Assemblée législative de l'Ontario

MUNICIPAL AND LIQUOR LICENSING STATUTE LAW AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT DES LOIS EN CE QUI A TRAIT À LA DÉLIVRANCE DE PERMIS D'ALCOOL ET À LA DÉLIVRANCE D'AUTRES PERMIS PAR LES MUNICIPALITÉS

KYLE RAE

ROB MAXWELL

ONTARIO CHAMBER OF COMMERCE

JOE MIHEVC

ONTARIO RESTAURANT ASSOCIATION

OAKWOOD COMMUNITY GROUP

MUNICIPALITY OF METROPOLITAN TORONTO

ONTARIO ASSOCIATION OF CHIEFS OF POLICE METROPOLITAN TORONTO POLICE FORCE

TORONTO EAST DOWNTOWN RESIDENTS' ASSOCIATION

ONTARIO ASSOCIATION OF CHIEFS OF POLICE METROPOLITAN TORONTO POLICE FORCE

CONTENTS

Tuesday 6 December 1994

Municipal and Liquor Licensing Statute Law Amendment Act, 1994, Bill 198, Mr Philip /

Loi de 1994 modifiant des lois en ce qui a trait à la délivrance de permis d'alcool et à la délivrance

d'autres permis par les municipalités, projet de loi 198, M. Philip

Kyle Rae

Rob Maxwell

Ontario Chamber of Commerce

Joe Couto, policy coordinator

Joe Mihevc

Ontario Restaurant Association

Paul Oliver, president

Rachelle Wood, manager, government affairs

Oakwood Community Group

Jim Stratton, member

Marlene Semple, member

Municipality of Metropolitan Toronto

Carol Ruddell-Foster, general manager, Metro Licensing Commission

Joe Pantalone, councillor and former chair, drug abuse prevention task force

Ontario Association of Chiefs of Police; Metropolitan Toronto Police Force, F-1520

Bill Tedford, representative

Bruce Crawford, representative

Toronto East Downtown Residents' Association

Michael Thomas, president

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/

Prince Edward-Lennox-Hastings-Sud ND)

*Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)

Abel, Donald (Wentworth North/-Nord ND)

Caplan, Elinor (Oriole L)

*Carr, Gary (Oakville South/-Sud PC)

*Haslam, Karen (Perth ND)

Jamison, Norm (Norfolk ND)

*Johnson, David (Don Mills PC)

Kwinter, Monte (Wilson Heights L)

Lessard, Wayne (Windsor-Walkerville ND)

Phillips, Gerry (Scarborough-Agincourt L)

Sutherland, Kimble (Oxford ND)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Cordiano, Joseph (Lawrence L) for Mr Kwinter

Duignan, Noel (Halton North/-Nord ND) for Mr Jamison

Marchese, Rosario (Fort York ND) for Mr Lessard

McClelland, Carman (Brampton North/-Nord L) for Mrs Caplan

Mills, Gordon (Durham East/-Est ND) for Mr Abel

Murphy, Tim (St George-St David L) for Mr Phillips

White, Drummond (Durham Centre ND) for Mr Sutherland

Also taking part / Autres participants et participantes:

Grandmaître, Bernard (Ottawa East/-Est L)

Ministry of Consumer and Commercial Relations:

Bertolini, Lynne, senior policy analyst, agency relations branch

Wise, Beverly, legal counsel

Ministry of Municipal Affairs:

Philip, Hon Ed, minister

Melville, Tom, legal counsel

Clerk / Greffière: Mellor, Lynn

Staff / Personnel: Yurkow, Russell, legislative counsel

The committee met at 1002 in committee room 1.

MUNICIPAL AND LIQUOR LICENSING STATUTE LAW AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT DES LOIS EN CE QUI A TRAIT À LA DÉLIVRANCE DE PERMIS D'ALCOOL ET À LA DÉLIVRANCE D'AUTRES PERMIS PAR LES MUNICIPALITÉS

Consideration of Bill 198, An Act to amend the Liquor Licence Act, the Municipal Act and the Regional Municipalities Act and certain other statutes related to upper tier municipalities / Projet de loi 198, Loi modifiant la Loi sur les permis d'alcool, la Loi sur les municipalités, la Loi sur les municipalités régionales et certaines autres lois ayant trait aux municipalités de palier supérieur.

The Chair (Mr Paul R. Johnson): Today we are dealing with Bill 198. We have a number of witnesses scheduled to be before the committee this morning and this afternoon.

KYLE RAE

The Chair: Our first presenter is Kyle Rae, a city councillor from ward 6. If you would come forward, make yourself comfortable and whenever you are ready, you may proceed.

Mr Kyle Rae: I had hoped there would be more members of the committee here.

The Chair: They'll be here very shortly. We have tight time constraints, so we're going to start regardless.

Mr Rae: That's fine. We have the same problems at city councils.

This has been a problem that I've been dealing with since I was elected back in 1991 and I'm very pleased to see that it's now being responded to. This legislation will allow the municipalities to protect the neighbourhoods that are being violated, and I would say many of our neighbourhoods are bleeding because of the problem of the maintenance of businesses that are catering to certain kinds of activities.

I was very proud to have Rosario Marchese, the MPP for Fort York, bring forward the private member's bill. He represents part of the area that I represent at city council. He and his staff and my staff have been working to try and find ways of tightening up the regulations so that we get some responsibility on the part of some businesses that decide that flouting the law is far too profitable to put aside.

The Metropolitan Licensing Commission for many of us was seen to be the best way to bring authority to the operation of businesses. However, we found that they were not very effective. They were good at issuing licences and providing Metro with a sound source of revenue. However, in terms of monitoring businesses and in terms of enforcing business licences, we found that they were quite lacking.

Bill 198 will allow area councils to request a hearing by the commission, request that conditions be placed on the licensee -- in particular the issues of hours of operation are very important -- and request that the Metro licensing commission revoke a licence.

One of the problems of the current Metro licensing commission standards is that there's this interesting term, "honesty and integrity." I don't know how one goes about measuring that. We have businesses downtown which have consistently ignored the police, the Metro licensing commission and the municipality in the operation of their licences.

Many of you probably live downtown when you're here in the city of Toronto and you may be familiar with Isabella Street. There's a bar at the corner of Isabella and Yonge which did not have a liquor licence for many, many months but continued to operate after hours. The liquor licensing control board would not go in because they didn't have a licence. The police would go in. They might take the liquor, they may take the taps, and the next day the owner will have new taps and more liquor and would continue to operate regularly, day after day, night after night, without a liquor licence.

There needs to be a way of padlocking the doors of operators who refuse to comply with the regulations of the LLBO or the Metro licensing commission. That same bar has had many infractions against it. Since February 1992, there were 52 charges laid against this bar. There were 35 criminal charges laid since January 1990 inside or outside the bar. These charges included drug offences, threatening death, assault, assault causing bodily harm, mischief, obstructing police, causing a disturbance, theft under $1,000, indecent acts, theft over $1,000 and breaking and entering, and they're still operating today.

What do you have to do to stop this kind of behaviour happening in bars? We are unable to shut them down. The police are frustrated, the municipality is frustrated and we have no mechanism to bring to a close the operation of a disreputable business operator. I would ask you to think about taking the next step. We need to find a way of closing the door on some of these businesses.

There is another incident that happens in the ward which is the operation of businesses that you would not think were involved in illicit activity but that in fact are purveyors of crack cocaine. One that's had some press is the Pioneer Donuts shop at the corner of Jarvis and Dundas. One of the owners of that doughnut shop was arrested more than two years ago and she's as yet to be sentenced. She was arrested two years ago for trading in crack cocaine and she was found guilty about six months ago, but we still haven't got a decision on what her sentence will be.

This is an indication of the problem of dealing with businesses. It seems that the province has taken a hands-off attitude in some respects and given the benefit of the doubt to many businesses, but in fact we are finding more and more businesses that are finding the economic climate so difficult that being presented with the alternative source of revenue is too enticing. They fall into it and it's difficult to blame them, given the stress that they may find themselves in, but in fact what they are doing is turning on the neighbourhood, they're turning on the residents whom they depend on and we're finding that they are part of the disintegration of the downtown neighbourhoods.

What I'm very pleased to see is that there's an attempt on the part of the government to regulate these businesses. However, I would ask that you think about taking a further step and giving either the LLBO or the police or the Metro licensing commission the ability to stop the operation of a business. You may have to padlock the doors. It may be distasteful to do that, but if you've got a chronic problem and a problem that's creating the kinds of incidents that I've read to you, there is no other way to deal with it.

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I'm wondering if, instead of using the term "honesty and integrity" which, as I said, is pretty difficult to measure, there may be some sense in using something like "community standards." What we have in some of the downtown neighbourhoods is quite a mix of residential and commercial and we need to find a way of balancing the residential and commercial. They often end up being in conflict, especially around the issue of noise.

It's quite disappointing that the LLBO will not take into account the problem of noise when it is looking at the reviewing of liquor licences. Noise, I think, for most of the people in the downtown, is a far greater problem than extending the liquor hours to 2 o'clock. They would not mind the extension of liquor hours to 2 o'clock or 3 o'clock in the morning. What they have a problem with are operators who are prepared to crank up the volume of their disco and the noise bleeds into the street and it bleeds into their apartment buildings. I would ask you to consider adding to the jurisdiction of the LLBO concerns around noise. I would suggest to you that the bars and discos are one of the most chronic problem noise sources that we have in the city. They may not be a problem in rural Ontario, but in downtown Toronto they are a significant problem. If you have the opportunity to look at that part of the LLBO regulations, noise is a considerable problem.

The municipality of Toronto does not have great powers in being able to shut down these businesses. As I've said, since 1991 I've been working on this issue and all I've got in my hands to deal with are the public health officials, the building inspectors and the fire department. What we end up doing is just harassing businesses that are probably dealing in drugs and we have found or the police have found them to be dealing in drugs or after-hours activities. We have no way of dealing with them head-on with the issue at hand. We have to then send in these other officials who harass them about cockroaches or harass them about not having a fire extinguisher and we can't really get at the major problem in front of us. So I think this piece of legislation is helpful.

I have in front of me the health inspector report from a diner on Dundas Street. The report from the public health department said there is limited food handling; the restaurant serves a few orders a week. This is a restaurant. We know that they were involved in crack dealing, but there was no way for us to get at that problem. We had the police go in and the police would just catch people as they came in and out, but we couldn't shut down the business. What we need is the ability to shut down the businesses that are creating the shopping centre of crack in the city, which is the corner of Jarvis and Dundas.

With those comments, I would hope that you would look at moving to a more responsible regime for the Metro licensing commission and the liquor licensing board. They can't merely grant a licence, wash their hands and hope that the operators are going to do the right thing. They need to have a regulatory arm. They need to be able to go out and assess what is happening. We need the ability to shut them down if they are not going to play by the rules of business. Far too many businesses are moving into the illicit trade of crack cocaine and other drugs in the downtown area and we need the legislation to stop it.

The Chair: Thank you very much for making your presentation before the committee this morning. I remind committee members that we have about 20 minutes per presenter and we have about eight minutes left right now. You will have realized at this point that we have the minister with us before the committee this morning. The minister indicated to me that he wanted to make a comment. Is that right?

Hon Ed Philip (Minister of Municipal Affairs): I would just comment, Councillor, that section 4 in fact does give you the power to close down the operation. Furthermore, under other sections of the bill, I believe it's section 18, failure to pay the fines that would result from your operations would allow them to seize your equipment, so I think you'll find you have some additional tools that would remedy the kinds of situations that you've talked about.

Mr Rae: In section 4, does that apply just to liquor-serving operations or does that include any business?

Hon Mr Philip: All municipal licence infractions.

Mr Rae: Thank you. Then that is what I'm looking for.

Hon Mr Philip: Good.

Mr Rae: What happened, Minister, is that the MPP for Fort York and myself, working with the residents in the east downtown, were working on this issue, not so much on the issue of liquor operations but on just businesses that were ending up in the drug trade. Then, when the issue of the shootings happened in North York or the northern part of Toronto, the caravan seemed to move and swerve into another direction when we had been working quite successfully with the neighbourhood in the area of problem businesses, not problem liquor outlets. I was worried that we were losing that part of the agenda and it was being taken over by the after-hours clubs.

Hon Mr Philip: I wouldn't have lost that in the bill.

Mr Rae: Thank you. I'm glad to see it's there.

The Chair: We have just a little more than two minutes per caucus.

Mr Tim Murphy (St George-St David): Thank you, Mr Rae; good to see you. I wanted to ask one quick question about the troubles you've had in closing down business operations and the question of whether section 4 deals with it. Do you know how long a process it takes to convict a business owner who has a municipal licence, how long a process it takes to get a conviction for contravening a licence provision, and do you have any sense of how long that process would take before we could actually get an order closing the premises down? Do you have any sense of how long that would take?

Mr Rae: I don't think we've been able to do that in the three years that I've been on council, and we've been trying. We've been pursuing that. There has been an inordinate amount of reluctance on the part of the Metro licensing commission to review licences. Once they give them out, they've got their fee. What they're interested in is the fee, the licensing fee, and not the regulation of the business. The first thing is to start motivating the Metro licensing commission that it has got more than just a revenue source to operate, that it also has a responsibility.

As I said, in the case of Lydia Choi, who is the operator of Pioneer Donuts, she was arrested in November 1992, she was found guilty in 1993 or 1994 and she still has not been sentenced. That tells me it takes two years to move on an individual. Is it quicker to move on a business? I hope so, but I don't have any measurement of that. I've not seen a business being shut down yet.

We've got the case of Bar One. As I said, it had 52 charges laid under the Liquor Licence Act and 35 criminal charges laid against it, and it is operating today. So does it work? No. Will this work? I hope so, but I don't know how long it'll take to kick in.

Mr David Johnson (Don Mills): I appreciate the problem that you're dealing with, coming from the municipal scene myself: liquor, and now you're extending it to crack cocaine. I might say, with regard to noise, from my experience, that it can emanate from many different situations. I've had people saying we should close down pool halls because people gather around and they make a lot of noise around pool halls, and there's a business across the way that's some sort of stamping business that bothers people.

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But on this issue of being able to close down businesses, in my riding there was a police action just in the last three months resulting in 30 arrests for drug dealing and many of my constituents, tenants who live in that area, say that a lot of the dealing was taking place in individual apartments -- well, some actually after hours from a recreation centre that was nearby, when it was closed, but from apartments. I wondered, along the same lines that you're suggesting we should be able to close down businesses or the municipality through the licensing commission should be able to close down businesses, if it's proven that drug dealing is taking place from a particular apartment, should those tenants, all of the tenants associated with that -- sort of equality here -- be evicted from that particular unit?

Mr Rae: I have been working with the officers of 52 division on a regular basis and when people on Church Street see me and say, "I can't believe it, I've got a crack house in my apartment building, 807-100 Gloucester," I report that immediately to 52 division or 5 district drug, and within a week they've been in there, they've broken down the door and they're out.

Mr David Johnson: The tenants were evicted?

Mr Rae: They're out.

Mr David Johnson: So you would agree that the tenants should be evicted in a --

Mr Rae: They are a blight. They are a disease in our neighbourhoods.

Mr David Johnson: Okay. I'm glad to hear you say that.

The Chair: I'd just like to bring to the attention of any witness, and I'll mention it now, that information that's in the public domain is certainly something that can be mentioned, but if there's something pending before the courts, an opinion should not be raised with respect to that before this committee for reasons, I think, that are obvious.

Mr Rosario Marchese (Fort York): Mr Chair, the noise is rather high. I don't know if you could from time to time just remind everyone --

The Chair: I just remind all the people in the room that we would like some order in here so we can hear the witnesses and the members of the committee can clearly hear the information being exchanged. Thank you very much.

Mr Marchese: I welcome Councillor Rae here and congratulate him on all the work he has done in his ward and in our riding around this particular issue.

You raised a question around "honesty and integrity" and then proposed a different kind of standard, which is community standard, and I have to tell you that concerns me. "Honesty and integrity," in my mind, achieves a balance between the public and the business operators. If we then talk about community standards, that, as you know, is very loose, very fluid, very dangerous at times in terms of what some of those standards might be in some of those communities, because every community might have a different standard that needs to be interpreted and defined.

Do you think that whatever community standard is set by any community should be the standard that licensing bodies abide by, and do you think that might be a problem, versus the language we have here that I think genuinely will get to the unscrupulous operator or the kind of violence that is happening in that establishment or around that establishment?

Mr Rae: I make the suggestion because I think the use of the term "honesty and integrity" reads to me as a hangover from the medieval period. It doesn't really mean anything. You can't measure it. It's in the perception of the commission what is honesty and what's integrity. In the same way, community standards is the same problem.

Why I'm responding to "honesty and integrity" is that for the last three years I've been dealing with honesty and integrity and I don't find it, and I don't find a way for the Metro licensing commission or the LLBO willing to go to deal with the term of "honesty and integrity." It's too fluid. They're fine principles and I wish we could abide by them, but in fact it's very difficult to nail them down and then move on the issue of honesty and integrity.

If you want to define them very clearly in terms of a business operation -- what to a business operator should be honesty and what should be integrity, then define them.

The Chair: Mr Rae, I want to thank you very much for making your presentation before the committee this morning.

I remind witnesses that we have 20 minutes for your presentations and you may use all of that 20 minutes to make a presentation or leave some time for questions and answers from the committee.

ROB MAXWELL

The Chair: The next presenter is Rob Maxwell, city councillor, ward 11.

Mr Rob Maxwell: I want to thank you for the opportunity to appear before you to speak on this bill. I represent, as you said, ward 11 on Toronto city council. Ward 11 is in the west end of the city and it contains a number of communities that have been experiencing problems related to drug trafficking for a number of years now. I want to add my voice in support to the bill that's before you. In particular, I would like to endorse the amendments that relate to the municipal licensing powers.

As you know, restaurants and other similar businesses in neighbourhoods that are afflicted with drug trafficking all too often end up functioning as office space for dealers and their customers. In my ward, we've had on many occasions to go to the LLBO to try to have the licences of businesses that tolerate or encourage activity removed, and this is in spite of the fact that very often the offences in question have nothing to do with liquor infractions. In addition, of course, this approach does not allow us to deal with premises that don't have a liquor licence.

I would have to say that many people in my constituency have become very cynical about the power or the willingness of government to solve the kind of day-to-day and very serious problems they have had to live with for these many years. I think the amendments that are before the committee today will help to provide citizens of Toronto and the entire province with a more effective tool for dealing with the job at hand.

There are three issues I would like to raise that I think need to be addressed, although it may not be possible to address those in the legislation. They may be done through regulation or simply through some kind of a policy directive coming from the ministry to the licensing commission.

The first is that the licensing commission should be directed, when requested and where appropriate, to hold hearings during the evening hours and in the communities where the businesses in question are located. I think this would allow for much greater community participation, both pro and con.

The second issue is that I think there needs to be some kind of a provision for anonymity for people who are raising issues with the commission. People, I have found on numerous occasions through my experience, are very afraid of coming up against a business where drug trafficking is involved and I think that's for a very good reason. It is very difficult for commissions and other decision-makers to really gauge what the public opinion is about a particular business when people are afraid to come forward and speak. I think people should have to be provided with some degree of comfort, that there are not going to be reprisals against them for exercising their democratic right to appear before a tribunal or a commission.

The third issue is that I think the commissions and the police have got to take a more proactive role in educating business on how to stop traffickers from setting up business in the first place. In my experience, most business owners do not want drug dealers operating out of their establishments, but they simply lack the knowledge or the resources to prevent it from happening. I think clearly it would be in everyone's interests if we could deal with problems before they start rather than try to correct them afterwards.

I want to finish by thanking, in particular, Rosario Marchese, the MPP for Fort York, for the work he's done in bringing this issue forward on to the political agenda. I know that can very often be a very difficult task. I just want to add my personal congratulations to him and to everyone else who has been involved in bringing the bill forward. I think it's a step in the right direction.

Mr Gary Carr (Oakville South): Thank you very much for your presentation and also your written presentation.

With respect to what's happening now, I take it you feel that there isn't enough power through the existing legislation to stop the problem right now?

Mr Maxwell: I frankly wouldn't purport to be an expert on the legislation. I think there has been a problem. Whether it's due to the legislation itself or the willingness, in my case, of the Metro licensing commission to act on the legislation, frankly I don't feel in a position to comment on that.

