Assemblée législative de l'Ontario

PRE-BUDGET CONSULTATIONS

CONTENTS

Tuesday 18 March 1997

Pre-budget consultations

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

Chair / Président: Mr TedChudleigh (Halton North / -Nord PC)

Vice-Chair / Vice-Président: Mr TimHudak (Niagara South / -Sud PC)

Ms IsabelBassett (St Andrew-St Patrick PC)

Mr JimBrown (Scarborough West / -Ouest PC)

Mr TedChudleigh (Halton North / -Nord PC)

Mr JosephCordiano (Lawrence L)

Mr Douglas B. Ford (Etobicoke-Humber PC)

Mr TimHudak (Niagara South / -Sud PC)

Mr MonteKwinter (Wilson Heights L)

Mr TonyMartin (Sault Ste Marie ND)

Mr GerryMartiniuk (Cambridge PC)

Mr GerryPhillips (Scarborough-Agincourt L)

Mr GillesPouliot (Lake Nipigon / Lac-Nipigon ND)

Mr E.J. DouglasRollins (Quinte PC)

Mr JosephSpina (Brampton North / -Nord PC)

Mr WayneWettlaufer (Kitchener PC)

Clerk / Greffier: Mr Franco Carrozza

Staff / Personnel: Ms Alison Drummond, research officer, Legislative Research Service

The committee met at 1011 in committee room 1.

PRE-BUDGET CONSULTATIONS

The Chair (Mr Ted Chudleigh: Yesterday we had a number of issues that were to be researched and then we would discuss them again today. There have been a number of changes made.

What I would suggest, with the committee's approval, is that we turn it over to the research assistant to take us through those changes and that as we go through them we talk about them so we can move on in a progressive manner. The alternative would be to let the research assistant finish her comments and then go back through them. If I suggest the former, would you agree? Thank you. I don't think it makes a lot of difference. Alison, would you take us through, please?

Ms Alison Drummond: If you take a look at the document the clerk just distributed, it's the second draft. Starting on page 1, the italicized questions obviously are going to go. If you look, a line by the side of the page indicates where change has been made; that should direct your eye to where I've made changes.

Starting at the sixth bullet point under "Minister of Finance and Staff," this was where the first concern was raised by Ms Bassett. I changed the wording to read: "Ontario's real trade balance was a record high of $17 billion over the first three quarters of 1996." That's simply a wording change.

The second change I have made -- that was simply an error I had made. It was fourth quarter department store sales that were up 7%, not fourth quarter retail sales, and I apologize for that.

On the next point, on auto sales, I changed the wording to what the minister had said in Hansard, which compared November 1996 auto sales to November 1995 auto sales.

The Chair: Are there any comments from any of the members?

Mr Gerry Phillips (Scarborough-Agincourt): All I care about is that this reflect what Hansard said.

The Chair: The research assistant assures me this is accurate.

Mr Phillips: That's fine.

Ms Drummond: On the second page, the paragraph which starts off, "In response to questions," the minister did not discuss the job creation indicators, so I've cut that section out.

The other change was to "announced improvements such as the small business investment tax credit for banks." That's it for that section.

The Chair: And this reflects --

Ms Drummond: What was in Hansard, yes.

Mr Phillips: So he never said the job creation was lagging other indicators?

Ms Drummond: No, the question was on job creation indicators, but the response did not say that.

The Chair: Okay. "Fiscal Situation"?

Ms Drummond: In "Fiscal Situation," the wording as it is here follows the wording the minister used more closely, and that's pretty much as it appears in Hansard.

"The deficit outlook is $7.7 billion for 1996-97, $508 million lower than the 1996 budget forecast. The target for 1997-98 is $6.6 billion, an improvement of more than 40% since June 1995."

In the paragraph at the bottom of that page, "Operating expenditures have gone up as compared to the budget forecast." In the last sentence of that paragraph on that page, as to the $53-million decrease, the document I was working with in the slides just showed it as a decrease, but I checked Hansard and indeed it was described as an accrual adjustment.

In the second paragraph on page 3, that's more a wording change for clarification, but that was what was stated on the $650-million reserve.

Finally, in response to the question on harmonization and the ministry staff discussions, again I think that's just a clarification of what the staff was talking about with the Maritime provinces agreement.

Mr Gilles Pouliot (Lake Nipigon): When we talk about both operating and capital expenditures going up, do we have a percentage? I find it troubling when you seem to be more dependent. The figures are telling; they're rather astronomical. It's expenditure that we are concerned about. Revenues go up and down; sometimes they can be sustained, but they're certainly more prone to cycles than are expenditures. That's usually the catalyst, and I would like to know what percentage expenditures have gone up by -- not vis-à-vis the forecast, but vis-à-vis real numbers, what was spent before and what is spent now, whether it means the government is spending more, cannot get its spending under control.

Ms Drummond: So you're asking me to calculate spending as compared to 1995-96?

Mr Pouliot: Yes; no rush. Thank you.

The Chair: Shall we move on to "Financing"?

Ms Drummond: Under the second point, the $1.6 billion that was raised in the domestic market, I apologize for that. I just missed that in the draft and have corrected that. The remaining $1.8 billion is of December 31. I apologize; I will add that.

I think that's it for this section. The next revisions that were requested were on page 13.

The Chair: "Other Witnesses: Fiscal Issues."

Ms Drummond: That was the changes in numbers.

The Chair: Okay, the change in number to three and the naming of those witnesses, as we discussed yesterday.

Ms Drummond: But also it's the specific numbers.

The Chair: And "Sixteen other witnesses"?

Ms Drummond: Well, there was some disagreement on the numbers, so if I could have --

The Chair: You haven't had time to match the two lists?

Ms Drummond: No, I've tried to, but I haven't reached it. If I could get permission to reach a consensus on that through the committee.

The Chair: This is going to require a little bit more time than we have at lunch.

Ms Drummond: Yes.

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The Chair: Would it meet with the committee's approval if these numbers were reviewed by the research officer and the finance department staff and final approval rested with the subcommittee? I ask for that because we may not meet tomorrow. If we meet tomorrow, you would have time by tomorrow?

Ms Drummond: Certainly.

Mr Tim Hudak (Niagara South): Chair, that was just about counting whether there are 16 or 24 witnesses or somewhere in between?

The Chair: Yes, the research officer would ensure that -- if someone said they supported it, it would have to be documented and it would have to be recorded in Hansard.

Mr Hudak: I can put my faith in the subcommittee.

The Chair: Assimilating those two lists, I think, is the trick. Okay? So the subcommittee will have final approval on that, if required, and that's on the basis that we do not meet tomorrow. If we do meet tomorrow, it will probably be available. We haven't even got into recommendations yet, so we may very well be meeting tomorrow. Okay, so those are the numbers.

Ms Drummond: The next change that was requested is on page 14 under "Personal Income Tax." This was just some background I provided from the budget, so what I did was followed the phrasing in the budget: "Provincial income tax was cut from 58% of basic federal tax to 54%." I've added the phrase "for the second half of 1996" to clarify that point.

