CONTENTS
Thursday 11 March 1993
Pre-budget consultations
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
*Chair / Président: Hansen, Ron (Lincoln ND)
*Acting Chair / Président suppléant: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings-Sud D) for Ms Ward
Vice-Chair / Vice-Président: Sutherland, Kimble (Oxford ND)
Caplan, Elinor (Oriole L)
*Carr, Gary (Oakville South/-Sud PC)
Christopherson, David (Hamilton Centre ND)
*Jamison, Norm (Norfolk ND)
*Kwinter, Monte (Wilson Heights L)
Phillips, Gerry (Scarborough-Agincourt L)
*Sterling, Norman W. (Carleton PC)
Ward, Brad (Brantford ND)
*Wiseman, Jim (Durham West/-Ouest ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Dadamo, George (Windsor-Sandwich ND) for Mr Christopherson
Fletcher, Derek (Guelph ND) for Mr Christopherson
Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings-Sud ND) for Ms Ward
MacKinnon, Ellen (Lambton ND) for Mr Sutherland
Perruzza, Anthony (Downsview ND) for Mr Ward
Ruprecht, Tony (Parkdale L) for Mrs Caplan
Clerk / Greffière: Grannum, Tonia
Staff / Personnel: Campbell, Elaine, research officer, Legislative Research Service
The committee met at 1022 in room 228.
PRE-BUDGET CONSULTATIONS
The Chair (Mr Ron Hansen): We'll resume the pre-budget consultations by the standing committee on finance and economic affairs. I'm going to hand it over to Ms Campbell here. She has a third draft and she wants to explain how far she's along so far.
Ms Elaine Campbell: Before you this morning you have proposed outline draft number 3. If you read the attached memo, it refers to the six sections that are contained in the outline draft.
Yesterday the committee was unable to come to any final agreement on the first section of the report. However, at yesterday afternoon's meeting the committee did ask that specific options be provided for the final five sections of the paper, and those options now appear in this copy of the draft. At this point there still needs to be agreement on the first section and decisions made on the options to be followed in the final five sections.
The Chair: Comments?
Mr Gary Carr (Oakville South): I would just like to throw out what I would like to see and then see if there's any agreement. If not, we'll go on to the section.
Looking at this, we could start with the debt and the deficit situation. What I would like to see is just basically a summing up of where we're at, what the deficit is, what the accumulated deficit is in a non-critical, "Just facts; here's what they are," way, using the Treasurer's figures and then making a recommendation regarding the debt, which would be something along the lines of, "The debt being what it is, we can't afford to increase it any more." I would even like to go further and say it should be reduced -- but to get agreement to say that the debt is a serious problem and it must be held in check.
I don't know if we'll get agreement on that from the government side. But with the whole debt issue, that's what I'd like to do, say here's where we're at, so the public knows and say the debt should become an issue that we can't afford to make any worse.
Mr Paul R. Johnson (Prince Edward-Lennox-South Hastings): That sounds like a reasonable request. If we factually state the position that the province is in at this time, I don't think anyone would have any difficulty with that. From there we can decide what we want to indicate, the direction the Treasurer should take with regard to the circumstances that we find ourselves in at this time.
Mr Monte Kwinter (Wilson Heights): I have no problem with the thrust of what we're talking about. I think that one of the things we have to take into account is that it is totally impractical to come up with a suggestion that is going to balance the budget. That's silly. It's just not going to happen.
What I think would be useful is if in the same way that the Treasurer in 1990 projected what he thought the financial position was going to be during the life of this government we could come up with a plan -- not a detailed plan but a goal, a target -- to say here's where we are, this is where the deficit is, this is where the debt is and, as a matter of policy, this government and any other government should attempt to try to reduce the deficit by X per cent every year over the next 10 years with a target that is going to eventually bring it into balance.
I think to suggest, as some of the presenters did, that we should have a balanced budget in one year or two years just isn't practical. It's not going to happen and there's no physical way it can happen. But it would be useful if this committee can come to a determination that the deficit should be reduced 15% a year over the next six years, or whatever it is, and hopefully by the end of this century, we have a balanced budget.
That is a lot easier said than done. I'll tell you, notwithstanding that my colleague over there took exception to the fact that I said by the end of the term of this government the debt is going to be $100 billion, I think that's a valid assessment. It will be $75 billion as a result of this next fiscal period, which means that if there are deficits in the range of $8 billion a year for the next three years -- we'll be lucky if we get to that -- it will be $100 billion in debt by the end of the term of this government.
Mr Jim Wiseman (Durham West): I don't disagree with perhaps doing that somewhere, but I'm not sure it should be done here. I think it belongs where you were talking about other things, later on in the document under the recommendations.
Mr Kwinter: I'm not talking about doing it in this particular section; I am just talking about in the document.
Mr Wiseman: Yes, somewhere later on maybe we can do that.
Mr Kwinter: No, I'm not saying where it should happen; I'm just saying it should happen.
Mr Wiseman: One thing I would also like to see, in terms of a statement of where we're at in terms of the deficit, is the breakdown of where we're getting the money from to finance the deficit. I know we borrow some from pension funds and I know we borrow some from some bonds, but the really, really major issue that concerns me the very most about the deficit is the amount of money we're having to borrow offshore.
I would like to see that in the factual statement: How much are we borrowing offshore? At some point I would also like to see, perhaps later on where we do this other thing Mr Kwinter has suggested, if we do it -- to perhaps recommend to the Treasurer that offshore borrowing be kept to an absolute minimum because of the long-range implications of borrowing offshore.
I think it's important that we put in some indication of how much we owe, who we owe it to and in what ways we're getting the money, whether it's long-term borrowing, whether it's short-term borrowing and what kind of interest we're paying. I think we need to know what it is before we can move to the next stage in terms of recommendations.
The Chair: Mr Kwinter, do you agree?
Mr Kwinter: Yes.
Ms Campbell: Am I correct in assuming that the last few comments have been made under the subheading "Debt and Deficit" under "Economic Summaries and Forecasts"?
Mr Wiseman: I think it's under "The Current Situation."
Mr Johnson: Except for the comments Mr Kwinter made. We've agreed they would come later on.
Ms Campbell: My concern is that this section is merely a summary of what the committee heard from the forecasters and from the Treasurer. If there is a need for additional information, is this the appropriate place to insert that type of information, which goes into a breakdown of where the money is coming from to finance the provincial debt?
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Mr Wiseman: Why don't we change the heading then? We could put in "Forecast and Current Situation."
The Chair: Mr Kwinter, do you follow? We can't leave it "Debt and Deficit"? You want to change the title?
Mr Johnson: There's no section for what Mr Kwinter has asked for, no section for it to be included at this point in time, right? There's no heading that would fall under. That's what you're saying?
Mr Wiseman: We could say we've heard from a large number of groups and this is basically what they have said. In addition, we would like to add that the committee has raised some concerns about the nature of the deficit, where the money has been borrowed, and this is the information that supplies that. Then out of that we can move to the recommendations later on about how we feel about the advice we're going to give to the Treasurer concerning how to manage it. Is that agreeable?
Mr Kwinter: I have no problem with that.
Mr Johnson: If I could just make a comment, when presenters were sitting before this committee, from time to time there would be individuals who would say that they didn't want transfers to their particular agency reduced, that they felt it was going to create undue hardship for them. In all frankness, they didn't offer us alternatives as to where we could generate revenue or specifically what kinds of reductions in programs should be arranged in order to facilitate the funding for their particular program.
When we come to the final analysis of what we should do, those different viewpoints have to be kept separate in the understanding, very clearly, that no one group came in with the solution to our problem. Indeed, those agencies that want more funding or continued funding from the province didn't offer solutions as to how we could arrange that or how we could generate the revenue.
Mr Wiseman: Sorry to interject, but maybe that discussion should come when we do transfer recipients, in an open paragraph.
If I'm reading the opposition correctly, what I'm hearing is that what they would like to do is set the economic scenario as it exists now, with an attempt to project to the future, but then structure the rest of the report and the recommendations in the context of the economic situation as it exists now. That would mean, when we talk about the MUSH sector, saying that while we may sympathize with what they're saying in terms of needing money, we would refer them back to the beginning of the paper where we talked about the fiscal reality of the province at this time, and maybe discuss there why it is that we're not recommending increased transfers to these sectors and that we may have to recommend some creative thinking on their part or changes in the way they do things.
I haven't even discussed this with my colleagues, so I may wind up in some trouble later, but I think that on the whole issue of administration at school boards, to be non-political about this point, the whole question about 60%, we need to ask, 60% of what? We may want to include some kind of discussion around, if you saw the article in the Toronto Star on Saturday, how administrations and school boards have just blossomed while the amount of money going into the classroom for the student has really not changed in 15 years. We may want to make some recommendations there in terms of what we think should happen.
My own view of this is that I think the Auditor General should do a comprehensive audit of school boards to look at whether or not they're delivering services based on the premise that the funds are actually meeting the goals of educating children. If they aren't, then maybe that money shouldn't be spent. That's the kind of thing we might want to talk about later.
Mr Carr: I agree. I don't know how many members know, or even care, what our position was on the transfer, but we didn't say yes, give the municipalities more; we said yes, they should be frozen in light of the circumstances, and that was when Harris went on TV last January.
I think the only problem we're going to have in getting it is that what we called for is, yes, you should freeze the transfers, but you should also introduce wage controls in the broader public sector tied to zero as well, so that a school board won't be negotiating 2%, 1%, 1.5%, whatever it is, and then that gets on to the property tax. That may create some difficulty, because I don't think that's the government's position, but I wanted to let you know that we're not going to come into this and say yes, keep the deficit down, and then give transfer agencies 4% or 5% and go wild there.
I want to tell you, when you do this -- I had a lot of calls from teachers saying no, you shouldn't do that. About 10 of them called and said that, but I'm prepared, and our leader is, to say these things. Yes, you freeze it, but in order to not download it on municipalities, universities and school boards, this is what we would introduce.
So I agree. I think we should say, and we are prepared and have been since January of last year, that the transfers should be frozen. Where we'll disagree and where we may have to do a minority report is that in addition to that, we call for introduction of wage controls in the broader sector, for teachers, for example.
I just wanted to make it clear that as an opposition we're trying to be constructive and not say, keep the deficit down but give more transfers. I don't know the Liberal position, but if we can get this committee to say yes, transfers to municipalities, universities and school boards should be frozen, then we can go further in our minority report.
The Chair: Mr Kwinter, any comments on Mr Carr's comments?
Mr Kwinter: I don't have a problem with specifics. I have a problem with the general thrust. I think what we have to do is make a determination on the three areas of flexibility. One is taxation. Is there room for more taxes? If the determination is that there is no room for more taxes, that we have reached the tax threshold where we are going to have a citizens' revolt, as has happened in other jurisdictions, then we can't look to taxes as a solution to the problem.
The second alternative is to look at the growth of the economy: Realistically, what is that growth going to be, and what is that going to mean in the way of generated revenue for the province?
Then we have to gear those two to my first comment I made earlier: What is the more practical rate of reduction to the deficit? We come up with that figure and then we have to find that figure, and the only place you're going to find it, given that you make decisions on the first two, is in expenditure reduction. Once you make that determination, then everybody's going to have to fight for their share of what that expenditure reduction is going to be.
I don't know whether it's our role to tell the Treasurer what that should be. I think that's a political decision that has to be made by the government in power about where it feels it can take the most or least heat. I think our role should be -- and, again, this is only my opinion -- that we should be giving that broad direction to the Treasurer, and then it's his job to come up with whatever response he has to that.
Mr Wiseman: I just want to respond to Mr Carr. I have a great deal of problem with the wage controls, for a number of reasons. They really do impose a hostile climate on negotiations with the various agencies, boards, commissions, school boards and so on, and that, I believe, should be avoided at all costs, because while you may be able to save 2% or 3% or 4% in terms of maybe rollbacks or increases, I think you lose a lot more in terms of hostility and people just bowing out. It's not a rational reaction that people have to wage controls. I was in the system when it was done before.
One thing, though, is that there are some creative things taking place. For example, the John Howard Society in Durham has faced an economic crunch, and it went to each of its employees -- there are 37 people who work for the John Howard Society receiving wages -- and they unanimously agreed that each one of them would give up one week's pay to create a fund of money to keep the person working, and that was done voluntarily.
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If you were to suggest that maybe we should put examples like this into this document about creative approaches that have been taken in other areas on how things could be done, I wouldn't have any problem with that at all. But I have to say that I would have serious problems with an across-the-board, government-imposed wage freeze or wage reduction, because then I think people will just get angry and maybe not find the creative approaches. But I think solutions could be found, for example, at board levels.
For example, the Durham board is talking about laying off 24 special ed teachers. I think a recommendation from here could be that creative solutions be found, where teachers may voluntarily take a 1% decrease to save those 24 positions. In fact, it wouldn't really hurt them that much, because the income tax level would be moved and they would be paying a little less in taxes. So it wouldn't be an appreciable decrease for them to do it, but it would be something that could be offered up. If you come across and say, "You're going to do it," you're going to get a lot of hostility.
The Chair: The clerk will clarify what Mr Carr said.
Clerk of the Committee (Ms Tonia Grannum): I thought I heard the words "minority report." I just want to let everybody know that, according to the standing orders, this has to be a report of the majority of the committee members, and the opposition can provide dissenting opinions. I know that's probably what you meant, but I just want to clarify that.
Mr Carr: I understood that. What I was trying to do was get common ground, because I knew the government wouldn't. In my case, it was ironic that after I called for this, I had all the calls from the teachers, but then the board held a big meeting and said, "If you don't take two days off without pay, we're going to lay off 75 people." So these creative things are happening.
I don't think we should get specific about that and say, "This is what Durham did," or, "This is what Halton did." In the report, maybe we can say that transfers to municipalities, universities, school boards and hospitals should be frozen. You will say they should be frozen, and then you find money other ways. In the dissenting report -- I'll call it that, then -- we will say this is to avoid the downloading on property taxpayers, in the case of education. We would go further and introduce wage controls in the broader private sector, whatever.
I'm just going to get some agreement. I didn't think you would agree to that, but maybe this committee will agree to say we should freeze the transfers to municipalities, universities, school boards and hospitals. What I wanted to get at is that we do want to be helpful and not just say, "Let's not run up the deficit but give municipalities what they want."
That's the old way of doing things, because you make school boards happy. They call you up and you say: "Boy, that terrible NDP. If we were in power, we would have given you 8%." We're saying, "No, we realize that; we'll go further." But I think there is some agreement to say that in the MUSH sector we should freeze the transfers to municipalities, universities, schools and hospitals. That's a first, to get all three parties to agree to it, and I think we can do that.
Mr Anthony Perruzza (Downsview): That's a really good suggestion.
Mr Wiseman: Could I have a point of clarification on that? What we have said is that this year there'll be a base amount plus 2%, and then next year it's going to be the same base plus the same 2%. Are you saying that what we should do is not give them the 2% and just freeze them at the current level, or to do what we have projected and said we would do in the interim statement?
Mr Carr: I would even be willing to go back to what the Premier's going to do. You can argue about that. What I would say off the top, because we're going to talk about the wage controls, is to freeze it the way it is now, and next year you get the same as this year. I know the 2% actually makes less. We can debate whether you want to do that.
All I'm saying is that I think we can get agreement here among the members of this committee to say that the old way of operating doesn't work and that we should freeze them. I guess that makes it so it is difficult for you to then agree, because you're going back 2%.
If I were Treasurer today, I would freeze it at today's levels, not go back 2% next year. But because the deficit is so bad as of yesterday, I would even be prepared to say yes, we should go back to the 2% next year and call it whatever it is, just so people understand it. The problem I've got with this is that my trustees don't even understand it, and they're the ones in the know. They said, "Oh, we're getting 2% this year." And I said, "Well, you know next year it isn't." They didn't even know, so how does the public know? The only problem I've got with this is that I think we understand what is going to happen. I don't think trustees do, quite frankly. When I told them that, they said, "No, that isn't the way it is."
Now, you get into even more detail. My Halton board really doesn't even get that 2% because of various other factors. So it all gets complicated and it's hard for me to say to the public that this is what I'm calling for, because Halton board is saying, "We're not even getting the 2% this year."
Somehow we need to simplify what we mean. I'm open to suggestions, because I'd be willing. The deficit is so bad that I would be willing to agree to the 2% less next year, if we can somehow get that so the public understands it. I don't know how you do that. I would agree to it, but let's just get it so everybody knows what we mean.
The Chair: Tony?