People in my community long ago gave up even attempting to approach the Metro licensing commission as an avenue for dealing with these problems, and everyone in my community immediately heads towards the liquor licence board, which I don't think is the right approach. I think this is clearly a licensing issue that has to be addressed in those terms.

Mr Carr: I know you've said on page 1, "...we have on many occasions had to go to the liquor licensing board to try and have the licences of businesses...revoked" and so on. Maybe you could again just give us a little bit of an idea of what happened. Is it a case of them not having the resources to enforce it or they don't want to do it?

Mr Maxwell: Sorry. The liquor licence board?

Mr Carr: Yes.

Mr Maxwell: No, I have found, in fact, and I think residents of my ward would attest to this, that the liquor licence board has become far more sensitive in recent years to the needs of communities. They've taken to doing things such as holding evening hearings in the community, which I commented on. There is, in general, a much greater sensitivity on the part of the staff there to dealing with the community. I'm quite pleased with the recent change in direction that's occurred there, but the purpose of the liquor licence board is to deal with liquor-related matters, and what we're dealing with is not liquor. We're dealing with another substance, which is illegal, which is of course street drugs.

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Mr Carr: If I have a little bit of time, on page 2 you talked about: "The licensing commission should be directed, when requested and where appropriate, to hold hearings during the evening and in the communities where the businesses in question are located. This would allow for greater community participation, both pro and con." If that happens, what do you think the people in your ward would like to see happen with these businesses?

Mr Maxwell: I can't say in general. I think it is conceivable that people could complain about a business where in fact there is no illegal activity going on. That's certainly been known to happen before. But in my experience, again, with liquor licence hearings, I was quite surprised to find a number of people who would attend speaking in favour of a business, against the licence being revoked. My sense was the community would come out en masse and you would just get this very one-sided perspective on the issue but what happens, of course, is that the management of the restaurant then also gets an opportunity to bring out people who, for whatever reason, believe that the business should continue. I think you get a much more balanced perspective and I think that's important for licensing bodies to be able to hear truly what people can do.

In my community, it's a working-class neighbourhood, people simply do not have the kinds of jobs where they can take time off and go to some agency downtown or wherever to make their presentations. If you really want to get and if you're serious about having community input into these things, you've got to have hearings during the evening and you have to have them in the community.

Mr Carr: What about the police? Is it a case of resources? As we know in this day and age with the amount of problems with crime, the police are stretched well past the limit. Is it a case of them not having the resources to do it, or do you think it is that they don't have the enforcement mechanism right now? Which is it?

Mr Maxwell: I would say probably both. Again, I couldn't comment in general. I could give you some anecdotal case-by-case information on that. Regardless of whether it's resources or legal mechanisms, I think these are reasonable amendments that help, that begin to get at the problem and I think they should be approved.

Hon Mr Philip: I just wanted to thank you and point out to you and Councillor Rae, who are concerned about the responsiveness of the licensing commission, that section 6 is a response to that. It will allow the lower tier, namely the city of Toronto, or in another region the city of Mississauga, or whatever, to make an application, and the licensing commission would have to respond back to the resolution passed by your council. That's an attempt in this legislation to give, if you want, people at the lower tier more control over the upper tier's licensing commission.

Mr Maxwell: Yes, I had noticed that, Mr Minister, and think it's a very useful addition. However, when we get rid of Metro, of course, you're going to have to deal with the question of devolving the licensing responsibility to the local municipalities -- for another day.

Hon Mr Philip: I look forward to the other two parties giving me their views on that.

Mr Gordon Mills (Durham East): I'd just like to put it on the record for your information that the minister, meaning the Solicitor General, has met with the Ontario Association of Chiefs of Police, which is very, very pleased with the proposed amendments to this legislation and in so far as resources, they feel that this will allow them an early intervention before things get out of hand. I know, and you must be aware as a councillor in the city of Toronto, at one call there were 24 police cars there. When we talk in terms in resources, this will allow that earlier intervention to snuff it out before it gets out of hand and thereby the resources will be better managed.

Mr Maxwell: If I'm permitted to respond to a comment rather than a question, point well taken. The local police officers I have spoken with are pleased with these amendments as well; they're quite supportive. I think what you've said, though, just underlines the comment that I made that if we could get involved even earlier -- and I think it's very important to be able to provide those business people who feel that a problem is imminent to try and deal with it before it takes root. That's an issue that I have written both to the liquor licence board and Metropolitan Toronto Police about, regarding liquor licences, and they are under way, I gather, developing a protocol for an educational package for liquor licence establishments. I think a similar process needs to be undertaken here.

The Chair: Mr Marchese, we have about a minute.

Mr Marchese: Welcome, Mr Maxwell. We share similar kinds of problems for many, many years and his ward, of course, is very close to mine and I'm as familiar with his problems as he is with mine in my ward.

You raised a point. Minister Philip mentioned section 6, which allows the municipality by resolution to require the licensing commission to investigate an alleged contravention, and that's quite clear. But in terms of the point you make in your first point, that licence commission should be directed to when requested and where appropriate hold hearings during the evening, I think that is a useful suggestion. I don't know whether the minister was thinking section 6 also deals with this, but I'm wondering whether the municipality can simply do that on its own or whether the city can request Metro to do that.

Mr Joseph Cordiano (Lawrence): You don't need to put it in the legislation.

Mr Marchese: I didn't think you did, but is it that the city council can request that as well in a similar way?

Hon Mr Philip: No, but Metropolitan Toronto can certainly as part of their licensing provisions provide for that, and I understand they are in fact doing some of that already. I'm reluctant provincially to dictate to municipalities how they run their operations and I think that's a local decision that should be made based on local resources and not have us impose it on a local municipality, be it upper tier or lower tier.

Mr Marchese: Mr Philip, I agree. I think city council can make that request of Metro obviously to urge them to do so, so that --

Mr Maxwell: I look forward to quoting the minister in that regard and perhaps on other issues.

Mr Cordiano: I'd like to just make a brief comment and perhaps ask your opinion. Councillor Rae spoke about noise in his community and a concern around that; I would express a similar concern with respect to commercial avenues which are confined within residential districts, and the proximity of those establishments to residential neighbourhoods. Obviously there's a concern around noise and traffic and just the numbers of people entering into what amounts to a residential community for most intents and purposes.

Subsection 109.1(3) of the bill, which amends the Municipal Act, states that you cannot refuse to grant a business licence because of location, if the business was operating at that location before the licensing bylaw came into effect. In a sense we're going to entrap what exists already in those types of neighbourhoods where you have commercial establishments. That is going to be the case in most of downtown Toronto, but my concern is with after-hours clubs that will now be permitted to continue to exist. There isn't going to be an effort in this legislation to see that there is a distancing of those locales with residential neighbourhoods, which is an ongoing concern that I have.

I would like to have seen some provision made for the separation of those establishments away from residential neighbourhoods and into perhaps industrial or entirely commercial areas, rather than being immediately adjacent to residential neighbourhoods.

Mr Maxwell: My feeling is that it's important to distinguish between the use itself and nuisance that may arise from the use, that after-hours clubs do not in all cases cause problems. When well managed they can very often be a useful asset to a community. I think what the legislation should concern itself with is dealing with situations where the management of the premises is not acting in the interests of the public and his or her neighbours. I guess there has to be a presumption of innocence in a sense here, that you have to allow a business to set up shop and operate and then be able to respond very quickly and very effectively if it is not playing by the rules.

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Mr Cordiano: I suppose there is a certain degree of compromising here with respect to the very realities of the city of Toronto. You are not going to be able to easily extract those business establishments from those residential neighbourhoods which are on commercial avenues. There is a difficulty in doing that; I understand that. But by the same token, there is a concern with establishments that, by their very nature of being in business, create that kind of noise and that kind of activity which happens in the wee hours of the morning, after-hours clubs being just one of those establishments.

Mr Maxwell: If I could cite an example here, there is an establishment that is not in my ward but is a few blocks away from my ward and very close to where I live. I forget the name of it but it's a very famous country and western club. It's at the corner of Dovercourt and College, near the West End Y, if you're familiar with that neighbourhood. It's been in operation there for, I believe, 20 or 25 years. It's a famous institution in country and western circles in the city. I frankly have never heard a complaint about the operation of that club and it has always been an after-hours club.

I think it's possible for these places to operate cleanly. Again, I think it's important at the outset that the managers of any business, whether it's a doughnut shop or an after-hours club, (a) be educated as to what their responsibilities are and (b) be given the resources and the assistance that's necessary to deal with problems at the beginning rather than at the end.

Mr Murphy: Just one quick question: Councillor Rae talked about the problems he had with the honesty and integrity provision and preferred something like "community standards" as a more basically understandable notion and one that a licensing commission might be more willing to act on than honesty, integrity. I wonder if you could comment reasonably quickly on that.

Mr Maxwell: Sir, I came in midway through Councillor's Rae's comments and so I didn't hear his argument around that. I think the public in general has trouble with connecting the concept of honesty and integrity with anything to do with government these days. It might be better to come up with a term that is not going leave all of us open to derision. But frankly, I don't understand the distinction between the one concept and the other.

"Community standards": It seems to me that has the potential at least for being overly restrictive in my mind, that basically what you would be saying is that whoever happens to show up for a particular hearing makes a decision, and I don't think that's appropriate. I think there have to be guidelines that everyone understands and can live with.

The Chair: Thank you, Mr Maxwell, for making your presentation before the committee this morning.

ONTARIO CHAMBER OF COMMERCE

The Chair: The next presentation is by the Ontario Chamber of Commerce, Mr Joe Couto, policy coordinator.

Mr Joe Couto: Thank you very much for allowing us to have our say on the bill, on rather short notice, but always willing. We thank you for that. The Ontario chamber represents about 65,000 businesses in Ontario, with about 75% of our membership being classified as small and medium-sized businesses.

The chamber fully supports the objectives of Bill 198. As a community-based organization, we understand the needs of communities to ensure that problems associated with illegal activities such as the sale of drugs and alcohol after the legal closing time for businesses are dealt with promptly and effectively by governments and law enforcement agencies. As an integral part of our communities across the province, the Ontario chamber members clearly understand and share the desire of the government to rid their communities of this serious problem.

While we clearly support the objectives contained in the proposed legislation, we believe that some changes must be made to ensure that law-abiding businesses are not unjustly caught in the large net of the proposed legislation.

Again, we support the Ontario government's strong desire to address the problems caused by illegal activities occurring in business establishments. We also welcome providing law enforcement agencies with greater powers with respect to functions occurring under special occasion permits. However, the proposed legislation should be looked at closely with regard to the long-term impact it will have on law-abiding businesses. We are concerned that some proposed aspects of Bill 198 may negatively impact on these legitimate businesses which, we trust, are not the government's target in this legislation.

Many of our members who have contacted us regarding the bill have expressed a strong concern that the legislation will focus on regulating legitimate businesses instead of getting to the root of the problem, which is the illegal activities occurring in some business establishments in Ontario. We urge the government and this committee to seriously examine whether or not the problem is one of lax enforcement of existing legislation rather than one of needing yet more regulations and red tape for legitimate businesses to have to wade through.

We sympathize with municipalities and law enforcement agencies that have to deal with these illegal activities. It is not an easy job. However, we would like to be sure that all avenues for enhancing law enforcement of the existing laws and a full understanding of the phenomenon of after-hours clubs are explored before the government proceeds with more regulation for legitimate businesses.

We believe that somewhere between the time the concept of the bill was developed and the actual drafting of the legislation, the focus has shifted from addressing the issue of stopping criminal activity in business establishments to focusing on the establishments themselves, whether or not criminal activities are actually occurring there.

Bill 198 has the potential to punish not just the perpetrators of illegal activities occurring in business establishments but the business as a whole by imposing conditions on a business licence or even suspending or revoking the licence.

The Ontario chamber urges the committee members to ensure that it is illegal activity that is the focus of the bill, not punishment of a business in which illegal activities may be occurring but which have nothing to do with the proprietors of the establishments, who are not participating in the illegal activities nor are even aware of such activities.

We believe that Bill 198 offers no assurances of uniformity in terms of how Bill 198 is applied across Ontario. Business operators may face different rules as different municipalities impose the bill differently. This adds to the frustration and confusion level for small businesses and is therefore counterproductive to encouraging streamlining of regulatory requirements which the government has recently acted on.

Again, the focus should be on illegal activities, not on broadening regulations under which municipalities issue business licences. Our members believe that municipalities should ensure that they are enforcing their current powers as effectively and efficiently as possible before being given the power to impose even more bureaucratic red tape on businesses already suffering from administration overload.

We recommend that municipal licence issuers who have doubts regarding the ability of an applicant to operate within the law simply not grant the licences at all. Placing conditions on a dubious applicant is inviting trouble, so a licence should only be granted to applicants who can ensure with relative certainty that illegal activity on the business premises is not a threat to the issuance of the licence.

The rights of the licence applicant to a speedy and fair hearing should also be ensured, as should safeguards for business owners who are not involved or are unaware of illegal activities in their places of business.

Many of our members have expressed frustration with the lack of action regarding the special occasion permits and the inability of the Liquor Control Board of Ontario to adequately restrict potentially dangerous SOP events. Essentially, the problems with SOPs are one of tracking. The LCBO does not adequately track applicants on an accessible computer system which allows the LCBO and law enforcement agencies to prevent a potential problem from occurring. Many after-hours clubs obtain SOPs as a means of doing business.

The Ontario chamber believes that by simply insisting that SOPs be issued only by municipalities where the event is being held and by implementing holding periods before the issuance of the licence to allow for a thorough background check, many of the problems associated with after-hours clubs and the accompanying illegal activities could be addressed.

The question of adequate police resources for addressing this issue is one which the Ontario chamber is not in a position to comment on. However, we urge the government to provide law enforcement agencies with adequate powers to do their duty in combating illegal activities on business premises.

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The chamber supports the government's efforts to address illegal activities in business establishments. This legislation can be a win-win proposition for all involved -- business, governments and local communities. We do not need to make this an exercise in simply allowing for more regulatory powers for municipalities without addressing the fact that it is illegal activities that need to be addressed.

We find that Bill 198 needs to be refocused on this all-important objective. Our members, like the overwhelming majority of Ontario businesses, are law-abiding members of their communities who do not engage in or encourage illegal activities. We ask the committee to keep this in mind as you deliberate possible changes to the legislation.

We have not had the opportunity to canvass our members on their views regarding allowing licensed establishments, such as bars and restaurants, to remain open past 1 am. We bring this to your attention only to point out that some of our members have expressed frustration with the most restrictive closing time in Canada and a belief that much of the after-hours-club problem with illegal activities can be curbed simply by extending closing time for legally licensed establishments and ensuring that law enforcement agencies are provided with adequate resources and support to do their jobs.

This legislation provides an opportunity to address licensing policies and other important questions. I trust the government will seriously address the issues we and other business groups raise and refocus the bill to address the pressing problems of our community.

Hon Mr Philip: With your comments about possibly allowing some of the existing businesses to stay open later, are you aware that Mel Lastman had that position, consulted with the restaurant owners in his area and changed his mind because he felt that it would not be of help to his community? In fact, all the mayors that I have met with have expressed their concern that the bill not do that.

I want to point out just a couple of things to you. Since you are a province-wide organization, you have a number of members in Windsor. You're aware that the Windsor legislation goes considerably farther than this goes?

Mr Couto: Yes.

Hon Mr Philip: Are you also aware that there hasn't been one complaint from one business in Windsor as a result of the Windsor legislation? Yet you're saying that this bill goes too far.

Mr Couto: All I'm saying is that the real focus of the legislation should be on illegal activities, not simply regulating businesses as a means to that. That's an important part of it, but --

Hon Mr Philip: That is the focus of the bill, sir. I suggest that you might like to read the bill again. Would you also like to --

Mr David Johnson: Give him an opportunity to respond.

The Chair: I would suggest that we don't badger the witness.

Hon Mr Philip: I'm sorry.

Mr Mills: He's stating facts. That's not badgering. Come on.

Hon Mr Philip: I'd just like to hear a constructive proposal from the witness.

The Chair: Certainly if there are questions raised by the minister, then Mr Couto should be given time --

Hon Mr Philip: One last question to you, and I just point out to you page -- well, you don't have your pages numbered -- but the second to the last page, on which you say:

"We believe that somewhere between the time that the concept of the bill was developed and the actual drafting of the legislation, the focus shifted from addressing the issue of stopping criminal activity in business establishments to focusing on the establishments themselves, whether or not criminal activity is actually occurring."

That simply, sir, is absolutely, positively wrong. The bill does not do that and I suggest that you read the bill again.

Mr Couto: Can I say something?

The Chair: Mr Couto, would you like to respond?

Mr Couto: First of all, I would suggest to the minister that I can only tell you what my members have told me, and if you think that you have a better ear to the ground than an organization of 65,000 members, all power to you. All I'm trying to point out to you here, sir, with all due respect, is that there is a concern in the business community that perhaps as the bill is going forward, as municipalities receive the new powers and all the changes are made, there is a perception that the real focus will be to further regulate business establishments.

Now that may in fact be wrong. It may be something that's not clearly been communicated. All I'm pointing out to you, sir, is that as a minister of the crown you should be aware that these perceptions are out there and that the committee then has an opportunity to carefully look at the legislation to ensure that businesses will be very comfortable with the bill. That's all I'm asking you.

Hon Mr Philip: Well, perhaps you can help us communicate with your members.

Mr Noel Duignan (Halton North): Point of order, Mr Chairman: The regular members of this committee want some opportunity to ask a question too, so I think we should be allowed that opportunity.

The Chair: Minister, if you'd like to respond and then we'll go to Mr Duignan.

Hon Mr Philip: I hope that you will help us to inform your members that in fact this focuses on individual businesses. It does not deal with general licensing, and in fact it's the offenders that this focuses on. I would appreciate if you could help us in communicating that to your members to relieve any anxieties that any of them may have, and I greatly appreciate your assistance in this matter.

Mr Couto: We're always at the disposal of the government.

Mr Duignan: Very briefly, I want to address some of the issues you raised in your brief regarding the special occasion permits. I don't know whether you're aware or not of the fact that the system will be automated fully by the end of February of next year and, because we've accelerated that process, we're now getting the system up so that will be in place by the end of February.

Mr Couto: I was not aware of that. Thank you.

Mr Duignan: Also the fact that the SOPs now -- regulation has been passed along to municipalities to deal with that issue and also the implementing of the holding periods, as exist already in the legislation. The problem we have with the background check you raised is that it's tough to do when you've got 87,000 SOPs to deal with, when particularly 80% of them are for wedding receptions. So you can see the enormous problem there would be to dealing with that particular issue.

Mr Couto: I appreciate that, and all we would encourage the committee to consider is any way that you can enhance the background checking and cut down on the potential problems of SOPs. I think that would solve a lot of the problems.

Mr Duignan: That will be operative by the end of February, so that should solve --

Mr Couto: Perfect.

Mr Bernard Grandmaître (Ottawa East): We've listened to three presentations this morning -- you're the third one, by the way -- and all three are concerned with the "honesty and integrity" in sections 1 and 2 of the bill. Could you elaborate some of your concerns?

Mr Couto: Sure. The problem, I guess, that we've had in reviewing that section is that -- and the previous speaker, in the questioning, sort of touched on it -- as clear as that can be, would it be better to have "community standards" instead of "honesty and integrity"? We're not exactly quite sure how that would apply.

What we would like to see done, quite frankly, is, in the process of issuing licences, the system itself has to be, I think, much more in tune with the fact that we need to stop potential problems from occurring. That's why we say the system needs to be upgraded so that we will have the ability to have the LCBO or whomever issues licences catch potential problems before they occur and that the police are aware of potential problems that could occur.

In terms of "honesty and integrity," it's all rather vague. I think we'll look forward to a little bit more explanation as the committee hearings go on and then perhaps we'll feel a little bit better about it. Right now, we don't have enough information to really be all that comfortable.

Mr Grandmaître: Are you recommending to this committee that the words "honesty and integrity" be removed from the bill? Is that your real intention?

Mr Couto: I would recommend that, except I don't have a suggestion for what to replace it with, quite frankly. We haven't got, at the chamber, to the state where we could have done that, short notice being what it is. I would just advise the committee to seriously consider at least carefully defining what that means so that the net doesn't become so large that it gets people whom it's not meant to get.

Mr Grandmaître: A better definition.

