment Act, and I have to participate in that. I am directing this to the clerk. Is it not normal that we do not sit when we are dealing with bills which -- is it in the standing orders or is it just a matter of courtesy?
Clerk of the Committee: I think it is not a prohibition against the committee meeting but a prohibition against the committee considering the same subject matter at the same time as the House. I will check for sure.
Mr B. Ward: You want to be up there, Norm?
Mr Sterling: I have to be up there.
The Vice-Chair: There are some different ideas being tossed around right now as to where this committee should go. I was thinking myself that for today maybe what we should do is have some brief discussion on the Porter report from those people from the committee who attended and then have Anne give us some more background notes on the other seminars that occurred at the Financial Post conference that was attended: the highlights of the other seminars, what people were focusing on and specific themes that were coming forward out of that.
We also had the issue of pre-budget consultations put forward on the table. I would like some feedback first before we go into the other areas. Since we are having some trouble focusing on how we should deal with the whole issue, perhaps the Porter report may give us some focus. We may want to continue our hearings focused around what was in the Porter report and have some more comment and opinion brought forward on its issues by different groups and use that as a focal point for more discussion on the issues. Maybe we should have some discussion around that for the time being and go from there.
Mr Kwinter: I would like to comment on the pre-budget consultations. I think we should continue them but I would like to see them happen as soon as possible, so that it is not a sham, not just people coming forward, and you know it is not going to make any difference because the budget structuring is already taking place in the Treasurer's office and, regardless of what we hear in this committee, we are not going to have any impact. It would be nice to get people coming in and talking about what they think the Treasurer should be doing and have plenty of time so that even if he does not do it, at least he will have some notice not to do it.
Mr B. Ward: I think we do have some time constraints, in the sense of the number of times this committee meets. The Porter report is a timely report and we have had the competitive seminar from the Financial Post. The United Steelworkers of America gave a conference as well on competitiveness. I think there is a lot of useful information out there and it would be timely for this committee to begin to examine the various divergences of opinion out there on where the future of this country and province should be heading from an economic standpoint. There is a great volume of information out there and I think it would be of great benefit to the House if this committee began to undertake the tremendous challenge of examining what the various groups are thinking.
The Vice-Chair: Just before I go to Mr Wiseman, did everyone receive his copy? Did they get the summary of the Porter commission at their office? I believe they were sent out but I talked to some people yesterday and not everyone had it. We have extra copies here.
Mr Kwinter: The Challenge of Change?
The Vice-Chair: Yes, The Challenge of Change. We will get that distributed.
Mr Wiseman: I would like to make a comment on the pre-budget consultation hearings. When I was in the chair, we received direction from the Treasurer that he would like to see the process be meaningful and different. Unfortunately we never really got around to discussing how that could come about. I think a little discussion should revolve around how we can accomplish that goal, to see if we can make the process go a little differently and with recommendations to the Treasurer. I take the Treasurer at his word when he says he would like to have the process be meaningful, and therefore to achieve that I would see it taking place sooner rather than later.
I would not feel really comfortable about delving into the Porter report at this time for two reasons. First, we have not had time to read it, digest it and analyse it. Controversy is now emerging over some of the statements made. The chief executive officers of some of the largest corporations in Canada, Noranda and a forest company, have made comments that cause me concern about statements in it. I would like to have an opportunity to read it and check it against other sources, and we will need time to do that. Also, I have not received copies of those other competitiveness documents.
It is a big issue and I think we are going to need some time. We should go into the budget hearings and prepare ourselves more fully for whatever items come up later.
Mrs Sullivan: I will address both issues. That seems to be the way we are going.
First, I recall the discussions relating to pre-budget consultations of this committee as we were beginning consultations last year. I will tell you, because I have worked there and I know how it happens, that at this time of the year initial steps are being taken for preparation of next year's budget. We already know that some decisions relating to that budget have been made in terms of the deficit projections, and the revenue projections are certainly going to be looked at. Clearly, as well, decisions and requests are already being made by various ministers concerning needed allocations. So the process is already beginning.
It seems to me that if the Treasurer meant what he said last year, he will be a participant in hearings here, and there will not be the private, behind-closed-doors sessions in the Treasurer's office. If he means what he said, this committee will be the place where all pre-budget consultation occurs. I do not believe, frankly, that any Treasurer will agree to this.