Mr Tony Ruprecht (Parkdale): I'll wait till that discussion is over, because I'd like to present a new item on the current situation.
Mr Perruzza: Chairman, a point on that, just to get it cleared up. If I'm understanding this correctly, what is being suggested is that school boards ask their teachers -- because we all know that in most school boards roughly between 75% and 80% of their total annual budgets go towards paying salaries, mostly teachers' salaries, but there are other salaries grouped in, administrative salaries and that kind of thing. So what we're saying here is that a message be sent to the school boards that they ask their teachers' federations to renegotiate contracts and to recommend that teachers' salary contracts be scaled back. Is that what we're saying? Because I'd be inclined to support that kind of initiative.
The Chair: I didn't hear it that way. Mr Carr can explain it.
Mr Carr: Yes, that's what we called for. If it's already been negotiated, we've called for a rollback. I would be careful, though, because I know Tony Silipo called for this, but I don't think we're going to get the government side to agree to that. If you have authority to do that and we could get you to agree to that -- I don't know if we could with the Liberals -- then that's great, if we're really doing that. But I'm saying that you'd better be careful, because I don't think that's the government's position. But that's what we've called for.
Let's use Halton as an example. If a wage has already been negotiated for next year, which it has -- I forget what the amount is, but they've already negotiated an increase for next year. What we're calling for is for it to be rolled back to whatever the transfer is. If it's 2% less, then it would be 2% of whatever. That's what we have called for. But I just caution the government members that I don't think that's the government position. But if we can get the report to say that and the Liberals to agree to it, then we certainly would.
Mr Wiseman: Could I just interject a piece of information from the Toronto Star on the board of education issue?
The Chair: Mr Wiseman, Mr Johnson had his hand up and you talked right over top of him.
Mr Wiseman: Sorry. I didn't see that.
Mr Johnson: All this cross-dialogue is very good and valuable, but I think it's really important that we get on with the task at hand. I'm not sure under what heading it would go, but I think we could make some opening statements or some statements somewhere in this submission to the Treasurer.
There are some things we already agree on. As I've listened to the dialogue around the larger table here today, for example, I think it's clear that the province of Ontario has not lived within its ability to pay. I think that's evident by the fact that the deficit and the debt have increased as dramatically as they have. I think we could say that in a statement that we would all agree with.
I think likewise we all agree that there has to be, as Mr Kwinter so ably stated, a comment about the deficit and the rate of reduction we would expect over the next few years in order to ensure that the deficit problem doesn't get absolutely out of hand, and then we can go on and make our opinion on taxation.
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We might want to make a statement that we've reached that point where certainly we know, it's evident by the people who presented to us, that people are quite unhappy with the prospects of increases in taxation, understanding too that there may be some areas where taxes could be increased marginally, but generally speaking, taxation does not seem to be a positive thing for most of the presenters. Of course, as it has also been stated, where there seems to be a need for expenditure reduction, I think clearly that becomes something that the present government has to deal with because it becomes a political issue.
Mr Ruprecht: Mr Wiseman had some comments relevant to this present discussion. I'll wait until a new item comes up at the beginning of the economic summary, so that I can get up as well.
The Chair: Fine, I just wanted to make sure. Mr Wiseman, we want to get on with this.
Mr Wiseman: I think maybe what I'll do is I'll photocopy this article from the Star and I'll give it to everybody. Then everybody can have it and we can deal with it when we do the MUSH sector.
The Chair: Ms Campbell, have you got enough direction now in this? I know we've skipped all over there, haven't we?
Mr Ruprecht: I have one more. Looking at the current situation, I'd like to add one more item there if it's possible. One of the major keys for economic recovery obviously is funding availability by that sector which creates most of the jobs, namely, small business. All of us know, it's been in every paper and every newscast, that the banks are not providing the kind of money that's necessary for economic recovery for small business.
I'm wondering if the researcher can, in the current situation, add one more point here when she talks about the present economic and current situation, whether that might be relevant to point out. So just in case the Treasurer comes up with some idea about economic recovery, he should have that in front of him.
Ms Campbell: So you're asking for the insertion of a statement to the effect that the committee expressed concern about the availability of funding for small business which is deemed a key to the province's --
Mr Ruprecht: One of the keys.
Ms Campbell: One of the keys to the province's economic growth.
Mr Ruprecht: Yes.
The Chair: Do you agree with that, Mr Carr?
Mr Carr: I just maybe need a little bit of clarification. You said funding in terms of --
The Chair: Loans.
Mr Carr: Loans through the Ministry of Industry, Trade and Technology?
Mr Wiseman: Availability of loans.
Mr Ruprecht: I'm saying that the common complaint by small businesses today is they're unable to get sufficient funding for starting up new enterprises, new businesses, and that the banks are not sufficiently providing for those contingencies.
Mr Carr: The only trouble I've got with that, of course, is that the broad statement sounds nice, meaning that MITT presumably would make funds available, but the problem is with the number of small businesses and the pool that would be there. We've already got that with the venture capital fund right now and presumably, the ones who sat on this committee, that was for small businesses to access. The problem is there are more small businesses that want it. If you made it $3 billion, there would be enough out there.
If you were going to give any type of relief to small businesses rather than putting this pool of money that these small businesses will then try to access -- and the ones that get it are the ones that can lobby their MPPs or MITT the best -- personally, I would say whatever amounts you were going to give, whether it's $250 million, $200 million or whatever in this pool, I would reduce the employee health payroll tax by a similar amount, starting with the smallest up, until you ran out of $200 million or whatever. I know we're debating points because we can all say, philosophically, we should make more money available to small business.
The Chair: Mr Ruprecht, if I understood right, it was a simple statement to the point that small businesses, when they knock on the bankers' door, they say no. I don't think he went into all the other details there.
Mr Carr: Just quickly, I was going to say I wouldn't agree with that because I don't see how it works. Philosophically, nobody could disagree in this room. I don't see how it works and I don't see -- maybe I'm new school or whatever, but I don't see putting stuff in a report unless there's something really workable and something the Treasurer can say, yes, that's good, nice little philosophical -- and this isn't any knock against Tony because I know what he's saying. He may want to see the report broader, but I just don't think that would work.
Mr Norm Jamison (Norfolk): I'd just like to comment because that seems to be a specific area of concern for me. You're absolutely correct when you say the banks have tightened up their lending policies over the last while, and banks normally do that during a recession or doing a period of time of higher-than-normal risk. The small business community is traditionally a much higher-risk venture.
The previous government, to its credit -- and I'd like to say that -- set forward the new ventures program, and the problem we've developed in doing that and in spreading small business self-help offices throughout the province, 28 now, is that the banks are administrators of the guarantees we give, dollar for dollar up to $15,000 on a startup basis. What we have found, and the complaints have come in steadily over the last two years, has been that the banks are administering that in a very, very tight-reined, tight-fisted manner.
To that end, I think we should be indicating two things at this point: broaden the scope of participants as far as the lending end of the situation goes; broaden that to try to include other moneylenders such as credit unions and caisses populaires.
The other point I think I'd like to make is that in a great sense small business is very locally based. They are the driver and the creator of the vast majority of jobs in the province. There should be some ability to administer those loans, possibly not directly through the banks but through a community-driven force that is community based. That avenue should be looked at because I agree with both of you that the system as we have it now doesn't seem to be serving the needs because of the restrictive policies of the banks at this point in time.
The Chair: How do you read it there, Ms Campbell?
Ms Campbell: I have a couple of questions. If the committee is interested in making a statement to the effect that it has some concerns about the situation regarding small business, is it not perhaps better to put those comments under "Economic and Fiscal Policies"? Also, correct me if I'm wrong, but a lot of the lending institutions are regulated by the federal government as opposed to the provincial government, and if this is a report to the Treasurer -- or is this maybe just a statement of concern on the part of the committee as opposed to a recommended action to the Treasurer?
The Chair: Mr Ruprecht, you say it's a statement; this is what's happening in the real world.
Mr Ruprecht: Yes, my point really is that it doesn't matter to me how you put it in there, but it seems to me if this committee, the finance committee, does not at least look at that issue and tell the Treasurer this is a concern, then in terms of the committee's relevance it may be questioned.
In my experience as an MPP in my area, I get many people calling me about their inability to get loans. Somehow the Treasurer would have to look at that in whatever fashion. Even though it may be just one statement in here, at least he should be made aware that he should be looking at it. However he can do it, it doesn't matter; under whatever heading you want to put it doesn't matter to me either, but I think it's an important part.
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Mr Carr: What I would agree to -- and I think everybody agrees with this, because we've heard this many times, not only this committee but the venture capital -- is basically to have somewhere a preamble stating that the job creation of this province is the small and medium businesses, that they are a big factor, that we see the future job prospects in that area, not exclusively, but that the Treasurer should do whatever, however Elaine wants to word it, to enable the small and medium businesses to grow and thrive and prosper and create jobs and so on. I would have no problem with that.
Where I would have the problem is if we got specific and said that we should somehow have any more type of loans for small and medium businesses or whatever, but I have no problem with right at the very front saying that this committee agrees that the small and medium business sector -- and for those of you who weren't here, I just came from meeting the small business group of the Ontario chamber -- somewhere a preamble saying that we recognize, and the Treasurer should recognize, which he does, and the government should recognize, that the small and medium businesses are going to be the engine to drive our economy.
If Elaine can put it some way, and I think she's got the drift now, I would have no problem. Where I would have a problem is if we said the way to do that is to give them loans or guarantees. I don't think that's the way to do it, but I have no problem with a preamble statement like that, although my colleague may.
The Chair: Okay, I've got to go Mrs MacKinnon next here.
Mrs Ellen MacKinnon (Lambton): I'm really not sure where this is at. We seem to be bouncing around. But under "Debt and Deficit," would it not be helpful if at some point we were able to point to a number and say, "This is what it costs to service the debt, service the loan." An awful lot of people out there don't seem to comprehend that if you borrow $1 billion, it might cost you $1 million a day to keep that loan paid off in interest, if you get my drift. Finance and economics is not my forte, but I think I can --
Mr Ruprecht: Oh, I thought it was.
Mrs MacKinnon: Well, I used to have a household budget that my husband could never understand and I never was able to keep to anyway, so why should it be any different here?
Mr Carr: My wife -- we should let them get together.
Mrs MacKinnon: Oh, I'll show your wife how to run her household budget, and you wouldn't like what I do.
Mr Ruprecht: You show me how to run your household and you'll be a good member of this committee.
Mrs MacKinnon: I think we should be able at some point to show our constituents: "This is how much we owe, this how much it costs to pay the interest. Which do you want us to do, pay off the debt, pay off the interest, or what do you want us to do?"
The Chair: Those are in the reports that come out from the Treasurer, if you can read all the lines.
Mrs MacKinnon: Are they public? Will they be in the budget?
The Chair: No, they're not in the budget. Mr Jamison.
Mr Jamison: Just a comment. I think we have to be careful when we say that small business is the future of the province. There has to be an understanding, and I think Mr Kwinter would agree, being one of the previous ministers of what used to be MITT, that there is a correlation, a direct connection between small business and large business. But to simply put all your eggs in one basket and say that's our future -- yes, they're creating most of the jobs, but certainly, for example, if you were to look at Algoma and have Algoma fold, the direct connection in the reverse terms would be a direct and miserable effect on the small business community.
I think we have to recognize that there's a connection throughout with large and small business, but identifying that the major job creator at this point is in fact the small- and medium- sized business community. Our definition in the province for provincial purposes, and I'm not sure it's correct to do this any more, is recognizing a small business at 100 employees or less. I'm not sure that that's probably an adequate way, with technology and so forth, to really recognize --
The Chair: Mr Jamison, I know it's another statement, but we've got to get going on. That was only a one-line statement that we had that there's a problem out there loaning money, and I've got to go to Mr Sterling, if we can get on to this report.
Mr Norman W. Sterling (Carleton): I'd like to get on with the report too. I don't think that whether banks lend or don't lend money to small businesses is relevant to our report. That may be good advice. First of all, banking is a federal power and I think we should concentrate our efforts here on advice to the Treasurer on things which he has control over, and therefore I think we should get on with giving him advice.
The Chair: Mr Sterling, listening to all the discussion here, what seemed to come out was that small business has a problem kickstarting because it's having problems getting money. If they were able to get this money, then they would be able to hire someone, which would take someone off, say, unemployment or welfare. This seems to be the problem. I think that was just sort of a general statement to tell the Treasurer there are some problems on this kickstarting.
Mr Sterling: But the Treasurer can't do anything about it, so why tell him?
Mr Ruprecht: No, he can.
Mr Sterling: What can he do?
Mr Jamison: I don't believe that.
The Chair: But if he's doing a forecast.
Mr Sterling: If you want to advise him to write to the federal government to tell it to tell the banks to lend money --
Mr Jamison: No, that's not what I'm saying, Norm. There are other avenues.
The Chair: Mr Sterling, maybe it is that when he's doing the forecast, he's looking at revenues. It does have an influence on his revenues because there's a problem out there. That is, I think, the direction.
Mr Sterling: If we spend an extra day here, he's going to have to find some more money to pay us to sit here for an extra day. Everything relates back to his budget, I grant it, but let's get down to the key figures here, the key questions that we're to talk about here.
Mr Ruprecht: So we'll just put a general statement then.
The Chair: Okay, we've got the general statement there. Let's carry on.
Mr Perruzza: Mr Chairman, the statement I'd like to see on debt and deficit is that on the deficit side we recognize that during hard times governments just simply can't turn their backs on the people they were elected to serve, but have to cushion the blow of hard times and recognize that in some cases deficits are acceptable. Certainly, they're acceptable during hard times. We have plenty of historic lessons to teach us that. One can only think back to the Depression, to the Roosevelt days, the New Deal and all of that. It was essentially deficit spending that got the United States and Canada out of the Depression of the 1930s.
Recognizing that, we also have to understand that we can't just simply let the debt or the deficit run away with itself, because what'll end up happening is that in order to service the debt we will be siphoning money away from much-needed programs that in fact help people during difficult times. That's the kind of statement I'd like to see in that section, that while it's acceptable during a recession to carry a deficit, that deficit has to be held in check and not just simply grow beyond a government's capacity to service it, because then you end up hurting the people who --
The Chair: I think Mr Kwinter already went over that earlier this morning.
Mr Carr: I was going to say that what I would rather do to make it short and simple is leave the preamble out and just say, "This is what the deficit is." I appreciate people need to know what the servicing is, just some facts as to what the accumulated deficit is. "This is what it is projected at this year," $13 billion as of yesterday. "This is the accumulated deficit of the province. This is what it costs to service it." I know Elaine can do this. She's probably done some of the work. I've even got it down to what it costs per hour.
The Chair: Yes, we heard that.
Mr Carr: You can get what it's serviced per day. I used that figure. If you want to get into that, just so people know, when I tell them what it is to service it per minute, not for health care or education, just to service the debt, people don't realize that. At the pre-budget hearings in Windsor, when you saw, in the five minutes that I had to ask questions, that it was more than people are making as income, it really hit home.
I would suggest we do that -- Elaine's done it for me in the past, or certainly that department -- so that people realize, because picking up on what the other side said, if we do that, I don't think we need a preamble. Just say, "This is where we're at." We'll use the Treasurer's figures: "This is what the budget's going to be. This is what our accumulated deficit is. This is what it's costing you to service it." The only thing I would say is, let's not put in the preamble why it's good or bad or whatever. Just say, "This is it." That other stuff is nice to say, but I don't think it's relevant. That's what I'd like to see in it, and then whatever you want, go from there.
Mr Johnson: Under the very next title, "The Future," should we maybe not include something that would show us what a no-change scenario would mean for the province of Ontario?
Mr Carr: If nothing were to change?
Mr Johnson: Yes, if nothing were to change?
Mr Carr: I have no problem with that.
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Mr Wiseman: Also, could we include -- I don't want to be left out -- domestic and offshore borrowing? I'd like to see those numbers as well.
The Chair: I thought we already went over that. I think that's down already.
Mr Wiseman: Fine. Just as long as it's there.
Ms Campbell: Just to recap, under "Economic Summaries and Forecasts," under the subheading "Debt and Deficit," the committee would like a summary of the comments and concerns expressed by the forecasters who appeared before the committee. It would also like to supplement that information with some additional facts and figures about the actual size of the provincial debt, the cost of servicing it and further information about domestic and offshore borrowing.
Mr Wiseman: Yes.