Mr Couto: Yes, at least. At least clarify what is meant. I think that's just a matter of either amending it or -- yes, amending it would probably do.

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Mr David Johnson: On behalf of the committee, I would like to apologize for the treatment you've received here this morning. You've brought a very legitimate case, one that I have a great deal of sympathy for, to this committee on behalf of the business community of Ontario. Indeed, I think if we thought seriously about this --

Mr Mills: A point of order, Mr Chair.

Mr David Johnson: I'm in the middle of making --

Mr Mills: That comment about apologizing for the behaviour of the committee I think is out of order. The minister was stating facts. He wasn't badgering the witness. That should be on the record.

The Chair: That's not a point of order.

Mr David Johnson: That's just wasting my time.

The Chair: Mr Johnson is entitled to make his comments.

Mr David Johnson: I think if we'd thought about this deeply, then we would share your point of view that it's the criminal activity that we should be focusing on and we should be well aware of the administrative burden on businesses. Indeed, you've indicated that some businesses may not be even aware that the illegal activities are taking place within their premises and could be impacted by this.

It seems that perhaps the focus -- well, we've discussed the "honesty and integrity" situation, and it's really not definable. How honest do you have to be before you --

Mr Couto: How honest is honest, yes.

Mr David Johnson: How honest is honest? How much integrity is integrity? I don't know. Maybe it should be prior convictions or something of that nature. Is that what you're thinking, perhaps?

Mr Couto: Something that can be measured, I suppose, is a word I would do. The problem with good intentions -- and "honesty" and "integrity" are, I think, good-intended phrases -- is that they tend to be not as clearly defined as perhaps we would like. I think there's an opportunity, quite frankly, for the committee to propose, and we would like to propose it, if we may, after our hearing and after we've had a little bit more chance to look at the legislation, just how we can improve that, because I think the idea is right, and perhaps even the words are right, but there just need to be assurances that it's not going to be applied in a manner that it's not intended to be, that's all.

Mr David Johnson: You've mentioned the special occasion permits as well, and I think there's been some discussion on that. Are there any other particular areas in the bill that you would like to raise the red flag about in terms of the business community?

Mr Couto: I think we really have touched on at least some of the really broad issues. I would like to come back to the issue of extending closing hours, which the minister mentioned. Again I emphasize that we haven't had a chance to really find out what our members think about it, but I think that's something that perhaps the committee needs to really look at. I know you may not want to handle that question here, but it needs to be discussed, there needs to be a debate on it.

There are a lot of businesses that really feel that would be a step forward in combatting a lot of the problems we have now. Of course, there are communities that take the opposite view, that no, that's encouraging the problem even more. We're not certain, but I think that really needs to be thought over very carefully by members of the committee. I would encourage the minister, in particular, and his staff to really, really think about how that fits into all of this.

Mr David Johnson: There needs to be some thought on that. I guess, just finally, I echo your comments with regard to community standards as well, getting back to that issue, I suppose. In my comments to the previous deputant I know that people within a community find many different aspects a problem. Noise, for example, is something that was raised this morning.

Mr Couto: Nuisance problems.

Mr David Johnson: But noise is in the ear of the beholder, I suppose. I remember being called out after midnight one morning to listen to a business in East York that supposedly was creating noise problems and, my goodness, you had to strain to hear it but, sure enough, it was there. It was probably about 20 decibels, which is way below, but this little noise was bothering a person at that time of night, I guess, when they were trying to sleep.

The Chair: Mr Johnson, I'd just like to encourage you to get on with your question.

Mr David Johnson: Okay. Just in wrapping up then, people will use these kinds of standards in a broad base to affect many different businesses, so I'd be very reluctant to put in "community standards," because it could tackle any kind of business and be more red tape and hindrance to the business community.

The Chair: Thank you very much, Mr Couto, for making your presentation before the committee.

JOE MIHEVC

The Chair: The next presentation this morning is by Joe Mihevc, councillor, city of York.

Mr Joe Mihevc: Thank you for allowing me to make this deputation on the proposed legislation affecting late-night businesses and after-hours clubs. First of all, I want to applaud the government's initiative, an initiative that I think will help local communities like the city of York basically to get back our community. I hope and trust that all members of the provincial Parliament will move quickly to see a speedy passage of this bill.

Unfortunately, I don't have a copy of the precise changes in legislation, as things have evolved quite rapidly -- I only have a copy of the press release of November 24 -- so I'm not quite competent in terms of speaking to the details of the new legislation. Now I have it, okay. Nevertheless, I feel that it is important to speak to the committee on the issue because of the experiences we have had in the city of York related to booze cans, after-hours establishments, crack houses and so on. Over the last three years we've developed quite a strategy in our community to combat these illegal activities.

Let me tell you of some of the problems that we have had in the city of York and how the province can be of assistance to a local municipality like ours.

As some of you are no doubt aware, in Toronto the Vaughan-Oakwood corridor has gained some notoriety in the past three to four years because of the level of illegal activity that has been going on. A relatively peaceful community had, within a very short time, been hit with quite a number of illegal activities from crack houses to drug dealing in homes and businesses, booze cans and prostitution on Oakwood Avenue and Vaughan Road. Three years ago, when the then new council of the day sat down with a number of stakeholders, we listed the number of such premises, and they listed in the area of about 40; we had about 40 such establishments. Needless to say, our normally peaceful community was in an uproar.

Our strategy to fight against them was quite simple and, as I look back, quite effective. It could have been more effective if some of the changes that are being proposed were in place then, and that's my key point today. The essence of our campaign to clean up Oakwood Avenue was what I would call a multisector approach: We involved concerned community members who were beginning to organize in a group and at the city level we organized a crime committee that brought together basically anyone at the city level, the Metro level or provincial body who could help.

Sometimes, but not always, police action is the answer, there's no doubt about that, but at other times it is better to use other tools that are available, such as health inspectors, bylaw people or the liquor licensing board. Sometimes we even went after the owner of a particular premise who was an absentee owner who had very little concern for the community around the property he or she rented out. Sometimes we even went to the mortgage company to see what levers it could use to pressure owners around mortgage renewal time. This strategy, which took an awful lot of work, was very effective, and I think in the last three years we've basically eliminated about 80% of the problem properties.

The key, however, is that it took an awful lot of work. Who would have thought that the politicians and the city departments would be so involved and have to jump through so many hoops to curb this illegal activity? It took a lot of work of politicians, police and city departments. This time is too long, especially as very often the persons involved in the illegal activity quickly pick up and move to their next location. The point here is that we need more tools, tools that we can use quickly to nip these problems in the bud before they get out of control, as happened on Oakwood Avenue. I believe it is inappropriate for local municipalities to have to spend so much time and resources on controlling illegal activity.

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I'll give you an example. We had a property on Arlington that was having regular house parties. Advertisements and posters publicizing the event went up weeks in advance. Hundreds of people descended on to the residential community regularly and had parties almost till dawn. Cars were everywhere, partygoers were urinating on neighbours' lawns etc. The police had very little power, except to charge them with noise bylaw violations and maybe a liquor offence.

On one occasion, I drove around with the police for a few hours while one of these house parties was going on. The only charges that got laid were a few parking tickets and a noise bylaw violation. By the time this charge went to court, the residents had moved and, in the meantime, the neighbourhood had been absolutely terrorized.

In this case and in many others, it is appropriate for police to have greater powers to seize the speakers and the alcohol as soon as there is clear evidence that a house party is about to happen. As I said, I haven't reviewed the details of the legislation, but I trust that the legislation gives police the authority to do so.

Another area of concern is establishments that run throughout the night; for example, doughnut shops. York has been powerless to stop some doughnut shops where there has been drug dealing going on in or around the premises because, as legislation provides, what's demanded is equal treatment for all business establishments that are of a like nature. As I understand the proposed legislation, the new law will allow for some discretion by municipalities to treat one location different from another where there are just grounds. I support this change because it means that in sensitive areas like Oakwood and Vaughan, or Jane and Woolner in the west end, for example, where there is a history of illegal activity in certain pockets or nodes, we can make the case that certain premises should be closed for certain hours, especially in the late evening.

One area of concern that I'm not sure the legislation touches upon, and I'd appreciate being filled in on this, is whether we will have some legal recourse against the owners of residences that have house parties or the owners of commercial facilities whose tenants or leaseholders regularly break the terms of the special occasion permits. Landlords ought to share the responsibility for what is permitted on the properties that they own. Similarly, we need tools to deal with owners of banquet facilities, for example, that rent out on a regular basis their halls to groups that party virtually all night.

That's all I have to say and I thank you for this opportunity to address the committee.

Mr Carman McClelland (Brampton North): A couple of quick questions, and perhaps we won't use up all the time and can roll over to my colleague to my left. You mention on the second page, in the second complete paragraph, that you would hope that there would be authority for police perhaps to seize property.

What would you suggest in terms of a situation that may obtain where property is seized inappropriately, that there is in point of fact an error made, that police exercised discretion perhaps a little bit overzealously? I know they would not do that intentionally, but mistakes do happen. Would you suggest that perhaps there should be some safeguard or some indemnity put in place for that type of potential inadvertent error?

Mr Mihevc: Sure. There would need to be safeguards put in place, and I would say that the police should have that authority to go in and seize property once a clear case has been established that this is a house where there has been an ongoing presence of house parties.

Everyone has at times a larger house party. We're not looking at those kinds of situations. We're looking at situations where there are literally hundreds, sometimes, of people descending upon a house. Maybe the first time you have no cause for it, but certainly by the second house party, where there are advertisements distributed, where there's admission charged --

Mr McClelland: So in point of fact, you're talking about perhaps a habitual situation as opposed --

Mr Mihevc: A habitual situation, that's right.

Mr McClelland: Okay. That might be of some help.

Secondly, two points. I'm going to try to wrap them up in the interests of time. You talk, in the next paragraph, about where there's activity around the premises. I'd be interested in knowing how you feel the proprietor or the lessee should be responsible for what happens in and around the area that's adjacent to his or her property. It seems to me that is not their responsibility, ultimately. I'm not sure how you could bring a sanction against the individual who is, in point of fact, perhaps a victim themselves.

Secondly, landlords for what is permitted activity -- how about a landlord for what turns out to be unpermitted activity, that somebody is engaging in conduct contrary to the express interests and express provision of the landlord, yet the person who is leasing the property proceeds notwithstanding a specific and direct admonition of the landlord not to do what in point of fact they're doing? Where would you see the, I suppose, justice ultimately of the landlord being held accountable for something that he or she not only did not endorse but, in point of fact, did everything in their legitimate and legal power to prohibit from happening? Would it not be reasonable that the perpetrator of the illegal activity bear the burden, not the person who, again, would be a victim?

Mr Mihevc: Yes, certainly the person who is promoting the activity, the illegal activity, is the prime focus. However, the landlord has a role to play in making sure that the premises they rented out are safe and doing either an honest business or having bona fide residents, if it's a residence.

I think provisions can be made for landlords. Even if they are not the perpetrators, they do have a responsibility, it seems to me, and I'm not sure if the legislation provides for this, to take some responsibility. If there's no correspondence, if there have been no warnings, if the landlord has basically collected the rent and buzzed off and you don't see them, and there's absolutely no evidence of them doing anything with regard to illegal activities going on in the business or residence that they own, I think they have some accountability. There are ways to put borders around that accountability, but I do think that they should share in the accountability.

Mr McClelland: I'd be very interested in those borders because I guess, in closing, I'd ask you a question: Have you ever met a landlord who has had a bad tenant?

Mr Mihevc: Oh, yes.

Mr McClelland: Okay, thanks. I guess that makes my point, sir, and I --

Mr Mihevc: Our experience in the city of York has been twofold in that. We have had landlords who, once we have pointed out an illegal activity going on on their property, have moved quickly, have worked with us and have assisted us, and we've assisted them, in evicting the tenant.

Mr McClelland: Absolutely. It seems to me too that you've probably met proprietors and operators of legitimate and in fact very positive enterprises in the community who are again victims --

Mr Mihevc: Victims, that's right.

Mr McClelland: -- of disreputable conduct, through no fault of their own, of patrons of their establishment.

Mr Mihevc: That's right.

Mr McClelland: Therein lies, I think, a very, very great concern.

Mr Mihevc: That's right. With respect to the former one --

Mr McClelland: I appreciate where you're coming from. I just think it's a very, very sensitive and delicate balance and I think that we have to proceed with abundant caution in respect of the legitimate business concerns that are, more often than not, it seems to me, the victim and only, in the very, very rare exception, are part and parcel of the problem.

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Mr David Johnson: I congratulate you for your efforts. Obviously you've been involved with just about every kind of situation and under very trying conditions. It certainly appears that you've been most successful in representing your community and coming to grips with this problem.

I just wondered, when you were out with the police, you mentioned that there was a house party or house parties that were being observed and there were very few charges that were laid. According to the Liquor Licence Act -- and I may be misinterpreting it, but this is the existing Liquor Licence Act -- there's a clause on page 389 -- do you believe it? -- that says, "No person shall be in an intoxicated condition...in a place to which the general public is invited or permitted access." From the way you've described this, posters were placed around the community inviting the general public, in a sense, to come. Did you hear any talk from the police? It sounds to me as if that existing provision would allow the police to lay a charge and I wonder if that ever came up.

Mr Mihevc: As I understand it, they could have, at the height of the party, gone in, especially with the noise bylaw, and closed the place down just on the virtue of the noise bylaw. But as the police of the night were telling me, and they had five cars patrolling in this one area, "Who in their right mind is going to allow their police to go in, 10 police against, you know, 100 partiers, half of whom are intoxicated?" So at certain points in the evening, even if they do have the authority, they will not exercise that authority for obvious safety and security reasons.

I think the way to get at house parties is earlier on in the evening -- and this is for habitual places, where there is evidence that this is an ongoing activity, and the flyers are usually quite prominent in the community -- that they are able to come in, not at 1 o'clock. By 1 o'clock the most they can do is move cars on and basically watch, but if they could get in at 7 pm or 8 pm, when the speakers are coming in and the booze is being brought in, and confiscate the booze and take the speakers, that would nip it right in the bud. As I understand it, these new provisions allow for that to occur.

Mr David Johnson: I just wanted to get back for a minute or so --

The Chair: Sorry, you only have one minute.

Mr David Johnson: Okay, good, for a minute exactly, then -- to the businesses. You've made reference to a doughnut shop. From your experience, what sort of businesses are most susceptible, let's say, to the drug trade? Is it primarily the food trades, or what --

Mr Mihevc: I would say it's the doughnut shops. There's usually a phone around a doughnut shop, and because doughnut shops are often open all night, they present problems. And many doughnut shops might not even be directly involved.

Mr David Johnson: Sure. Well, that's the point.

Mr Mihevc: Yes. However, the doughnut store owners will tell you themselves that -- they might argue that they need to stay open all night. They say two things: "We need to stay open all night for business reasons. At the same time, we don't like what's going on in our neighbourhood."

Mr David Johnson: In my final 30 seconds, is there anything that they should be doing now, from your experience, that if they had done this, other than close down, obviously, but is there anything else they should be doing to discourage the drug dealers?

Mr Mihevc: That doughnut stores should be doing?

Mr David Johnson: Yes.

Mr Mihevc: Well, regular reporting to the police is what we encourage them to do, and also to get involved, send an employee or that the owner go to community meetings where problems are discussed, where information is shared, that kind of thing. If they're more involved and integrated with the positive side of the community, I think that's a helpful step. That's certainly what we're doing in the Vaughan-Oakwood area. For all new businesses, we invite them to a community meeting and we kind of read them the riot act but we also invite them to participate with us in keeping the neighbourhood clean, for their interest as much as the community's interest.

Mr Duignan: You raise many issues, and I don't think we have enough time to cover them in the three minutes, but maybe I'll have a chat with you after we're finished here.

I'll pick up on a point Mr Johnson raised in the question on house parties. Part of the problem with the police getting access is they had to get a search warrant under the Provincial Offences Act, because largely the house parties were held in private premises. That was part of the problem. With Bill 198, police will be able to obtain a search warrant under the liquor licensing act to enter those premises and indeed will be able to order people to vacate and will be able to seize alcohol on direct and indirect proceeds as well. So there are additional powers there to deal with that particular issue. It will give police greater access and power to order people to vacate.

Also, the question about doughnut shops: Under Bill 198, municipalities will be able to base licensing decisions on the honesty and integrity of that operator or establishment. If an operator welcomes or indeed is involved in illegal activity, licensing actions can be taken by the municipalities. Also, under that, the licence, or conditions, such as limitation in operating hours, can be imposed upon individual problem licensees as well. So it will give the municipalities additional powers there, and doughnut stores will be subject to the increased fines which are applicable under the municipal bylaw infractions, which hopefully will encourage the doughnut store owners, the legitimate ones, to inform the police and complain to the police: "There are illegal activities taking place in my premises. Do something about."

Mr Mihevc: Would that include around their premises?

Mr Duignan: Yes. Municipalities will be able to take enhanced licensing action against individual problems. You could put conditions on the licence.

Mr Mihevc: This is great.

Mr Duignan: Business operators, again, I said, will be encouraged to take action if illegal activities exist.

On the question of booze cans, again, under Bill 198, police will be able to obtain a search warrant under the liquor licensing act to enter any premises, order people to vacate, arrest without warrant for identification purposes and seize alcohol, and direct and indirect proceeds as well, so that gives additional powers there. Municipalities can ask the courts for a closing order on the location if a booze can has been operating without a municipal licence etc, so that can happen there. Booze cans will be subject to the increased fines which are applicable to municipal bylaw infractions. So there's a whole range of powers there as well.

And as I said earlier, under the SOPs, for example, we have a new tracking system that will be fully operational by the end of February 1995. We're giving the municipalities the power to issue a SOP licence in the municipalities in which the event is taking place, and also a holding period as well, which already exists in the legislation. So indeed there are a number of things happening that will increase very effective policing powers as well as municipality powers to deal with some of the problems you have raised in your brief here today.

Mr Mihevc: Yes, and we are extremely thankful. I think if these things had been in place earlier, then we would have been able to clean up Oakwood and Vaughan much more quickly than the time that it took. So we're grateful for this.

The Chair: Thank you, Mr Mihevc, for coming before the committee this morning.

ONTARIO RESTAURANT ASSOCIATION

The Chair: The next presentation is by the Ontario Restaurant Association, Paul Oliver, president, and Rachelle Wood, manager of government affairs.

Mr Paul Oliver: Good morning. On behalf of the Ontario Restaurant Association, we are pleased to have an opportunity to present our views and those of the restaurant and food services industry on Bill 198. I'm Paul Oliver, president of the ORA, and with me is Rachelle Wood.

The ORA recognizes and sympathizes with the goals and objectives of Bill 198. We agree with the government's view that the illegal sale of alcohol after 1 am, the sale of drugs and violence that sometimes goes with these illegal activities is disruptive to the community and in some cases very detrimental. Our concerns with this legislation do not focus on its goal but on the means by which it is attained.

The ORA commends the government of Ontario for taking steps to deal with the issue of illegal activities occurring in business establishments and giving police greater powers to deal with special occasion functions. The ORA, however, has several concerns with the way in which the government has chosen to deal with this issue under Bill 198. Specifically, we are concerned with the implementation of the proposed legislation and the requirements and possible effects it will have on legitimate, law-abiding small business operators. It is also important to note that many of the initiatives surrounding enhanced enforcement of liquor legislation do not require legislative changes and in fact could have already been put into place a long time ago.

While Bill 198 is intended to address the issue of illegal after-hours clubs and legal clubs in which illegal activities are occurring, it instead has its focus on legally run, licensed establishments and will have far broader ramifications. We fear that this legislation will in fact hurt the good guys and continue to ignore the bad guys, those not seeking licences.

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The continuing problem of illegal after-hours clubs is one of enforcement, mainly due to the fact that existing legislation is not properly nor adequately enforced. We must keep in mind that we are talking about an illegal activity. Regardless of how much one tries to regulate an illegal activity, it remains just that: illegal. Only after enhanced enforcement of existing laws and a better explanation and understanding of the causes of after-hours clubs will we be able to get to the root of this problem. More regulation by itself will not be an effective solution.

The questions this committee should be contemplating are: Will this legislation solve the serious problems we are facing, and is there a more effective way to address these problems?