The next request for revision was again counting witnesses, so again it's if you would allow me to continue to go over that material.

The Chair: That's at the top of page 15: "Five witnesses"?

Ms Drummond: Yes.

The Chair: That's the second number for clarification.

Ms Drummond: Yes, and that's the same issue under "Harmonization." Otherwise, revisions I've made to the report have been naming witnesses where I had simply "five witnesses" or "two witnesses" or whatever.

The next substantive change is on page 19. After the discussion of the restructuring announcements in January, I've given some background on those announcements on pages 18 and 19. Ms Bassett requested some indication that there may be some changes to those proposals, so that paragraph, essentially the second paragraph on page 19, was my effort to do that with some background.

Mr Phillips: The committee requested that yesterday, did they?

Ms Drummond: I had understood that was a request from the committee.

Mr Phillips: Do we have Hansard at these meetings?

Clerk of the Committee (Mr Franco Carrozza): Yes.

Ms Drummond: I believe it's for any kind of substantive changes. There will be indications that there have been additions and those are simply listing witnesses.

Then on page 28, for the second paragraph under "Access to Capital," I went back to the CFIB brief; indeed the discussion was very specifically of the labour-sponsored funds, so I've added that to the sentence and just improved the parallel structure a little bit. I think that's all.

The Chair: Any other comments? Then we're ready to proceed with the introduction of recommendations, I take it. Are the three caucuses prepared to table their recommendations?

Ms Isabel Bassett (St Andrew-St Patrick): Yes, we are.

Mr Phillips: I'm sure ready.

Mr Pouliot: We don't have ours yet.

The Chair: When do you think they might be coming? Will you be having any?

Mr Pouliot: We will likely be against most recommendations by the government. The fix is in. We know how these things operate. I'm not so sure that anything that could be said by parties of the opposition, given the obvious majority -- notwithstanding the comments of Premier Harris, which was an outright departure from the truth as we know it, the majority on the committee will prevail, through the good auspices of the parliamentary assistants and their legitimate cohorts.

We have some differences mostly vis-à-vis the tax cut. We feel that in lieu of that, you'd get better action direct if that money was to be directed against the deficit. You're caught between the deficit and what portion of it and the commitment of the tax cut vis-à-vis an acceleration.

These are good times. Revenues are coming in, you're doing very well, your export market is okay; it's driven by the primary sector of automobiles, auto parts. You're doing great; you're to be commended; you've had good fortune. But your expenditures are still a problem in spite of the cuts, and they will keep on being a problem as the demographics take over.

I'm not so sure that you have a focus, and we begin to see that some of the policies that were drafted, not because of the lack of consultation -- I too am aware that you can consult forever and become inactive or paralysed on account of it. It's a complex situation. What happens elsewhere cannot necessarily be duplicated. You can take the good, but no two situations are alike. I'm concerned about the lack of data vis-à-vis expenditure.

The Chair: Mr Pouliot, I understood there was an agreement that we would all introduce our recommendations at the same time so that no advantages could be taken of the other group. Could you give us an indication as to when you might be introducing --

Mr Pouliot: Simply put, I'll look at our research. You need 25 people; some of us sit on two and three committees by substitution. You're in Thunder Bay one day and you're in Ottawa two days after and then you pick up the piece of paper. Our researchers say that, for instance, one person has to look after health -- and we know the ongoing responsibility that entails; it speaks for itself -- and finance and children's issues at the same time. We'll endeavour to put the rush on, but we treat our people kindly. We'll remind them: "Look, this is overdue. It was overdue last week." They have copies of all the briefs that have been presented. My apologies.

The Chair: I'm in the hands of the committee. Do you wish to introduce your recommendations now or do you wish to wait for the third party to come up with its recommendations?

Ms Bassett: I think we should go ahead as planned. As the honourable member pointed out, they're very busy, and who knows? In two days they're probably booked on to something else. We've booked ourselves into this at this time. If Mr Phillips is in agreement, I think we should go ahead.

The Chair: Mr Phillips, would you agree to that?

Mr Phillips: Sure.

The Chair: Okay, let's proceed. We'll recess for 10 minutes to have enough copies made for everyone.

The committee recessed from 1030 to 1039.

The Chair: We now have the Liberal recommendations and the PC recommendations. What is the committee's wish? Should we go through the recommendations first, one by one?

Ms Bassett: We might sort out some general agreement. I think what we did last year was go through and vote in blocks, and then siphon off the ones there's absolutely no agreement on. But I'm happy to listen, whatever format you want to go.

The Chair: That seemed to work fairly well last year. Would you approve that process? Which list should we start with, the government list?

The government list, number 1: "The government should honour its commitment to reduce the deficit and balance the budget by the fiscal year 2000-01."

Mr Pouliot: I need your help, Chair, on this first recommendation. It says, "should honour its commitment." The election was held on June 8, 1995. Constitutional requirements ask that you go to the people within five years. The commitment was that it will be in the first term of office. It's in the CSR, that document there. You seem to surpass or exceed your constitutional capacity by adding one year. The commitment was to balance its budget in the first term of office. You would have to, essentially, backtrack on that commitment.

Mr Joseph Spina (Brampton North): In the CSR it says 2000-01.

Mr Pouliot: It says first term of office.

Mr Spina: The revised CSR.

Mr Pouliot: Oh, so it's the second one.

Ms Bassett: We must give you the updated version.

Mr Pouliot: It was directed to you.

Mr Phillips: Find it in there.

Mr Spina: Is that the one after Paul Martin's --

Mr Phillips: Yes, the sixth printing.

Mr Pouliot: That's why I need your help from time to time. So it's the second commitment, then, the newest version.

Mr Phillips: Was it in this one? I really can't find it in here either.

The Chair: It wasn't in that one. When we found out the deficit that was current, there was an economic statement made.

Mr Pouliot: Is this supported by legislation, and should it not indicate that to give it more credibility? Is this what is being meant by the government when it says "should honour its commitment"? Is it going to be supported by legislation like a real commitment?

Ms Bassett: We made an election commitment on the campaign trail and subsequently that we would balance the budget by 2000-01, and indications show that's what we are doing. We're well on the track, as many of the witnesses said, to do that. I think that is sufficient. We don't need to burden ourselves with added legislation. We're trying to reduce legislation. It's obviously clear to everyone that's what we're doing.

Mr Pouliot: You also made a commitment of -- but we'll get to this. I'm sure the Liberals will want to talk about the 725,000 jobs. You can make all of us rich, madam, in the future, but what about now? You have little credibility unless you have clout, you mean what you say. You say you're going to pass legislation. It only adds one more line on your recommendation. Is your committee willing to do that, to go that far?

Mr Jim Brown (Scarborough West): Would you support it?

Mr Pouliot: I'll support anything which is going to help you.

Mr Wayne Wettlaufer (Kitchener): Did Hansard get that?