Mr Carr: Yes. The other thing I would caution about is that when we do the economic forecasting, I don't know how you do it when you add such a big range. I don't want it to be -- again, I think I mentioned this yesterday; even if it could be; I don't know what you planned on doing -- a table of all of them. I just didn't want to get you to pick the TD or the Royal, and I know you won't do that. But if you can somehow get some consensus -- I don't even know if taking the range really gives it to you. I don't know how you planned on doing that.
Ms Campbell: Are you talking about using the information that was provided to the committee --
Mr Carr: Yes.
Ms Campbell: -- or going out and doing additional research?
Mr Carr: No, I would say what was provided by the committee.
Ms Campbell: Just focus on that.
Mr Carr: The only thing is that we've got a wide range. What would you pick? How do you see it working? Would it be the range? Are you going to incorporate the range, the growth rate, as it came in, from the high to the low? I don't know how you saw it happening.
Ms Campbell: Would you like a statement added within that particular section about the committee's concern about the deficit situation?
Mr Carr: Yes. I'm prepared to support that, in a broad sense just saying that we have to be concerned about that.
Mr Wiseman: I think we leave the recommendation that flows out of that to later on, though.
Mr Carr: Yes. We'll use the word "horrified."
Ms Campbell: Under the subheading "The Future," I just heard that you would like that information supplemented as well. I guess I need further clarification on just what it is. I think Mr Johnson mentioned something about what would happen if nothing were to change. Is that to mean if there nothing was to happen to the provincial deficit?
The Acting Chair (Mr Paul Johnson): If there was a no-change scenario; that is, if we continued to spend under existing programs as we have and if we continued to borrow at the rate we are and if our revenues continued to be as low as they have been.
Ms Campbell: So I will abstract comments related to that from what the presenters said to the committee, if it's there?
The Acting Chair: Yes. I think the information is available, or at least it wouldn't take a whole lot of extrapolation of some graphs to determine where we'll be year after year for maybe the next four or five years.
Ms Campbell: So you're asking for the insertion of graphs? A graph?
The Acting Chair: I think that would be fair, if everyone agrees.
Mr Carr: I'm sorry. I didn't catch that.
The Acting Chair: Would you agree to a graph that would show what our circumstances will be year after year for the next four to five years, if there's a no-change scenario?
Mr Carr: Yes.
The Acting Chair: Do you understand what the no-change scenario is?
Ms Campbell: I think I've heard it mentioned a few times.
The Acting Chair: Okay. Does that now conclude the input we want to have? Will you have enough information for the economic summaries and forecasts?
Ms Campbell: I think it should be possible to put something together. If I do have some difficulties, I will consult further on that.
The Acting Chair: The next topic of this brief is "Economic and Fiscal Policies." Any additional comments on what's already noted in this brief, in this draft?
Ms Campbell: At yesterday's meeting, I think Mr Kwinter was expressing some concern on being able to link the forecasts presented by the people from the banks and the consulting firms with the following sections of the paper. I would suggest attempting to do that in this particular section and opening with a statement linking what the committee heard from the forecasters, including the Minister of Finance, with these policies and with the presentations of the other witnesses who appeared before the committee.
I also suggest, under this heading, that the remainder of the section focus its discussion on possibly two issues that were raised by the witnesses and which the committee feels are pivotal to the province's economic growth, or perhaps representative of the concerns that were presented to the committee. I've listed some possible topics here. I don't know whether the committee would be agreeable to reference to both of those issues or not. Perhaps there are some others they'd rather focus their attention on.
Mr Carr: I liked it and I think we talked earlier, before we got going, about the taxation one that was listed there. I'll just throw my points of view in on that. I think it should be in there. What I think I heard us talk about a little bit before is that everybody has said there can be no tax increases. What I would suggest we call for, and I don't know if the government can agree to this or not, is that this committee suggest to the Treasurer in a preamble, saying that in light of what we've just seen in terms of revenue dropping, and however Elaine wants to word it, this committee recommends that there be no tax increases in the next provincial budget.
We, of course, would be prepared to support that. I don't know if the government can, but I think taxation is very important. As you know, it was one of the big issues when everybody came in. We would like to say that having heard from the people, we recommend there be no tax increases in the next budget.
Mr Jamison: The report would simply handcuff the Treasurer in the area of tax, totally. I believe that all of us realize the sensitivity that's out there in the general public as far as tax increases are concerned, and I think we should specify that there is a concern over tax burden at certain levels in the global market sense, that any considerations in the area of tax should be looked at with a sensitivity towards that aspect of the situation. To say carte blanche that there simply would not be any form of tax increases doesn't leave any discretion, then, to the Treasurer at all. The tax area, of course, is a major area of discretion. We're saying use the discretion in a sensitive way.
Mr Carr: Can we get a compromise like this, then, saying no new net increase, so he can arrange it? How would that be? I know what you're saying, "No new tax increases." How about if we go, "No new net," as a compromise? That says, "Okay, if you can, tax somebody else to whatever." How about, "No new net tax increases," so the bottom line stays the same? How about that as a compromise?
Mr Jamison: Again, I think we should be pointing out to him the sensitivities in that area. I think that in itself sends a message from the committee. But to really get into pre-budgeting the tax measures or non-measures that are in the budget I think handcuffs him totally. That's a signal from us that would handcuff him in making the assessments, and there are assessments that have to be made. We point out that the whole tax area is one of great sensitivity, considering the global changes, considering the sensitivity out there in the public and the ability to promote as speedy a recovery as possible.
Mr Johnson: I just want to know if, under the table of contents, it would be appropriate under this heading to put in concerns that have been raised already, more specifically with regard to accounting and disclosure, because I know that when you put down that possible topics are capital spending and federal-provincial relations, not every province or the federal government does an accounting procedure that's exactly the same. When we talk about capital spending, that's something that would come under the broader topic, maybe, of accounting and disclosure. Is that appropriate?
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The Chair: Mr Carr.
Mr Carr: Now I want to comment on that. I didn't want to jump around; I just wanted to see if we could get one more compromise with Norm on the tax situation. We can agree with the preamble. I would like to have said no new taxes or no new net. What if we say that in light of the tax fatigue -- whatever you call it -- we call on the Treasurer to look first at spending rather than increasing taxes; a broad statement that Elaine could do saying that if you don't want to freeze taxes or freeze net taxes, we would encourage the Treasurer to look at spending controls further before tax increases. I don't know if you could agree to that or not. Then we'll get back to Paul's, if we want to keep this going on topic.
The Chair: I'm going to go to Mr Kwinter, then over to Mr Wiseman and then to Mr Perruzza.
Mr Kwinter: I just wanted to comment on Mr Carr's call for no tax increases. I don't know whether it's appropriate for us to say that. That's the one thing the government has the discretion to do, that is, to tax. But I think it would be absolutely incumbent upon us to bring to the Treasurer's attention the representations that were made to us. As far as the business community is concerned, it thinks it's in one of the most overtaxed jurisdictions in North America, and I think it's fair to say that the average citizens feel they are at the threshold where if taxes go any higher they are contemplating a tax revolt. I think it's important that we certainly send that message to the Treasurer. He is going to have the ultimate decision as to whether or not he's going to increase taxes, but he should be aware of the climate that is out there and I think it's important for us to bring that to his attention.
Mr Wiseman: I would like to say that the province is going to need increased revenue. I would like to see perhaps a recommendation that the Treasurer look at where there might be some areas where the reduction of taxes could actually generate an increase in revenue by stimulating some demand in an area. I think it might be a good place to put that in at this point. We were talking about it earlier. It's called the Laffer curve, where tax fatigue comes in and people actually avoid taxes as taxes increase, and as you increase them more, the amount of revenue coming in decreases.
Mr Johnson: Diminishing returns.
Mr Wiseman: Well, it's the law of diminishing returns that Laffer applied to this. I think we might want to draw the Treasurer's attention to looking at scenarios where the reduction in tax would actually lead to an increase in revenue.
Mr Perruzza: On this taxing section, recognizing that obviously, as a government, we have the right to tax, I'm not going to be a supporter of what was said by my Liberal colleague in saying that we're one of the highest-taxed jurisdictions in North America, because I don't believe we are. However, having said that, I don't believe for one minute that just because we're not the highest means we can continually go to tax. I'm proud of the fact that we're not the highest, and I'd also like to work to ensure that we never become the highest; in fact, if anything, that we roll back the tax burden our citizenry pays.
Having said that, for any movement in taxes I would like to see that one principle be at the heart of any new tax, and that's the principle of fairness. The Treasurer started something in the last budget which was very interesting. For the first time, he essentially stayed off the backs of middle-income earners and low-income earners by introducing a tax that essentially was at the top end. If any new taxes need to be introduced, I'd like to see a strong statement in our report that suggests that that tax be paid by those who can most afford to pay and not by those who can least afford to pay. Simply by virtue of numbers, we know that the largest number of people belong to that middle- and low-end pool. That's where all the money is and that's where governments tend to generally go for their revenues.
I'd like to think we're slightly different, that we look at that small pool at the top, and if we have to go after that in an aggressive way, then so be it, if we need the money. That's what I'd like to see happen. I would hope that no new tax increases be in the budget, but if there have to be, that they not be on the backs of the working poor or middle-income earners, that they be at the top end.
Mr Sterling: First of all, I think it should be pointed out that the Treasurer increased income taxes for people making $10,000 a year in this province last year in his budget. It was pointed out by ourselves in the House that they had been given a break by Brian Mulroney and the federal government, and this government took it back from the working poor. That's how this government deals with --
Mr Perruzza: There's --
The Chair: Mr Perruzzo, you had the floor before, and Mr Sterling was very quiet.
Mr Perruzza: Yes, but he's talking about Brian Mulroney giving a break to the poor.
The Chair: He has the right to make an opinion.
Mr Sterling: That is the fact.
Mr Perruzza: Even when that opinion is totally misleading?
The Chair: If you want to put your hand up and comment after, fine and dandy.
Mr Perruzza: Okay, that's what I'll do.
The Chair: I've got Norm next, though.
Mr Sterling: The fact of the matter is that if one wants to examine the record, the federal government gave all of our taxpayers, including the low-income taxpayers, a break on our income tax rates. What happened? Last year, the Treasurer came in and scooped that up to the penny, taking $45 off somebody who earns $20,000 a year in this province. That's how this Treasurer has dealt with the working poor, the people who are trying to struggle etc. It's is a joke that this Treasurer is kind to those who are earning less, and I take great offence at that.
Second, the fact of the matter is that we are the highest-taxed jurisdiction in North America, when you add municipal taxes, provincial taxes and federal taxes. We are taxed out of our minds. I think it would be irresponsible for us not to make a general statement about taxation, a general statement about expenditures and a general statement about deficits.
The Chair: Make it a very simple one, Mr Sterling.
Mr Sterling: Those are the three major areas the Treasurer has to consider, and I think the committee should try to reach a consensus with regard to all three of those.
The Chair: Mr Jamison.
Mr Jamison: If we're going to consider making statements of that nature, I think it is important to indicate that if any form of tax increase were to take place, it would be on a graduated basis and not on the basis of a GST, for example, which applies to everyone, rich or poor, equally. That issue is one I think Mr Perruzza was trying to approach, that if taxes are increased, it has to be done in a sensitive manner, and graduated increases are more fair in their application. Certainly that has not been the experience of any major tax that's come forward federally or any cut that's come back on family or child assistance over the past. The best option there is to indicate that that's a very sensitive area: The whole question of taxation is very, very sensitive, more so than it ever has been.
The Chair: Ms Campbell.
Mr Perruzza: Mr Chairman, I thought you were going to give me an opportunity to respond. You said, "Put up your hand and I'll give you a chance to respond."
The Chair: I will give you a chance. Ms Campbell has some comments to make, and she's not the opposition or the government.
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Ms Campbell: I'd just like some clarification at this point. The discussion that has been continuing for the last few minutes seems to be focused on the issue of taxation, which was the third heading in the outline. We seem to have moved from economic and fiscal policies directly to taxation. My question to the committee is, would the committee like there to be discussion about the issue of taxation in the form of a paragraph and a recommendation under the heading "Economic and Fiscal Policies" rather than having a separate section?
Mr Perruzza: Do I get the floor now, or no?
The Chair: Mr Johnson.
Mr Johnson: Maybe in the interest of isolating taxation as a separate idea in this report, it should be under its own heading. Taxation is fiscal policy.
Mr Carr: Mr Carr, do you agree there should be a separate heading "Taxation"? Because we got into taxation and just flowed right out of the other.
Mr Carr: Yes, we flowed right out.
The Chair: And Mr Perruzza has a few comments to make.
Mr Perruzza: Just on that note, I think that would be good. I'm not going to repeat my particular preference for the statement I'd like to see happen there, that the key and central to any statement applied therein should be the issue of fairness and ability to pay. That's something I've always profoundly believed. Any tax measure that doesn't reflect that is, in my view, abhorrent. But just to correct the record slightly --
The Chair: As you can see, the researcher --
Mr Perruzza: Mr Chairman, I didn't interrupt you, right? You interrupt me all the time.
The Chair: Mr Perruzzo, I just want to say --
Mr Perruzza: It's Perruzza, with an "a" at the end. Here's the name; you read it. I didn't interrupt you, but if you want to continually cut me off, go ahead.
The Chair: I was just going to make a comment that the researcher already has down what you said earlier, so you don't have to repeat it.
Mr Perruzza: I know what I said.
The Chair: Okay. Go ahead, Mr Perruzza.
Mr Perruzza: I'm through.
Mr Kwinter: In response to Mr Perruzza, the only problem with his logic is that unfortunately in our society we don't have enough rich people. That is the problem. It's one thing to say we need to be fair and you've got to tax the people who are able to pay. We do that now, and we tax them at a progressively higher percentage. The more you make, the higher percentage you pay. But again -- I'm not trying to be facetious -- unfortunately we don't have enough rich people to carry the burden. Also, when you talk about the law of diminishing returns, in our society they are the most able to move: They have the greatest flexibility as to where they generate their income and where they report their income. It becomes self-defeating.
I don't think anybody objects to fairness. I just think there's a practicality. Under our system and under our way of life we have to spread the load over everybody, also recognizing that those who can afford to pay should pay. But you can't dump it all there, because it defeats itself.
Mr Carr: I want to be specific about the fairness issue, that taxes should be fair. We had this discussion before. As you know, in the last budget a surtax of 14% went on anybody making $53,000. People believed that $53,000 was middle-income. Jim and I were debating whether that is or not, but in Oakville that's the average CAW worker at the Ford plant.
Mr Johnson: Gee, I don't make that much.
Mr Carr: I know, MPPs don't. But when you talk about fairness and say it should be fairer, the people working in the Ford Motor Co who got hit with the 14% surtax on top of all the other taxes would say it isn't fair. If we're going to talk about fairness, what I would suggest we do is use that one at $53,000, the 14% surtax. I'm not talking about the lower tax and what happened with the federal and provincial, but we all know there was a surtax of 14% at $53,000. I would agree to the fairness issue if we said that we should reduce that surtax on anybody making $53,000, so that the Treasurer knows that when we say fairness we mean people in that $53,000: the average worker at the Ford Motor Co plant. I would suggest that we suggest to the Treasurer that he roll back that surtax on anybody making $53,000.
The Chair: Any comments on Mr Carr's statement?
Mr Johnson: Yes, I do. I don't think we could agree with that. Again, when we talk about the specifics -- generally we can give advice or direction to the Treasurer but now you're bringing up a specific and I don't think that was stated by any of the presenters and something this committee should do.
The Chair: Mr Carr, could you put it --
Mr Carr: Pas wouldn't get hit then.
The Chair: Mr Carr, maybe you could put it in a different way.
Mr Carr: No, what I was getting at is that -- and this is a difference of philosophy in the report. I agree we should be more specific. Paul obviously says we shouldn't and there should be generalities, but to say the tax should be fairer, I mean, everybody agrees to that. But when you need to get specific, what is fair to the $53,000 Ford Motor Co worker and what the government is, and I'm just saying when you say words like `"taxation should be fair," it's absolutely useless, because people are so cynical now.
What I would say as a compromise in this whole issue, because we've gone back and forth on the taxation long enough -- if we could get agreement on this, as I think we can, and then move on. We'll incorporate other stuff that we can't agree on here and we may in our minority call for that and so on, but what I would suggest we do is come up with a broad statement saying that the people of Ontario through these submissions have said there's a tremendous amount of tax fatigue and that the Treasurer should be -- I don't know what words we should use, but be very careful regarding the taxation issue because people are fed up with it. How we word that to get agreement is the big question, but I think Elaine can get the drift of that, saying taxation was a big concern among all groups and that the Treasurer had better be very careful looking at that area because there is tax fatigue out there. Then maybe we should just move on because I don't think we're going to get any more agreement than that from the --
The Chair: You know, $53,000 is a little bit misleading, I think, because --
Mr Carr: Yes. No, take that out. Don't include that --
The Chair: -- the thing is that you've got RRSPs, you've got personal deductions. You're up in the $70,000 plus, so it's not really a true fact.