I just want to add one point. The previous speaker raised a number of issues around house parties and the growing problems that they are disruptive in residential areas. I would note that because house parties do not seek municipal legislation or liquor control board or liquor licence board licensing, they are not covered by this legislation. In fact what we may be doing from this legislation is shifting after-hours clubs from industrial or commercial areas into residential areas. The enforcement contained around a house party is going to be very difficult, and what we may do is actually disrupt communities even more under this.

But I'll ask Rachelle to comment on our specific concerns in this legislation.

Mrs Rachelle Wood: Our first series of concerns are in regard to part IV with respect to the Liquor Licence Act and special occasion permits. As stated, the ORA supports initiatives which impose further restrictions on SOPs. However, we believe that Bill 198 does not go far enough in dealing with the severe problems associated with SOPs. We believe that many of the current problems occurring at SOP events occur because LLBO criteria for applicants are too relaxed or administrative criteria are not maintained. Many of the illegal after-hours clubs are operated under SOPs. The ORA believes that the current problems surrounding the issuance of SOPs are therefore a human resources issue.

The ORA understands that there are currently guidelines which suggest recommended waiting periods for the various types of SOPs. However, we believe that these guidelines are not being properly followed nor enforced. Therefore, the ORA believes that Bill 198 should include specific clauses regarding the issuance and enforcement of SOPs.

With respect to the hours of operation for legitimate operators, the ORA has recommended that one of the options to reduce the proliferation of illegal after-hours clubs is to allow licensed and controlled restaurants and bars to remain open later. As previously stated, Ontario is the only province in Canada which as 1 am closing hours and is the province with the greatest problem with illegal after-hour clubs. Therefore, the ORA continues to call upon the government of Ontario to adopt extended hours for a province-wide six-month term and to evaluate the impact and consumer response after that six-month period.

On pages 3 and 4 of our submission we have various recommendations with respect to SOPs, and I won't go through all of them as they're there and we will be able to answer questions with regard to them.

Our next set of concerns relates specifically to part I of Bill 198 under the Municipal Act. Our primary concern revolves around proposed changes to the act. The proposed changes fundamentally could impact many legitimate and law-abiding small business operators and substantially increase the red tape confronting business.

The ORA wishes to ensure that the real issue, that is, criminal activity occurring in businesses, is dealt with. However, we believe that Bill 198 is seriously flawed in that its focus is on the establishment where an illegal activity is occurring, regardless of whether or not the proprietor is involved in the activities. Bill 198 will not necessarily punish the person who is committing an illegal activity; rather, it will punish the establishment as a whole by revoking, suspending or imposing conditions on the business licence.

This will impose a severe burden on small business operators who under Bill 198 will be punished by the actions of their customers. We believe that in the majority of cases, business owners cannot be aware of the activities of their customers, do not participate in these activities and, most of all, cannot restrict the activities of their customers.

Bill 198 states that a business operator who is believed not to be operating with "honesty and integrity" will have a hearing before a council or police services board before any decisions are made regarding their business licence. The burden that this will place on all businesses, and especially small business operators, will be significant and costly.

In addition, the degree to which Bill 198 will be applied across Ontario will largely vary. The ORA has always advocated and supported a fair playing field for its members throughout Ontario. We also believe that Bill 198 results in serious discrepancies between competing operators, as municipalities will impose Bill 198 to varying degrees. This conceivability will create an unlevel playing field with competing operators required to abide by varying operating rules.

As stated, we believe the continuing problem of illegal after-hours clubs is one of enforcement, mainly due to the fact that existing legislation is not being properly nor adequately enforced. By allowing municipalities broad powers to issue, suspend, revoke or impose conditions on a business licence, regardless of whether the business sells alcohol or not, at the discretion of the municipality, small business operators will be placed at a serious disadvantage and will face massive increases in bureaucratic red tape. Powers under Bill 198 will only serve to create a patchwork of legislation in Metro and across the province, as different municipalities will enforce the legislation to varying degrees.

I would just like to touch upon two of our recommendations, the first one on page 6, that Bill 198, part I, clause 109.1(2)(d) be amended to remove the words "at the time it is granted or...."

The ORA believes that if a business licence requires conditions placed on it from the outset because the licence issuer has doubts that the individual requesting the business licence may not operate the licence within the confines of the law or with "honesty and integrity," then the business licence should not be granted at all.

In addition, we believe that section 109.1 should be amended to include a clause which would require that, "Where a licensee is not knowingly aware of the illegal activities of his employees, clients or customers, the licensee will not be held responsible or liable for any act or acts undertaken by such employees, clients or customers."

The ORA believes that Bill 198 must include specific safeguards to ensure that business licence holders are not charged for the activities of their employees, clients or customers. Thus, Bill 198 must include a clause which removes responsibility or liability from a business owner who unknowingly has employees, clients or customers involved in illegal activities.

In conclusion, we strongly urge the members of this committee to think of the long-term ramifications of the new powers which will be granted to municipalities under Bill 198 and the potential negative impacts and burdens it will impose on legitimate business operators.

We will state once again that we are willing to work with the Ministry of Municipal Affairs, the Ministry of the Solicitor General and Correctional Services and the Ministry of Consumer and Commercial Relations regarding the issues we have raised in our submission.

Mr David Johnson: Thank you very much for your presentation. You've raised a number of red flags about this legislation. Looking at the "honesty and integrity" clause, you've raised some serious concerns about that, and we've had some question as to how it could be defined as well. I think you're saying the same thing, that there may not be a level playing field and indeed it may be applied different ways in different municipalities, and that could certainly cause a problem. I wonder if you'd expand a little more on any other problems you see with regard to the honesty and integrity clause.

Mr Oliver: Certainly we have a lot of concerns about the interpretation of honesty and integrity. Certainly in one municipality honesty and integrity may be interpreted very differently than in another, or depending on whoever's overseeing the hearing.

But in particular we're concerned whether the individual has to be convicted of a criminal act before their honesty and integrity is questioned or whether something as simple as not paying their taxes on time would put in question their honesty and integrity.

We've already seen this interpretation used by the province of Ontario in the Liquor Licence Act, where they use clause 6(2)(d), using the words "integrity and honesty." They have attached special conditions for establishments that are late or slow in paying their provincial sales tax. Subsequent to that, the province has amended that legislation, but that's been in use now for at least a year and a half. We don't have any guarantees that Metro Toronto won't say, "If you haven't paid your property taxes on time, your integrity has been infringed; therefore, we are putting a special condition on that."

What we've done is just opened up the Pandora's box without the controls in place. If it was to say that if you're dealing crack in your establishment -- shut them down. But we have a lot of situations, and ones that have even come up today, where a previous speaker was talking about that they know an area, a geographical area, that has criminal activity known in the area, or it might be adjacent to or near the establishment, and that the conditions should be put into place on those. The honesty and integrity of that operator has not been infringed, the honesty and integrity of that establishment has not been infringed, but they're already interpreting it as the right to start putting conditions on it.

I think it's important that this committee put some restrictions on "honesty and integrity" before we move this forward. It will give business a good idea as to where the level playing field is, but in particular it will help municipal officials determine what their responsibilities are, as well as the scope of their power.

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Mr David Johnson: Okay. I appreciate your comments. You made a number of specific recommendations. It will take a while to go through this, and I guess we've only got today to deal with it. Would it be your suggestion that the "honesty and integrity" clause just be taken out, or would it be your suggestion that it be changed to, for example, if there's a conviction registered? How would you deal with this?

Mr Oliver: I would suggest there has to be a better way and a cleaner terminology that we could come up with, and I know there's a certain urgency to rush this legislation forward. My recommendation is that if we need to slow it down and take an extra day or an extra two days to do it, then let's do that, because we don't want to create a nightmare out there for small business, a nightmare for municipal officials.

I know that this legislation was drafted very quickly, in about 23 days. That's an unprecedented speed. But when you're doing things rapidly and quickly, you make mistakes. I think we have terminology here that is not going to be effectively implemented, and either we're going to be back here in a year or six months with municipalities asking for clarification or we're going to have a whole bunch of municipalities exposed to legal challenges from operators.

If you come in and ask for a licence, or have a licence and I put a restriction on you, and then you prove there was no honesty and integrity infringed, the municipality potentially could be sued. Because we haven't put the terminologies in here, we're exposing municipalities also to a huge potential liability.

Hon Mr Philip: Are you aware, sir, that the Liquor Licence Act and the Mortgage Brokers Act use "honesty and integrity" as one of their criteria and in fact that there's a long case history of judicial decisions based on this? Therefore, it isn't something new that is being suddenly dropped into this act.

I'm wondering, since we have Beverly Wise, the legal counsel for the Ministry of Consumer and Commercial Relations, if she could respond to your question and that of Mr Johnson on the definition of "honesty and integrity."

Mr Oliver: If I could respond to your question, yes, I'm aware of it, particularly in the Liquor Licence Act. I'm quite aware of that. But that's where our concern arrives from, that the liquor licence board has used tax payment as a question of honesty and integrity. We don't think that's what initially was put in there, but what we're doing is we're opening that Pandora's box up at the municipal level. We would disagree with the way the province has interpreted it in Ontario, but a lot of small business operators don't have the financial resources to fight Queen's Park, and what we're going to do is now have them fighting city hall as well.

Hon Mr Philip: I'm going to ask Beverly, but under the Liquor Licence Act what you're dealing with is a question of fraud. I think that's different from what we're dealing with here.

Mr Oliver: No, I would disagree. They have to have a clearance from the Ministry of Finance that all of their PST is paid up to date. That's not a question of fraud, it's not a question of audits; it's that everyone has to have this clearance beforehand to pass the honesty and integrity issue. If it was a question of fraud, that would be honesty and integrity. It's not. This is an application that's applied to everyone, all 14,500 licensees in Ontario.

Hon Mr Philip: I'll ask the ministry staff from the other ministry.

Ms Beverly Wise: My name is Beverly Wise and I'm legal counsel with the Ministry of Consumer and Commercial Relations.

The principle of honesty and integrity is a concept which is reflected in many of the Ministry of Consumer and Commercial Relations' regulatory statutes, including, to just name a few, the Real Estate and Business Brokers Act, the Motor Vehicle Dealers Act and the Gaming Control Act.

The concept in the Liquor Licence Act, like the other statutes, is linked to the past conduct of the applicant. In liquor, it's the past and the present conduct of the applicant in relation to the ability to carry on business or their trade in accordance with law and with integrity and honesty.

The liquor board, just as in the other regulatory statutes administered by my ministry, looks at many factors in assessing an applicant's honesty and integrity, and those factors have to be relevant and provable. Those factors can include the truthful completion of the application form, conduct in relation to other licensing requirements and criminal or other offence record. The evidence that you're referring to, I would presume, would be relevant evidence that would be put before the board in making an assessment as to honesty and integrity.

In relation to the other MCCR statutes, there is an administrative tribunal that has addressed the issue of honesty and integrity over quite a long period of time. It's the Commercial Registration Appeal Tribunal, which has developed jurisprudence dealing with the concept. That's just a broad history, if I can say, of inserting the concept here.

Mr Oliver: So from what you're saying, if I'm understanding it, and correct me if I'm wrong, is you're suggesting that the liquor licence board has the ability to use taxes as a question of honesty and integrity.

Ms Wise: As the whole picture. They don't take an isolated factor; they'll take the whole picture.

Mr Oliver: Yes. I guess then the question would become, why would a municipality not be able to use property tax payment, if you're late by three months in making your payment, that your honesty and integrity have been infringed; or if you haven't paid a parking ticket, that your honesty and integrity have been infringed? I would think that would be the same principle carried forward. That's our concern, that we can find reasons to shut businesses down, even though there may not have been a reason to start with.

Hon Mr Philip: Non-payment of your taxes is already used as a criterion for not renewing your licence, so there's nothing new in that.

Mr Oliver: Provincially or municipally?

Hon Mr Philip: Municipally.

Mr Oliver: To the best of my knowledge, it isn't.

The Chair: If you would identify yourself for Hansard, please.

Mr Tom Melville: My name is Tom Melville. I'm a solicitor for the Ministry of Municipal Affairs.

With respect to the non-payment of retail sales tax, I understand from information just given to me that that is a rationale for not renewing a licence but that it operates independently of the criteria of honesty and integrity and in fact was introduced as part of a recent bill, Bill 161, which deals with smuggling. So it's independent criteria.

Mr Oliver: If I could correct you on that, my understanding was that the sales tax provisions before 161 was passed were used based on the honesty and integrity provisions of this. It was because of concerns expressed by our industry, as one of the reasons, that it was amended. But for a year and a half it was used under these provisions.

What we have is, a municipality could say the payment of property taxes is a question of honesty and integrity, and unless the small business operator has $100,000 or a couple of hundred thousand in the bank to challenge city hall, they are going to be put out of business. That's not solving the problem of crack dealers or drug dealers. It's an issue of hitting the good guys.

Mr Melville: One further response: I don't think we can get into an argument about the specific outcome in a particular case. As has already been answered, presumably any evidence related to honesty and integrity could be used in a licensing decision, but the tribunal, in the whole of the evidence and circumstances, would make the decision. We do have information that Bill 161 certainly effects the decision-making independently of the criteria of honesty and integrity.

The Chair: We're going to the Liberal caucus now.

Mr Cordiano: We are concerned in our caucus about this "honesty and integrity" section. It's a view we have that perhaps this needs to be further defined, and perhaps that can be accomplished through a prescription in regulations where it's made clearer what would be taken into account. I think that would be something that would go towards alleviating some of the concerns you may have and others have expressed around this clause. Would you agree with that, if an effort were made to more clearly identify what is included in the clause?

Mr Oliver: Yes. Our first preference would be to have "honesty and integrity" defined clearer in the legislation; as an alternative, to set criteria through regulation in which a municipality can question the honesty and integrity. That would be a second thing. I recognize there are time considerations --

Mr Cordiano: That's what I'm concerned about.

Mr Oliver: -- in getting this passed before Thursday. It could be something that could be addressed in regulation. I think it's important for the municipalities to know where they have the power and where they don't --

Mr Cordiano: Absolutely.

Mr Oliver: -- just as much as for the business to know what the rules are.

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Mr Cordiano: We wholeheartedly agree and I think we would ask the minister to consider that in our clause-by-clause considerations this afternoon.

Mr Murphy: I want to follow up on the conversation you were having with the ministries' solicitors on the issue of honesty and integrity. I just want to understand the argument. If what you're saying is correct, until Bill 161 amended the provision, the "honesty and integrity" clause was used in the context of non-payment of certain fees as a reason not to renew a licence.

Mr Oliver: Yes, or to put a special condition on the licence.

Mr Murphy: So if that interpretation is right, then that bolsters your argument that the "honesty and integrity" clause can be used to bring in all sorts of other things to police, in essence, a business broadly, because in fact by amending the law to prevent that from happening, we recognize that as a legitimate interpretation of the honesty and integrity provision, as it stood, those kinds of things could be used. I'm wondering if you agree with that, and then I'd like to see what the ministry lawyers have to say about that.

Mr Oliver: Yes, we do. We would say that a municipality potentially could use the honesty and integrity to question property tax payment. But the problem becomes that if a municipality does that, the only person who is there to challenge it is a small business operator who may be running a doughnut shop or a pool hall. The problem becomes for them that they just don't have the resources to fight to get back to where they should have been, or their rights in the first place. Unless we address this now, we're going to have a lot of small business operators put at a disadvantage.

The Chair: Mr Murphy, I'm sorry, our time has expired and we must proceed. I want to thank the Ontario Restaurant Association for making its presentation before the committee this morning. I might remind any of the witnesses who have come forward that we are going through clause by clause this afternoon and there will be further debate with respect to this Bill 198. Some of the issues that have been raised here I have no doubt will be considered as we discuss clause by clause.

OAKWOOD COMMUNITY GROUP

The Chair: The final presentation this morning is by the Oakwood group. We have Jim Stratton and Sandra Walker.

Mr Jim Stratton: Thank you for allowing us to appear. My name is Jim Stratton, and with me is Marlene Semple. We are members of the Oakwood-Vaughan community group. This is a group of volunteer citizens in the city of York that started about three years ago in order to try and improve our neighbourhood, and particularly to deal with matters relating to crime and with police activity.

In that regard, one of our major concerns has been and continues to be after-hours clubs. In our neighbourhood in the last three years, there have been six murders at after-hours clubs. Our neighbourhood is plagued with after-hours clubs. I have one where a murder occurred about 12 months ago, and the person has not been found, that operates four doors from my house. Many members of our group have been directly affected and continue to be affected. We're very concerned about the quality of life in our neighbourhood and we certainly welcome the government's initiative in this regard.

I would simply tell the members that in our view there are two distinct issues that have to be addressed. One is with respect to licensed establishments that do not honour their responsibilities as a licensee and operate after hours.

We have had direct experience in that regard. We got involved in our neighbourhood, right at the main corner, Oakwood and Vaughan, with a restaurant called the Deluxe Restaurant in a hearing before the liquor licensing board. There were days of testimony showing, as a result of undercover activity, that there were ongoing violations of the Liquor Licence Act, that drugs were being sold quite openly on the premises. Drugs were sold to the undercover agents. The violations were extensive. Many members of the community were talking about no longer going to that corner. The result of all that testimony was that the licence was lifted for a period of 30 days, and we really found that that was quite inadequate.

In addition to that, they filed suit against the chairman of our group for libel and slander in an attempt to keep us from proceeding in this matter.

The other kind of premise that you have to pay attention to is private house parties. In our neighbourhood private house parties are not what maybe you think of in your neighbourhood. They have become a completely and totally commercial venture. These are all invitations to private house parties in our neighbourhood. These are commercial ventures and they operate completely outside the law. Because they are private residences, we are told by the police that their ability to stop them, under the current legislation, is almost nil and they can't even approach the problem directly. What they're doing is basically sort of harassing them to try to stop them. In our neighbourhood, they try to deal with these kinds of problems by dealing with the parking nuisance that it generates.

Well, that's not good enough, because what's happening in these premises is a great deal of illegal activity, a great deal of drug sales. We know that there are people using guns and bringing guns into our neighbourhood and people getting shot.

I think I'll just conclude on that note, and if you'd like to ask us any questions, please feel free to do so.

Mr Duignan: I'll just briefly tackle the two issues you've raised, and some of my other colleagues may have a question to ask.

On the question of house parties, under the Provincial Offences Act, the problem is getting search warrants for entering the premises. What Bill 198 will do is that the police will be able to obtain a search warrant under the Liquor Licence Act to enter any premises, order people to vacate, arrest without warrant for identification purposes and seize alcohol in direct and indirect proceedings as well. So that's what will happen under Bill 198.

On the question about after-hours bars, basically the same thing will happen. As well, municipalities may be able to question the honesty and integrity of an after-hours bar operator and take action against the operator's municipal licence such as revoking, suspending or placing conditions upon operation.

There are some new, additional powers being given to the municipalities and to the police in dealing with these two problems, so it may begin to solve your problems with those large house parties, as well as after-hours bars.

Mr Stratton: I agree.

Mr Marchese: I just wanted to thank Mr Stratton and Ms Walker for coming today. Our bill is in response to people like you --

The Chair: Mr Marchese, I just wanted to, I think, correct you. It's Ms Semple; is that right?

Ms Semple: Marlene Semple.

Mr Marchese: Sorry. It's because of the response we've had from communities like yours, and my community, which is where I began my work with my private bill, that we began this process of trying to change the law to give communities and the police and municipalities the power they needed to get to these problems. Current laws do not allow the police and others to be able to solve the problem.

We want to thank people like yourselves, because it's partly connected to the work that you do that we then, as politicians, respond in order to be able to change the laws to make things happen.

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I have a question of you because the restaurant association and some others raised this concern. It says in this bill -- and yes, I know you haven't had a chance to look at the details; I think you said that in your submission -- that "the council or police services board may exercise its powers under" subsection (2), which talks about revoking a licence and other things, "if, the conduct of the applicant or licensee affords reasonable grounds for belief that the applicant or licensee will not carry on the trade, calling, business or occupation in accordance with the law or with honesty and integrity;"

Do you believe that language is good enough to get to the kinds of problems that you were addressing but also to make sure that the honest businesses that are operating are not affected by it so that we have an appropriate balance between the public's interest and the business owners'?