It might be useful to invite the Treasurer to come before the committee and say what he does mean. Will he, along with Treasury officials, sit in this committee? Will this committee be the place where pre-budget consultations take place, where the questions are asked, not only by Treasury officials and the Treasurer but by members of the committee, and where the support agencies, the advocates, the sectoral representatives put their case before the Treasurer in the preparation of the budget? That includes people from not only outside government but inside government.
As I recall, in our last pre-budget hearings we had only one or two ministries come before us. They were substantial ministries -- the Ministry of Health, I believe, and perhaps the Ministry of Community and Social Services and the Ministry of Education. But the issues are not limited to the large ministries, and any minister will tell you that. Will those ministers and their officials also come and make the same kinds of arguments in public that they would be making behind closed doors?
If there is going to be a change in process, I think it is going to have to be significant. The Treasurer is going to have to be frank with us about where he intends to go.
On the competitiveness issues, I am very interested in what the federal government has done with the Porter report, because it conjoined with the Business Council on National Issues to commission the report. The federal government has already decided to set up public hearings on the Porter report comparable to those for the Spicer commission. We have documents prepared some time ago but still timely which relate specifically to the Ontario situation and the Ontario theme of the Premier's Council on technology. One of them is Competing in the New Global Economy; the other is a document relating to skills management. There may be some new issues out of the Porter report but, frankly, most of the issues in the Porter report have been covered in Ontario-specific documentation. If we are going to have hearings on the nature of our competitive position in a global economy, surely we should be reviewing material which directly relates to the provincial economy.
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As well, it seems to me we should be looking at the Economic Council of Canada document relating to the competitive position province to province, given separation or a change in the constitutional nature. That is very much a part of the competitive factors affecting our nation.
I think the pre-budget consultation should be early, and I concur with my colleague on that, but we should know where the Treasurer stands. There are a lot more issues to discuss than the Porter report if we are going to look at the issues of being competitive.
Mr Kwinter: I do not think we should get involved in trying to duplicate what the federal government has just announced it is going to do. We should not be setting up our own hearings to mirror what it is doing. My concern when I first suggested we should maybe look at competitiveness is more hands-on. I would like to spend time not looking at the macro picture of global economies and productivity and all of that, but very specific things: how taxes impact on decisions, what things determine investment decisions, plant locations, plant closings -- those kinds of areas of competitiveness, very micro issues. If we can do that, I think we can be of some service to this Legislature because we can then point out to our colleagues the areas we have to address.
We might make a mistake if we get on the road of the various conference boards and the Michael Porters of the world and everybody else looking at the macro picture of what we are doing competitively. That is going to be done with the federal study and we will be the beneficiaries of that. I do not think there is any reason for us to duplicate it. I would like to spend some time on those other areas, but I also want to caution you that if we are going to make any kind of meaningful contribution to the pre-budget consultation, it has to happen now.
Mr Sterling: Perhaps we should limit ourselves in this committee primarily to what we were set up for originally, to deal with pre-budget consultations, and not stray too far from that in our overall mandate. It seems to me that once we start to stray, difficulties arise. We get into almost esoteric arguments and therefore do not really do anything reasonable.
Last week I was very grateful to the committee and particularly to the former Chairman, Mr Hansen, for allowing me to go to the Financial Post seminar on competitiveness. Of all I got out of this committee in the last eight months, that conference was probably the most useful. Other than the education part, I am not certain this committee is going to do anything useful, and therefore I would urge the committee to follow Mr Wiseman's suggestion that we perhaps call in Mr Laughren and ask how we should approach these.
I think it is most important for us to understand when he starts making decisions on the various sections of his budget. As I think everybody knows, he is almost into the consultation period at this stage of the game. We should really look at the making of a budget in the modern context and in the context of what happens here. What really happens now in Ontario is that the budget is not made on April 30 or May 10 of the year but over a period of time, and decisions are brought into play over that period which are reflected in the document on May 10 or whenever the Treasurer chooses to introduce his budget for the year, which has traditionally been in late April or May.