Mr Carr: You're up into the Chairman of committee's facts.
The Chair: And I don't think all the Ford workers down there are making that kind of money today.
Mr Carr: In overtime.
Mr Johnson: In fairness, clearly it's an arbitrary sort of comment and what any one of us believes to be fair someone else might not.
Mr Carr: Yes, if you hit me it's not fair; if you hit him, it's fair.
Mr Sterling: Yes, I was going to say the same thing. Fairness to me means I don't get taxed. That's what it means to the people.
The Chair: Okay, we'll have the researcher -- go ahead, Ms Campbell.
Ms Campbell: Could I get clarification on the recommendation that the committee would like to put under the heading "Taxation"? Should it incorporate concerns about fairness and sensitivity to the needs of the people paying taxes as well as the business community in the business climate?
Mr Carr: No, I wouldn't agree to that, because fairness -- as we saw, we can't agree what it is. You know, fairness --
Ms Campbell: Would sensitivity be a better word to --
Mr Carr: No, I wouldn't even say that. What I'm saying in terms of the statement isn't saying that we should even tax anybody else on a fair basis. I'm saying, if you want to get specifically what I would agree to, and I don't know if the other side could or not, words to the effect that the committee heard from all groups, or from many groups, and you can list them or whatever, regarding the taxation issue and that there was a tremendous amount of concern out there about taxation levels and I would even be prepared to say at all levels.
Mr Johnson: That's true. That's what we heard.
Mr Carr: So we can include federal, provincial, at all levels, and that as a closing saying the Treasurer should -- I don't know what words we use -- look very closely before we raise the taxes or whatever. In other words, be careful about taxation and how you want to word that --
Ms Campbell: Exercise discretion?
Mr Kwinter: Well, he always exercises discretion with taxes. I think he should exercise caution and be mindful of the fact that all sectors have indicated to this committee that taxation is a major concern to them and that they feel we are losing our competitive advantage because of the level of taxation. That isn't just companies, you know; it has to do with people. I hear more and more from multinationals saying they can't get their people to come to Ontario because the tax bite is too high. Until recently most major league ball players had in their contracts that they could not be traded to the Blue Jays, and the reason they had that --
Mr Johnson: That's absolutely --
Mr Kwinter: No, it's true.
Mr Carr: Until they won the World Series.
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Mr Kwinter: Even then. They had it in there because they did not want to subject themselves to the tax regime here compared to the tax regimes they had in other places in the United States. It's quite true that a lot of them still have it to this day in their contracts. I shouldn't say just Ontario; they won't go to the Canadian teams because of the tax regime.
The Chair: It's just the different way it's treated here in Canada.
Mr Kwinter: It's not the different way; it's the amount.
The Chair: You can't spread it over as many years as in the United States.
Mr Kwinter: No, it's just the basic tax is much higher. This is the same problem that executives have when a company wants to move an executive from an American facility to Canada and he says, `"No way, I'm not going to Canada and pay those taxes." If you take a look at the on-average take-home pay of people in the United States compared to on-average take-home pay in Canada, you'll find an incredible discrepancy, plus the fact that you can deduct things like your mortgage payments from your tax returns in the United States; it's a taxable deduction.
The Chair: If we go into that, that's quite deep, because we're talking about health care benefits, we're talking about safe streets and we're talking about parks, and it's hard to compare.
Mr Kwinter: I'm not suggesting we go into it in detail. All I'm saying is that the Treasurer should be mindful that it is a concern and a problem and that it's something he should be aware of if he's going to be looking at taxes.
The Chair: The image of the tax bill, but there are a lot of side benefits.
Mr Kwinter: The reality of it, not the image.
Mr Carr: Could I just reaffirm, because I think everybody heard it and I saw Paul's head nodding, to be non-partisan and non-political, if we could just say, "As a result of taxation at all levels," so that we get everything in there, because it is the bottom line.
The Chair: I think Mr Sterling said that about an hour ago.
Mr Carr: I just want to make sure that's in there.
Ms Campbell: Could I ask one further question about the heading "Taxation"? I think I'm fairly clear on what the committee would like to recommend under this heading. What would the committee like in terms of content in any paragraphs discussing the issue of taxation? I've proposed two options under this heading to discuss, perhaps briefly, two specific taxes or look at taxation as it relates to one or two of the sector representatives who appeared before the committee. In the case of agriculture, we heard from the Ontario Federation of Agriculture and the Ontario Flue-Cured Tobacco Growers' Marketing Board, who both discussed the issue of taxation as it related to their particular areas of activity. The Canadian Manufacturers' Association also discussed the issue of taxation with respect to research and development.
Mr Carr: I would like to get specific, but I don't think we'll get agreement with retail sales tax since I couldn't get agreement on no new taxes. I would like to say, let's do retail one by one. We'd get Ron to agree on the tobacco tax and a couple of others, but I don't think we'll get the government to.
The Chair: Ask me.
Mr Carr: So if we can, let's just make it general.
Ms Campbell: The sectoral?
Mr Carr: Yes.
Ms Campbell: And which sectors would the committee like to refer to?
Mr Carr: No, say "general," the first point that you have there; say that for taxation in general, there were many sectors, including business and taxes.
Ms Campbell: Just a paragraph of comment?
Mr Carr: Yes, that's what I'm suggesting, because I think that's all we can agree on.
Ms Campbell: Does the committee agree with just a paragraph of comment?
The Chair: Are you agreeable, Mr Kwinter? Would you like to make a comment?
Mr Kwinter: I have one other comment. It is my perception, and I wasn't at the hearings when we travelled outside of Toronto, but one of the main things that came out on taxation was the issue of harmonization of the retail sales tax and the GST. I think that is something we should have some kind of a statement on, because it seemed to me that messages came through pretty loud and clear from several of the deputants. I don't know whether anyone has any comments on that.
Mr Carr: I'd agree with that.
Mr Sterling: I think that a good statement would be that the committee now agrees with the Conservative position in a minority report two years ago that we combine the GST and the PST.
Mr Carr: Articulated by Norm Sterling.
Mr Johnson: I wouldn't agree, so there we've got a problem.
Mr Carr: How about without the preamble? Would you agree with that?
Mr Johnson: The problem I have is that I think it was reprehensible of the federal government to bring in the GST and have a retail-like sales tax that was already being applied in the province of Ontario to compete in Ontario. We know that it wasn't seen as a very positive tax by almost everyone in Ontario. So to now suggest that we harmonize those, when we know that there are indeed advantages for the people of Ontario by not harmonizing the GST with the PST, I don't agree with that.
Mr Sterling: Why don't we put in that we would like a manufacturers' sales tax instead of the GST?
Mr Johnson: Depending on who gets in during the next election, that may be revised.
Mr Sterling: Is that okay, Paul?
Mr Johnson: Pardon me?
Mr Sterling: Should we put in a manufacturers' sales tax instead of a GST? Is that what your choice is?
Mr Johnson: I didn't offer a choice.
Mr Sterling: You can't have it both ways.
Mr Johnson: I think the people of Canada and maybe the people of Ontario would have preferred if it had been left as it was, with the manufacturers' sales tax, yes.
Mr Sterling: Okay, we're saying the manufacturers' sales tax.
Mr Johnson: Guess what? With our manufacturing industry decimated like it has been by the free trade agreement, then I guess we would have lost a lot of revenue under this deal.
Mr Sterling: Nobody believes that, Paul.
The Chair: Okay, we'll go to Mr Kwinter and then Mr Carr.
Mr Kwinter: My point, in raising the issue, is not necessarily to advocate one or the other. It's to say that it seems to me there was significant concern about it, and I think the report should reflect that there was concern about harmonization. To Mr Johnson's remark that he doesn't agree with it, that isn't the issue. The issue is that it's a fait accompli and there's duplication. There are economies of scale that can be achieved by harmonization.
I think that, because of the representations, we should respond somehow or other, whether we say this has been raised by several people and we don't agree, or it has been raised by several people and the Treasurer should look at it, or, if you want to take the extreme position of my Conservative colleagues, that it should be done.
The Chair: I think one point there -- I know my wife has different politics than I have. She'd like to have them both together and she likes the refund that she gets from the province, but she doesn't get paid anything on GST when she files it. I think that's a big concern with small business that there's not one cent involved in collecting the GST.
Mr Carr: I just want to say that the business group I met with this morning called for that. We've called for that. I would caution the government members, because I know before the next election this government won't do that, embarrass the federal government, because you can't have a federal government calling for the elimination of the GST. But you're going on the record as saying you're opposed to it. Regardless of what happens in the next election, if your government's still here, I am making a prediction that the provincial government will do it -- not until the election. For you to sit here and say it should never happen and that was a bad GST might be acceptable now, before the next federal election. But you'd better be careful in saying that, because when the provincial government sees exactly how it is, it might be your government that brings it in. Just a point of caution. I think it should be in there.
Mr Johnson: I'd just like to make a comment that I heard what Mr Kwinter said. Indeed, this report should reflect what the presenters have said. I have no doubt about that. Therefore, if there was a significant concern about the harmonization of the retail sales tax and the goods and services tax, I think maybe there should be a comment made about that under the heading of "Taxation."
Whatever this government may feel or whatever my opinions might be are not relevant to the broader opinions that were made by those people who made presentations before this committee.
The Chair: I think, Mr Carr, we're talking about taxes here and this is a tax part. If you put the two of them together, there would be more items taxed, so people would be taking a look at an increase in taxation. Would that not be correct?
Mr Carr: I'm sorry, what?
The Chair: If you wind up putting the two of them together, the PST and GST, a lot of items that aren't taxed under the PST in the province of Ontario, if you harmonize them you would have to tax them now.
Mr Carr: No.
Interjection.
The Chair: I'm just saying that because it would be an additional revenue to the province. I'm just saying that because it would be an additional revenue to the province. When you go and buy a meal, let's say at McDonald's, and it's under $4, all of a sudden now you'd be paying --
Mr Carr: That's why your government is probably going to do it, and it's non-political because, as you know, Quebec has done it.
The Chair: I'm just pointing it out.
Mr Jamison: I've heard people here today talking about absolutely no tax increases. Just the combination of those taxes creates a tax increase. Just for your information, Mr Sterling.
Mr Sterling: I think in clarification --
Mr Jamison: I'll carry on with what I was about to say.
Mr Sterling: I think it's important to know, if he would read our minority report --
Mr Jamison: It's important that we also take into consideration that within a very short period of time -- people like to make forecasts here about political outcomes -- we're approaching an election federally in which there have been, both by the Liberal and New Democratic parties, overtures about the GST, and that could significantly change things also.
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Mr Johnson: Even Kim Campbell.
Mr Jamison: Even Kim Campbell, as a matter of fact, has made some indication that way, yes. The New Democrats have come out and said they would basically do away with the GST. The Liberals have basically said, "Yes, we'll do something, but we'll tell you after we're elected what it is." The Conservatives are even waffling on that issue itself right now, some of the supposed front runners federally. It looks at this point as though the Conservatives might be experiencing some difficulty in re-election terms --
Interjections.
The Chair: I guess if Floyd collected the GST, he could keep it and just transfer what money he doesn't get from Ottawa and keep it in the bank here.
Mr Sterling: Perhaps it would be helpful to the NDP members to have the clerk dig out the report and our recommendations in this regard, because we acknowledged in that report there would be a windfall for the provincial government of, we estimated, about $500 million and we suggested that $500 million be used to reduce gasoline taxes because at that time we were dealing with the cross-border shopping issue. Therefore, what we advocated was no net increases in taxes.
We suggested that there would be a shift in taxation somewhat to sales tax, and then we suggested that it be taken off the gasoline tax. If you look at the report of this committee on cross-border shopping and you look at the same report of the Conservative Party, it will let the NDP members know a little bit about this issue.
The Chair: Okay. Ms Campbell, where are you now?
Ms Campbell: I'd just like some clarification. I think I'm fairly --
Mr Carr: I don't think we got to the harmonization agreement.
Ms Campbell: As a compromise, would you like a general overview of the issue of taxation that included reference to the opinions that were expressed on tax harmonization and maybe a few other taxes such as corporate minimum tax and commercial concentration tax?
The Chair: Yes, those three items were brought up by quite a few groups.
Mr Carr: We're not going to get agreement on them surely. I mean, if we did --
Ms Campbell: No, but would you like reference to them in an overview?
Mr Carr: In what way?
Mr Johnson: Just that they were raised.
Ms Campbell: That they were raised as issues of concern.
Mr Carr: Yes, that's fine.
The Chair: We didn't come here to listen to people and ignore what they had to say, did we, Mr Sterling?
Mr Sterling: Sorry?
The Chair: He's ignoring me. Okay, we've done taxation now. Everybody happy with taxation?
Mr Carr: Not really. I pay too much.
The Chair: Not happy with taxation but the reporting part.
Mr Carr: We're not happy, but we've got the gist.
The Chair: Okay. We have "Sectoral Issues." I'm sorry, we have to go back to "Economic and Fiscal Policies," at the top of the page. I guess we skipped from "Debt and Deficit," "The Future," and we got into "Taxation" and we skipped over there.
Comments on "Economic and Fiscal Policies"? Mr Kwinter, I think we sort of discussed a little bit of this yesterday.
Mr Kwinter: Yes, we did discuss this.
The Chair: Yes, because we went over the forecasters from the banks and that's when we got into the crystal balls yesterday.
Mr Sterling: That's what all this stuff is; it's trying to forecast the future and showing what a dismal job they've done in the past.
Ms Campbell: Would the committee like this section to be taken out of the outline?
Mr Kwinter: No, I think it's okay. One of the things I think we may want to comment on, and this was something that certainly has been a topic of discussion throughout our hearings, is this area of capital spending, not so much the capital spending, but how do you report it? How do you get it off the balance sheet and are you in fact just putting smoke and mirrors by shifting it from the budget to these capital corporations?
The other item, of course, is the federal-provincial relations, which I have no problem with. It could centre around the whole issue of the stabilization payments and what is the actual reality of ever seeing that, because I can assure you, and you don't have to be a soothsayer or a seer to project that the Treasurer will move that $1.2 billion from this year and have it in next year and it'll be there probably at the end of this government's term and it will still be there as a potential revenue. I think that is an issue we may want to look at.
The Chair: Mr Kwinter, I think we covered all that yesterday. If Ms Campbell has her notes there, do you remember we discussed all that? I think we're over that part.
Mr Carr: We called for it to be removed from the books, didn't we? I thought that's what we agreed to.
Mr Johnson: If I could just make a comment that I think I made earlier today, I think we need a simple but complete statement from the Ministry of Finance that tells the status of the province of Ontario with regard to its liabilities and its debts so that anyone, not just members of the government but anyone, can have a look at this accounting procedure, if you want to call it that, or disclosure statement or whatever, that includes all things the government ultimately would be responsible for with regard to liabilities.
That would include things like WCB, Ontario Hydro and any new capital corporations that may be created. I think that's what people want. In fact, maybe it wasn't the focus of everyone's presentation, but I did hear a number of people speak to that concern. I think this would be an area where we would want to include that, and I don't think anyone would disagree with that.
The Chair: Mr Sterling, and then we're going to recess right after this.
Mr Sterling: I agree with Mr Johnson that the total overall contingent liability or the liabilities that are out there should be up front and centre, that the debt incurred by crown corporations should be part of the debt of the government and any money they might make should be part of the income of the government in a consolidated way. I'm not so certain about WCB, because as I understand WCB, the government is not ultimately responsible for the contingent liability there. But you might want to include that as a footnote on it.
The Chair: Okay, Ms Campbell's got one question before we recess.
Ms Campbell: This question concerns the recommendation that the committee would like to make under the heading "Economic and Fiscal Policies." Would it be something building on what Mr Johnson and Mr Sterling have just been discussing?
The Chair: Can you read it out?
Ms Campbell: Mr Johnson said a simple but complete statement that provides information on the status of government's liabilities. He was looking at the issue of disclosure procedures. Mr Sterling mentioned contingent liabilities, a recommendation building on those statements.
The Chair: Mr Kwinter, do you agree?
Mr Johnson: I think we need to send a clear message too that we need to revise the way the province does its accounting. I think that's a simple message, is it not?