Ms Semple: I think it is good. I think currently, if there's a restaurant that is trying to get a licence and we've had contact with the restaurant and we've not had good contact with it, then we will oppose the liquor licence, for example. So right now in our community we've sort of set it up that if someone is going to ask for a liquor licence, they come to the community first, and once the community feels that these people can carry on a good business, that there are not the problems that previously existed -- because often in establishments, even though there's a new owner and a different person will come in, it will be the same attraction, the same problems. So we've worked that out and had meetings and people went ahead and got their liquor licences and we haven't opposed them.

That's good. I don't think it's a disadvantage at all. I think it's an advantage for everyone. It's not going to affect people who want to operate good businesses.

Mr Stratton: I was struck, in the hearing on the Deluxe Restaurant, by how far I thought the law had gone the other way, where they were regarding the sale of liquor as a right that could not be denied rather than as a privilege that had to be adhered to responsibly. I found that they were far too one-sided in favour of the restaurateur, in my opinion.

Ms Semple: Can I just comment on that too, since I'm one of the people being sued directly by the owners of the restaurant because I wrote a letter to a public official on behalf of the community group suggesting there were problems in the establishment? There was literally 70 pages of police information, so they lost their licence for 30 days and that's all they got. I found it was basically unjust that with the information, the drugs in ceilings, the drugs inside of the walls, whatever, that's all they got. It was not a great hardship.

I don't see this as being a problem for good businesses whatsoever. It's shocking what little slap on the wrist they did receive for such a problem and so much of the problem spread within the community that we still haven't solved.

The Chair: I'd like to remind the witnesses that they should not speak about any issue that may presently be before the courts.

Mr Murphy: I wanted to follow up on an example, without naming any particular business, about the circumstance where the licence ended up being lifted for only 30 days. We had a witness here earlier this morning who talked about continuing problems in getting the current Metro licensing commission, in the municipal context -- and you realize this one was a liquor licence -- to actually act. I don't know whether you've had time to look at the bill, but on the face of it I actually don't see anything in here that would necessarily result in that institution getting anything more than 30 days. In other words, on some of those issues, because of the way in which Mr Stratton talked about how there is a bias in the system towards licence holders, there is nothing in here that changes that and we in a sense are leaving it up to them continually. So the results of your application in front of a commission, either the liquor licence board or Metro licensing, could still be the same after all that work. Even with these changes, it could still be only be 30 days. I'm wondering what your comment on that is.

Mr Stratton: I suppose that may be clear and that may be something that the government wants to look at. However, I would think that if the Legislature, in passing this bill, indicates to the liquor licensing board, which I understand is an independent board, that it may view these matters more seriously than it has thus far and maybe bring the balance back towards the mean --

Interjection.

Mr Murphy: No, thank you. I'd like to give the rest of my time to --

Interjection.

Mr Murphy: I don't know. We're using our caucus time. I'd like to give the balance to my colleague. We have time later on to do all of the details.

Mr Cordiano: I'll be brief, Minister. Just a further comment on one section of the act: I'm very familiar with your neighbourhood and that community and I know that many of the establishments are adjacent to residential neighbourhoods. It's very difficult to separate the two. I think even after we deal with the serious problems, residents in my community are still concerned about noise and excessive amounts of traffic, just the general number of people who would come into an area as a result of a series of these establishments having been set up, particularly in the Vaughan-Rogers Road area and places like that, which I think is what you see now.

Part of the act would prohibit the revoking of a licence where the location already existed, where the business location is currently operating. I'm concerned that there is no provision in this act to deal with an existing business in a particular location where there may be ongoing problems around noise and traffic etc, that there isn't enough in here to enable residents to deal with areas like that where there is excessive noise, where there is excessive traffic etc and that these will not be taken seriously by council. Are you concerned about that at all?

I know you've had to deal with very serious problems and I hope we can deal with the serious problems as a result of this act, but there are ongoing problems around noise and excessive amounts of traffic.

Mr Stratton: I'm sorry. I'm not sure I understand the intent of your question.

Mr Cordiano: The bill essentially says -- let me read the section.

The Chair: I remind you, Mr Cordiano, that we're well behind your time. However, if --

Mr Cordiano: Just to clarify, the "board shall not refuse to grant a business licence with respect to the carrying on of any business by reason only of the location of the business if the business was being carried on at that location at the time the bylaw requiring the licence came into force."

Essentially, you could not revoke a licence that exists, what's there already, by reason of the location. My concern is that there's no real mention of noise as being a factor for revoking a licence or provisions made in the act to deal with excessive noise and traffic and virtual concerns that people have around that kind of impact in a neighbourhood.

I guess you're not concerned about it. That's fine. You don't have to answer.

Mr Stratton: We are concerned about existing premises and the businesses in our community are concerned about it. What happens is that if you get a number of bad operators in your area, then good businesses shy away from your area and it's very difficult to revitalize your neighbourhood. That's one of the things we're trying to do hard right now.

The way we deal with bad operators in existing locations is when they come up for renewal of their licence. Possibly the renewals should be more frequent, but that is how we have dealt with various situations now, when they come up for renewal.

Mr David Johnson: Thank you for your deputation. I wanted to focus on house parties if I could, and perhaps to help both of us, could I direct my questions to ministry staff? Is that possible?

The Chair: Sure.

Mr David Johnson: Could you tell us briefly, if you could, because I've only got a couple minutes and I'd like to ask another question or two, with regard to house parties, specifically how this legislation is going to help. I'm asking the staff, if I can.

The Chair: You can direct it to the minister, and if the minister can't answer it, I'm sure he'll ask for the staff --

Mr David Johnson: I knew this wasn't going to work. Okay. Give me a minute, then.

Hon Mr Philip: To answer your question, the police tell us that the provisions will certainly reduce the need for undercover police activities. The police will be able to obtain a warrant under this act if they feel there are reasonable grounds to believe that a liquor offence has been occurring and if they think that they will be refused access. This gives the police considerably more powers to deal with those illegal house parties, the parties which don't even apply for a licence in the first place. The police have clearly said this is a provision which they need, and it's contained in this act.

Mr David Johnson: How long will it take them to get a search warrant under these provisions?

Mr Melville: I'm not sure I can answer that.

Mr Mills: Not long.

Mr Melville: Yes. I think it would depend on the facts of the case. They would certainly have to go and apply to a judicial official or a justice of the peace and obtain that warrant.

Mr David Johnson: So if there was a house party on a given night, unless they've started the process before, they wouldn't get the search warrant for that particular same night. Is that what you're saying?

Mr Murphy: No. It's possible to get it if there's a JP on duty.

Mr David Johnson: So maybe in some cases. Maybe, maybe not.

Mr Melville: Perhaps I should defer this answer to someone with more experience in the area of obtaining warrants.

The Chair: Ms Wise, you would like to respond to this?

Ms Wise: It is possible, where there are reasonable grounds to believe that there may be a contravention, to obtain a search warrant in advance, and the obtaining of the search warrant depends on the availability of a justice of the peace.

Mr David Johnson: Can you tell me what would be the violation? What aspect of the house party is the violation? The fact that they didn't get a licence? This could be just somebody who lives there who has a big party.

Ms Wise: For example, sale of liquor without a licence, and also, besides the ability to obtain a search warrant, the police, under this bill, will have the ability to go in and order all the persons vacated from the premises in such a house party.

Mr David Johnson: So the violation would be sale of liquor. Would it be charging admission? Is that --

Ms Wise: Any of the provisions under the Liquor Licence Act in terms of the sale and service of alcohol.

Mr David Johnson: What about the liquor act as it exists today that indicates that if there's a general admission, open to the public, people aren't allowed to be intoxicated on the premises?

Ms Wise: That would also be an infraction of the liquor act, as far as I'm aware. You also cannot sell liquor in a dwelling place.

Mr David Johnson: And it's your view that --

Ms Wise: You wouldn't be able to get a licence in that circumstance as well.

Mr David Johnson: So it's your view that in that case then they could get a search warrant fairly quickly.

Ms Wise: As I say, it depends on the availability of the justice of the peace. If there are grounds to believe in advance, as well, one could go. It's my view that it would be possible to get a search warrant quite quickly.

Mr Jim Wiseman (Durham West): If they're advertising it, for example.

The Chair: Mr Johnson, I must tell you that our time has expired.

Mr Marchese: I'd like to correct something for the record, please. I would make the point on page 3 of the bill, section 4, "Where an owner is convicted of knowingly carrying on or engaging in a trade, calling, business or occupation on, in or in respect of any premises or part of any premises without a licence required by a bylaw passed under this act, the court shall order that the premises or part of the premises be closed to any use for any period not exceeding two years."

So it's quite clear we can shut a place down and it can be for up to two years. So it isn't a matter of simply suspending something for 30 days. We can revoke a licence; we can shut the place down up until two years. So for the record, I think that --

The Chair: Thank you, Mr Marchese. We will deal with these issues in clause-by-clause this afternoon. I want to thank the Oakwood Community Group for making its presentation before the committee this morning and part of this afternoon.

I want to inform the members of the committee that our 4:10 pm witness has declined, so we will be into clause-by-clause at 4:10.

This committee stands recessed until 3:30 this afternoon, immediately following routine proceedings.

The committee recessed from 1215 to 1604.

The Chair: We will continue with Bill 198, An Act to amend the Liquor Licence Act, the Municipal Act and the Regional Municipalities Act and certain other statutes related to upper tier municipalities.

MUNICIPALITY OF METROPOLITAN TORONTO

The Chair: This afternoon, our first presentation is the municipality of Metropolitan Toronto, Joe Pantalone, councillor, chairman, 1990 Metro drug abuse task force. I'm not sure who is with you. Perhaps you would identify yourself, please.

Ms Carol Ruddell-Foster: Carol Ruddell-Foster, general manager of the Metropolitan Licensing Commission.

The Chair: Our witnesses have 20 minutes to make presentations. Before we start, I would like to let the committee members and the other witnesses know that there has been a cancellation and there may be a party willing to fill that cancelled spot. I'd just like to put the question to the people who are here now. I believe Michael Thomas is here. I just want to inform you that you will have to wait approximately 40 minutes before you'll have that opportunity, but if you're willing to wait, we do have a spot for you. Okay. I must also get unanimous consent of members of the committee. Is that agreed to?

Mr David Johnson: Are there any other people here who would wish --

The Chair: We only have one cancellation, Mr Johnson, one space to fill.

Mr David Johnson: I appreciate that, but other than the gentleman in question, is there anybody else who's shown up who wishes to make a deputation?

The Chair: I don't think so.

Mr David Johnson: Maybe you should ask.

The Chair: According to the clerk -- is there anyone else here?

Mr David Johnson: If there's only one person, that's fine. Is there anybody else?

Mr Wiseman: Aren't we going to run into a little bit of a time problem?

The Chair: No. With respect to the committee, we can sit till midnight, quite frankly, but with respect to our witnesses, we have --

Mr David Johnson: Maybe the clerk could figure that out as we get down there. If there's only one, there's no problem.

The Chair: All right. Then it would appear that Mr Thomas will have an opportunity in about 40 minutes.

We'll start the clock, if you would like to start your presentation.

Mr Joe Pantalone: As pointed out earlier, I'm here not only on behalf of myself as the former chair of the Metro Toronto drug abuse prevention task force, but also as the representative of the Metropolitan Toronto chairman from the municipality of Metropolitan Toronto.

As you may be aware, in 1990 Metro Toronto council adopted a number of recommendations of the Metro Toronto drug abuse prevention task force. Four of these recommendations, which are attached to this submission, relate directly to licensing issues in general and to activities of so-called after-hours clubs. Since adoption of the report of the task force, there have been numerous discussions with the province on the legislative amendments required to bring these recommendations into effect.

Bill 198, the Municipal and Liquor Licensing Statute Law Amendment Act, 1994, addresses some of the issues raised by the Metro Toronto drug abuse prevention task force and we commend the action taken by the government to bring forward this legislation.

Specifically, the municipality of Metropolitan Toronto is pleased to see the following amendments proceed:

One, increasing the maximum fines for municipal licensing infractions to $25,000 for individuals and $50,000 for corporations and allowing for the seizure of a business's equipment for the non-payment of fines imposed.

Presently, the maximum fine of $5,000 is of little deterrence to owners and corporations but is considered just the cost of doing business. The Metro drug abuse prevention task force recommended that increasing the level of fines was a message to licensees that infractions of the terms of a licence are very serious offences. In addition, at present, when convictions are entered against owners of establishments, the corporate owners will often dissolve the corporation and the fines remain unpaid. Therefore, distress upon the goods of the corporation would be a useful tool to ensuring that the fines are enforceable once the courts have determined that there has been a violation of the bylaw and imposition of a fine.

Secondly, the ability to impose conditions on individual business licences by the Metro licensing commission will allow the commission to respond to local concerns and the past conduct of business owners.

The Metro drug abuse prevention task force suggested in its recommendation 1, which is attached, that drug trafficking could be controlled to some extent by the imposition of conditions. The task force stated that in the colder times of the year, traffickers move indoors and premises that remain open all night become hangouts and ideal locations for the drug trade. Municipalities need the power to impose conditions on licensed premises, including conditions for restricting the hours of operation, in order that businesses in those areas experiencing such situations as drug trafficking problems may be restricted in the hours that they are permitted to remain open.

At present, the licensing commission has the authority only to impose conditions on licences across a business class, for example, all doughnut shops. Therefore, the problems or concerns about a specific business or business activity cannot be adequately addressed.

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The third element is that other very positive elements in Bill 198 include the ability of the courts to close any establishment convicted of contravening a municipal licensing bylaw and the provision for greater cooperation between the Metro licensing commission and the liquor licence board.

The one provision of Bill 198 which may merit some reconsideration is subsection 2(5), which does not provide an express ground for suspension or revocation of a licence or the imposition of conditions on a licence in respect of infringement to the rights of members of the public. In many instances it is not the activity of the business owner that is illegal per se but the actions of the patrons that may become a safety issue in the community at large.

Presently, section 11 of the Metro licensing bylaw 20-85, which is attached for your reference, includes such a public interest ground that has worked well in the past for the licensing commission. Clause 11(1)(e) of bylaw 20-85 reads as follows:

"(e) the conduct of the applicant or other circumstances afford reasonable grounds for belief that the carrying on the activity by the applicant of the business in respect of which the licence is sought would infringe the rights, or endanger the health or safety, of other members of the public."

While subsection 2(5) of Bill 198 states that the two grounds specifically set out in the act do not limit the discretion of municipal councils, we would still recommend the inclusion of public interest as a stated ground within subsection 2(5). This would provide clarity and prevent any possible challenges to section 11 of the Metro licensing bylaw 20-85 and the reading down of this bylaw by the courts to conform to the more limited criteria in Bill 198.

I would also like to add that I gather a concern has been expressed by some city councillors with regard to whenever a council resolution requests a hearing. Let me assure you that the Metro licensing commission takes and will take most seriously any such requests for a hearing. However, as you can appreciate, the licensing commission is a quasi-judicial body which operates at arm's length from the political body and as such must investigate such requests and, if indeed they're found to be justified, then a hearing will be held but, regardless, the council will be communicated to as to the findings.

Again, I'd like to emphasize that the Metro Toronto drug abuse prevention task force represented all six area municipalities within Metropolitan Toronto, Metropolitan council, the police force, the Metropolitan Licensing Commission, the school boards and rehabilitation organizations. As such, it was as comprehensive a group as ever and its recommendations were pretty well unanimous in terms of the issues that are before you today. Therefore, we strongly urge you to pass Bill 198 as soon as possible and look forward to its early proclamation, which will allow municipal council to address the very real and urgent concerns of our communities.

As I indicated earlier, Ms Carol Ruddell-Foster, the general manager of the licensing commission, is here, should you have any questions about the actual operations of the licensing commission today.

The Chair: I would like to inform the committee at this time that I was wrong in my previous statement to the committee and to the presenters here today. There is an order in the House that says that at 4:30 pm, regardless of any other matter that's before this committee, we will start clause-by-clause consideration.

What that means then is that we have, as you can see, the time left on the clock from now until 4:30 to hear all witnesses. It's regrettable but it's an order of the House that this will happen and it's not something that was decided by this committee. It's not something we can change. Therefore, we will continue with the matters before this committee and we will continue with the municipality of Metropolitan Toronto.

Mr Murphy: Mr Chair, if I could propose that --

The Chair: I'd just suggest that the time is getting away from us.

Mr Murphy: No, I understand. Just very quickly, given that some of the other presenters are here, maybe we can all give up our questioning time to let each of the presenters at least make their presentation.

The Chair: If we have unanimous consent for that, then we can do that. Agreed.

Mr David Johnson: The police are here, aren't they?

The Chair: Yes.

Mr David Johnson: Well, we should hear from them.

The Chair: Thank you very much for your presentation. There will be no questions, as agreed to by the committee members. I would now call the Ontario Association of Chiefs of Police and the Metropolitan Toronto Police Force.

Hon Mr Philip: Maybe we can thank Mr Pantalone for the work. His work certainly prepared the way for this bill.

The Chair: Thank you very much, Mr Pantalone and Ms Ruddell-Foster, for making your presentation before the committee today.

ONTARIO ASSOCIATION OF CHIEFS OF POLICE METROPOLITAN TORONTO POLICE FORCE

The Chair: The Ontario Association of Chiefs of Police and the Metropolitan Toronto Police Force, Bill Tedford, staff inspector, Metropolitan Toronto Police Force, and another individual I must admit I'm not familiar with.

Mr Bruce Crawford: I'm Detective Sergeant Bruce Crawford, Metropolitan Toronto Police Force.

The Chair: As you know, we're under time constraints now, if you'd like to proceed.

Mr Bill Tedford: It is with pleasure that we appear before this committee today to deal with Bill 198 as representatives of the Metropolitan Toronto Police Force and the Ontario Association of Chiefs of Police.

After reviewing Bill 198, we are very pleased with the contents. Generally, we believe the bill will assist police forces across this province in combating illegal after-hours clubs, those non-conforming licensed premises, as well as those very large and disturbing house parties within our communities.

With regard to part I and the Municipal Act, having listened to Mr Pantalone, I think he's done quite a bit of research and we are satisfied with the new provisions and authorities under the Municipal Act and are satisfied that they are workable throughout the province based on specific problems associated to those specific regions or municipalities.

The amendments will be of great assistance to all enforcement agencies located within those municipalities or regions as well and including the police forces.

With regard to the Liquor Licence Act, generally we are very pleased with the amendments and additions to the act and specifically:

-- The extended authority to revoke special occasion permits. I won't bother getting into all those sections and items on your bill. You have a copy of my presentation.

-- The new authority to obtain search warrants under the bill.

-- The extended authority to conduct inspections has basically empowered the police to act as liquor inspectors and we've very pleased about that.

-- The extended arrest authority which now has been extended to include violations under the regulations, which was missed before.

-- The new proceeds section which makes it an offence to be in possession of proceeds in contravention of the act and gives the police the power to seize those proceeds, which is very necessary to a proper enforcement standpoint.

-- The extended or expanded authority to seize property used or expected to be used in an offence, including liquor, which allows us to stop a continuation of offences from being committed.

We do have a couple of concerns, however, and under section 14, the new subsection 34.1(1) of the act, we don't see an offence section. We would like to see an offence section for failing to comply with an order to vacate. The difficulty is we can make the order to vacate, but there's no offence if a person decides to buck that order and has identified himself etc, and we could have a real problem.

As well, under the same section, we would like the act itself to state the specific use-of-force section to carry out the order to vacate.

We are aware of section 130 of the Provincial Offences Act, which gives a blanket authority to use reasonable force to effect a lawful purpose. However, an officer who is working on the street for the purpose of simplification and speed of research may not be aware of that implied section, and we would like to have that authority spelled out in the act itself, along with that offence section and the authority to use force in order to clear a place. When you're dealing with a club or an after-hours premise or any premise that could have as many as 1,800 people, as we've experienced, it's nice to have that authority in front of you.

The extended order to seize does not appear to include the regulations. It may be an implied authority taken from somewhere else in the act, but from our perusal through it today, it doesn't appear to be there. An officer in executing this section may not be aware of that implied authority and could perhaps overlook it and not be able to execute his duty in the way or fashion in which this bill intended.

As well, all the administrative authority comes under the Provincial Offences Act for fines, collection or how the courts sit etc. The Provincial Offences Act has not been addressed in this bill to correct the problem of the inability to collect fines such as now noted under the new section 330.1 of the Municipal Act which allows for seizure or distress for goods or chattels due to non-payment of fines.