Mr Pouliot: I would stick to your family; they're safer. Thank you, Chair.

Mr Phillips: It does say, "This plan will balance the Ontario budget within our first mandate." That's the latest. That was the one that was only days before the election. If you want to amend it and say, "within our first mandate plus a year," that probably would be acceptable to us.

Mr Spina: Looking at page 18 of the Common Sense Revolution, there is a chart on the upper left-hand corner which clearly shows a dot balancing the budget at 2000, which would be the fiscal year 2000-01. You may perceive it as a stretch, but I'd just point that out for clarification.

Mr Phillips: It's the first mandate plus nine months.

Mr Spina: Any of the statements that both the Premier and the finance minister have made have always indicated fiscal 2000-01.

Mr Pouliot: That says the first mandate. We can count. Are you going to have a six-year term of office?

Mr Spina: The first mandate ends in June 2000 and the fiscal year 2000-01 begins April 1, 2000.

Mr Phillips: So it's within your first mandate plus nine months. You may not agree to amend it.

Mr Spina: Can't you give us a few months?

Mr Phillips: If you want to get rolling, I'd say it's reduce the deficit and balance the budget within its first mandate plus nine months; just amend that.

The Chair: Are you moving that as an amendment?

Mr Phillips: Just to make it consistent with the CSR.

Mr Spina: The mandate is already five years and three months, is it not, Mr Chair?

The Chair: You're not allowed to ask the Chair technical questions.

Mr Spina: Could we ask for clarification from the clerk or research officer?

The Chair: What was the question?

Mr Spina: The actual term of office from election to election, if I understand it, is five years and I think it's either three or six months from the anniversary of the election.

The Chair: It's five years from the point of swearing in, I believe.

Mr Spina: Which means that this government would not be committed to calling another election until some time during the summer or fall of 2000, which would be well into the fiscal year of 2000-01.

Ms Bassett: Could I pick up on page 81 of the budget. It's clearly stated under "Economic Policies" that we "will balance the budget by 2000-01." That is exactly what our recommendation refers to. I don't know why we're getting caught up in the mandate.

Mr Pouliot: With respect, the chance is that you could well be out of office by that time. What you're doing is borrowing in the future. You have to go to the people in our system, and I don't hear anything about changing the system. The way you're spending money -- please.

Mr Spina: The way we are spending money?

Mr Pouliot: You people are back-spending like drunken sailors. At least drunken sailors spend their own money, but this is the people's money, so there's little credibility, and who says they will wait until June to call the election? They have no control over the year 2000-01. That would be four years and 10 months into the mandate. They know that; I know that.

The Chair: There's an amendment before the committee. Is the committee prepared to vote on the amendment?

Mr Phillips: Recorded vote.

Ayes

Phillips, Pouliot.

Nays

Bassett, Brown, Hudak, Rollins, Spina.

The Chair: I declare the amendment defeated.

Is there any further debate on this recommendation? Those in favour of this recommendation? Those opposed? That would carry.

The second recommendation: "The government should continue the reduction of personal income taxes to stimulate job creation, investment and consumer confidence."

Any debate on this recommendation?

Mr Pouliot: I'd like to move an amendment to read as follows: "The government should discontinue the reduction" -- I'm talking about instalments, assuming that the style will carry -- instalments three and four on the personal income tax. I feel very strongly that economic fiscal management can best be reflected and achieved through a direct attack on the deficit as opposed to a trickle-down theory, where you don't get what you intended to, you don't even get 50 cents on the dollar, and it takes too long to reflect in the economy, if it does at all. I feel that the money -- it's over $1 billion per instalment -- should go directly against that deficit.

The Chair: Further debate on the amendment?

Mr Spina: Frankly, the reality is that the beginning of the tax reduction and the trickle-down effect that my honourable colleague talks about clearly has been demonstrated already in a surplus of revenue to the government as of this past January, which the minister clearly reflected in his economic statement.

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It worked in 50 other jurisdictions, where revenue increased. Whether they balanced their budget or not was a different matter, because they did not reduce spending, particularly in the US as has been commonly touted. But the reality is that revenue unquestionably exceeded expectations as a result of tax reductions. Therefore, we must endorse the continuance of the personal income tax reduction as has been planned.

Ms Bassett: If I could add to that, I just wanted to add to my colleague Mr Spina's comment, that 12 groups, including Michael Manford, recommended that the government should continue the reduction of personal income taxes to stimulate job creation, investment and consumer confidence.

Mr Phillips: We'll get into this endless debate. The job situation is a disaster. You may choose to ignore it, but we've lost 57,000 jobs in the last six months.

Mr Spina: We've also gained 135,000.

Mr Phillips: This is why, frankly, the debate is a bit useless around here, because as soon as you begin to make a point -- you've lost 57,000 jobs. The rest of Canada in the last six months has gained 73,000 jobs. If you get in behind the numbers on the finances, as the minister acknowledged, you'll find that the key reason why we have a significant growth in revenue this year is because the federal government has given the provincial government its final numbers, and it is as a result of understating the personal income tax revenue from 1995. Personal income tax revenue this year, right now, is down $600 million over the previous year.

I know you're committed to the tax cut. There's nothing we can do to stop you on that. I thought Colin Brown said it very well for you, that government's a beast that has to be starved, and that's what the tax cut is all about.

I'm just saying that I have a very different opinion than you do. I think we have a disaster on job creation, particularly for our young people, and the longer you accept that it's all fine, the longer the problem exists and the longer it will take before we tackle it. I think it's a tragedy. I personally think you're being bamboozled by the cabinet on the numbers. That's my own view; you can reject it. But if you look at the employment numbers, they are a disaster by any stretch of the imagination. If you look at the success or failure of the tax cut so far, you judge it's a failure. These numbers cannot continue. We can't have this disastrous an employment situation.

We'll have this kind of mindless debate here for a while, with you having your view and me having my view, and essentially run the risk of wasting each other's time by our minds being closed on it, but I can't support that you have any evidence at all the tax cut is working. It is, without doubt, driving expenditure cuts far deeper than need be, even on your health thing. We're looking at a 10-year freeze on health spending; it isn't just a two-year. He shakes his head and says no, but those are the numbers.

In 1992 the province spent $17.5 billion on health care, and your promise is that you'll spend $17.5 billion in the year 2001. To me, that is a 10-year freeze on health spending. That's what you're telling me you're doing.

Mr Wettlaufer: Your party was going to spend $17 billion.

The Chair: Further debate on the amendment?

Mr Pouliot: In support of the amendment, I appreciate that we have to go back to the presentation. It was indeed food for thought, and for the most part I found him to be sincere, well prepared, well presented. I don't think that anyone can be satisfied, be it 9.7% unemployment at the national level, 9.25% in Ontario, with an emphasis on the most vulnerable, who happen to be the future, the group between 15 and 24.

We have to factor in that the service industry is overrepresented, if you wish, which entails not jobettes, because people are participating, they're contributors; by the same token they're not high-paying jobs. I know it does take time.