The Chair: What it looks like is that one government at one time is going to have to take the whack at when the books are changed.
Mr Sterling: That doesn't matter.
Mr Johnson: It's got to be done.
Mr Sterling: What happens is, you can show the books two different ways. You can show them the way they were kept before and you can show them in a new way, and then the people can make their choice.
I've got to tell you, I think until this government or any government, whether it's this government, the next government or whatever, comes to the realization that it's got to keep its accounting system on the accrual method of accounting, we're going to tempt treasurers to continue to fool around on the last day of the year or the first day of the fiscal year and try to use that. The political temptation is great to do that. We had a prime example of it last year in terms of the postponement of the payment to the teachers' pension plan.
I think there was a strong recommendation here early on in the hearings that the accrual method of accounting, which is the accepted method of accounting in business, should be the method of accounting --
The Chair: The way it's been done over the years, the public accountant came in and said to us that there was nothing wrong with it. I know Mr Phillips had questioned the Public Auditor, and that's the way it has been done for years, so he doesn't see anything wrong. So if you say it has to be changed -- I think Mr Phillips would like to have it changed -- that's something we have to look at.
It being 12 o'clock, we'll recess until 2 o'clock.
The committee recessed at 1200.
AFTERNOON SITTING
The committee resumed at 1410.
The Chair: We'll resume writing the report on the pre-budget consultations by the standing committee on finance and economic affairs. I guess we're down to "Sectoral Issues." Comments from the committee?
Mr Kwinter: I'd like a clarification of bullet point 2, which says: "It is proposed that the remainder of this section focus its attention on the presentations made by representatives of two sectors. Suggested areas for discussion have been mining, trucking or utilities." Are you saying that we pick two out of those three?
Ms Campbell: It's merely a suggestion. There certainly were others that made presentations.
The Chair: I think what Mr Kwinter's saying is that we heard from the rail industry and we heard from the trucking industry.
Ms Campbell: Or would the committee like a general summation of all the presentations?
Mr Kwinter: It would seem to me that when we talk about sectors, we've heard from many sectors, and to zero in on two of them may create some problems with other people saying: "We came to this committee. What happened to us?" I would far sooner see a more general discussion on the sectoral issues and maybe cover as many of them as possible with some kind of acknowledgement and statement as to what they had to say.
The Chair: Comments? Mr Carr.
Mr Carr: I was just going to agree with Monte. I was wondering what you had in mind. I know the summary did that. Did you have any thoughts in mind? I was here and listened, but what were you thinking, if you did it generally?
Ms Campbell: My thought under this particular heading was to perhaps focus attention on two areas that could be considered representative. I had a sense that the committee was interested in moving away from something that was mere regurgitation of what was said, but if the committee would prefer to have a general overview of the comments that were made by the representatives of those various sectors, it certainly can.
Mr Carr: Was there any common theme thread through all of them, do you think? I know what I think, but I'm just wondering what your thought is.
Ms Campbell: Taxation was a common thread. I think that would probably be the most common thread, if memory serves me correctly. It's fading a bit.
The Chair: Mr Johnson, comments?
Mr Johnson: I'll let Mr Wiseman make comments first.
Mr Wiseman: There were basically two common threads. One was that taxes should not be raised and the second was that in certain industries taxation was starting to be a burden in terms of their ability to continue to exist or to expand and invest and that somehow or other they needed some breaks. That's definitely the comment of the rail sector. The trucking sector was following that as well. It's rather interesting that you can't get an agreement between the two of them. The rail sector has always been arguing that the trucking sector has an advantage because its taxes don't pay for the true cost of maintenance of the highways and that gives it an unfair advantage, whereas the trucking industry was saying it needs to have its taxes lowered so it could compete with American truckers. I don't know how you resolve that.
Mr Carr: I was just going to add something else while we do that. As you know, there are another couple of areas we should take a look at. If you were looking at the presentations, I thought there were three: one, the whole health care issue; another, education, because universities were in and school boards and so on. The other one was social assistance; if you look at the summary, it had one of the largest percentages of references.
I think they should be included. I'm not suggesting what we do with them right now, but I would like to see us touch on those three major issues. If anybody wants to throw any others out, if everybody agrees they are the major ones, I would suggest that then we can decide what we'd like to say about them.
Ms Campbell: Could I make a point here? I think if you turn the page over, there's a section dealing with social issues.
Mr Carr: Okay. I'm sorry.
Ms Campbell: I was thinking there were some health issues and things such as social assistance that could be considered there, if the committee was agreeable to that.
Mr Carr: Okay. I'll wait.
Mr Kwinter: There was also the transfers.
The Chair: Yes. That covers the same area. It does the trucking, it does the mining and everything else. Well, no, not really. That's a different area.
Mr Wiseman: Just a comment here; I just throw this out for people to think about. It struck me that there were really two views on what should be done. There was one view that was saying that taxes should be rolled back.
Mr Perruzza: Absolutely.
Mr Wiseman: The second view we were hearing was that everything is really okay the way it is if we throw more money at it, if we put more money into it.
The Chair: You're speaking generally.
Mr Wiseman: Generally, in terms of where we're going over the next two sections. I think we're going to have to deal with whether we agree that those were the two basic philosophical approaches we heard or whether there's a reality that needs to be mentioned here in contradiction to at least one or both of those basic approaches we heard. I for one do not see things as being, "Everything's okay; just throw more money at it." I don't think that's the solution. I'll talk more about that when we get into the transfer payments and the partners, but I think it's worthwhile thinking about it in those terms. At least that's the way I'm approaching it.
The Chair: Can we give a little more guidance to Ms Campbell on how we're going to handle this section? I know we're getting a little bit off it.
Mr Carr: Yes. I did that by jumping ahead to the other one mistakenly. For the sectoral, I would like to keep it fairly broad, like Monte said, and touch upon some of the main concerns, the common threads. Then when we get to the other social, we could be a little more specific. I would suggest we make this sectoral section fairly broad, with a statement of what the common thread is, and just leave it at that.
The Chair: Any comments from the different sections, the trucking or the rail or the mining, to put in statements they've made, rather than just the reference that is in the summary? Just to give her some guidance.
Mr Carr: The only thing is that when you are differing, it's difficult. Which one do you pick?
Mr Johnson: There was a common theme, if I can mention it.
The Chair: Mr Johnson, I thought you were just agreeing. You sit like this, and I thought, "Okay, I'm all right."
Mr Johnson: Well, from time to time I've been known to agree.
When we look at the sectoral issues, at all of them, I think we see that the common theme is equality in taxation. I would use the word "fairness," but we know that becomes an arbitrary kind of word: We can argue what's fair and what isn't. As I read through the sectoral issues part, and as I remember, it seems to me, for example, that the distillers were saying they wanted equality in how they were taxed with regard to other --
The Chair: Alcohol content.
Mr Johnson: That's right. For example, alcohol content with regard to the wineries and the breweries. They wanted to be treated, from their perspective, more fairly. They wanted that equality in taxation and they thought that would assist them to some degree.
When we talk about transportation and rail versus trucking, again they're looking for equality, but not with each other but with other areas of North America.
As we look through all those sectors that are covered under this heading, we see that indeed the common theme is that they want to be dealt with equally. Compared to other jurisdictions, they want to be dealt with equally, and compared to other sectors that are similar to themselves, they want to be dealt with equally as well. Of course, all of them complain that taxation is a problem, but they offered some different ways of dealing with that. Some of them were suggesting that it be reduced over a period of time rather than reduced altogether. Some of them said they just didn't want any increases but they could live with what was happening. So it depends. But I just offer that as a first comment, anyway.
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The Chair: Norm, I noticed your hand up. Is that the tobacco issue you wanted to talk on?
Mr Jamison: When you're talking about this area, you're not going to find a real common thread other than no tax increases; they're very sensitive to the issue. But there aren't two areas that are identical out there. I think you could use some examples such as those that relate to direct, recognized effects: alcohol, tobacco, gasoline, those kinds of things that tend to promote something negative to happen in that we're next door to a jurisdiction that has tremendous price differences in those related products. Those kinds of examples, where it's recognized they have more direct public effect on things, should be pointed out.
Mr Kwinter: The point I was making when we started this discussion is that I've no quarrel with talking about the sectors. I just don't think we should limit it to two. We had the retail sector concerns about Sunday shopping, concerns about beer and wine in the corner store; we had agriculture concerned about a whole range of areas. I just feel that to exclude any reference to them would be doing them a disservice. All I really was suggesting is that we go through the record and see the sectors as such.
The Chair: Just say "Agriculture" and a statement.
Mr Kwinter: Yes, agriculture, retail, transportation, mining, the various sectors, and just a statement about their concerns.
The Chair: I think that would be great for the public to know also what's being said, rather than just the Treasurer finding out this out; that overall view of the whole economy.
Mr Carr: Agreed.
The Chair: Mr Johnson, agreed?
Mr Johnson: Yes, I do agree.
Ms Campbell: Does the committee wish to make any sort of recommendation under this particular heading?
The Chair: I think it's just a statement, isn't it? The Treasurer will make the --
Ms Campbell: So the committee has no recommendation to make under the heading "Sectoral Issues."
The Chair: The sectors have given us the recommendations that should be followed by the Treasurer. Mr Perruzza.
Mr Perruzza: I'd like to suggest a possible recommendation for this, recognizing that there aren't really any common elements or common themes that link all the people who appeared before us and spoke to the entire gamut of issues related to preparing a budget. Obviously you have some sectors coming here and saying, "You've got to cut taxes and you've got to make some drastic budget cuts," and you've got some others like the Ontario Good Roads Association that came here and said, "You guys are treating us unfairly; therefore we need more money." They didn't suggest where that money would come from, whether it would come out of health care or new tax increases or anything else; they just need more money for roads.
When you have that range, it's very difficult to be able to identify any sector and say, "This is the sector; therefore that should be given priority." My good friends here from the rural communities will argue that agricultural issues perhaps should be sort of the number one priority, and when you begin to identify them, that's I think what you do;, you begin to classify.
I'd like to suggest sort of a broad and sweeping statement that there is no question that a number of sectors and industries -- and I'm thinking now of the industries that were essentially hardest hit by a program such as free trade and interest rates and the high level of the dollar, such as a lot of the blue-collar industries, a lot of our manufacturing industry, a lot of our construction industry --
The Chair: Mr Perruzza, I don't want to cut in, but this has already been gone through, in that for each sector we'll be stating -- that's why we say we go agriculture. They'll make these statements in these statements the researcher will be doing, so that's already covered. We said there was a common thread but they change with the different sectors. So I would say that's all covered. The researcher has that already.
Ms Campbell: So there will be no recommendation under this heading.
The Chair: No recommendations, but the statements made by the different sectors. Do you agree, Mr Perruzza?
Mr Perruzza: Do I agree to what? I don't know what I'm agreeing to.
Mrs MacKinnon: If you were on time, you would know.
Mr Perruzza: Well, if Ellen knows, I'd like to hear an explanation from Ellen as to what we're agreeing to. Obviously, she was here.
The Chair: We have already agreed. All three parties have agreed. We're going on to the next section. We've finished the sector issues.
Mr Perruzza: What is the statement going to say, since we all agreed?
The Chair: Will the researcher repeat the written sentence so I don't get it wrong?
Ms Campbell: The draft that was presented to the committee suggests focusing on one or two areas. The committee has decided it wants a general discussion of all the presentations that were made to the committee with respect to sectoral issues.
Mr Perruzza: So anybody who didn't make a presentation obviously gets left off?
The Chair: No.
Mr Perruzza: Yes. That's what you're saying, Mr Chairman. That's exactly what I was speaking to, if you had given me an opportunity.
The Chair: Mr Kwinter, and then you can reply after Mr Kwinter gets finished.
Mr Perruzza: Sure.
Mr Kwinter: Not everybody in every sector made a presentation.
Mr Perruzza: Exactly.
Mr Kwinter: But every sector was pretty well represented by somebody. Whether it was a construction association, the Canadian Manufacturers' Association, the transportation people, the mining people, the agricultural people, they were all there. I was suggesting, rather than just zero in on two, we should cover all the major sectors, not the participants in the sectors but the sectors themselves, and by and large we heard from virtually every major sector in the economy of Ontario.
The Chair: Mr Carr, and then I'll go to Mr Perruzza to wind up.
Mr Carr: The only reason I said that too is that we could talk a little bit about what could be done in each sector, but I don't think we'd have too much agreement. The reason I'm saying make it like that is that then when we get into the social issues, we can spend the rest of the time taking a look at that. So I agree with what Monte said.
The Chair: Okay, Mr Perruzza. Do you agree now?
Mr Perruzza: No, that's precisely what I was speaking to, Mr Chairman. I will not agree. I'll just sit back and be a cautious observer and see what comes out of it, but I venture again that not everybody came and appeared before this committee, and when you begin to highlight them, what you end up doing is in effect to prioritize and underscore the importance of some areas, and some areas of the economy that didn't receive representation -- and here's I guess where I veer off from Mr Kwinter -- will be left out, not because they're not a priority, but just simply because nobody from that particular industry or from that group of industries came and appeared before the committee. That's all I tried to underscore.
The Chair: Who was left off? Which sector was left off?
Mr Perruzza: I can't recall all the people who actually appeared.
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The Chair: If you can tell us which sector, then maybe we can take a look at it.
Mr Perruzza: I don't, for example, recall anybody coming from the public sector; that is, the employees who essentially work for government. Do you?
The Chair: I'd have to take a look through the list there.
Mr Perruzza: I don't recall the teachers' federations appearing before this committee. Do you?
Interjections: Yes, they did.
The Chair: Yes, they did.
Mr Perruzza: There you go. The one group that I didn't --
The Chair: If you want to talk about labour, labour was here.
Mr Perruzza: I don't remember anybody from the police association.
The Chair: Yes, but you're talking about labour and services.
Mr Perruzza: No, we're not.
The Chair: Yes, we are.
Mr Perruzza: We're talking about different sectors of the economy, not necessarily labour.
The Chair: Well, we can. The nurses were here.
Mr Perruzza: This labour from the construction industry is quite different.
The Chair: The nurses were here.
Mr Wiseman: I think there could be a recommendation that this committee would like to make to the Treasurer on this section, and I'm going to throw it out for just a little bit of discussion. I think what we should recommend to the Treasurer is that if any changes are contemplated in any of the sectors that we are talking about, a very careful analysis of the ramifications be done. What I mean by this is not just to look by the sector itself, but holistically at the spin-off and where this may compound out as a stone rippling in the water.
I would think that all the sectors would agree with that, that no changes be made without giving very careful consideration to not just the impact on the immediate industry but what the potential spinoff implications are for other industries or feeder industries or such. I think they would all agree to that.
The Chair: Mr Carr?
Mr Carr: I was just going to agree.
The Chair: I think we're all in agreement, so I think we could --
Mr Carr: But Jim is right. I think rather than just outlining it, you can say that with all the diversity, just reiterate that any time the government does something, it should take a look at the impact on it. I think the people who came in would think that's great, and if we can get that included, with all of us, I think that's super.
Interjection: Good point.
The Chair: I think we'll cover some of that in the transfer recipients too.
The next issue is "Social Issues," page 4. Have you got something just sort of roughly drawn up on this first one, "This section will open with a statement recognizing the human face and costs attached to the effects of the recession and restructuring"? Just give us an idea of your thoughts on this and how you were going to have this.
Ms Campbell: I guess I was trying to do some creative writing. It obviously didn't work.
This is sort of building on a statement I had in the previous draft, that this section would introduce the human element to the overall report. Up until now we had been discussing not intangible issues, but as I say, the non-human element, and we certainly had representation from a lot of social service organizations and health care groups. People such as the Daily Bread Food Bank and Ontario Coalition Against Poverty were able to tell the committee about how the recession and its after-effects have changed the social milieu and have had a profound effect on a lot of families over the last few years.
The Chair: Comments from the committee? Mr Jamison.
Mr Jamison: I think it's important to recognize in this section that approximately 70% of our budget is taken up in three particular areas: health care, social services and education.
I think it's important to indicate that as we have travelled down the road on funding those issues in partnership with municipalities and with the federal government, the arrangement itself has been changing. Municipalities are of course saying that downloading is taking effect more and more, but there's also an issue that I think is important because it deals directly with mandatory payment on certain things, that the level of funding in the first stage of the downloading -- I guess it would go on -- has taken place at the federal end, to the extent that 29% is now shared cost rather than 50%, although it's still 50% in Quebec.