Without the ability to seize goods, chattels or property, as stipulated under the Municipal Act or an ability to incarcerate there, there is not much deterrence to continuing the offence by individuals who have found a great profit motive. We have quite a difficult time with large fines coming out which are unable to be collected. It also brings up the situation where other means must be tried before they'll issue a warrant of committal.

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I'm of the opinion that once you enter the civil court system for a judgement, and if the judgement is granted, that the ability to go for a warrant of committal is really null and void, and the judgement under the civil action if the person has no property or of any substance really becomes a non-issue in the ability to collect. So we would like to see the ability to seize goods and chattels or property as stated within the Municipal Act applied to the Liquor Licence Act as well, or an ability to incarcerate therein so there is a deterrent to continuing the offence by individuals who have found a great profit motive for continuing.

There's one other area that we came upon. Special occasion permits create difficulty for us. It is still not necessary for a person to provide identification when applying for a permit, that we're aware of in this act. It makes it difficult because they can go to any licensed premise for the purpose of selling liquor under the Liquor Control Board of Ontario, the outlets, and receive a permit without producing identification, and for follow-up for policing or enforcement purposes it would be nice to have that necessary, to produce proper identification before a permit be issued.

If these concerns can be addressed, we believe the repetitive offenders will be discouraged and there will be less likelihood of the offences being committed in the first instance.

That is a very short overview, and I certainly appreciate your time. It was a very short overview to our concerns and our feelings with regard to the bill. Overall we feel it's a very good bill and we're very much pleased to see it before the committee.

Interjections.

Mr Murphy: We have some questions.

Mr Marchese: No, there are others; I'm sorry. We still have another 10 minutes. Not that I don't want you to ask questions, but we do want to hear from someone else. Mr Chair, we have other deputations.

The Chair: We'd like to come to some conclusion with respect to this. There was someone who we agreed would fill in the spot that was declined.

Mr Marchese: Mr Michael Thomas is here from TEDRA and it would be wonderful to hear him.

Mr Mills: I voted for the whole process to be no questions.

Mr Marchese: Don't waste the time.

The Chair: Let me say from the Chair's perspective that we had agreed and I understood that we were going to just hear from the presenters, including Mr Thomas, who is waiting.

Mr Wiseman: If we get through the next presentation and we still had time left, we could bring them all back and ask a question each.

Mr Murphy: We don't need to look at the wall until the end of Mr Thomas's presentation.

The Chair: No, we can't do that, Mr Murphy. There's an order in the House.

I would like to thank the Ontario Association of Chiefs of Police and the Metropolitan Toronto Police Force for making your presentation. It's appreciated very much and it's regretful that we don't have more time for questions.

Hon Mr Philip: Maybe you could wait for 10 minutes in case there is an opportunity, if you wouldn't mind.

Mr Tedford: Yes, we will. We'll stand down.

TORONTO EAST DOWNTOWN RESIDENTS' ASSOCIATION

The Chair: Mr Michael Thomas, if you would come forward now, please, and make your presentation.

Mr Michael Thomas: I'd like to thank the members of the committee for this opportunity to address you. This bill actually originated in our neighbourhood in east downtown Toronto. Rosario Marchese is our local MPP, and in an effort to deal with a new problem in our neighbourhood, that of crack dealing, we have looked at many different ways of making our neighbourhood safe for the residents who live there, 3,000 residents. We have Metropolitan United Church, Ryerson Polytechnic University, Sears Canada corporate headquarters. It's a very rich downtown neighbourhood that has been invaded by crack dealers; specifically, a 24-hour doughnut store at the corner of Jarvis and Dundas.

In December 1991 it became the venue for this crack trade at all hours of the day and night. Residents have put up with violence, shootings, knifings, weapons hidden on their premises, all centred on this doughnut store. We have worked with the Metro licensing commission for over two years to hold the owner of this store responsible for the business conducted on the premises, to no avail. Everything is in suspended animation. We feel this legislation is a step in the right direction so that the Metro licensing commission can make business licensees accountable to the business conducted on their premises.

Honesty and integrity: The fines suggested by this legislation will give those two words meaning to business owners. In fact, the crack trade continues at this doughnut store. It operates outside the law even though hundreds and hundreds of police arrests for crack dealers on the premises have occurred. This bill will end the nonsense at that location.

We also have in our neighbourhood an after-hours club. In April we met with the owners of that club. They assured us -- and the police were there and representatives and Rosario was there -- that they would be operating with honesty and integrity. That was in response to a shooting in March.

Well, May 24 weekend, there was a riot at that club, shootings; 200 police officers were called from across Metro. We were assured once again that they would operate with honesty and integrity.

October 9, early morning: another riot, another shooting.

So this legislation was appended to Rosario's private member's bill. It became Bill 198 in response to the after-hours problem in Metro, in London, across Ontario.

We were assured by the police that they had calmed the situation at this particular after-hours club. In fact, last weekend, November 28, Sunday morning, another shooting occurred -- sorry, two weekends ago. The TEDRA foot patrol -- these are residents who go out to do neighbourhood watch in our neighbourhood -- went to this site last Saturday evening and there was another party happening there. They had no special occasion permit. The liquor licence board, in a fast-track hearing, had revoked all SOPs for this location due to pressure on them to do this. Metro licensing had flagged their business licence for not renewing it when it came up for renewal. However, this particular premise continued to operate as a party centre. Once again there was drinking going on, there was violence, and the residents had to put up with noise well into the early morning.

This bill will address that problem and save the taxpayers of this province a lot of money in terms of policing in the long run.

I'd like to thank Rosario for his efforts in bringing this to the House's attention and the three ministries involved in addressing all of these business licence problems. We think it's a privilege to have a business licence, not a right. This legislation will go a long way in forcing business owners to be responsible members of our community.

Just as an aside, two doors from this particular doughnut shop was a Kentucky Fried Chicken outlet. They left. They have a seven-year lease; they continue to pay their rent. They refuse to do business next door to what really was the Wild West, and continues to be.

I'd like to invite members of the committee to meet at Dundas and Jarvis tonight at 9 o'clock. The residents are doing another foot patrol. You will see this doughnut store and you will see the nonsense that's going on there. It's now over two years; in fact, this is three years. So we urge all parties to support this legislation.

The Chair: I might just ask you: You represent the community of?

Mr Thomas: We call it east downtown Toronto. I'm the president of TEDRA, the Toronto East Downtown Residents' Association. It goes from Yonge Street to Sherbourne and Gerrard down to Queen. It's a 24-city-block area of 3,000 residents, businesses etc.

ONTARIO ASSOCIATION OF CHIEFS OF POLICE METROPOLITAN TORONTO POLICE FORCE

The Chair: We have about three minutes left if the committee would like to have the representatives of the police association, Metro police, back. We've only got three minutes.

Hon Mr Philip: While they're coming forward, I'd like to table with the committee a letter that was received from Mayor Mel Lastman, who couldn't be with us but who is in very strong support of this bill. Copies will be distributed.

I also would like to report to the committee that as a result of the presentation from the restaurant association, I will be tabling one amendment that will be circulated to you. I think it meets some of their concerns and is supported by --

The Chair: Thank you, Mr Philip. We have very little time. Mr Murphy, if you could take only a minute.

Mr Murphy: One of the questions I have is relating to the order to vacate and then the search warrant. I'm just trying to work out how this bill will actually work in a house party situation.

I guess my concern, and I don't know whether you've had the time to look at it, is, if you show up at a house party premise and are denied entry, how long, practically speaking, would it take to get a warrant under these provisions as they're drafted so that you can go back and break it up? That's basically my question, if you've gone through it in that detail.

Mr Tedford: It's maybe a little difficult to answer in specific terms simply because, where is the justice of the peace located who we have to get? That has always been a difficult situation for us at any time. Traditionally, up until midnight we can find a justice of the peace. Monday to Friday, we can find a justice of the peace usually at one of the jail centres doing bail conditions or releases or perhaps sitting in court.

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The problem arises after midnight and on weekends. It's a little more difficult, usually because they're in their houses. We have to phone, find out where they are, attempt to either get them to us or us to them. It can be a matter of hours or it can be a matter of half an hour. Unfortunately, most of our experiences have been it takes longer than sooner to get the warrant, and it is a particular concern. That's another agency that we don't have control over.

Interjection: Four hours?

Mr Tedford: Four hours or --

The Chair: Thank you. I'm afraid we're going to have to continue with clause-by-clause. Our time --

Mr Murphy: It's still 4:29.

Mr David Johnson: You're being a little bit strict here.

The Chair: A little strict? No, I'm just --

Interjections.

The Chair: I want to thank you once more for coming before the committee and answering at least one question. Thank you very much for making your presentation today.

I'd like to ask the committee at this point in time: We are going into clause-by-clause by order of the House. There was a consideration by the committee with respect to using part of our clause-by-clause time to question the ministry staff.

Mr David Johnson: Mr Chair, at one point you said that because we weren't going to have the opportunity to quiz the police, there would be a period afterwards, maybe out there somewhere, we could ask --

The Chair: You're out of order, Mr Johnson.

Mr David Johnson: I'm just asking a question.

The Chair: You're out of order, Mr Johnson.

Mr David Johnson: Is it okay to ask a question in --

The Chair: But you're out of order.

Mr David Johnson: -- this sort of Stalin-like approach that we have here?

The Chair: I just remind you that you're out of order, Mr Johnson, and what we are now in is clause-by-clause. Of course, if it's of any interest to members of the committee, I can read what it says in our orders. It says, "With unanimous consent, the standing committee on finance and economic affairs was authorized to consider Bill 198 on Tuesday, December 6, 1994, from 10 am to 12 noon and from 3:30 pm to 4:30 pm in hearings, and from 4:30 pm to 6 pm in clause-by-clause and the bill will be reported back to the House on Wednesday, December 7, 1994."

Because the committee mentioned that they were interested in questioning, in the clause-by-clause period, ministry staff or the minister, I wanted to know how they would like to proceed with respect to that. Do we want to go directly into clause-by-clause, section by section, or is there still a wish of the committee members to put some questions with respect to the bill to the ministry officials and the minister?

Mr Marchese: I think we would be flexible to the members if they want to ask questions now of the ministry or as we do it in clause-by-clause. During that time, the members of the opposition and our own members have the time to ask civil servants questions that they might have before dealing with the issues. So either way.

The Chair: So you're suggesting that if we go through clause-by-clause, as we come to a particular section they may pose questions with respect to that?

Mr Marchese: Yes.

The Chair: Are the rest of the committee members in agreement with that?

Mr Mills: It sounds good to me.

The Chair: Okay. The clerk is going to distribute government amendments, and that will take just a moment.

We shall proceed, then. All the members should have their government amendments, and there are some PC motions as well.

We will start with section 1 of the bill. I would ask if there are any comments or concerns with respect to section 1 of the bill. Seeing none, shall section 1 carry? All in favour? Opposed? Carried.

We have a number of amendments to section 2, and I've been advised by the clerk that we will deal with the amendments in this order: We have the first three amendments from the Progressive Conservative caucus, then we have the government amendment, and then we will finish with the Progressive Conservative amendment. With respect to section 2, I'll move to Mr Johnson.

Mr David Johnson: I move that section 2 of the bill, section 109.1(2)(d) of the Municipal Act, be amended by striking out "at the time it is granted or."

If the conditions are required before the licence is even granted, then the applicant obviously does not fit the criteria of the granting authority. If the licensee demonstrates that he or she is not carrying on business in the manner that was understood as required when the licence was granted, conditions should then be applied. This is a submission that was made earlier by the Ontario Restaurant Association, I think, in particular.

Hon Mr Philip: I would urge members of the committee to reject this. There are many circumstances that may warrant that a new business application be subject to certain conditions. Licensing authorities need the power to consider these circumstances to impose proper conditions where necessary, including those on new licences. For example, it might be reasonable to impose a condition that there be compliance with the municipal property standards bylaw before the licence would be effective.

The other problem I have with this amendment is that it would give a loophole to offending parties. It would allow somebody to simply change owners and have the ownership of the particular doughnut shop or whatever transferred into the person's relative's name or friend's name. Therefore, you could have the same perpetrators of a series of very nasty things in a community happening over and over and over again because it would be a new licence and the original conditions that were necessary to help control the problem would be removed. I therefore would urge you to defeat this amendment.

Mr Murphy: Just some questions on the amendment: I think I understand the purpose and I support the purpose. That being said, when I talked about this last night I wasn't sure whether this was the wording that would get at the concern either, because I share some of what the minister said in terms of someone being able to just change their corporate garb and come back again.

The question I have is, and probably the ministry staff can answer this, although the minister can as well, what are the provisions and what is the authority and what kinds of rules currently govern a council or a police services board in piercing that corporate veil? In other words, the assumption built into your example, which is they want to impose a condition so you can't just change the garb: What authority does the police services board or the council have to look through that now? If they don't have that authority, there's nothing in here that would provide that opportunity other than the broad powers that clause 109.1(2)(d) gives.

My concern would be, I think, twofold: One, I would want an opportunity, where someone was just changing their corporate cloak, to make sure those conditions could be imposed, but I don't want it to be too broad. I'm just trying to find a way through those two matters.

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Hon Mr Philip: I'll ask my legal staff to advise you on the legal matters and that; I'm not a lawyer.

Mr Melville: The act expands the number of circumstances where conditions could be imposed on a licensee from the beginning. The act has not changed the law in respect of what evidence might be taken into consideration at that hearing, except in so far as it adds the honesty and integrity requirement.

I can't really speak beyond that in terms of piercing the corporate veil, other than to say that it suggests that the evidence would be evidence that would be at the hearing and would be taken into consideration.

Mr Murphy: I guess my concern is really this: If it in fact has been the practice to date, which I have heard it is from the people who came and gave us depositions, that people can just change the cloak and get a new licence, the question is, why has that happened? Is it because there just is no power here to impose a condition, never has been to impose a condition on a new restaurant licence, and as soon as it's got its Party 1995 Inc instead of Party 1994 Inc, it's enough so that the current licensing commission before this law says, "Oh, hear no evil, speak no evil, see no evil"? It strikes me as odd, that's all, that this is the current case.

Mr Melville: Under the existing Municipal Act, conditions can only be imposed in respect of a few classes of licences, and this would expand it to all classes of licences, so that's the main difference in that respect.

Mr Murphy: Okay. All right. What I'm getting at, then, is that in those classes where this power has been used before, have they been able to do what we're hoping it can do, which is pierce through that changed corporate garb? I mean, have they been able to do that in those circumstances where they've already had the power?

Mr Melville: Beyond that I can't really speak to it, other than to say that there have been many cases where municipalities have been able, through their licensing bodies, to make licensing decisions after a hearing, including imposing conditions.

Mr Murphy: I'm just wondering if there's anybody here who knows.

The Chair: Is there anyone in the committee room today from Consumer and Commercial Relations who could answer this particular question? I guess not.

Mr Murphy: Have you had experience, Rosario?

Mr Marchese: Part of my comment is to agree with what Minister Philip had said originally. I'm also concerned about what Tim Murphy is raising, as well as the restaurant association. My understanding is that there haven't been too many examples that we can offer where this has been used at the present time. Part of the complication was that the law wasn't very clear and therefore it probably never was used, to begin with. But where it did apply in relation to some of those few classes, I understand there weren't too many examples of problems around those classes with respect to it. So I don't know that I can say much.

But I support the current language that's here, only with the intent that it will be used where reasonable grounds exist to impose conditions on those establishments that obviously have created a problem. It will not be applied willy-nilly, as I understand it, but where there are reasonable grounds that will apply. If that's the case, then I accept the terminology that's there that says "at the time it is granted." I understand the fear, but I don't accept the fact that it will happen to everybody, because the language is there. I don't think that it will be the intent of licensing boards to simply say, "Ah, here's an opportunity for us to shut people down." That has never been the intent in the past, and I don't think that because we're changing the law all of a sudden people are going to say, "Here's an opportunity to clobber well-established businesses."

I really think that what's here will get to some of the problems that are there. The minister identified one type of example where this will be very useful in terms of our ability to get to people who have broken the law, come back with another name or transferred to a parent or relative and keep on going. I support the language that's here.

The Chair: Any more discussion? All those in favour of Mr Johnson's motion? All those opposed? The motion is lost.

Mr David Johnson: The next one is with regard to clause 109.1(5)(a).

I move that section 2 of the bill, section 109.1(5)(a) of the Municipal Act, be amended by adding after the words "with honesty or integrity" in the last line, the words "as defined in the regulations."

Here again, by way of explanation, we discussed this this morning with regard to the Ontario Restaurant Association. I'm just trying to recall, but I think maybe the Ontario Chamber of Commerce raised this issue as well.

The words "honesty and integrity" probably will be defined differently under different circumstances. I guess one could ask just how honest is honest and how much integrity implies integrity. I think there's a concern for a level playing field. Certainly, I believe it's known what the government is attempting to do here: It's to ensure that if there are people who "lack" honesty and integrity in the estimation of the authorities, this could be part of the process in terms of granting the licences etc.

However, with the lack of definition, there was another deputant, I think, who suggested that it should be changed to community -- I forget what his words were now exactly --

Mr Marchese: Public interest, community interest.

Mr David Johnson: -- public interest, community interest or something of that nature, which again shows that there is a concern about this phraseology.

What this amendment would do, because it's obvious we're not going to be able to define that in the time that's available here this afternoon and the time that's available this week to come to grips with it, is simply allow the government to put some boundaries around this, to make sure that there's fairness in this concept through the regulations.

I think that's a little bit open, but that's about the best we can think of at the present time as to how to come to grips with the concerns. Unless somebody has a definition that they wish to slide in at this moment that would make everybody happy, I know of no other way to buy some time, sit back, listen to all the concerns and try to make this phraseology fair for everyone. That's the sense of the motion.

Mr Murphy: On a point of order, Mr Chair: Just a question about procedure. Actually, I had a question about subsection (4). We haven't -- we can still discuss this as long as I can just go back to subsection (4). We have no problem with that?

The Chair: Sure.

Hon Mr Philip: You may want to have Mr Johnson move his next amendment, because I think we could probably deal with them together, if that's okay, Mr Chairman.

The Chair: If Mr Johnson's willing to do that --

Mr David Johnson: It's the same sort of rationale. If you want to have two motions on the floor at the same time, I move that section 2 of the bill, section 109.1(5)(b) of the Municipal Act, be amended by adding after the words "with honesty or integrity" in the last line, the words "as defined in the regulations," with the same sort of rationale.

The Chair: I was just advised by the clerk that you could amend your first motion just to say "109.1(5)(a) and (b)" and it would --

Mr David Johnson: If that would make it easier for all concerned, I'd be happy to do that.

The Chair: Then we can deal with both of them at the same time.

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Mr David Johnson: I'd be happy to do that then. Can you consider that done?

The Chair: Thank you, Mr Johnson, for doing that. Mr Philip, you had a comment with respect to this?

Hon Mr Philip: I appreciate what Mr Johnson wants to do. It was a struggle to get a balance in this bill. He mentioned that there were those who had advocated "public interest," indeed, in Windsor, which goes further than our legislation. That has not been misused. However, we were concerned, and I'm sure groups like the Ontario Restaurant Association would be very concerned, about that because it is open to too wide an interpretation. We felt that those who were advocating that kind of power were being excessive, that a higher standard needed to be used, and therefore we refused to go that route, even though we recognized that the city of Windsor and its elected people have not abused their privileges of that.

We weren't completely convinced that somebody at some point in time might not use it in a discriminatory way against some group. Because, you know, let they who are without sin cast the first stone. I'm sure that there would be possibilities for that.

The municipalities are very firm on this matter, I think. They don't want a prescription. They basically want a framework and they feel that common sense will allow them to deal with the local situations, but at the same time we've put a certain onus on it and built in a certain number of safeguards in terms of review and judicial review.

The words "honesty and integrity" are used in other acts by the government of Ontario and have worked. The problem with being overly prescriptive is that there's always someone who can find a loophole. The more prescriptive you become, the more the lawyers will get out there trying to find the loopholes. I think that what you have to do is to at least accept that most people, including municipal councils, operate in an interest of having as many businesses as possible operate in their municipalities and pay taxes -- they're not in the business of closing up businesses unless there's some reason to do so.

You have to rely that the courts will have to look at certain circumstances and judge certain circumstances and from that will come a body of experience, if you want, of common sense and usage. Therefore, I would not want to be overly regulatory. I would rather trust the municipalities and trust the courts to deal with this in a commonsense manner. I understand where you're coming from. I just worry about being overly centralized, bureaucratic and technocratic in imposing that on the municipalities.