We have the transfer payments, which are decided upon at the very latest by the end of January. So I would really like to hear from the Treasurer when he starts locking himself into those positions. Then I think we should go in step with that process. If the first problem he addresses is the transfer payments to the hospitals, the school boards and the municipalities -- and that takes a huge chunk of his budget, probably 35% to 40% -- then we should get right down to it now and start calling in the constituents who are concerned about that part.
But I think Mr Wiseman's suggestion of calling the Treasurer and perhaps some of his people in -- I would really like to have sort of a chronological timetable as to how he is going to make his decision, not holding him to the fact that he has to make his decision by January 1, but wanting to know the approximate time frame when he is starting to come down on those decisions so that we can plan our hearings so they really do mean something in terms of going into that process.
If the Treasurer says, "Well, I have to make certain decisions by January 15," this committee should then shoot for having an interim report by January 15 dealing with transfer payments or whatever it should be, and then we should shoot for March 15 for having another interim report dealing with whatever decisions he is closing in on at that stage of the game. That is my feeling.
As for the competitiveness part of it, I agree with Mr Kwinter that we should not try to duplicate what is happening at the federal level. It continues to be a concern of mine, as does the constitutional issue, but I really think if we want to do anything that has the most direct effect, it is probably the pre-budget consultation and trying to introduce more logic and reason to it.
Mr Jamison: I am sorry for being a few minutes late, but I understand there has been a discussion going on about the possibility of pre-budget consultations next, or looking at the competitive issues that face us, especially here in Ontario.
The question of competitiveness is one I have heard from the opposition benches more times than enough, and it certainly is a very important and crucial issue facing this province. The direction taken by the federal government is one that I think reflects a viewpoint that would take in the full scope of Canada, Ontario being a major player in the manufacturing end of our economy. The type of situation that prevails now in the manufacturing sector makes it imperative that we address that particular issue.
Working in the ministry that really gets the bad news first, I know it is crucial to our future to address the issue of competitiveness, and I am quite frankly amazed that this seems to now no longer be the issue, because it has been and has prevailed to be the issue as brought forward by both the opposition party and the third party every day in the House. Every day you can find some statement on competitiveness, and it is rightfully so. We are heading down a road where we are going to have to evaluate where we must go as a province and as an economy to find the avenue where government can be effective and be of assistance to the very people we rely on to promote economic growth and to provide the jobs that in turn -- this is almost like a quote from the opposition side of the House --
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Mrs Sullivan: You can come on over any time.
Mr Jamison: -- supply the jobs that are necessary to the wellbeing of the people of this province. I really believe that is the burning question.
Let me say, beyond that, that whether you are a businessman or whether you happen to be employed in a factory or whether you happen to be employed in the service sector, the one major overriding question on the minds of the people of this province today is in fact whether or not they are going to be employed six months or a year down the road, and that very question deals with the question of competitiveness. We simply must take the best possible look at that question, that word, that cliché -- competitiveness -- and what it means to Ontario, what it means as far as where we have to go as a province and as a government are concerned. I think at this point in time, if we are to reflect the mood of the people who are outside those windows on the street, the people who are unemployed, the people who are potentially unemployed and the people who are looking for a better way of doing things -- that is the reflection I receive from the people of this province -- then we had better do some work on that issue.
The Vice-Chair: To help facilitate the process, I am wondering maybe if for the next half-hour we could not just have Anne talk about the different sessions and go through the handouts, and maybe the subcommittee can meet at 3:30 and try to hash this out a little more, to come back here for 4.
Mr Sterling: I have to be in the Legislature. I am the Revenue critic for my party.
The Vice-Chair: How about if we met at 3?
Mr Sterling: I cannot be here this afternoon.
The Vice-Chair: Are you up for questions today? We are in question period from 3 to 3:30.
Mr Sterling: Oh, I see. Okay.
The Vice-Chair: If we went to 3 o'clock, would that be better?
Mr Sterling: That is fine.
The Vice-Chair: Okay. The subcommittee will meet at 3 and then maybe we can come back with a recommendation. I realize the difficulty at 4.
Mr Sterling: I am sorry; whenever the debate on Bill 85 starts. If it starts at 3, then I have to be in the Legislature.
The Vice-Chair: I do not know whether it is going to be the first one up today or not.
Mr Sterling: I believe it is. That is what my House leader tells me.