I think our government has tried to point that out and I think it's important, because that has an ongoing effect on the delivery and the ability to deliver on social issues. Again, I believe inclusion of those figures is important in understanding that really, beyond those three areas, there's only 30% of our budget left and the pressures that are on there.
Mr Ruprecht: Mr Chairman, can I ask you, are we on point 1 or point 2 or doesn't it matter?
The Chair: I think we'll talk about the section.
Mr Ruprecht: Social, good. What I'd like to include, if it's okay with the committee -- the second sentence reads, "Community-based health services were of special concern." While I wasn't here all the time, I do recall the important statements that were made by the rehabilitation community, meaning those who are dealing with aftercare services.
What I'd like to see in here is, "Community-based health and rehabilitation services were of special concern," and that same subject should be followed up in the last sentence where you say, for instance, "Other possible topics are social assistance or interval and transition houses," and include that rehabilitation aspect as well.
The Chair: Okay, fine. Mr Carr.
Mr Carr: I was just going to say the headings that I would like to see in there. The major ones are the ones I mentioned: health, education, social assistance and housing. The problem we've got with it is that this is where we disagree on what needs to be done.
The Chair: What, on co-op housing?
Mr Carr: On probably all of them, but take housing, for example; non-profit housing, yes, of course we're opposed to that, and go on and on. So we're not going to agree. What I would like to say is that I think those topics should be covered. But this is where we now disagree and we can spend all afternoon debating, but just one quick point: The only thing I'm saying is that if people agree those are the major areas, we can add more or whatever. The problem we've got is that we now need to decide, what are we going to do? I know for a fact we're not going to agree on the housing.
The Chair: Are you saying that as a party you don't agree or some of the presenters didn't agree and agreed with you?
Mr Carr: No, I'm talking about opposition to recommendations. I think now, when we get into those areas, is when we should make recommendations. I wouldn't just like to do like we did in the sectoral where we summarize it.
The Chair: There were certain groups that came forward that agreed with you on some of the questions you had asked --
Mr Carr: Yes, and some agreed with the other side.
The Chair: -- and others didn't agree and agreed with, maybe, Monte over here and some agreed with the government, so it was all over the map with some of them presenting there.
Mr Carr: What I'm saying is that I don't think -- to make it long, we should then summarize everything and then make recommendations in this. I would just like to make recommendations. Otherwise the report's going to be --
The Chair: Can we wind up on the recommendations? Can we write in the report that the government recommends this and the third party position and the official opposition position and write it right into the report? Are we able to do that?
Mr Carr: Can we at least agree on the categories? I'm just saying if we can't even agree on the categories -- those are four I listed. There may be others that I could agree with. I just threw them out. If we can agree on the categories, then we can each do our recommendations and it would be maybe easy for comparison -- I don't know -- rather than just going off and --
The Chair: The other question is, these recommendations from the Conservative caucus, when would they have to be handed in to you?
Clerk of the Committee: Wednesday the 17th.
Mr Carr: Before the 22nd.
The Chair: Wednesday the 17th, just to give you an idea.
Mr Carr: Yes, we've already got them.
The Chair: If you don't hand them in by then, we don't find them.
Mr Carr: You know them all. It's the things we've been saying for years, Ron.
The Chair: Okay. Mr Wiseman.
Mr Wiseman: I'm sure that what I'm about to say will not be really popular among a lot of the groups that have presented here, but I'm going to say it anyway.
I think we need to have a debate around whether the amount of money being allocated for social services is adequate. I think within the framework of that debate, we need to ask a fundamental question, and that is, is it being delivered in the most effective way?
For example, do we need to have all the administration structures of all these various groups being paid the salaries that they're being paid to administer the funds being delivered to their clientele?
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That leads to my next question, and that is --
The Chair: Who is this question focused at?
Mr Wiseman: This question is fundamental to anybody who cares to want to jump into the debate. What I'm saying here is, could we not do more for the people and the clients of these groups by having fewer delivery mechanisms and delivery administration systems? In other words, rationalizing the delivery process to avoid having a myriad of people, presidents of organizations, vice-presidents of organizations, treasurers, people to administer the payroll, people to administer the buying of goods. I'm just asking if we couldn't be doing more with the money by rationalizing those into fewer structures with them still having the same amount of money --
The Chair: You're talking about restructuring then in a lot of these organizations.
Mr Wiseman: That's exactly what I'm talking about.
The Chair: Okay. Comments?
Mr Kwinter: I just want to respond to what was just said. Notwithstanding what we say, there's not going to be any choice, they're going to have to do that. We have a situation right now where 13% of all of the revenues that come into the province are used to service the debt. By the end of this government's term -- and I'm just using that as a gauge because those are the figures we can see in the next two or three years -- that figure is going to increase to nearly 20%, which means that more and more of our revenue is going to service the debt, which means less and less is going to be available for distribution.
The problem any government is going to face is the situation where the economy is going to improve, as it supposedly is doing right now, but it's not improving so greatly that it's going to have a marked effect. It's going to be better than what it was but it's not going to be fantastic only because we're looking at, best-case scenario, 4% increases in gross domestic product, which is not going to be a huge increase. As I say, best-case scenario is 4%. As I told you yesterday, the Economist says it's going to be 2.8%, whatever it is.
You're going to have the strange situation of people saying that things are better, we need more money because we have been cutting back and we've been laying off and we've been closing down facilities when times were bad and now that times are good we need more money. We're going to be in a position where notwithstanding that times are good, somewhere along the line -- and again I'm not trying to point the finger, but in 1990 you were espousing Keynesian economics, you run up deficits when times are bad and you pay them down when times are good -- you're going to find that it's going to be a tough argument to sell: We can't give you anything right now because times are too good and we have to pay down our debt. You're going to have to do it but it's going to be a hard message to sell to people that because times are good you can't afford to pay them anything.
You're going to have to restructure anyway. There's no choice. It isn't a matter of options. The thing is that you're going to have to take a look at how you deliver the services and you're going to have to get better productivity. That's exactly what's happening with CN Rail; that's exactly what's happening with Hydro; it's exactly what's happening with IBM; and it's exactly what's going to happen to the Ontario government. They're going to have to look at it and say, "We have to do more with less and that means we've got to cut out middle management; we've got to cut out all these consultants; we've got to cut out all these people who are adding to the financial burden but are not necessarily adding to the productivity."
I think that's a given, but I think it's important that statement be made. We should include that so everybody is put on notice that this situation's going to happen and we're going to have to be prepared to address it. I think it's important that we have something to that effect in the report.
The Chair: Mr Carr, do you agree in this area?
Mr Carr: Yes, I agree with both of them, so hopefully we can get that in there. The way it should be worded is much along those lines and say that's what we recommend, that it has to happen and it can be worded. I think it's great. I agree with both of the two previous speakers.
The Chair: Mr Kwinter, you were saying you have to cut out a lot of middlemen -- middle people, okay, I won't use that other term. What we have is regional government. Are you saying if you cut out regional government, the cheques would come from the province and you would eliminate some of the lower levels of government? Just so the researcher has an idea.
Mr Kwinter: If you take a look at any of the restructuring that is going on, whether it's the private or the public sector, you will find that the only areas that you have to restructure are in middle and top management. The reason for it is that these are people who add to the total overall operation of the facility but they are not directly related. The guy that's digging the hole to put the pole in the ground is going to have to be there or you're not going to get the pole up. There may be three guys above him who decide that's where the pole is going to go. You can't get rid of him because someone has to dig the hole, but you can get rid of those three guys and say only one guy is going to do it.
The Chair: Yes, but how does he know where to dig the hole?
Mr Kwinter: I'm saying that one guy is going to make the decision instead of the three.
The Chair: One guy, okay; I thought it was the one guy with the shovel who was digging the hole.
Mr Wiseman: A system where the labourer has more contact with the upper managers.
Mr Kwinter: What I'm saying is that those are the areas, without having the system totally fall apart. You're not going to get rid of the guy who is driving the ambulance, he's got to drive that ambulance, but you're going to have to get rid of some of the intermediate steps of who is supervising that guy to get the ambulance.
The Chair: You're talking about a bigger area, where one person's in charge instead of someone in every little municipality.
Mr Kwinter: You're just going to have to get more productivity, get rid of these guys who it's nice to have when you have lots of money. When you get into the crunch, you've got to cut back, and those are the guys that have to get cut back.
Mr Jamison: What Mr Kwinter is saying is a fact of life in industry today. Industries have had to do that for probably the last three or four years anyway, and probably many of them were doing that for the last while. I believe that the time for that spillover effect, in the demand to streamline government itself, is here.
When you look at the Treasurer's budget, you're looking at operating costs as being the most significant portion by far of the budget, and in those operating costs are ministry costs, agency costs of ministries and everything included. It's only a fact of reality that when your budgetary requirements are at one level and your ability to garner revenue is at another level, then you have to work towards that, and it has to be done through all areas of spending.
The Chair: Okay. Ms Campbell, just some clarification.
Ms Campbell: I'd like to clarify that the committee's recommendation is along the lines of, "Consideration be given to a more efficient and rational delivery of social services."
The Chair: It was actually everything, though, all government services, wasn't it?
Mr Carr: All government services.
Ms Campbell: Under the "Social Issues" heading?
Mr Wiseman: Since I threw this out, what I am particularly thinking about here is that --
The Chair: Mr Ruprecht is next, if you don't mind.
Mr Ruprecht: Is that okay with you?
Mr Wiseman: Go ahead.
Mr Ruprecht: I deferred to you the last time.
Mr Wiseman: That's fine, you go right ahead. I'm sorry.
Mr Ruprecht: I think we're all on the same wavelength. It's a great idea. Who would argue against streamlining and cutting out the fat? Obviously, all of us are in agreement with that. Where it gets a bit tricky is, obviously, how do you coordinate all this human delivery service stuff that takes place in all the ministries? I'm thinking about the Ministry of Community and Social Services, the Ministry of Correctional Services -- there are four or five ministries that deliver human services.
The idea that Ms Campbell is indicating is great, except you've got to add a little more to it than simply saying we should be coordinating more than we have in the past. The reason I say this is because I remember when I was there, and they said, "What we need to do is we need to coordinate, we need to cut out the fat and we need to streamline." We've heard all this before. Now, economically, we're being pushed against the wall and we have to do it. Simply to say, "Let's get it all together," may not be good enough.
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You've got to be tougher, especially when it comes to human delivery services in certain ministries, because each ministry has a similar kind of service that goes out into the community. In terms of group homes, for instance, the group homes are organized by three or four ministries that have their actions in the community. If you could centralize that aspect of group homes or boarding or lodging houses and those kinds of services through one ministry, obviously we'd be able to cut out the middle-management types across the board. Just to say, "Let's coordinate through one ministry," will not be good enough. We've got to coordinate throughout all ministries. I hope I made my point there.
The Chair: Mr Perruzza is next, Mr Wiseman.
Mr Perruzza: I don't see how you could link up that kind of process and why anyone would just simply isolate social services. We govern or preside over a quagmire of service delivery systems. I don't see how you can dissociate that from issues of governance. I'll just give you one example. Here in Metro alone you have seven municipal councils, you have eight school boards --
Mr Wiseman: Nine.
Mr Perruzza: With the French language, you probably have 10 when you separate them out. You have a number of institutions at odds with each other. I've sat in on and watched on television municipal councils make decisions on taking the regional council to court and then taking the commissions to court and then the OMB to court and then the provincial government to court. Everybody's suing everybody and all of these consultants and lawyers and the rest of it are just siphoning off so much in terms of our resources.
There's an excellent article that was circulated by one of my colleagues by Trish Crawford of the Toronto Star which says, on our educational system, that, "In Ontario, there are roughly 100 school board staff, including 69 teachers, for every 1,000 pupils." What that suggests is that for every 10 kids, you've got an administrative person: not a teacher, not someone in the classroom, but someone at the board.
Mr Wiseman: That's a great pupil-teacher ratio.
Mr Perruzza: This is nuts. If you say, "Jeez, it's in social services," it's because we're simply looking at the delivery of human services on the basis of neighbourhoods and leaving out the monsters like our educational system that's just simply gone nuts. If you take the statistics to the service and to the classroom, there's no relevance between the dollar we pay and the product we receive, none whatsoever.
We can't say that we're going to take social services and talk about how we're going to restructure three or four ministries and not talk about issues of governance and the system we preside over. I can understand why we have the system we have. It's really been easy for governments in the past not to make difficult decisions. What you do is you appoint a board that essentially governs itself, has some taxation jurisdiction on its own, and you say: "Go off on your own and do your own thing. If you make painful decisions, if you make difficult decisions, you suffer the consequences, and we'll sort of detach ourselves from that process." That's a great Conservative strategy.
The Chair: I think we're sort of getting into the next section a little bit. If we can stay on this one, it seems like everybody's in agreement with the recommendations, other than maybe Mr Carr in some particular areas on social issues.
Mr Carr: I agree with the broad --
The Chair: The general.
Mr Carr: Yes, I agree with that.
The Chair: Some clarification, Ms Campbell?
Ms Campbell: I'm fairly certain about the gist of the recommendation the committee would like to make. My question at this point is, what would the committee like in terms of content under this particular heading? I have suggested here focusing attention on two issues. The committee might not like doing that: deciding that two issues are more important than others. Would you, as you asked for under "Sectoral Issues," just like a general overview of what was said by the different groups that appeared before the committee?
Mr Wiseman: Just on that, the mere fact that there are so many groups representing each sector -- I don't want to centre any one of them out, but let's take one that didn't come: addiction counselling. You have hospitals doing it, you have AA doing it, you have the John Howard Society doing it, you have counsellors doing it, you have a whole myriad of groups delivering it to this one person. What I am suggesting is that we need to deal with delivery in one-stop shopping. We need to have somebody or some agency that does all those things. If you're coming out of our correctional facilities and you've got these difficulties, then you should be able to have that service delivered by one agency. It should be so cosmopolitan that it should be delivered, and that's the on-the-ground service delivery person. Eliminate all the duplications of all the different adminstration structures.
I guess what I am recommending to the Treasurer and to the government as a whole is that we start to move in that direction. I know that's not going to be popular among a lot of groups, because if it goes in the direction I'm envisaging, a lot of those groups' hierarchies are going to disappear.
Mr Kwinter: If I can make a comment, I think that's a very valid point. It's important that we recognize that we've come to a very interesting point in Ontario history, if I could just take a minute to tell you. This government has done something rather dramatic in the way it has reduced the amount of money that is being expended on increases in health care. It's taken it from an average of 11% a year down to 1%. I can say to you that this government is the only government that could have done it. The reason I say that is that the old New Democratic Party would never have allowed it to happen.
We had a situation in the 1970s where Frank Miller was the Minister of Health. He became the Premier, but through a quirk in history he eventually wound up reporting to me as the chairman of the Ontario International Corp when I was the Minster of Industry, Trade and Technology. He came to see me one day. Some of you may not remember, but when he was the Minister of Health he thought that health care costs had gone totally out of control and had advocated closing down a number of hospitals. The one in Toronto was Doctors' Hospital; there were hospitals throughout Ontario. I'm not trying to put this in a partisan way; I'm just stating historical fact. He had to back down because the NDP in particular had the demonstrations on the front steps: "There's no way you're going to do that."
But the interesting thing was that I asked him, when he came in to see me, "When you thought the health care costs were out of control, what was the total budget for health?" This was in, I think, 1972. He said, "Our total health budget was $2.75 billion," and at that stage he thought it was out of control. We're now at $17 billion.
What I'm saying is that we have an opportune time to do it because this government is where it is. I talk about the old New Democratic Party and the new New Democratic Party. I can tell you, the conversations we have been having over the last two days would have been impossible not too long ago. I sit here and I think to myself, "I can't believe what I'm hearing coming from that side of the room." I'm totally delighted, but --
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Mr Carr: Don't worry. A few years from now, it'll be reversed.
Mr Kwinter: I'm just saying that we have an opportunity when everybody seems to have zeroed in on the problem and is prepared to do something about it. There's no question that it's going to be tough, because a lot of people are going to be quite upset that this is happening. But this is a rather unique opportunity to get our house in order because of circumstances where everybody seems to be on side and is prepared to do something about it. I think it's a key message that should be coming out of this committee at this time.
Ms Campbell: Could I just regurgitate, then, the recommendation that the committee might want to make in very general terms: The committee recommends that there be fewer delivery mechanisms involved in the provision of social services and that they be delivered in an efficient and rational way, or something along those lines.
Mr Kwinter: I wouldn't want it to say that there be fewer services delivered. I would rather have it a more efficient delivery of services, whatever that means.