Mr Cordiano: I hear what the minister is saying, but I don't think that dealing with sections of an act in as complete and wholehearted a way as the way in which we are attempting to do here -- I have some sympathy with this amendment. In fact, I had suggested this morning that the minister look at regulations to deal with this matter.

I don't believe that it would be a highly bureaucratic or highly centralizing piece of legislation that attempts to give a broad framework. I think what we're really talking about is how effective that framework is by the words that are used here with "honesty" or "integrity" and leaving it at that rather than giving a greater definition to that meaning, following some guidelines or guideposts that can be used across the province evenly. I'm more concerned about the fact that it would be used across the province evenly, and to that suggestion I think it would be that you would get broad inequities across the province on how this is applied. My concern stems from that, that we have in fact something that would be used evenly across the province with respect to the implications around that section.

Hon Mr Philip: I think there are restrictions on it. The restrictions we've put on it are that the honesty and integrity has to pertain to the individual activities that the business is taking part in. If you look at the bill, basically what we're talking about is, is the person honest and showing integrity in the kinds of things that the business is operating in? If, for example, someone had been convicted of an election fraud and then operated a doughnut shop, one would think that while that may not be a very savoury character we'd want to associate with or by doughnuts from, none the less it might not interfere in his or her being able to operate a doughnut shop. It has to be related to the kinds of operation that person is under. On the other hand, if he was a crack dealer, then we would certainly be very suspicious about having him operate an all-night doughnut shop. There is that restriction.

I also think the way in which you get some stability or uniformity province-wide is that the courts will interpret, as they've done in other statutes, how it will be applied in this statute and that out of that will emerge some semblance of similarity between one community and another. I would urge that it be defeated.

Mr Cordiano: Just to finish off, I think what the minister is telling me is that, in effect, each of these difficult cases or cases around where there are questions in applying this section would end up in court, necessarily. I would think that we would like to try and avoid all of the inherent costs associated with appeals that reach the level of our courts and try and avoid that by drafting legislation which becomes more effective and efficient to be used by municipalities.

Hon Mr Philip: What I'm saying is the exact opposite, that if you're overly prescriptive, then you end up in court cases because there is a constant attempt by some individuals to interpret or to get around the particular prescription. If you rely on common sense to prevail in the local circumstance, and if you've restricted it in the way in which we've done the bill, you're less likely to have any kind of litigation.

Mr Murphy: I think that's, in a sense, sort of missing the point of what's trying to be done with this amendment. I support the amendment. I think the purpose is really a couple of things: One is that you're going to get lawyers going at this whether you've got no flesh on the skeleton or it's a full thing. Either way, there's going to be lots of fighting over it, if it can be afforded. I think there's a certain irresponsibility in saying, "Let's leave it up to the courts to determine," because what that is going to mean in practice is you're forcing citizens engaged in business in this province to spend a lot of money to go through the court process to determine what it means after the fact as opposed to giving them some general guidelines before the fact.

The theory that you prescribe in particular, that it will result in picayune disputes about whether it applies or not, can be true of the Income Tax Act, for example, but that's because there are presumptions etc that apply. In this case, I think when we say "honesty and integrity" what we mean in a general sense is that four or five factors need to be satisfied by a council as to those provisions and that's it, and they can be statements of value as opposed to detailed prescriptions of the circumstances and cases in which they apply, so that both the council or the police services board or the commission, as appropriate, and the businesses in the community understand what's required, understand what's going to be needed in terms of making the application in the first place.

As it is now, we are dumping an incredible responsibility without any guidelines on to councils and businesses that will, after the passage of this bill, be obligated to conduct themselves according to its provisions without any idea of how it applies, which I suspect will give us many, many more court cases and much more money spent on lawyers as opposed to productive business than you would if you gave some sense of where you thought it applied.

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My other concern about this, though -- and I know you've said that these words are in other statutes, and that's true -- is that this is in a new context. The words generally have been included in cases where it's a tribunal exercising a power of decision-making. We are now giving these for the first time to a municipality that does not have experience as a tribunal, is not a tribunal.

So I'm not sure your arguments in favour of just taking this newly born bird and tossing it out of the nest and saying, "Go fly," is enough to make it do anything but fall on the ground. I think we've got to give ourselves the scope to give some sense of the direction, and that will be of help to both municipalities and the businesses that are going to have to govern themselves by the legislation, after Thursday, presumably.

Hon Mr Philip: I can respond to you this way: I think statements of value are open to more interpretation. The fact is that many municipalities in this province already have the words we are using in the act. Basically, what we are doing is giving them the power of statute and therefore more power in the court.

There's been no evidence that municipalities, such as Metropolitan Toronto, that have used this wording for years have abused that authority. You've been a lawyer practising in Toronto for a long time. Maybe you know of instances where Metropolitan Toronto has abused this authority under its act, but the fact is that I know of none, our staff know of none, it is used in other acts, and I think the suggestions you're making would result in more interpretation, more confusion, if you want, and more litigation.

I think we just have to rely on the common sense of municipalities to impose this in a commonsense way, the way they have done in the past, but in a way they can actually have upheld in the courts, and that's the purpose of this. Municipalities have had it. There's a been a problem in getting it upheld in the courts. This gives it the weight of statute so that what they've been doing for years will in fact be more effective if and when they reach a court.

Mr Murphy: I'm not saying, "Don't give the power." We're not voting against the clause as a whole; we'll support the clause as a whole. The question is the circumstances in which it is applied and the degree of direction you give to the people who have to use it.

I think it's a fair question for a business owner or a reeve or a police services board member across this province to wake up on Friday morning and say, "Gosh, we have a whole bunch of new powers," or "I am subject to a bunch of new powers as a businessperson. Well, what does this mean I'm going to have to do?" I don't think it gives the direction that is sufficient for enough certainty either on the business perspective or from the municipality's perspective.

The intention in this amendment is pretty straightforward. It's to provide the option too, and in order to fix it, if you're wrong, you'd have to amend the act. What this will permit is, if I prove to be correct and you prove to be wrong, it gives you the avenue to fix it without actually going back and fixing the act. You have an authority in regulation to provide greater certainty to businesses and councils, and I think having that option is worthwhile.

Hon Mr Philip: Let me suggest to you that what you are proposing gives greater uncertainty to businesses, because while putting in "as defined in the regulations" would allow a provincial government to define it very narrowly, that same provincial government, via regulation, overreacting perhaps to one or two very serious incidents in which somebody was killed or something, could define so narrowly that it could be open to considerable problems with legitimate businesses.

I'm suggesting to you that municipalities know their community. We have to have some faith in local municipalities in using this in a reasonable way. I have the faith in the municipal leaders that I've had to deal with as minister, and I want to trust their judgement and not simply hold that power at a provincial level, either by myself or by any future minister who may hold this position and who may be affected by the latest news headline of the day, tragic as that news headline might be. I think it's common sense. Municipalities can interpret this.

Mr Murphy: I've got to respond briefly to that. It's hardly a point of not trusting municipal officials, quite the opposite. In fact what we are saying to them is, they are going to make the judgements in a series of applications and we are giving them the power to make the judgements. We are agreeing with giving them the power to make that judgement and we are saying that what we want to do is make sure that the policies across the province are consistent and that they have some guidance in what is meant. Municipalities repeatedly say, "You dump this load of stuff on us, and you never tell us what you want and you make us work it out and you make us pay for it," because the municipalities are going to have to pay for this, defining what that means.

I have every faith in the elected officials at the municipal level, and I have every faith that together, if we give them sufficient guidance, they can then exercise their discretion and common sense in individual circumstances for the benefit of their community.

Hon Mr Philip: This is what they are asking for.

Mr David Johnson: When the minister says this is what they're asking for, I think they'd be quite happy with the bill with this amendment.

I find a couple of things interesting. Generally the government wants to put as much in regulations as it can. We've seen this over and over again, that the regulations have been used to a great extent in many bills, and here we are suggesting the opportunity to define words that obviously, from the deputations today, just about from all sides, there's a lack of clarity as to what the definition is going to be. We're offering the government that opportunity, but I guess it's come from the wrong source.

Secondly, it's interesting how people can use exactly the same words to describe diametrically opposite situations.

Hon Mr Philip: And I'm not even a lawyer.

Mr David Johnson: When the words "overly centralized" and "bureaucratic" are used, it's interesting that the deputants who have appeared before us today I think are trying to avoid that situation in suggesting that this phraseology have some more definition to it. They're trying to avoid an overly bureaucratic and centralized kind of system by putting more definition to it. But you use the same words no matter if you're describing this or if you're describing that. As long as you use the same words, it sounds great. Who knows what the meaning is?

The one example that was raised today, for example, I don't think the municipalities would be anxious or intending to close down a store if it was a couple of weeks behind in property tax. That was one issue that was raised today. But there is concern that if the words remain the way they are today, the interpretation could well be that there's a lack of honesty or a lack of integrity or something because the person hasn't paid their property tax for a couple of weeks and this clause could be invoked. I don't think municipalities would be intending to do that, and I don't think they would be the least bit disturbed if a definition in the regulations precluded that kind of situation.

It's been stated throughout here that what happens must be relevant to the liquor business, and I've heard that previously today. I guess at one point, maybe the minister in his response -- I'm sure he'll be responding -- would point to me the words -- are they contained in this act or are they contained in the main act? -- that indicate that the actions that are taken under this section must be relevant to this particular business. I'd appreciate having that point.

Maybe I should just stop there and let --

Hon Mr Philip: I'd be happy to. If you look at section 2, clause 109.1(5)(a) -- it's on page 2. Do you see the little (a)? "The conduct of the applicant or licensee affords reasonable grounds for belief that the applicant or licensee will not carry on the trade, calling, business or occupation in accordance with the law or with honesty and integrity."

Mr David Johnson: All right. I see that, but --

Hon Mr Philip: It's basically dealing with carrying on that business, not carrying on some other business.

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Mr David Johnson: But surely there are at least two different ways of interpreting that clause. Is the minister or the staff telling me that somebody couldn't separate the "or with honesty and integrity" from the rest of that clause and those words couldn't be applied on a broader basis? Could you not find a lawyer who would argue that particular case? I'd be surprised if you couldn't.

Mr Murphy: Yes. I could.

Mr David Johnson: There's one right here. We found one. We didn't have to look very far.

Hon Mr Philip: But he comes cheap, though.

Mr David Johnson: I see silence at the end of the table. I don't think that's clear, if that's what this whole thing hangs on. I'm not a lawyer, but I don't think that's clear, and that's what, for example, the restaurant association is saying. Yes, I think they would agree it should be relevant to the business, but I don't believe just that phraseology makes it clear.

Secondly, and this point has been made but I'd like to make it again, and it was made this morning by at least one deputant, maybe two, to force small business people to go to the courts to sort this out is -- surely we would all agree that that's not the right way to proceed. Small businessmen can't afford high-priced legal help to sort this kind of stuff out, and my guess is they're somewhat intimidated by that at any rate. They haven't got the time. Most of them are hanging on with their fingernails in terms of their cost structure. They can't afford it. They haven't got the time to do it. Surely we should set in place something that doesn't require the courts to sort this out.

I think, again, that gets back to a definition that does away with as much of the bureaucracy as possible by limiting the scope of what's intended, and I think the municipalities would be very happy with that as well.

Hon Mr Philip: The first hearing is held at the municipal level, and to suggest that somehow municipalities are going to want to somehow capriciously abuse their power in order to do something to some businessperson, who's a voter and a constituent of theirs, without proper cause is saying that you've got some pretty weird people elected. And that's a possibility. Maybe you had some of those on your council. I don't know.

I see that your lawyer is leaving for a minute, but I'll have my lawyer respond to him if you'd like.

Mr McClelland: You said he comes cheap, so he left.

Mr Melville: You were asking about whether this could be interpreted in a way so that the "or" was disjunctive and that somehow conduct would be interpreted in a way that would allow for the revocation of a licence where there was no relationship of the conduct to the business.

I don't think anyone can guarantee that a lawyer might not argue anything at any time. I would certainly concede that point. But in terms of the success of the argument, or the reasonableness of the argument, I can only point out that the words themselves suggest that the conduct must somehow be related to the business.

Secondly, in the past interpretation of municipal law generally by the courts, the courts have in fact acted as watchdogs and have interpreted statutes in a manner that would, with respect to licensing decisions, require that a decision be based on the business activities of the business and not go into such broader things, for example, as the lack of popularity of the business with the surrounding neighbourhood and so forth.

Mr David Johnson: Well, let me ask you this: In the case of the point that was made this morning, is the property tax of a business relevant or associated with that business such that it could be interpreted by this clause? It seems to me that the property tax of a business is very relevant to a business, or associated with a business.

Mr Melville: I'm not sure quite how to respond to that. I can try, if you wish.

Mr David Johnson: Please.

Mr Melville: With respect to property taxes of a municipality, I'm not aware that non-payment of property taxes as such is an offence. It would seem that perhaps the non-payment of property tax, of municipal taxes, might be evidence that would be considered by a tribunal. But given the number of mechanisms that are available for collection of a property tax elsewhere in the Municipal Act, which I'm sure you're aware of, in terms of liens, distress -- liens on property, I should say -- right of action, and the fact that it is not an offence, it would seem to me that that kind of evidence would carry less weight than some kind of violation of statute or law.

Mr David Johnson: All right. Just to follow up on that, this clause, as I understand it, does not indicate that an offence has to be perpetrated. It hangs around the words "honesty and integrity," and not all dishonest people perpetrate offences, I don't think, necessarily. You can be dishonest without creating an offence. So I'm not so sure what the relevance of the offence is.

What has been asked today is, if the property tax is in arrears by a couple of weeks, the property tax which pertains to this particular business, which is very relevant to this particular business, could it be perceived that the owner or the businessperson would run afoul of the honesty and integrity section, was less than honest or less than having integrity to match up with this clause -- and there's no offence created, but it doesn't call for an offence -- and therefore this section would be invoked?

Mr Melville: I think I've answered the question in the sense that yes, the lack of payment of taxes might be considered relevant in the decision, but in the context that the tribunal has, where it may be considering other evidence, such as drug trafficking on the premises or a serious criminal conviction of the licensee, such evidence would be given greater weight in the decision. I can't answer further than that.

Mr David Johnson: I guess you would say it's possible but not likely.

Mr Melville: In some, yes.

Mr Murphy: You're good. He's a natural.

Mr Marchese: Just a few quick statements: I do want to say that I understand the concerns the restaurant association has raised, and that if used in the extreme or injudiciously or unscrupulously, that would be a problem, and I understand the efforts both the opposition members are trying to make with this.

I should point out, however, that when regularly in committees the government says "as defined in the regulation," the opposition usually goes up in arms and says: "That's a problem. We don't know what the government's going to do. We want to see it. They're not going to bring it back. It can change." I understand your intent, however, nevertheless. I wanted to point it out, that I do understand the intent of what you're getting at.

The point is that nobody wants to shut down businesses. We don't want to do that. Municipalities don't want to do that, because when you do that people are laid off, they're not working, they don't pay taxes, and that's a problem. That's why we don't see too many convictions in general.

But I think the purpose is that we want to deal with the unscrupulous operators, and we think this is a fair way to get it.

"Public interest" is something we avoided because it's much worse, and the restaurant association agrees that would be a problem because "public interest" could be defined in any which way a community wants. That would be a problem for restaurants because any community can come up and complain about anything, and then they'd be in trouble. So we've ruled that out.

But we feel that if you establish something that's prescriptive, as the minister said, that would be a problem. I know Mr Murphy wasn't saying prescribe; provide guidelines. The problem with guidelines is that you can never really get to all of the situations, even with guidelines. So I'm not entirely sure that even if you had guidelines, we're any farther ahead with that, versus the "honesty and integrity" language that we have here. I really think this language is a balanced approach between keeping the interests of business and the public in a very effective way. So I think in spite of the concerns raised, this will do it.

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Mr Drummond White (Durham Centre): I'm actually rather concerned that we seem to be taking a lot of time arguing about what's honesty and integrity, something which most of us seem to have some cognizance of. My friend speaks about this being an issue that would be before the courts and that lawyers would want to argue. I'm not sure that other groups or professions would necessarily find an interest in that.

This is a direction, this is a guideline, and the fact that lawyers have difficulty understanding what honesty and integrity are is irrelevant to this issue, because it's the council that would make that decision.

These are issues that I think are very, very important. We have a limited amount of time to debate this thing and I hope that we can move on.

I don't think it makes a great deal of common sense to define issues like honesty and integrity in regulations, when those are words which have a great deal of common usage already. I hope that we can move on with this, and my colleagues opposite, I'm sure, would have equal concern because I know that I've seen on the television how this is a concern for members of the opposition. Why, just last weekend I saw that the Leader of the Opposition was running on this very bill, so I'm sure that she wouldn't want it to fail.

Mr Wiseman: I just have a really quick question to the minister and that is, if this change is made to the wording, to "as defined in the regulations," will that lead to more regulations and an unlimited appeal to the cabinet to make more regulations and change, so that every contingency would have to be covered and that if somebody missed one, it would take a new regulation in order to do it?

Hon Mr Philip: That's one of the downsides. Another of the downsides is that a government could at any time simply decide to submit to the mood of the day and either completely open it up or completely tighten it up and make it too tight. I think that local councils are in the best position to make good decisions.

Mr Wiseman: I'm happy now. Let's vote.

The Chair: Is there any further discussion before we take the vote? All those in favour of Mr Johnson's motion, as amended? All those opposed? The motion is lost.

Mr Murphy: I want to ask a question about subsection 109.1(4).

The Chair: Oh, you want to go back.

Mr Murphy: I raised it initially as a concern only because I, off the top of my head, didn't know the answer, so now that I have the people here who do, I want to ask it. My concern is this: This sets up a new section in the Municipal Act. There are some sections of the current Municipal Act repealed, but one of the sections you leave is the provision that says this doesn't change any powers under section 214, which is the provision for hours of operation for establishments.

My only question is that the wording in that section, which I think is subsection 109.1(5) of the Municipal Act, says that despite anything in this subsection or section, you can't do that, and this creates a new section which appears in subsection 109.1(4) to give a power to prescribe hours of operation, despite what section 214 says. My concern is that you could end up having a council that was the decision-maker that didn't have -- a commission or something -- but you could have a council that decided as a matter of course it was going to have a policy where the official closing hour was 10 pm and applied that as a condition of each licence.

Hon Mr Philip: No, you couldn't, because they would have to in fact have a reason for imposing the condition, and the condition would have to be that the operator -- not the class of operators but the individual operator of the business -- was not operating that business with integrity. So it's specific to a business and it's specific to the person who owns or operates that business not operating it in a way that is in keeping with the integrity of the business.

Mr Murphy: No, and I understand that argument, except that my concern is that subsection 109.1(5), which we've just dealt with, reads a bit disjunctively on that, because it says, "The exercise of a power...in the discretion of the council or police services board and, without limiting such discretion," provides then that those conditions relating to the applicant apply. So you've give a broad discretion and while you say it applies in a certain circumstance, it's done without limiting that discretion. So you still have quite a broad discretion given to the council under, whatever it is, subsection (3) and have given it the power to restrict the hours of operation. So my concern is that we might be giving a little more than we thought we'd been giving.

Hon Mr Philip: We haven't changed the discretion, but I can have counsel respond.

Mr Murphy: Sure, please. I just want the answer.

Mr Melville: Fair enough. The discretion that we've given under the new Bill 198 merely reflects the existing discretion that municipal licence decision-makers have.

In terms of your question about hours, the existing 109(3) essentially is the one that you're talking about. That's a power to set classes of hours for classes of shops, beyond the regular bylaw-making power for that purpose. The new subsection (4) of 109.1, as the minister indicated, is a power that can be imposed on an individual basis after a hearing, after evidence is introduced and so forth, that would be applicable to the individual licence-holder.

Mr Murphy: I'm just trying to work this through so that I'm satisfied in my own mind, which may take a long time. Because the wording of subsection (2) is, when an applicant comes up, the council or police services board can impose a condition on the applicant. At least, just in (2) alone, that's an unfettered discretion of the council to impose a condition.

Mr Melville: That's correct.

Mr Murphy: Period, full stop, regardless of any history of the applicant. Then you go to subsection (5) which appears to limit that discretion, but in my reading of it actually, I don't think it does fully limit that discretion, because it does say, "without limiting such discretion" these conditions apply.