My feeling is that you will be further pressed to the tune of $5.4 billion divided by two, the third and fourth instalments, $2.5 billion, $2.6 billion, that you will quickly have to go inside and get that money or cut equal money in terms of expenditure. With the pressures on health, first, and education, because your timetable commitment number 1 is so telling, it puts on a lot of pressure. As I weigh the benefits of the tax cut -- it's welcome; we all agree that we're paying more taxes than we should perhaps -- and then I look at the deficit, and my interpretation of economics is that you don't -- yes, a tax cut, the perception, it's encouraging, but it takes too much time, that you're better off paying the debt. Then it gives you an awful lot more latitude.

I think you're gambling too much, and the odds are getting long if you can deliver on all your other promises. It's only my perception and the way I see things, not entirely different from the government side, but it's a matter of opinion and interpretation that I would like to see more emphasis on the deficit, which would stop you from having to dislocate the system, because you're already under a lot of pressure. You started with an $11.2-billion deficit and the revenues are going well, but you become fragile the closer you come to your commitment. That's all I'm saying. I would chance on forgoing instalment 3 or 4 or maybe less on instalment 3 or 4 and focus on the debt. Mind you, politically, I know what that would entail.

The Chair: Any further discussion on the amendment? Are you ready for the question?

Mr Pouliot: Recorded.

Ayes

Phillips, Pouliot.

Nays

Bassett, Brown, Hudak, Rollins, Spina, Wettlaufer.

The Chair: I declare the amendment defeated. It was moved by Ms Bassett. Any further debate on the motion, on recommendation 2?

All those in favour of recommendation 2? Those opposed? I declare the motion carried.

Number 3, Ms Bassett: "The government should keep its commitment to reducing payroll taxes and continue the reduction of employer health tax in order to stimulate job creation for small business."

Debate? Are you ready for the question?

All those in favour of the motion? Those opposed? I declare the motion carried.

Recommendation 4, Ms Bassett: "The government should continue to eliminate red tape and unnecessary regulation and reduce the barriers to investment."

Mr Pouliot: I too love my mother. I just feel particularly touchy this morning. Mr Chair, would you help? "Reduce the barriers to investment." Positive tells you, when you come here to learn English, that you encourage investment. There's nothing negative about that. What you are saying with the second line is that you're almost killing the good deeds that you intend to convey in the first line. Encourage investment. No one is evil here. It's not barriers to investment. You encourage investment; you don't reduce barriers. It says the same thing, but it says it more positively, from a government that should be positive. Picky, but if you're going to put it through.

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The Chair: Is there further debate? We'll see that Mr Pouliot's mother gets a copy of Hansard.

Mr Pouliot: They'll say yes and then they'll go to the House and say, "Who says we don't listen to the committee?"

The Chair: Are you ready for the question? All those in favour of the motion? I declare the recommendation carried.

Recommendation number 5, Ms Basset: "The government should encourage the federal government to act on its budget commitment to establish an income-contingent loan program to help increase students' access to post-secondary education."

Mr Pouliot: Clarification from the government side: I listened to Mr Martin on his budget. Is this post-budget? My understanding is that there was some encouragement. Are we saying that there was not enough encouragement, you would have liked to have seen more, or was this drafted prior to Martin delivering his budget?

Ms Bassett: I can answer that. We've been working together with the federal government and we feel that the recommendation is necessary because we want to continue to pressure them to carry through with it. It's very important to us, and to them.

Mr Spina: They frankly have not responded as quickly as we would have hoped, because as you may recall, in last year's budget we had introduced this idea. There are negotiations, but we need their full cooperation to fully implement this. As Ms Bassett said, it is our intention to continue the pressure. Even though Mr Martin made the statement, he still isn't delivering, and that's the reason why we felt that it was important to reiterate it as part of this budget.

Mr Pouliot: But you see, the reason I say this here is, you say this en passant. This is a pre-budget consultation. Those recommendations from the committee will go to finance, to Mr Eves's fortress, and then he will be judicious and he will read it all. This is the federal government, I understand, but education is a provincial jurisdiction. It is a provincial budget. I know only too well that you're the government now. Should the focus not be on what you would like to see in the provincial budget, aside from the myriad laments of the federal government?

This is a direct message, recommendation, to our provincial entity. You're telling Mr Eves, the Minister of Finance of the day, your government, that this is what you would like to see in the budget, so what you would like to see in the budget is an encouragement, a signal, a voice to the federal government. Come on, really. It's, to say the least, feeble; well said for the gallery, but it does not interest anyone, even children.

Mr Spina: How would you beef it up?

Mr Pouliot: If the emphasis is on the provincial government to do something, to encourage and so on, to remind the federal government --

Mr Spina: Do you have an amendment?

The Chair: Further debate?

Mr Pouliot: Pardon me?

Mr Spina: Do you have an amendment?

The Chair: Excuse me, Mr Spina. Before we speak at the committee, usually the Chairman recognizes you.

Mr Spina: Sorry.

The Chair: Ms Basset.

Ms Bassett: I was just going to say that in the minister's budget of May we did say that we were committed to the income-contingent loan and to point out to Mr Pouliot that we do need the cooperation of the federal government at this time to move forward. That's why we worded it this way. We have a double commitment: One in our budget and one in this.

The Chair: Any further debate? Are you ready for the question? All those in favour of recommendation number 5, the motion? I declare the motion carried.

Number 6, Ms Bassett: "The government should work to improve access to child care."

Mr Pouliot: I'll ask the good character, the tolerance and the indulgence of my colleagues' focus, the government, the people opposite. We've had delegations, presenters after presenters. It is of your own making because of your philosophy of your approach, half of it deliberate, the other half consequential just as much. This group told you they were afraid, they were frightened. Now you have the audacity, the gall, to say the government should work to improve access to child care. You don't put any figures. You know the most vulnerable are of a different thought, and the presenters told us that. I can go one, two, three, four, five. There were a lot, almost unanimous. They said, "Beware where you've cut." Now you come up -- because it's proper to do so. No one wishes to deliberately, and nobody does, but the very agenda makes that happen, if it happens by ricochet or indirectly, and it was felt by the presenters that you were not as sensitive as you should have been vis-à-vis the needs out there. Now you come up with a general statement.

This is not a speech from the throne. This is a budget. Show me the money. You have a program and you have the funding for that program. Otherwise, don't come. I mean, save it for the Saturday evening -- Martin, Louis XIII, in the finest of boudoirs, for the club, the Boulevard Club. "Yes, we should do something and here, I'll sign the cheque." But the most important document, the most important care for people who don't have a voice -- you're not seen in good light, so you feel to reinforce.

I'm going to support that -- who wouldn't? -- but I would like to see what they told you is more action. The doors are being shut, the service centres are being padlocked and we feel that your government's agenda does not allow us -- in French we say "payant sur rue," front row centre -- to be like the others.