The Acting Chair: Do more with less, quite simply.
Mr Kwinter: Yes.
Mr Wiseman: Fewer delivery agencies.
Mr Kwinter: I wouldn't even want to say fewer delivery agencies; I would just want to say a more efficient delivery system.
Ms Campbell: More efficient and effective?
Mr Kwinter: More efficient, effective and productive.
The Acting Chair: And coordinated, and who would disagree with that?
Mr Kwinter: Well, let me tell you, the labour movement sees "productivity" as a buzzword for cutting jobs, and they're not happy with it; they object immediately when you start talking productivity. But I think the key is productivity. The key is that you've got to do more with less.
Mr Ruprecht: Streamlining and coordination.
The Chair: Mr Carr.
Mr Carr: I agree. We have a good opportunity, and in a non-partisan way. We know the government's going to have to do this. It will be a good opportunity for this committee to put its mark on it, and the government can then say, "See, this is what they recommended we do." I think the government will benefit. I agree with it and it will happen anyway, and I think we should be part of saying it.
The Chair: Mr Johnson, you agree?
Mr Johnson: Yes, I agree.
The Chair: Mr Kwinter? Okay. Mr Wiseman, you're not going to unagree, are you?
Mr Wiseman: Heck, no; I started this. But I think it should be put in here somehow, with the agreement of the rest of the committee, that the overriding criterion, in terms of assessing whether the delivery mechanism is efficient, is how the service is delivered to the client, and that it should be client-based, result-evaluated, client-driven. I'm going to be saying a few things about education that aren't going to make me a whole lot popular there.
The Chair: I think when we get down to the transfers --
Mr Wiseman: I'm going to wait till then, but it's the same basic premise. We need to go to those the service is directed to and deliver it to them in the most efficient, cost-effective way. That then means going back and evaluating the delivery mechanisms and whether you need to have eight or nine delivery mechanisms for each individual you've got out there in terms of housing, counselling and so on. I just want to make sure that that issue isn't lost in the broad, general direction.
The Chair: Mr Jamison.
Mr Jamison: I'm sitting very close to the mike this time. I just walked in on the tail end of Mr Kwinter's statement that labour would be not recognize the need for productivity. That may have been the case five or six years ago, Mr Kwinter. I can tell you that I don't underestimate the labour group out there, their ability to understand that, as times change dramatically, there can be a win-win situation that evolves out of that.
I'd like to add an example. An example of that is an industry that's in trouble: the steel industry in this province is in pretty tough straits at this point. But Stelco, for an example, has one plant, and I'm sure you're aware of it, Lake Erie works, where a combination of skills has taken place, along with the advent of good technology, and has really placed that particular plant in a situation where it hasn't felt the layoff situation because it is highly productive.
So when we make a statement like that, I'd certainly say that light is being shed in the labour movement on that particular issue -- although part of a labour union's mandate is certainly to try and ensure that jobs are preserved, and around that, of course, sometimes there is a mixed signal. But I do believe that the labour movement is much more ready to participate in that type of thing, in a win-win situation, today than ever before.
The Chair: Can we get everybody's agreement on "Social Issues"? Can we get on to "Transfer Recipients"? Comments.
Mr Johnson: Just before we start, in our brief or our document that we submit to the Treasurer and to the Legislature, will we be submitting as well the summary of recommendations?
The Chair: I thought we would talk about that when we get through the total report. This is why I'm sort of pushing: It's getting on to 10 after 3. There may be some other issues we want to put in the report that aren't covered in the outline, and maybe we can discuss that.
Mr Johnson: I raise that point because if the summary of recommendations is included, then whoever reads the general comments we're going to submit -- and indeed they are general -- can, if they desire, have a look at the summary of recommendations and see how we derived our comments that would be much more general than the more specific summary of recommendations.
The Chair: Any other comments?
Mr Kwinter: I have no problem with the suggestions of the researcher. The only thing I would like to see is an inclusion of the same general statement that happened under "Social Issues," the idea of productivity and value for money and streamlining. I had talked to the people at IBM, and they came up with what I thought was a good word. When you watch most of the discussions about plant closures or layoffs, they talk about downsizing. IBM has coined a new word. Instead of downsizing, they call it "rightsizing."
Mr Johnson: Like in correct sizing.
Mr Kwinter: Yes. "This is the right size we should have for what we are doing," as opposed to downsizing. It's not a bad word, not a bad concept. It should be rightsizing: Whatever is required is there, but no more.
The Chair: Actually, rightsizing is the right number of people to do the job; downsizing is cutting productivity. Mr Carr, you agree? Okay.
Ms Campbell, any questions or comments?
Ms Campbell: I guess my question is, what has been agreed? Is the committee willing to follow the outline that's provided under the heading "Transfer Recipients" and focus on one topic as it relates to each transfer partner, rather than a number of issues?
Mr Carr: No, I think what Monte was saying is that the same principles we had put in under social should appear under the transfers, because that's who's doing it. I don't know if we can get agreement on what to do with the actual transfers. We had some agreement this morning on two sides.
The Chair: You're talking about freezing them at the present levels without the increases?
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Mr Carr: Yes, however we word that, whatever it works out to be. Actually, it's probably a 2% reduction next year.
Mrs MacKinnon: I would just like some clarification under "schools," here. It talks about integration of services. Does that take in the possibility of destreaming? What does "integration of services" mean? You're not talking about the two different systems, are you?
Ms Campbell: That was a subheading that is found in the summary of recommendations.
Mrs MacKinnon: It's what?
Ms Campbell: There was a summary of the recommendations made to the committee prepared and handed out a few days ago. One of the subheadings that was included under the title "Schools" was "Integration of Services." There were a number of educational groups that appeared before the committee that were concerned about the number of services that schools were required to provide and the fact that they had to deal with a number of different ministries in the provision of these services.
The Chair: Ellen? Page 5.
Mrs MacKinnon: Thanks.
Ms Campbell: Actually, it's on page 9. They were concerned about cutting costs.
Mrs MacKinnon: Therefore, you're discussing the integration of services from ministries, as opposed to the schools themselves.
Ms Campbell: Yes. It had nothing to do with destreaming.
Mrs MacKinnon: Makes sense to me. We've been saying that for years, haven't we? At least I have.
Mr Wiseman: This is also going to lead me into interesting waters.
Mr Jamison: Maybe I'd better distance myself.
The Chair: Are you ever going to teach again, Mr Wiseman? Is there a board that would hire you?
Mr Wiseman: I may not even be able to go home after I'm finished with this.
In terms of the municipalities, it seems to me that the demand for funding from the province is based on a concrete ratio in that if the municipality builds a road, it can apply and get 80% of the money from the province for a road. It seems to me that one of the major issues we have facing us is the anger over property taxes, but also that every time a municipality builds another subdivision -- and this is particularly true for growing areas -- everybody's taxes go up. Because a lot of the money that it costs to deliver those services, such as the education system, hiring teachers, or building recreation complexes or schools, is transferred on to the province's back, and it has to deal with that.
I don't know how you put this into a recommendation to the Treasurer, but clearly we cannot continue to have the kind of sprawl that we have in terms of municipalities, because it continually adds more and more costs to both the municipal and provincial sectors.
The Chair: You're talking about intensifying?
Mr Wiseman: I think we need to talk about that. I think we need to say to the Treasurer that something has to be done. I don't think we can continually and unquestionably transfer funds to the municipalities if they are going to continue to deliver services in an inefficient manner. If we're going to get our provincial deficit under control, we need to examine that as one of the areas of concern.
The Chair: Maybe give an example, because I'm not following you too closely. I don't know how you control it at the provincial level, because then you don't need the municipality.
Mr Wiseman: I think you have to talk about the elimination of the automatic transfer of funds from the provincial government to the municipalities in some of the areas where they are automatically receiving these funds, like on the building of roads, the building of sewers and the amount of money that is being paid for bridges.
The Chair: But if it's approved by the province, it looks at the plans. It's not just writing out a cheque.
Mr Wiseman: It's almost like that.
The Chair: It's not.
Mr Wiseman: I wouldn't mind going through each one of these -- I have a few thoughts on all of them -- but Mr Carr --
Mr Carr: I was just going to say on this that I appreciate what you're talking about. The only thing I would caution is that one of the reasons -- and I talked about it this morning with the wage controls in the broader sector -- is that we didn't want to get into saying, "You're going to get less." The problem we've got with school boards -- and we'll use them as examples, not to make them whipping boys -- is that the trustees can't even negotiate, because if they come to an impasse or whatever -- and the same with municipalities -- it goes to the arbitrator.
Whether it be GO or whatever, arbitrators have historically given large rate increases -- not large, but they end up getting rate increases anyway. When you look at it, you see that arbitrators are making the decisions in the province of Ontario right now in some cases, like GO Transit. To simply freeze transfers to school boards, for example, and then say to the trustees, "You make up the difference," when 80% is salaries -- and that includes the overbloated administration; teachers may be 60%, 50%, whatever, but 80% is salaries -- if we don't introduce the wage controls we talked about, all we do is download further on to the properties.
My trustees who are on the bargaining committee -- and Jim will know this -- say, "We really don't have that much leverage, because if we go through the whole process, strikes being what they are, the public not liking strikes, we don't have any control." My big fear about this, and the reason I couldn't agree with a freeze unless there was -- and this is where we're obviously going to disagree, because you've already said you can't agree -- is that if we don't tie the wage salaries to it, we could never agree to freezing to municipalities and then having the tax burden from the provinces going down on to the property tax.
I think you'd agree we all know that. We all criticize the federal government for doing that, so if we were going to call for any type of freeze, it would have to be so that whether it be school boards or municipalities, where a large portion isn't the roads, it's employee salaries as well -- it can vary, but it's a high, high portion. If you don't and you simply download and freeze transfers -- and that's why we have tried to be flexible in what we've called for in the wage controls -- if it's 2%, if it's 1%, if it's whatever, it should be tied to the rate of the transfers. The problem we've got is that we couldn't agree to do that unless the wage controls came in, and I know the other side won't agree.
My suggestion, having rambled on about that, is that we incorporate in this section the same points we had in the first with the general statement and then each of the parties can decide what it wants to do after that, because I don't think we're going to get much agreement on what needs to happen with the transfers.
Mr Perruzza: Speaking just very briefly, hopefully, to the municipal, I agree with my colleague. I think the government needs to intercede to ensure that the municipalities function efficiently. I don't know if some of you are aware, but most municipalities have reserve funds. I know that established cities, like in Metro, cities where you have new developments coming on stream all the time, cities selling lands, transferring densities off their roads and so on and selling them to developers, they have a good base of cash flow. Now I hear Mayor McCallion saying, "We're going to come in with zero." No kidding, she's going to come in with zero. You've got Mississauga developing at an unprecedented rate with new developments coming on stream all the time. She probably has more money than she knows what she can do with. She could probably even roll back taxes. I think the city of Toronto could roll back taxes. I think North York could roll back taxes. But they go out and they buy and do new and fancy doodad things all the time and then complain that they've got no money. But that's fine. That's part of the game. I understand that. But I think it's incumbent on government to move in on situations like that and lock municipalities into value-for-money tax increases and everything else they do.
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Getting back to the school boards and saying to school boards, "We're going to freeze transfers to you," I can't help but think how naïve a concept that really is. When you have, on both sides of a negotiating table at a school board level, teachers negotiating their salaries, on the management side and on the teacher side -- because whatever happens with the teacher on that one side is going to happen to the management teacher on the other side of the table.
You had a government back here, I think it was the Liberals, that came along one day and said that directors of education have to be certified teachers. So who's at the top of the pyramid of the corporation? A teacher.
To say, "We're going to freeze transfers to you," and to think that all of a sudden this director, who's a teacher, whose assistant is a teacher and probably right down the line, is going to say, "We're going to put a few of these people back in the classroom, and we're going to downsize or rightsize the system so that we redirect the moneys where they really count, in the classroom" -- absolutely not. It's absolutely and totally naïve to think they're going to do it for themselves.
There are a number of brilliant models right around the world, and right here in this country of ours, Canada, that are excellent education models. But you have to have a government that's going to take the bull by the horns and say, "We're going to be responsible for education; we're going to bear the brunt; we're going to take the flak from the users and from the parents of the users of the system, and everybody else has got to pay taxes; we're going to change it, and we're going to remodel it to make it more efficient and to make it reflective of the 1990s," not of the 1940s, not of the 1960s or 1970s, where governments didn't want to touch it and didn't want to get near it too much and let somebody else do it and just sort of stayed at arm's length. I think you have to get knee-deep right in the middle of it and say, "We're going to move it, and we're going to funnel dollars."
The Chair: This is going to the Treasurer. If the province is going to pay 100%, can you give the Treasurer an idea what he's going to raise out there?
Mr Perruzza: Mr Chair, 100% of what?
The Chair: Of the education if the province takes it over.
Mr Perruzza: Takes over what?
The Chair: Education, if I understood you right.
Mr Perruzza: I don't think you understood me.
The Chair: Okay.
Mr Perruzza: Absolutely. I think there are a number of models. I think you could restructure. There's one in fact in Alberta that's a school-based budgeting model where, essentially, moneys are allocated on the basis of pupils and that kind of thing, and you build in formulas for special needs etc. What happens is that you eliminate a lot of the middle managerial moneys that my colleague, my Liberal friend there, was suggesting earlier. It's the teacher in the classroom who counts, and that's where you have to put the resources; you don't have to put them in an administrative structure in a board. Once you begin to do that, I think the issue of taking over taxes or property taxes --
The Chair: That's where I lost you.
Mr Perruzza: -- just to jump one step ahead of you, because I suspect that's what you were thinking of --
The Chair: Thinking, "Take the property taxes off."
Mr Perruzza: I think that once you move in and do that, then you can also address the issues of fairness and equity in our tax system. In that way you can address the issue of property taxes and that kind of thing. But I don't think that you'd ever be able to do a reform of property taxes other than, I suspect, moving in and developing an emergency property tax relief fund for the low end, for people who find themselves unemployed and are struggling in the face of losing their homes, or seniors whose pensions don't keep pace with the rise in property tax increases.
If you take a close look at that, for example, you'll find that a senior who's on a basic pension income, certainly in Metro or in some areas in Metro, just can't fork out $3,000, $4,000 or $5,000 in property taxes in instalments: January, February and March and then June, July and August. Any reasonable-minded individual would recognize that this is a serious problem, and that's something that needs to be looked at. In the interim, I suspect that this could only be addressed through, as I said, an emergency fund that bails out people who essentially are unemployed or are on fixed incomes or who are seniors with very low-level pensions and so on.
I think all of these issues are intertwined, but I can't help but think that our education system -- if the numbers in this are accurate, and I've been reviewing some of this myself, and I can't say for sure that you have 100 administrators for every 1,000 pupils in our system across Ontario.
The Chair: No, no. You've read it wrong. Read it again.
Mr Perruzza: Well, "100 school board staff." I don't suspect I read it wrong.
The Chair: Read a little further.
Mr Perruzza: "In Ontario, there are roughly 100 school board staff, including 69 teachers, for every 1,000 pupils." That's including 69 teachers. So administratively, there are 100. It's one in 10, so the ratio is correct.
The Chair: No. That's not the way it reads.
Mr Perruzza: I'm not going to argue with you on whether I read it correctly or whether you didn't read it correctly.
The Chair: But it's 69 teachers. The rest are administration staff, which could be a janitor, could be an electrician or whatever the case may be.
Mr Perruzza: Mr Chairman, I was a trustee on the school board. I understand all of the different roles in the schools. I went through many of them and I sat in on many meetings where we discussed many of these issues. I'm not going to rehash them, but I would hope that any statement would include something on that.
The Chair: Just for clarification, you said in Mississauga there was a reserve fund they were using for other things. Is not the reserve fund, when a subdivision goes in, to be kept there, because in 10 years you're replacing maybe street lights, sidewalks and roads?
Mr Wiseman: They spend it on other things.
The Chair: If you spend it someplace else, that reserve fund from that subdivision, that money, is used up. Now you have to build another new subdivision to have income. Is that what you're saying?
Mr Perruzza: No. What I'm saying is that municipalities can do a number of things. Municipalities can sell densities off of their roads. That's money; that's like a sale. They can sell parcels of land within their own jurisdiction that they own. They generally have land acquisition funds as well, in order to be able to bank land to then sell to a developer, based on what their official plan requirements are and based on what they want to see happen in certain areas. So they have very creative ways and very creative revenue resources. They can do a number of things with those things.
I know the city of North York just built a nice, new performing arts centre.