The Vice-Chair: Okay, I am trying to think. I am in a meeting from 1:30 to 3 myself, so that is not good.
Mr Christopherson: Could I interject? My only concern is that, with the greatest respect to all of us, we have spent an awful lot of time over the last few weeks trying to decide on our agenda and we are wasting valuable working time. I have a hunch we are not going to come to a collective agreement on what the subject ought to be. We have bounced back and forth, each of us at different times over the past few weeks, advocating either pre-budget consultation or competitiveness. I think all parties have been on both sides of the issue at different points, depending on what is happening out there. As much as I would like to see the subcommittee do some work this afternoon, because I think it has some detailed co-ordinating to do for us, I think we need to make a decision this morning on what it is we are going to do for the next few weeks.
I think our position on the government side is that the competitiveness issue is so important, and it constantly comes up. In our discussions with the Treasurer, he is and has been keenly interested in the issue of competitiveness. We want to deal with it head-on. The Porter report is a timely opportunity. There is a lot of discussion out there and a lot of people who want to comment on it.
There will always be another priority. No matter what we choose, there will always be another priority. I do not think there is a right or a wrong here; I just think it is a question of finally coming to grips with diverse opinions and making a decision. At the appropriate time, once we have had full and complete discussion, I would like to see us place a motion on the floor that says what we will do for the next four or five weeks, be it competitiveness or the pre-budget.
The Vice-Chair: I have to pop out for this press conference. What I would like to do is ask if you, Mr Wiseman, want to come up and just take the chair for a couple of minutes while I pop out and do that. Maybe you can continue discussion and process. Depending upon what you come up with at the subcommittee -- I do not know whether you have luncheon meetings, I might be available --
Mr Kwinter: I do.
The Vice-Chair: Okay. We are running out of options.
Mr Kwinter: Mr Chairman, I agree that the issue of competitiveness is important, but I think the reality is that if we are going to have any kind of meaningful input into the budget we have to do it now. Notwithstanding that historically what this committee does is have some input into the budget, if we decide we are not going to do that, that is fine as long as that is the decision. I do not think that, effectively, you can start on competitiveness and deal with that and then expect that somewhere along the line you are going to deal with pre-budget consultation. There has to be a realization that if there is going to be any meaningful input into the budget, it has to take place now. If the feeling is, "We don't really care about the budget but we think that competitiveness is more important," that is fine, as long as that is the decision that is taken.
Ms Akande: I really do not see the two as being mutually exclusive, provided, of course, we are certain about what kind of discussion and how lengthy the discussion on the Porter report and competitive issue will be. I think a lot of the pre-budget consultation will be framed by the information that comes out of the Porter report and the discussion of the competitiveness seminars. But I do agree that the pre-budget consultation has to be early. One of the suggestions that was made, to have the Treasurer identify his priority in terms of timing, would allow us to address both issues in a way that would get him timely information and at the same time allow us to discuss the Porter report and the competitiveness seminars.
Mr Sterling: I think we have a serious time problem in terms of dealing with both issues. We can talk about competitiveness for another three years and we could occupy all our time talking about it because it is a very wide-ranging subject. I agree with Mr Kwinter that competitiveness is important. I like to hear people talk about it because it is sort of a macro issue and I find it much more intellectually stimulating than hearing people who want more money from the provincial government, which is what normally takes place in our pre-budget consultations. I guess it is really in the hands of the government members to make that decision as to which way they want to go on it, but if we want to do anything that is meaningful, the first choice in my view is pre-budget consultation.
I would point out to you, Mr Chairman, that in the Legislature we are at Bill 85, which is the Fuel Tax Amendment Act. We have to deal with Bill 86, Bill 87 and Bill 130, all of which are tax bills, and if they go as slowly as Bills 83 and 84, we can expect two, three or four more weeks of debate on those tax bills. That draws away from this committee the members who are required to be involved in that. We also have our constituency week break -- the week of November 11 -- so you are not talking about a great number of meetings between now and Christmas.
If there is a decision that we are going to have some time to meet during the winter break period, perhaps it might be more fruitful for us to go a week in February or whenever dealing with competitiveness at that time, and I think it is more fruitful for us now to get in the pre-budget. But really, because the committee, as you know, is -- and I believe rightly so -- controlled by the government side, that is my two cents worth.