Yes, the government should work to improve access to child care. They don't have the power and the purse -- I'm sorry, your action betrays your good deed, but be it with the benefit of the doubt; no one is evil here, but I hope it's not mere words.

The Chair: Further debate? Are you ready for the question? All those in favour of recommendation number 6? It's unanimous. The motion is carried.

Recommendation number 7, Ms Bassett: "The government should keep its commitment to preserve $17.4 billion in health care spending and any money saved in hospital restructuring should be invested in priority health services."

Mr Phillips: I think increasingly we're all going to find that a 10-year freeze on health spending at $17.5 billion is going to create a crisis for us in health care. Over that 10-year period there will be 1.5 million more people in Ontario; 300,000 more people over the age of 65. We are kidding ourselves if we think that's going to be enough to sustain our health care system. So I have difficulty in cheering the government on if we really think that's going to do it in the year 2001.

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Mr Pouliot: I know it's not the place to really define it, you define it under estimates, but the government was weak in its negotiations with doctors, who, let's face it, take what some would call a disproportionate amount out of the health care system. We attract in Ontario fully 60%, under refugee and immigrant status, of new arrivals, people that pay us the compliment of their visit on a permanent basis to strengthen the country, so that means more people.

Mr Phillips is right: We also have demographics, so if you're spending the same money, the case can be made that you are spending less, because per unit, if you have more people and you have the same money in the pool and the costs of units keep going up and you have more people -- and with the demographics, the last two years of a citizen's life, I think you spend 50% on health care, more than half of what you'll ever spend for your entire life before that.

It's conjuring illusions, if you wish. It's a little cheap magic. It's vaudeville. It's a tombola in the most remote of villages. We know the way the shell game is played -- $17.4 billion -- it doesn't mean anything. I'm going to vote against simply because I want it to become a matter of record and say hospital restructuring is a mess. It's a mess out there. The demographics will come back to haunt you, but by that time they hope they will have lulled people one term at a time and they'll be in their third or fourth term of office.

I could not support this. This is the most telling pitfall associated with the chase for the mighty buck at the expense of health care. They're actually spending less and things are screwed up in the marketplace big-time. There is no other support in place. It's a transition without the alternative being present. They keep their fingers and their toes crossed, but it's not going to work.

Mr Spina: I would argue with my honourable colleagues here that, first of all, it's not a shell game, and second, Mr Phillips makes it sound as if the peak of the baby boom will hit the health care system within the next two years. I'm on the leading edge of that baby boom; I turned 50 years old. We're just now beginning to address it.

The reality is that this is strictly a benchmark of $17.4 billion. It's the bottom level, the absolute minimum we would maintain. That's what we mean when we say that we preserve that amount of money. The reality is that there has been $300 million more already put into the system and I would suggest to you, once we are in a position to increase spending where it is needed in an efficient manner, that it take place.

The reason the last item of that phrase, that "money saved in hospital restructuring should be invested in priority health services," is that both your governments put spending in hospitals on a patronage basis. Why does Windsor, with a population of 200,000 and a catchment area of 275,000, have four or five hospitals? Why does Sudbury have four hospitals with a population of less than 200,000 people?

Why does Brampton, with a population of 270,000 people and a catchment area of 325,000 people, still only have one underfunded hospital? Why does the entire region of Peel, 800,000 people, have three hospitals? Why do we have to rely on travel to the overfunded 44 hospitals of Metro when I should be able to, as a cardiac patient, access those services in my home riding, in my home community?

Because hospital funding has been passed out, has been doled out, by your governments on a patronage basis as opposed to a real-need, demographic-need, basis. That's how health care funding should take place and that is what this government is in the process of doing.

Mr Phillips: I think if you'd check back, you'd find that all those decisions were made by a Conservative government. I know that you're on a bit of a rant about it, and you must see these imaginary devils around, but you're probably chasing the wrong thing if that's what occupies your time and effort. You should probably look back at why those decisions were made and I suspect they were made by Bill Davis who thought at the time --

Mr Spina: Why didn't Brampton have a hospital?

The Chair: Mr Spina.

Mr Phillips: We'll have to talk to Bill Davis about that.

Mr Pouliot: It says health care and then we get a sortie on hospitals, the focus and the grab-a-club style. Don't cheapen the process, please. Everyone realizes that there's need to change. I know our party is not opposed to restructuring. Probably it would have entailed, had we been given time, the closing of some hospitals. But you've been at question period and people have asked that the money that is taken out of one community, that all efforts be pursued to put the money back into that community to provide the alternative.

If you say you're spending the same money, that's an invitation. You cannot project in 10 years, wishing well to everything, that the costs will be the same. You can cut, cut, cut and you find out that the costs are going up. MRI could cost more than scanners. The gadgetry waits for no one. We know about Bill C-91, about the pressures on the drugs. Every month you've got between 7,000 and 9,000 more people, in Ontario alone, going from 64 to 65; that's more than 100,000 people a year, and 95% of them latch on to the drug program. Those programs are open-ended. If you go inside the ministry, they're hard-pressed. You play ping pong between the program, the ODB, and then you go back to Trillium etc. You don't know what those costs will be but let's assume that those costs will be more in 10 years' time than they are now. If it's true for drugs, it's true for other programs as well because of the factors we've established.

I would like to see more clout. Spending the same money is just not good enough when one fifth or one sixth of the money on health goes to pay the "profession."

Mr Wettlaufer: This past weekend I was fortunate enough to watch a documentary on television. It was a very complete documentary. One of the comments made was that we know we are having a vast improvement in our health care system. This was by a professor at Wilfrid Laurier University, by the way. While he had some concerns about some of the changes that are taking place in health care, I think it is noteworthy that his most memorable comment was that we cannot continue to spend as we have in the past on a percentage basis. He said: "How much can we afford to spend on health care? We can keep on going the way we were and we would be bankrupt." I think it's important to keep in mind that health care is changing, is improving, as he said. As a result, it will not be necessary to keep funding it on the same percentage basis of the provincial budget as we have in the past.

We know that the Liberals had already stated, in their campaign in 1995, that $17 billion was what should be committed. I would like to know what the NDP thinks we should commit to. We committed to a minimum of $17.4 billion. We know it's going to be $17.7 billion or $17.8 billion in actual expenditures this year to fund health care. I wonder what the NDP thinks should be spent, considering that Mr Pouliot has already said in the hearings this morning that the government doesn't have a control on its expenditures.

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Mr Pouliot: The problem with the NDP was never through lack of commitment. The problem stemmed from the fact that we were a little short of currency, of cash to honour those commitments, but I don't think anyone can question the sincerity of the NDP in making a commitment; I mean commitment big time; serious commitment the NDP can make. It's just that when you project into the future there are some facts, that unless you spell out the rules, unless you change the game, you're going to have to need more money. You can't say, "We're only going to spend this," when you don't alter the fabrics, the rules. If you follow the same rules, that's what got us where it is.