The Chair: A lot of corporate money went in there.
Mr Perruzza: While the mayor says none of that came from the taxpayers, I would venture to say he's inaccurate because $4 million a couple of weeks ago was just transferred to the performing arts centre from general revenue.
The Chair: Mr Wiseman? I'm just going to circle around here. Comments from Mr Kwinter, if he has any? Mr Carr, comments on this section?
Just before I go on, Ms Campbell, have you got any questions on this section? Just before we get back over here to Mr Wiseman.
Mr Wiseman: Wait a minute.
Ms Campbell: Perhaps I should wait until Mr Wiseman has made his comment.
The Chair: Okay. There's a comment on this section?
Mr Wiseman: I guess I won't be employed at the universities by the time I'm finished with this, but I really have a difficult time believing the universities are in financial trouble. The reason I say that --
Mr Johnson: You sat on the public accounts committee.
Mr Wiseman: -- is because of the way they're structured. I think universities are going to have to grapple with a couple of points. The most important one is, what are they there for? Are they there as instructional bodies or are they there for research, research delivery bodies?
The reason I bring this up is that if my number is correct, which I find just absolutely floors me, the average university professor teaches 10 hours a week. I've heard this from a number of different sources.
Mr Ruprecht: I used to teach nine hours a week full-time.
Mr Wiseman: Full-time.
Interjection: How much work did you do other than that?
Mr Ruprecht: A full-time job, nine hours a week.
The Chair: And you fit that into how many hours? Fifty hours?
Mr Ruprecht: In addition to that, of course, you have students to see and work to prepare, but essentially it's nine hours of lecturing to a class.
Mr Derek Fletcher (Guelph): And then research.
Mr Ruprecht: If you are experienced, you don't have to do much more than nine hours plus grading papers. If you're not experienced, you have to study harder. But essentially, you've got a good point.
The Chair: So you took this 90-hour job a week for more money?
Mr Ruprecht: This is more than 90 hours a week.
Mr Wiseman: The reason I bring this up is because I've had a lot of discussions with Gary Polonsky, who is the head of Durham College. Durham College has experienced a 43% increase in enrolment in the last three years, and has virtually experienced a zero increase in its funding transfers from the province. You have to ask the question, "How did you do that?" What they did is they right-sized, to borrow Mr Kwinter's phrase, the administration. In other words, they've eliminated most of the administration in the system.
Administrators now teach at Durham College all the way down the system. Maybe Gary Polonsky and one or two others do not, but the indication he has given us is that where they used to have administrators before who did nothing but administer, they are all in the classroom now. With just a one- or a two-hour increase per week within the university system in terms of lecturing and attenuating work that would go into that, the system could absorb the numbers of people increasing, if you were to downsize the senate and the administration and so on.
I've raised this again because I think that my colleague Mr Perruzza has raised the issue about school boards and about the size. In the 15 years that I taught, I saw the bureaucracy of the Durham board expand from one little building in north Oshawa to that building and a whole industrial unit in Whitby. I think we need to have comprehensive audits in all of these areas to address this situation about whether the money that is being spent is delivering the service to the client in the way that is the most efficient.
Ms Campbell: I have two questions for the committee. The first is, as far as the text under the heading "Transfer Recipients" is concerned, I have a feeling that perhaps the direction that should be followed at this point is another general overview of what each of the MUSH sector representatives said in the form of their presentations; rather than focusing on one or two specific issues that they raised, just do a general overview of each presentation.
The second question deals with the recommendation that the committee would wish to make under this heading. Would it be a variation of what would be found under "Social Issues" or is there a desire to make a recommendation under this heading?
Mr Kwinter: I would suggest that we do a variation of the same concerns we had under "Social Issues."
The Chair: Mr Johnson, agreeable?
Mr Johnson: Yes, I would agree with that.
The Chair: Any other comments? I think we should get a comment from Mr Carr. I see he has slipped out for a minute.
Mr Ruprecht: Why?
The Chair: There he is. I knew he just slipped out.
Mr Perruzza: Mr Chair, you told us the other day that we couldn't point out when someone wasn't here.
The Chair: What am I supposed to do? Just sit here and say nothing? I knew he was right out in the hallway. I could see him.
Mr Carr, we were just waiting for you because I saw you turn around at the phone there in the hallway.
Mr Carr: Pleased to be here.
The Chair: You're our main soldier from the Conservatives. Did you want to repeat it again, Ms Campbell?
Interjection.
Mr Carr: I felt like I had to give a 20-minute speech. Ladies and gentlemen -- sorry. Go ahead, Elaine.
Ms Campbell: I'll just repeat the two questions I asked a few moments ago. The first dealt with the text that would appear under the heading "Transfer Recipients." I asked if it was a case of, once again, the committee wanting just a general overview of what municipalities, universities, colleges etc said in the course of their presentations.
Mr Carr: The reason I think it has to be is that we won't get an agreement on anything other than that.
Ms Campbell: The second question dealt with the recommendation that the committee would wish to make under this heading. There seemed to be an interest in perhaps repeating a variation of the recommendation that appears under "Social Issues" with respect to efficient delivery.
Mr Carr: I agree.
The Chair: So we're all in agreement on that.
Mr Wiseman: I did add that perhaps all these institutions should do comprehensive audits to determine the most efficient delivery system of the services, with the client being the focus and not the administration. What I fear is that it's easier for some of these people to say, "The province isn't transferring us enough money," when in reality what they really need to do is readjust their administration systems and the delivery of the services.
Ms Campbell: Is that the recommendation then that the committee would like to make as a whole?
The Chair: Are you comfortable with the direction of the committee as it is now?
Ms Campbell: Yes.
The Chair: As we're winding up here, are there any other comments the committee members would like to make on an overall basis?
Mr Carr: Not that we're that far along. I just wanted to very quickly thank all the people who were involved in putting it together. It hasn't been easy at times. So to our clerk, to the Hansard people, to Elaine and so on, thank you very much. We know how hard it is to put this together, especially when everything's run so smoothly. I just wanted to quickly thank them, not that we're at that point, but in case we do, thank you very much. We appreciate it. We know what you did to get this out for the night and then over lunch hours and everything else. We do appreciate it, even though sometimes we forget to thank you. That's all.
Mr Johnson: Likewise, I would like to thank the staff who have so ably assisted us throughout this process. I think they certainly are always deserving of credit, which maybe we don't always publicly announce.
I just want to say that I'm very pleased we have had a certain amount of agreement made so easily during the last couple of days. I know in these committees so often we are partisan and find it very difficult to agree on anything.
I know it's very easy to speak retrospectively. We can speak retrospectively about 10 or 20 years ago and we can indeed speak retrospectively about things that have happened only in the past year or two. Certainly we can condemn things that have been done over all those years and we can praise things that have been done during that same period of time.
Mr Ruprecht: Just stay with the praise.
Mr Johnson: I think regardless of whether it was the Progressive Conservative Party some years ago, the Liberals more recently or the New Democrats today, depending on your partisan viewpoint, you can find things to praise or things to condemn. I just think, given the very serious situation the province finds itself in economically and fiscally, there are certain things that have to be done regardless of the party that's in power, quite frankly.
I think we've heard some very interesting comments and observations from all the presenters. Of course, they're not here today, but I think their purpose was well intended. Although our final brief will be somewhat general, I earlier indicated that I thought it would be important to send along with that brief the summary of recommendations as we had them made available to us, so that reference can be made to the observations and comments that were made by those presenters who were before this committee. I'd like to thank everyone again.
The Chair: Okay, Mr Johnson, you have a motion.
Mr Johnson: I move that the subcommittee be authorized to give final approval to the committee's report and that the Chair be authorized to table the report in the House.
Mr Wiseman: Can I just make a comment before that?
The Chair: Is that an addition, since we just passed the report?
Mr Wiseman: I was just going to say that it's been traditional in the past, at the beginning of the report, to thank all of the people who presented before the committee, and I think perhaps that would be a nice thing to do. It would be nice to continue that tradition.
The Chair: Thank you. I'll take your direction.
Mr Johnson: A very good comment.
The Chair: Mr Johnson has moved that the subcommittee be authorized to give final approval to the committee's report and that the Chair be authorized to table the report in the House. I guess I'd like to thank all the members of the committee for their cooperation.
Clerk of the Committee: We have to vote on that.
The Chair: Okay, everybody's in agreement? All those who agree, put up their hands.
Interjections: Agreed.
Mr Perruzza: Agree to do what, Mr Chairman?
The Chair: To report it to the House. Opposed? None opposed.
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Mr Wiseman: Do we need a special motion to send the report to the Treasurer prior to it being tabled in the House?
The Chair: It's already done. We're one step ahead of you, Mr Wiseman. The dissents will have to be in by Wednesday, March 17, 4 pm, to the clerk's office.
Mr Perruzza: Does this mean --
The Chair: Can I just get finished here, Mr Perruzza? Also, next Thursday, March 18, the subcommittee and Chair will meet in this room to look over the report, the finished draft; Thursday, at 1 o'clock, March 18.
Mr Kwinter: On a point of order, Mr Chairman: The only difficulty I have is that we have approved the broad framework of what this report is to be. Until we see a draft -- once the draft comes out, we may find there are things in there that don't interpret what we thought we had agreed to and we may want to do something about that, but there's no provision to be able to do that.
The Chair: The subcommittee will be going over it.
Mr Johnson: That's a fair statement, because if the subcommittee can't agree that this is the document we want to present to the Legislature and to the Treasurer, then it'll have to revisited, or delayed, I would suspect.
The Chair: We'll have to come to an agreement on this, so, Ms Campbell, make sure you write it properly.
Mr Wiseman: Could I ask a question as a potential solution to this problem? I understand that we were authorized to meet for one more day for this committee. Is that correct?
The Chair: Tomorrow.
Mr Wiseman: If we don't meet tomorrow, is it possible, with the agreement of the House leaders, that if the scenario unfolds the way Mr Kwinter has suggested, we ask them to meet one more day, not next week but the week following, in order to --
The Chair: It's too late. March 22 is the date for us to hand a copy to the Treasurer. That's why we're meeting on the 17th. Even to meet next week, I bet you if I ask for hands in here, most are with their children on the March break and it'll be very difficult.
Mr Johnson: Indeed. If I could just make a comment, that's --
The Chair: And you're going to come home early, Mr Johnson.
Mr Johnson: Yes, I sure am.
Mr Perruzza: I forgo my March break holiday, because I think this is more important. It's for the taxpayers of the province of Ontario.
The Chair: You can come with me on Thursday.
Mr Johnson: I just want to make a comment that someone from the government will be here to check this out, but --
Mr Ruprecht: Why are you looking over here?
Mr Johnson: I'm optimistic that someone from the committee will be here. I don't know what kind of merit it will have to send someone from the government to review this. It hasn't really been a participant in the process. So I'm a little nervous about this, but we'll see what we can do.
The Chair: Can I get approval from the committee here that if the subcommittee cannot agree on the finished draft report that will be submitted to us, we approach the House leaders to wind up delaying the written brief until we wind up having one more day for the committee to sit, like Mr Kwinter's concern?
Mr Kwinter: I have no problem with that, other than there seems to be --
[Failure of sound system]
Mr Kwinter: -- not going to be able to consider it in the preparation of the budget.
Mr Johnson: I don't think that's necessarily so, quite frankly.
Mr Kwinter: That's the information I was given.
Clerk of the Committee: It has to be tabled in the House on the second day we come back.
Mr Johnson: It has to be tabled in the House on the second day, and there are some --
Clerk of the Committee: That's in our Votes and Proceedings.
Mr Johnson: What are the time constraints, then, that demand that the Treasurer have it by the 22nd?
Clerk of the Committee: I spoke to Catherine Schuler in the budget secretariat. At first, she originally told me the middle of March. So then I asked her, "Can we get it to you on March 22" -- and she said okay -- "for him to consider for inclusion in the budget process?"
Mr Johnson: Having worked recently in that ministry, I'm under the impression that there isn't a deadline, that the Treasurer isn't demanding that it be there on the 22nd. In fact, to be fair and honest, I think that if he was to receive it before the end of the month, he would still have adequate time to take the report into consideration.
Mr Kwinter: Mr Chairman, that would solve our problem, because any time after the 22nd, we will have, either myself or Mr Phillips, or both of us, as many people as you need to take a look at the document just to see the final draft.
The Chair: Okay then, we need an agreement here by the committee to go to the House leaders to meet one more time.
Mr Kwinter: The 22nd or after.
The Chair: The 22nd or after.
Mr Wiseman: Only if it's necessary.
The Chair: Only if it's necessary. Let's say the subcommittee can agree, that the finished draft is approved by the subcommittee. But if it can't be agreed by the subcommittee, we meet one more day, and the subcommittee will pick the day that we meet.
Mr Kwinter: Mr Chairman, Mr Johnson had raised what I think is a valid point, and it certainly pertains to our caucus. There are only two people in our caucus who have been on this thing more or less the whole time. Neither one of us, Mr Phillips nor myself, will be available until the 22nd. So if you're just looking for a body to attend a subcommittee meeting, he or she is going to have very little input. They're going to sit there and look at it, and they're not going to be in a position to really make any kind of determination, because they will have had no experience listening to everything that went on, listening to these discussions.
Mr Perruzza: Tony, you just became a body.
Mr Kwinter: No. With all due respect to my colleague here, he is --
The Chair: Mr Perruzza --
Mr Ruprecht: I'm just a sub.
Mr Perruzza: Yes, a body.
Mr Kwinter: He's just a sub. He's only sat in a couple of days.
Mr Ruprecht: I didn't even know I was going to come today.
Mr Kwinter: What I'm saying is that I would have a greater comfort level if I had a chance, or Mr Phillips had a chance, to look at this one more time before it is finalized.
The Chair: You're saying March 22, we meet in the morning.
Mr Johnson: Or after.
Mr Kwinter: Any day that's convenient after March 22.
The Chair: That would be a Monday. We could just about be on deadline there, because you're going to have it all prepared. Then we approve it. It's gone. So by 4 o'clock on the 22nd, a copy will possibly be going to the Treasurer, and we'll still meet our deadline.
Mr Kwinter: Yes.
The Chair: So we have it on March 22. I'm taking a look. Mr Johnson, you'll be back then on the 22nd?
Mr Johnson: No, I won't. Mr Wiseman and, I understand, Mr Jamison will be; I won't be. But I would like to move that we agree to meet as a committee on Monday, March 22, to review the final draft. Can I move that motion, or is there a problem with that?
Clerk of the Committee: You need approval.
Mr Johnson: We need approval by the House leaders, do we?
Clerk of the Committee: Yes.
Mr Johnson: Okay.
Clerk of the Committee: Add that.
Mr Johnson: -- "on approval by the House leaders."
The Chair: Discussion? All those in favour? Anybody opposed? Nobody opposed, okay.
Interjections.
Mr Johnson: In a sense, we're forcing their hand, aren't we -- the House leaders' I mean -- because if we're not going to meet until that point in time, we're all gone and they're probably going to be keen to oblige us.
Mr Kwinter: Mr Chairman, just to clarify, it's my understanding that we already have approval to sit tomorrow if need be.
The Chair: That's correct.
Mr Ruprecht: Good idea.
Mr Kwinter: We're not having an extra sitting --
The Chair: We only transferred it.
Mr Kwinter: -- and the only constraint we had was the information I had that this had to be in the hands of the treasury people by the 22nd, and if we can meet on the 22nd, I don't see any problem with the House leaders. They've already approved the extra day. We're just saying, instead of the day being tomorrow, it's going to be on the 22nd.
The Chair: Okay. The clerk just told me we can't transfer Friday to another week, but we'll have to ask the House leaders. I don't think there will be a problem.
Mr Ruprecht: There shouldn't be. I have a very quick question, and that is, I suppose it's almost obvious --
The Chair: Do you want to get up to the mike? You're not being recorded.
Mr Ruprecht: It doesn't matter. I just wanted to find out -- I guess we can't have this ready by tomorrow, right?
The Chair: Tony, you've written a book. Maybe you could help her tonight and it will be ready tomorrow.
Mr Ruprecht: With Elaine, I would help any time.
The Chair: Okay. Then tomorrow morning we meet here at 10 o'clock and you're going to help Elaine tonight to write it.
Mr Ruprecht: Elaine, do you agree with this, or what? Is it the committee's wish?
The Chair: We'd better tell Hansard we're just fooling.
Mr Ruprecht: We should cut this out. You told me to be close to the mike, didn't you?
The Chair: No further comments? This committee is adjourned.
The committee adjourned at 1551.