Quite frankly, I do not want to talk about it any more. I want a decision made. If the government members feel they want to talk about competitiveness, let's do it and get some witnesses in here and talk about it. If we want to talk about the pre-budget stuff, then let's get Mr Laughren or some of his officials in to talk about how we could structure that. But let's get on with it.
The Acting Chair (Mr Wiseman): We just calculated there are six hearing days before Christmas.
Mr Sterling: If tax bills are being discussed those days, then you can knock one or two of them off.
Mr Christopherson: Do I understand that we will not have a meeting this afternoon as a result of some of the members here having to participate in House debate?
Mr Sterling: You can have a meeting this afternoon if you want. The standing orders, as shown to me by the clerk a few moments ago -- I knew there was some rule, but I did not know the specific rule -- say we cannot meet if we are considering a bill here when the same matters are being discussed in the House. You can have a meeting this afternoon if you so choose, but it has been common courtesy in most committees that if the main thrust of your committee is discussed in the House, then usually the committee does not sit.
Mr Christopherson: Okay, then I think it is even more important that we try to reach some kind of decision today, even if the subcommittee meets another day prior to our proper sitting day to work out the details of whatever it is we decide. We feel strongly about doing the Porter report, there is no question. But we have always been, and tried to be, very sensitive to the concerns and thinking of our colleagues on the other side of the committee room. In a reflection of that concern, I would like to ask for maybe a 10-minute recess so that we could have a fast caucus on it, come back maybe at 10 or 5 to 12, put a motion on the floor, debate it, vote, and know where we are going, if that is acceptable to our colleagues.
Mr Sterling: That is fine.
The Acting Chair: Okay. We will be recessed for 10 minutes. We will return at 11:50.
The committee recessed at 1143.
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Mr Christopherson: Mr Chair, we have had a chance to caucus on this, and there is certainly a real division as to whether we ought to do competitiveness or the pre-budget consultation first. We are going to respect the thinking of Mr Kwinter on this, and we certainly cannot go wrong going to the people and allowing them to come in and having as timely an input as possible on the pre-budget consultation.
I would like to stress, however, that in my discussions with him, the Treasurer has emphasized that he wants to have as early an announcement as he possibly can, which means that time is of the essence if we are going to do this. It is a shame we have wasted these last few weeks.
I suggest that we indeed place a motion that says we do the pre-budget consultation for the MUSH sector first, that we try to do it all within two or three days, if that is at all possible, and also that we invite Treasury staff to come in for maybe a half-hour before we do that to ensure we have an overview of the kind of economic situation that the budget development is taking place in.
Having regard for all of that, I move that we indeed do as I have just outlined.
The Acting Chair: All in favour?
Motion agreed to.
The Acting Chair: Should we instruct the clerk to set up the appropriate deputations to begin coming in next week?
Mr Christopherson: In consultation with the subcommittee.
The Acting Chair: Through the subcommittee?
Mr Christopherson: Yes. We should start out if we can with the Treasury presentation on the overview of the provincial economic situation.
The Acting Chair: Invite the Treasurer in first, you mean?
Mr Christopherson: No, the Treasury staff, just to give an overview so we know the content. I must emphasize again, Mr Chair, that if we are going to do this and have it be meaningful, which we sincerely want, we have to do it as quickly as possible and try and use as few days as possible to conclude our work.
The Acting Chair: If I understand this correctly, direction to the subcommittee will be to determine the deputations to present, the first deputation to be from ministry staff for next Thursday morning.
Mr Christopherson: For half an hour, on the economic overview of the province, and then move right in, if we can, to deputations, trying to bunch them as much as possible, I think, and to bring in the major umbrella groups, recognizing the time constraints.
The Acting Chair: Thank you. Any further discussion? Seeing none, this committee is adjourned until --
Mr Christopherson: Next week, I believe.
Mr Sutherland: Are we not meeting this afternoon to have an overview, or is everyone comfortable?
Mr Christopherson: Apparently we cannot, because one of the matters in the House is also a matter before this committee.
The Acting Chair: The committee can have an overview this afternoon, if that is the wish of the committee. No? Then we are adjourned until November 7, 10 o'clock.
The committee adjourned at 1207.