I want to see your restructuring plans. When Ms Jones slips in the bathtub and dislocates her hip -- she's 74 years old, she's a little frail -- how many days is she going to be in the corridor, or is she going to be in a ward? Those are the realities of it. How many times will she fall off the stretcher? You will be reminded, not because it's easy, because it's the biggest program you have. It's also the biggest risk you have.

You can dislocate all kinds of programs and save a few million dollars. Unless you go to the very heart where the money is, you will not enact the big savings. That's where the money is. The money is in three programs, mainly: You've got health, education and general assistance.

I recall being at cabinet with Ruth Grier and after cabinet was over. There was a series of cuts. We were cutting beds and trying to be more efficient because we felt we were losing control -- more acute during a recession -- and I asked Ruth, "How will it reflect in your budget?" She said: "Oh, it's looking good, Gilles. We started last year and this year we'll only spend 2% more on health."

So the pressures -- you find out that almost no matter what you do, short of really hitting the system big time, you can delist so many drugs -- I mean, those lobbyists -- and then only do good things, the battle between the generics and the lobbying for the patent, but it keeps going up and up. They're just coming now with a new one for MS etc. A thousand bucks a month is nothing in some cases, and more people are being impacted and so on.

Anyway, I want to wish you well, but you cannot project in 10 years and say, "We're going to spend the same money." Nobody knows how much money we'll be spending unless you have a plan of attack to match the money.

Mr Phillips: Just a quick question maybe of the parliamentary assistant: How much money do we spend on health in Ontario? I know what the government spends, but how much money do we spend on health in Ontario currently?

Ms Bassett: They're saying now $17.8 billion, which is over our commitment to maintaining the $17.4 billion.

Mr Phillips: But Mr Wettlaufer said somebody said we'll be going bankrupt. I think we probably spend $28 billion or $29 billion on health in Ontario. I mean, that's the number. If we spend 10% of GDP, it's $33 billion.

Ms Bassett: Oh, you're talking total spent. I thought you meant the government specifically.

Mr Phillips: Anyway, we're on to a health policy issue. You've decided to take $1.5 billion of health and put it on the property tax. Is this $17.4 billion on top of the $1.5 billion you put on property tax or not? I just don't know what your intent is here in the recommendation. What is the intent of this recommendation?

Ms Bassett: The intent is that $17.4 billion will be spent on health care.

Mr Phillips: By the province.

Ms Bassett: That's right, minimum.

Mr Phillips: Okay. That's interesting. So that the $1.5 billion you transfer to property tax, you'll still spend another $1.5 billion.

Mr Pouliot: When you say the $17.4 billion, the commitment to spend the same, not withstanding contingencies where you throw in --

Ms Bassett: Not to spend less.

Mr Pouliot: Have you factored in the changes in programs, for instance, that used to be under the jurisdiction of another ministry? You lose some and then you take some on. If you were to spend, let's say, $100 on one program, you take on the program and now you only spend $80 on the program. Health is getting bigger, the flirtation with social services, for instance, where as you amalgamate, as you mesh, blend your services, you say: "My God, who dreamed that? That's 20 years ago. There's no need to do that. We'll stop the duplication. Give it to us because we do all the parallel services that go with it." So you latch on, you pick up more services, and yet the budget is being decreased there but it's not being fully increased to you. You have to blend all the complexities of these programs in, so when we say $17.4 million, we know there are three or four programs that did not exist under health two years ago and now they do.

Thank you very much. That's just the caution that I have. You're going to spend the same money. The thing is, health responds to the need.

Ms Bassett: We are committed to spending the $17.4 billion, minimum, on health, so how you factor it out we'll have to -- as you say, it's very complex.

Mr Pouliot: But health is not the same person I met two years ago when I answered the ad, when I heard the Common Sense Revolution. I read "health," and then another person comes to the rendezvous. What am I going to do, put the brakes on, step on the gas? It's not exactly the same program. In those things you have to have supporting documentation, otherwise you will be spending the same money. But there are programs that did not exist then under health that do now.

The Chair: Further debate? Are you ready for the question? Those in favour of the motion, recommendation 7? Those opposed? I declare the motion carried.

Ms Bassett moves recommendation 8: "The government should work to ensure small business's access to capital in order to help stimulate job creation."

Mr Pouliot: It was right here, in fact, really on a day like today; it was one of the must painful reactions that this member of the third party had to endure. Oh, I can recall so vividly. It was not a mistake, an error, somebody reading the wrong agenda. It was a member of the government, and what we had is the --

Mr Phillips: Bankers.

Mr Pouliot: The bankers, thank you. Actually, it was a sad state of affairs where I think it was one Mr Brown, but the record can attest to or deny that, who talked about accessibility to banks.

Mr Phillips: He's lost the battle in caucus.

Mr Pouliot: I had this vision, this horror show of beating a path, a path travelled only too often, between the banker -- and I could see Mr Brown with cap in hand asking that the banker grant him the pleasure of an audience and saying, "Will you please give me some money so I can meet the payroll?" I felt sorry for the bankers. I saw them under a state of siege, but not quite.

I said awful things and I regret them, like "a capitalist without capital," that the same Mr Brown had a cash flow problem and did not have the right collateral. But he wanted banking to go back some years and he almost told them that they were a cartel, a monopoly, and yet they said they like competition, especially when they're about to enter the insurance field. Don't change the charter, though.

I'll finish by saying that when I look at this, I've known for some time that they'll take your money and they'll invest it. Those are investors. The fact that they take the money from the savers, put it into a savings account, and then you lend it and then you have a rate of appreciation -- that's not the way it works any more. They've lost their purpose that way. They don't want to lend money to small businesses. They tighten up. They say they will, they'll pour in $150 million. Look at their sheets. Look at the way the money goes, the percentage, compared to where it used to be.

Hit them. Hit them big time in terms of mandate. They change the Bank Act every 10 years. They lobby for five years before and five years after. They do a lot of good work in terms of services, but the lack of competition at the marketplace -- when you look at the number of those senior institutions compared to the per capita in the United States, you don't have competition in the marketplace. You have a semblance, you have exactly the same thing, which is the reflection to shareholders. Michaud is right and people will be lining up at the microphones in terms of the way those boards of directors bypass those humble shareholders. I hope that some of the rules can be changed so the teachers' fund can take over one big bank. They have enough money.

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Mr Spina: I really appreciate the comments of the honourable colleague, because our intention is very much in line with what your comments are. As you heard from some of the presentations, part of the access to capital report that Mr Sampson and I submitted to the minister -- and you are welcome to have copies of that if you wish -- recommended the widening of competition so that we could change the rules that we have jurisdiction over within the province. We are recommending to the minister that he adopt some or all of those recommendations.

As you know, some of them are controlled by the federal government under the Bank Act that you mentioned. In that regard, that requires further negotiation on our part, but we feel that there were a number of recommendations here that fit right in with this. That's the purpose of this particular motion and that was really what our intention was. So I think we are on the same wavelength, Mr Pouliot, where we want to have a broader range of competitive resources for capital, not only for startup but also for growth, so that businesses can grow and hire employees.