Mr Melville: Yes, that is correct. It was necessary to do that in order to preserve the existing law that applies with respect to the exercise of discretion by municipal licence decision-makers. So this is an additional power.

Mr Murphy: All right. So does, then, sub (2), in granting as broad a power as it seems to, add to existing council powers? Clearly, it does.

Mr Melville: Yes, it does. That's the purpose of the legislation.

Mr Murphy: My concern, then, to go back to sub (4), is that it gives an authority for the council to do that. Now it says, "despite a bylaw." My only question is this: There's that saving section in subsection 109(3), the old one, which says that any provision, any whatever it is that a council can do, can't change what's under section 214. My question is, I'm not sure, because of the very wording of that subsection, the old (3) in 109, applies to this subsection and therefore may not save the power you're giving under what is now a new section, which is 190.1. In other words, that sub (3) may not be broadly drafted enough to cover the new powers you've given here.

Mr Melville: With respect, I think they're different powers, though. The 109(3) that exists now essentially is a power to restrict hours on a class basis for the classes of different businesses. The power to restrict hours in subsection 109.1(4), as the minister indicated, is a power that may be exercised on an individual basis after a hearing, which is required by subsection 109.1(7). To that extent, I can answer your question.

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Hon Mr Philip: I perhaps should have done this earlier, but I'd like to table a letter received from Bill Mickle, the president of the Association of Municipalities of Ontario, strongly supporting the bill as written. Perhaps it can be tabled and provided to members.

The Chair: Thank you, Mr Philip.

With respect to section 2, we have a government motion.

Mr Marchese: I move that subsection 109.1(7) of the Municipal Act, as set out in section 2 of the bill, be struck out and the following substituted:

"Review

"(7) A council or police services board may at any time on its own initiative review any action taken by it under subsection (2) and may confirm or vary such action.

"Same

"(7.1) Subject to subsection (7.2), a council or police services board shall, at the request of a licensee, review any condition imposed by it under clause (2)(d) and may confirm, vary or remove the condition.

"Limitation

"(7.2) A council or police services board shall not review a condition under subsection (7.1) if the request is made before the condition has been in place for one year.

"Opportunity to be heard required

"(7.3) A council or police services board shall not exercise its powers under clause (2)(b), (c) or (d) or subsection (7) or (7.1) except after giving the applicant or licensee an opportunity to be heard."

Hon Mr Philip: The purpose of this is to respond to the concern, which certainly impressed us, from the Ontario Restaurant Association that perhaps we were being a little bit overly prescriptive, that we should give some flexibility that where someone has had certain restrictions put on their licence, where they can demonstrate perhaps that they've cleaned up their act and that they're going to behave in a way which is responsible, the restrictions can be changed. So we're trying to build in some of the flexibility that the Ontario Restaurant Association requested in item 5 of its presentation.

Mr Murphy: I will support this amendment. It covers one of the amendments that I was going to move, which was the application for a review after one year, so I'm glad to see that's in there.

My one proviso is this, and perhaps the minister or the ministry can answer this: I think probably the Statutory Powers Procedure Act applies to this, and I'm just wondering (a) if I'm right on that and (b) what it says about notice of a hearing and written reasons to be provided to applicants or the subjects of the hearing, if you know that.

Hon Mr Philip: The applicant can apply for written reasons as exercised under the Statutory Powers Procedure Act. Suppose, for example, that you're representing a restaurant owner or a doughnut shop or whatever and you wish to appeal it to court. Then, of course, you can request it, and I believe they have 18 days, is it, in which to provide --

Mr Melville: I'm not sure about the number of days required for an appeal to court. I just would say that's in accordance with the ordinary rules of court.

In terms of the question about the Statutory Powers Procedure Act, the wording in Bill 198 parallels the wording in the Statutory Powers Procedure Act in that reasons may be provided upon request.

Mr Murphy: Where is that now? That's sub (8), right? Okay. That's fine.

My question then comes back just to the notice provision. In fact the amendment we wanted to move would provide a 14-day notice period, and my only question is specifically this: not the court procedures, but what the Statutory Powers Procedure Act would obligate a municipal council or a police services board, whatever the body is that's going to have the hearing, to do in terms of providing a minimum notice period to whomever is going to be the subject of the meeting. Obviously, you want to have time for them to engage a lawyer and my thought was that 14 days would be sufficient notice. If it's already covered in another statute then we don't need to, and that's just what I want to confirm from you.

Mr Melville: In response to that question, the Statutory Powers Procedure Act, which would apply, does not provide a specified period of notice. It provides for "reasonable notice" in section 6 of that act, which I have before me. It also provides, you may be interested, in section 8 that "where the good character, propriety of conduct or competence of a party is an issue in a proceeding, the party is entitled to be furnished prior to the hearing with reasonable information of any allegations with respect thereto."

Hon Mr Philip: If I may just add, this again is one of those instances where we had to weigh and add some balance. There were certain municipalities that were wanting the power to simply close down an operation until such time as a hearing was held. We thought that was excessive and we felt that municipalities could call a hearing in a reasonably short period of time, namely a day or two, if they wished, and they in fact have that power now.

We thought, therefore, that putting in the requirement that there be a hearing -- but at the same time, you don't want somebody who's doing a whole bunch of things that are really very, very shocking to a community to be able to stay open for another 14 days waiting for that hearing. So it was a balance between simply putting the padlock on the door immediately or forcing the municipality to quickly call a hearing and then act. That's the balance we chose.

Mr Murphy: Still a lot of flexibility.

Hon Mr Philip: Still lots of flexibility.

The Chair: Any further discussion on the motion? Seeing none, all those in favour of the government motion? All those opposed? Carried.

That brings us to the PC motion, Mr Johnson.

Mr David Johnson: I move that section 2 of the bill, section 109.1 of the Municipal Act, be amended by adding the following subsection:

"(7)(a) A council or police services board shall not exercise its powers under clause (2)(b), (c) or (d) in the case where a licensee or owner is not knowingly aware of the illegal activities of his employees, clients or customers, the licensee will not be held responsible or liable for any act or acts undertaken by such employees, clients or customers."

Obviously, this would prevent owners who are not involved in illegal activities -- and drug dealing has been raised here in many cases today -- who are not aware of such activity among their staff or clients, from losing their business licence under the Municipal Act, but it would not deal with offences under the Liquor Licence Act such as serving alcohol after hours, serving a minor or serving an intoxicated client. It's obviously a little difficult to define, but I think the point was made by at least a couple of deputations this morning that there would be a variety of situations that one would encounter.

In some cases the owners could be quite knowledgeable about what's happening and perhaps by their inaction may be contributing to the problems. But obviously there are going to be a number of cases, depending on the severity of the activity, where the owner would not be knowledgeable about what is happening, either if it's happening through clients or in some cases it could even be staff, and for someone in that position to suffer what may be extreme consequences, including up to, I guess, losing their licence, would not seem to be fair. So this amendment, specifically suggested by the Ontario Restaurant Association, is put forward to address that situation.

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Hon Mr Philip: Let me respond to you again. What we had to deal with was, I guess, a compromise. One proposal that I refused was the powers to put a lien on the property. I felt that simply because you happen to be a landlord and rent your premises out to somebody who is running a doughnut shop is no reason why you would necessarily know that the person who rented your property was going to do something that was inappropriate to the community.

The other proposal was again that we use public interest and I thought that criterion was far too broad and could very well be used to hurt a proprietor whose clients might be performing activities outside the licensee's control and that might be objectionable for cultural or other reasons to some members of that community.

Therefore, I think what you have is the same kind of criteria that are used under other statutes, such as the Liquor Licence Act, and we feel this is the proper balance.

Mr David Johnson: I think the point has been made. I don't know what more I can say, I guess. There are different points along the balance that we are all looking at. I would hope that no one here would condone a situation.

When we think of landlords, we think perhaps of absentee landlords, but it could be somebody actually owning property and working there, managing the property, having staff or just simply having customers -- could be taking some steps, but depending on where an establishment is located, if it's in a difficult part of town, then may be up against a severe situation, a difficult situation to address, for an individual like that, a small business person perhaps, to be caught in this web and suffer circumstances.

I know it's not easy to define this situation. I'm not even totally convinced myself that what's here is workable. But still, surely we would not want to close somebody down, an innocent small business person who may even be taking steps to address the situation.

Hon Mr Philip: You forget, though, that the onus is for the municipality to show to the tribunal that this person is not operating with integrity. He would have as his or her defence that if there had been a whole bunch of illegal activities of which he was the victim or an innocent bystander, no doubt he would have reported these to the police or tried to take some action, because there is an onus on a proprietor not to allow illegal activities to happen in his premises, in the same way that you and I have some onus to make sure that people are not becoming inebriated in our homes so they can't drive, or that they're not bringing stolen goods into our homes.

The same onus holds true then to a shopkeeper and you would have to be able to connect him or her with the activity that is illegal or inappropriate.

Mr David Johnson: He may be aware of the activity; he may not be aware of the activity. He may have taken steps that, in the decision of a court, I guess, in the view of a court, may or may not be significant enough to qualify as being honest and with integrity. I don't know. I think we've gone through this business that small business people will not look with great regard in going through a court process to have their future determined, and somebody defining what is honest and with integrity.

It seems to me to be a potential for being a very cumbersome process and I think it's quite easy to perceive of instances where somebody could be caught in this net, some person we would probably all agree, if he or she appeared before us and told us the circumstances, we'd say that person is innocent and should not be subject to having their licence revoked, for example, or something of that nature. That's all I'm simply trying to address and, frankly, I don't think it is fully addressed in the bill, no matter what balance we claim to have.

Hon Mr Philip: You and I are both concerned about small business people. I'm concerned about the small business person in my riding who's losing business in his store because there's some fellow who's operating in a way that's completely inappropriate to that community, inappropriate to that mall, and the other merchants in the mall are being the victims of what's going on in the mall. I guess that's where my discretion and my concern for honest business people lies. I think there are enough safeguards built into this with the tribunal, with the criteria of honesty and integrity and with the right to have an appeal to the court, that I'd like to protect the law-abiding business people in those malls who are affected and are losing business by those who have less integrity than they do.

Mr David Johnson: This amendment is clearly not aimed at people who are operating outside of the law, or people who are affecting, by operating outside of the law, adjacent businesses or concerns. It's clearly not aimed at that situation. I fail to identify with the words the minister has just said. It's aimed at the small business person who is caught in a net, who's been innocent. Apparently, this bill gives authority for him, unknowing in certain circumstances, to have his licence revoked, for example.

Hon Mr Philip: The only response I can give is that if we make this act inconsistent with other acts, it weakens the case of the municipalities in the courts to deal with people, then, who are not operating with integrity. I'm not prepared to weaken the powers of the municipality to that extent.

Mr Marchese: Just a quick comment: I agree with the minister and would add another comment to it. I think Mr Johnson wants to make explicit what I think is already implicit in the bill. For example, on page 3 of the bill, section 4, it says, "Where an owner is convicted of knowingly carrying on or engaging in a trade, calling, business or occupation on, in or in respect of any premises or part of any premises without a licence...be closed to any use...."

Implicitly there it says that if the owner is not involved, then it's not a problem, but where he knowingly is carrying on or engaging in illicit or illegal activity, that's a problem for the owner. I think it's implicit in this act without having to necessarily say what Mr Johnson is saying, although I understand what he's getting at.

The Chair: I'll put the question: Shall Mr Johnson's motion carry? All those in favour? All those opposed? The motion is lost.

That brings us to a Liberal motion. Mr Murphy.

Mr Murphy: No, that's fine.

Hon Mr Philip: We've covered his motion.

The Chair: You had more than one motion, Mr Murphy.

Mr Murphy: No, I'm fine, because two of them were dealt with by virtue of the application of the government motion, one by the statutory powers, and it's pretty clear that my 14-day motion won't pass.

The Chair: Okay. I'm clear, as I'm sure all the members are, with respect to that.

Shall section 2, as amended, carry?

All those in favour? Opposed? Carried.

The Chair at this time would like to move expeditiously. If there are any concerns with respect to any sections of the bill, then I would ask members to raise them at this time.

Mr Murphy: Just jump straight to section 6 of the act, the amendment to the --

The Chair: Okay, then, if you'll just bear with me for a minute. Mr Johnson.

Mr David Johnson: Section 4.

The Chair: Shall section 3 carry?

All those in favour? Carried.

Mr David Johnson: In section 4 the very brief discussion we had with the Metropolitan Toronto Police raised a couple of issues, and obviously they're not going to be able to be addressed. They seem important to me and I guess we can at least get some response from the government on it. They're dealing with subsection 34.1(1), and specifically they say there is no offence section. This is on page 7. "We would like to see an offence section for failing to comply with an order to vacate."

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The Chair: I'd like to bring to your attention that that's section 14.

Mr David Johnson: Oh, I'm sorry. I'm talking part IV rather than section 4. I'm all the way to part IV.

The Chair: If you could just wait for a second then.

Mr David Johnson: I'll wait.

The Chair: Shall section 4 carry? All those in favour? Carried.

Shall section 5 carry? Carried.

Shall section 6 carry? Mr Murphy wants to raise a question here.

Mr Murphy: Just if I can, briefly, to the minister and the ministry: We have a letter from the mayor of the city of Toronto in which she expresses a concern. I don't know whether you've seen it or have it in front of you or filed it as an exhibit. Her basic point is this. She says:

"I am recommending that [this section] be amended to require the licensing commission to hold a hearing into an alleged contravention of the bylaw upon receipt of a resolution from the council of the area municipality, rather than simply investigate."

She wants an obligation that there be a reporting back. I'm just wondering if the ministry and the minister could respond to that suggestion.

Hon Mr Philip: We thought that the provision which allows the lower tier to pass a resolution requiring the licensing commission at the upper tier to investigate was as far as we wanted to go. Forcing them to hold a hearing was -- we think there's considerable political persuasion there that if there's evidence following the investigation that they will want to hold a hearing. It's not necessary, then, to go quite that far.

It's also important, when you have a tribunal, for it not to have the political interference in the operation of that tribunal and therefore we thought that we had hit the balance between allowing political interference and allowing the local municipality to suggest that at least the matter should be investigated.

Mr Murphy: If I can understand you correctly -- and I think I know where you're going and I may agree with you -- the bottom line is: what you don't want to do is limit the discretion of the licensing commission. In other words, you say, "You have to conduct an investigation." Once they conduct an investigation they have the authority to decide whether that requires a hearing or not and that is within their authority and that's appropriately done so. All right, thank you.

The Chair: Further discussion? Seeing none, shall section 6 carry? Carried.

Shall sections 7 through 13, inclusive, carry? Carried.

With respect to section 14, Mr Johnson.

Mr David Johnson: I've already said my intro to it so the rest of it is that, as I understand it, this section would give some authority: If there are reasonable grounds then people can be required to vacate the premises. However, I think what the police are saying is that there is no offence created for failing to comply with the order to vacate. I don't know who can respond to that.

Hon Mr Philip: We'll have to get people from the Solicitor General's ministry to respond.

The Chair: Are there people from the Solicitor General? Okay.

Ms Wise: Could you repeat the question, please.

Mr David Johnson: The Metropolitan Toronto Police have indicated they would like an offence section. We're looking at section 14. In other words, they have the authority under certain grounds to force the premise to be vacated but I gather, in police parlance, there is nothing to create an offence if somebody fails to comply with the order to vacate.

Mrs Karen Haslam (Perth): Actually, I share the concerns and when I asked the question the question was not that they didn't have the authority but that they wanted it written out more because if you're facing 1,800 people, you want to be --

Mr David Johnson: I think that comes under "force." That's the next question, I believe.

Mrs Haslam: Okay, that's mine.

Mr David Johnson: Are you with us? That was their deputation. They actually read that out. What happens if people fail to vacate when the police order them to vacate?

Ms Wise: Under the new bill, there is not an offence section, a new offence created for refusal to comply with the requirement to vacate. I guess, in order to address your question, there is perhaps a criminal law power in terms of obstructing police that is available to the police, but under this bill a new offence is not being created in that regard.

Mr David Johnson: Is that something that would normally be there? From the way you're describing it, by the look on your face, there's something maybe here that's been missed.

Ms Wise: No.

Mr David Johnson: Am I interpreting too much?

Ms Wise: No. In terms of the second part of your question, the use-of-force aspect that the police raised in their submission, there is a provision under the Provincial Offences Act which permits police to use as much force as necessary to do what an officer is required to do or is authorized to do by law.

Mr David Johnson: They admit that. They say, "However, an officer on the street, for simplification and speed of research" -- whatever that means -- "would like to have that authority spelled out in the act itself." I think they're saying that it would be quicker, more efficient. If the purpose of this is to deal with this problem, then it should be outlined in this act.

Ms Wise: I would suggest that the police have powers from various sources and that it may well not be appropriate to incorporate all the powers of the police in this particular statute. There are powers available under the criminal law, there are powers that are available under other provincial statutes, and in particular the Provincial Offences Act, that may not be appropriately transferred into the Liquor Licence Act.

Mr David Johnson: Do you have any objection -- since we've had this discussion and I guess it's too late now -- but if we had more time, would you have had any objection to putting an offence section into the act for failure to comply with vacating the premises?

Mr Murphy: Someone is saying over here it already exists.

Mr David Johnson: I heard that, but the way you described it made it sound as if it was somewhat not as speedy or as direct, let's say, as what the police are asking for.

Mrs Haslam: They have to go to a criminal court in order to apply for other legislation, and what they want in this legislation is it laid out in fines so that it doesn't have to go through the criminal courts. My understanding is that it's already there in other legislation to go through the criminal courts.

Mr David Johnson: All right. I raised that issue. The only other issue I raise is the inability to collect fines that they've noted, as well, since you're there. I think they would like to be able to seize goods for non-payment of fines. Is there some reason why that wasn't included?

Ms Wise: I'm not prepared, unfortunately, to address that issue.

Hon Mr Philip: I'm sorry, Mr Johnson, I didn't understand you. They do have the power to seize chattels for non-payment of fines.

Mr David Johnson: Why do they think they don't then? "Inability to collect fines" is "noted under new section 330.1 of the Municipal Act which allows for seizure or distress for goods or chattels on non-payment of fines."

Mr Murphy: Under the Provincial Offences Act.

Hon Mr Philip: Except that this gives them more power. They can actually walk in and seize the chattel immediately.

Mr Cordiano: So they can walk in right on the premises and seize.

Hon Mr Philip: It applies to violation of municipal bylaws. It applies to non-payment of fines resulting from the enforcement of this act.

Mr David Johnson: I raised the concerns of the police. I object to the fact this whole thing is sort of time allocated. We've got no time to deal with these problems. They're valid concerns. That's all I can do.

Mr Murphy: I too want to echo the concerns of the police related to subsection 34.1(1). I think an offence section would help. I would think something that corrects the problem with the Provincial Offences Act would help.

My one further question is the concern about needing ID for a special occasion permit. I think that makes sense, actually.

Hon Mr Philip: The Ministry of Consumer and Commercial Relations, when I asked them that question, said that the imposing on ordinary citizens and indeed the cost to the bureaucracy and the inconvenience when we have a decentralized system would be just phenomenal. Perhaps there's somebody here from Comsoc who would like to respond.

Ms Lynne Bertolini: I'm Lynne Bertolini from Consumer and Commercial Relations. We have just filed a new regulation under the Liquor Licence Act that requires photo identification on request for applicants who are applying for SOPs. We have a list of refuse-to-issue and red-flagged premises, as well as individuals, and if there's any concern about the application, the person issuing the SOP can ask for photo identification.

Mr Murphy: Can you make sure that you tell all your offices that too, as soon as possible? Just communicate it to them.

The Chair: We're leaving it as discretionary.

Mr Marchese: I would move the rest of the sections, Mr Chair.

The Chair: Shall section 14 through section 20 carry? Carried.

Shall the title carry? Carried.

Shall the bill as amended carry? Carried.

Shall I report Bill 198, An Act to amend the Liquor Licence Act, the Municipal Act and the Regional Municipalities Act and certain other statutes related to upper tier municipalities, as amended, to the House? Agreed.

Hon Mr Philip: May I thank all of you and the staff of all three ministries and the other two ministers and particularly Rosario Marchese for everything that he's done.

The Chair: This committee stands adjourned until the call of the Chair.

The committee adjourned at 1801.