Mr Phillips: You dealt with co-ops and credit unions and stuff, did you?

Mr Spina: Yes, and trust companies, credit unions, caisse populaires.

Mr Jim Brown: Mr Pouliot, I'd like to report that after that meeting I had a great deal of remorse for the way I treated the banks. It lasted for 10 seconds. But I think many of us here share the view that there needs to be competition in the financial lending or giving of capital to small and medium-sized enterprises.

Just for the record I'd like to point out that in the United States, which has 10 times the population, they have something like almost 20,000 competing banks, and if that were the case in Canada, we'd have 2,000. We only have five or six, so we definitely have to do something. The federal government seemingly takes its time in changing the Bank Act to increase competition, so we have to look in Ontario to increase competition.

The Chair: Is there further debate? Are you ready for the question, recommendation 8? All those in favour? It's unanimous.

Ms Bassett moves recommendation 9: "The government should work to promote youth employment."

Mr Pouliot: What is it? When all is said, if everything was factored in, I think it's between 15% and 20% of young people, yet I turn around and I read in the newspaper that the federal government has committed to, if not easing, encouraging people with certain expertise, because in the Ottawa region alone 2,000 jobs are going begging; perhaps 20,000 across Canada where there are no takers. People don't have the tools, the qualifications.

It's mostly centred in the alliance of -- I'm trying to translate here -- the high tech, the robotics and computer science. They'll take anyone; 20,000 jobs open and yet people do not have the -- but this is a problem. When you say to young people and encourage galore: "Go to school. Do this, do that."

"Well, I won't have a job."

"At least if you have an education, you have a better chance. Think. If you don't have an education, then you really won't have a job."

I'm happy to see this, and I think you will get kudos for that. People will applaud that when they see that they've got to encourage. There's nothing wrong with doing some of the jobs, apprenticeship and so on but, for their effort, there has to be some reward or some good chance of reward, and it's a tragedy for all of us in a country like ours when you see close to 20% of our young people without a permanent job. I support recommendation 9.

Mr Wettlaufer: I'd like to follow up on my colleague Mr Pouliot's comments. One of the concerns I have had for a number of years is the education system perhaps not giving the youth what it needs. As you are probably aware, my riding is situated in what is called Canada's technology triangle, and I just heard last week that some of our industries are having to go outside of the country, to Europe and to the United States, to obtain employees because we don't have enough graduates in Canada to meet the demand.

I know from personal experience that there is a great deal of competition within the universities' faculties. If they get good students applying to a given university, there is competition within those faculties to have the students go to one faculty or another for the major, instead of advising that student to go into the areas where there will be demand for jobs in the future.

Now, we heard during the course of the hearings the last few weeks that many of the universities and university professors feel that they also need to teach the student an awareness of life, of the arts and what have you. I don't disagree with that, but I believe that we have to give them adequate training in the areas in which there is a demand for jobs. If we have a demand for 20,000 in the high-tech industry, why can't we meet it, for instance, within our own country? I think perhaps in promoting youth employment it may be necessary to sit down with the various universities and try to address this problem.

The Chair: Further debate? Are you ready for the question? All those in favour of recommendation 9? Unanimous.

Ms Bassett moves recommendation 10: "The government should promote the startup and growth of small and medium-sized enterprises in order to encourage job creation."

Debate? Are you ready for the question? Not quite, apparently.

Mr Pouliot: I'm buying time for our recommendation to come here. You're already under some other proposals: "Should promote the startup and growth of small and medium-sized enterprises in order to encourage job creation." I have heard that for some time, but not wishing to prejudice the style, sometimes I tend to go over it too quickly and not give it the attention or the thought that it deserves because it begins to resemble family values, peace, harmony, love.

I've heard it before: "Should promote the startup and growth of small and medium-sized enterprises in order to encourage job creation." Maybe the conglomerate of wealth across, people who dwell with this on a daily basis, can inform someone like myself, what is the rate or percentage of insolvency, bankruptcy? If all of us were to start a small business -- we're not there yet, but let's say a small-size enterprise; I take it that's small business -- what percentage of us would not be around when we meet again in two years or three years, for all kinds of reasons? What's the rate of bankruptcy?

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Ms Bassett: I just want to remind Mr Pouliot -- you said you didn't want to be negative -- we were trying to be positive in this in that so many presentations made to us were pointing out the need to give money to small businesses and medium-sized businesses to start up, because a lot of people think, "Hey, you're not going to make it; you're too small." Banks feel they're not in the business of taking on a lot of risks, as our friend Mr Brown has pointed out, so that was the intention behind this and we felt it merited a point on its own.

A lot of the figures recently show that new employment and youth employment are coming from very small businesses that are not tremendously sophisticated, that have every chance and are being successful. They do need startup money, so that's the intention behind it.

Mr Pouliot: Madam, I have a lot of respect for you. I therefore find it quite difficult to be negative, but those were your words, not mine. More importantly, when we go back to encourage -- and I'll express myself more clearly. Every government became sensitive, through representation, and tried to put their best foot forward. Not at every opportunity did we know what we were getting into. We all agreed that's where we got our first jobs, most of us, be it a summer job or a job right after high school, is with small enterprise. They're really the backbone of job creation.

I'm just wondering, when we do that is when someone comes calling. I recall the flow-through system; I recall the R&D. Where we're still looking for the money, as citizens. About the best, you just said, may be eight out of 10, seven out of 10. That's not being negative when you're investing the people's money. I'm just wondering. As a taxpayer I will want to see, is this the best way to spend it?

We can go into one resolution under number one, a student loan. Dr Grant has passed away; Dr Loan is barely alive, because you never get the money back, or you only get a portion. The rate of default is 20% among those people. They just don't have the dineros, the ability to pay back. When we say we do this, we're getting to the small and medium sizes. I don't wish to be negative, but I don't want to get taken.

Ms Bassett: You won't be taken.

Mr Jim Brown: Mr Pouliot, you must understand that it's not just small enterprises that go down the toilet. Most notably, in the last few weeks there are a couple of very large ones, so I think it's the state of the economy, why that happens.

I think too that when we talk about this recommendation, we're talking about money, we're talking about rules and regulations, we're talking about perhaps incentives. When you mentioned the R&D, a long time ago when those R&Ds were around, they generally went to big guys and not the little guys. We're talking about mom-and-pop operations, we're talking about family operations, and these are the people who generate all kinds of new jobs, especially for youth. New enterprises generally tend to hire younger people who don't have all the experience. That's how they're going to get experience and that's how we're going to put people to work.

If you're arguing that we shouldn't adopt this recommendation, which I seem to be getting out of you, that you're not supporting this recommendation to support small and medium-sized enterprises, the mom-and-pops, the small family businesses -- I'm astonished that you wouldn't support this recommendation.

Mr Pouliot: Then you're astonished. By the way, let Timothy rest in peace, not turn in his grave. They should have exercised the same -- the banks, that is -- due diligence as they do elsewhere. They wouldn't be in the mess they're in. But they said they were over-retailed anyway and didn't pay close enough attention to the business. I'm just saying value for money here, that it's not sometimes a matter of money; it's chance at the marketplace.

It has often been said in the United States that it's harder to get into business but it's easier to stay in business. It's not difficult to get in business here, but it's harder to stay in. If you have the ability to graduate readily to the medium size, then you have some economy of scale and some niche. But unless you're exactly that, unless you're well-niched and specialized, you just don't go and start a business.

I'm not used to grade B chicken, so how am I going to open a restaurant and compete with everybody else around who has been a restaurateur -- a tough call -- for a lot? Every time there's a budget, I see that, and I see some little bit. The thing is the marketplace is not going that badly, but there's still a lot that needs to happen. To take the job -- you're not suggesting that -- of the bank, that since it's difficult to do this they're going to come to the government, in fact the government should be even more careful, cautious, about the way it parts with public money than a supposed lending institution.

Mr Jim Brown: I think in this recommendation there's more than just money.

Ms Bassett: I was just going to say there's nothing in this recommendation necessarily about giving taxpayers' money. There are lots of ways of encouraging that the government can play a pivotal role. While we appreciate your warnings -- I think those are well-founded -- we want to make sure that it's not going to be handouts, necessarily.

Mr Phillips: I wanted clarification of something said earlier, that part of your plan here is financial. Is that right, financial assistance?

Ms Bassett: Not necessarily.

Mr Phillips: Hansard I think would show that -- I thought both of you said there would be other assistance, but part of it would be financial assistance.

Ms Bassett: No, what I pointed out --

Mr Phillips: So it won't be financial assistance?

Ms Bassett: No. You're twisting words. We said the problem with small businesses and medium-sized business is getting access to money. So there are different ways of ensuring that people get that access to money. It doesn't mean necessarily you're going to give money. You could.

Mr Jim Brown: Other people's money, not taxpayers'.

Mr Phillips: I'll review Hansard, then. I just thought when you were explaining --

Mr Jim Brown: Actually, if you review, Mr Pouliot, he --

Mr Phillips: No, I was listening to Ms Bassett, who was explaining what was intended here, and I thought she said --

Ms Bassett: Access to money.

Mr Phillips: I'll review Hansard. Thank you.

The Chair: Is there further debate? Are you ready for the question? Recommendation 10, all those in favour? It's unanimous. I declare the recommendation carried.

That completes the government list. Since we have one hour for lunch, is this a good time to take that break? We'll return at 1 o'clock. I would ask the committee to be prompt. Mr Pouliot, would you have any estimate as to when you might expect your recommendations?

Mr Pouliot: As we speak, we have a full-time, one third of a person working on it, so hopefully it will be early this afternoon.

The Chair: Thank you very much. The committee stands in recess until 1 o'clock.

The committee recessed from 1149 to 1303.

The Chair: I'll call the meeting back to order.

Ms Bassett: Mr Chair, could I make a comment when you get to taking comments?

The Chair: We were going to move to the Liberal recommendations. Are there any comments before we do that?

Ms Bassett: Yes. I don't know whether you want to deal with it now, but I just want to follow up on something that Alison said about we have to be sure that the expert witnesses be identified by name and not by company, and it has to be voted on. Do you want to do it now or later?

Ms Drummond: This issue hasn't come up before and I'm not certain --

The Chair: I thought we had dealt with that. Had we not dealt with that? I believe that has been dealt with by the committee and they will be identified by individual --

Ms Bassett: I thought we had dealt with it.

Mr Pouliot: On a point of clarification: expert witnesses meaning everyone who extended the courtesy, not only people who abide by the mantra and who happen to be in the same philosophical spin as the government. Expert witnesses, in my interpretation, is everybody who paid us the compliment of their visit. They're all expert witnesses.

Ms Bassett: No.

Mr Pouliot: Are you talking about the first list of --

Ms Bassett: The invited experts.

Mr Pouliot: Yes, the ones with titles.

The Chair: They get an hour's time, yes; those who had the extra time.

Ms Drummond: Is this a change that people want in the format of the report, starting on page 4, that instead of "Scotia Capital Markets," Michael Manford would be identified as "Michael Manford." I'm not certain of the direction I'm getting here.

Ms Bassett: Yes, instead of on page 4, "Scotia Capital Markets," we would have to say "Michael Manford," and it would be him you would put, and then when you identify him, "Michael Manford from Scotia Capital Markets," that's fine.

The Chair: Is it all right the way it is? I think that's been done, that they have identified both the company and the individual.

Ms Bassett: We're finding we're running into some trouble with "Scotia Capital Markets" at the top. We should have "Michael Manford."

The Chair: Comments?

Mr Pouliot: We're not into name-dropping. If it's going to satisfy the majesties from the government side, we'll acquiesce with that. We're flexible.

The Chair: So we're going to identify the individual by name and then later in the body by company. Is that the recommendation?

Ms Bassett: Right under, yes, so it's just the headings we're talking about.

The Chair: Just the expert witnesses. Are we all in agreement to that? Any opposed to that?

Liberal recommendations: Mr Phillips, I understand you would move this list. We could start with number 1: "The government must agree in its budget" --

Mr Phillips: Let me also ask if we could move another recommendation, and it really comes from last year's recommendations, just at the risk that if I can't get agreement on my other ones, at least get one in there.

You remember that last year the summary of recommendations from the report, which I think the government members agree to, said: "Job creation is an important criterion against which the budget is measured. The government should honour its commitment to create 725,000 new jobs."

I wouldn't mind that being almost recommendation 1. It's not written there, but I had thought when the government brought forward its recommendations it would be part of the recommendations and it wasn't. Is everyone clear on what I'm saying here?

Ms Bassett: You want to add a recommendation.

Mr Phillips: Recommendation 1.

The Chair: Would you read that again, Mr Phillips?

Mr Phillips: It's actually from last year's recommendations that the government proposed.

The Chair: Which number?

Mr Phillips: It was number 6 last year: "Job creation is an important criterion against which the budget is measured. The government should honour its commitment to create 725,000 new jobs."

It's just that I'm fearful I might not get agreement on all my other recommendations. I'd at least like one of them in there for sure. Is everyone clear? I didn't have it typed out.

The Chair: Debate? Recommendation 6 from last year has been moved. Is there discussion? Are you clear on the motion? Are you ready for the question?

Mr Hudak: I'll enter the debate on this issue before the question's posed. I think Mr Phillips and most members of the committee are agreed that job creation is a priority for this government. Most of the deputations before this committee spoke about job creation. I'd say a good percentage of the recommendations talked about -- whether it's their sector across the economy as a whole, whether individual companies or broad-based -- job creation was their goal and they wanted to see government economic policy, whether it's through the budget or through regulation, related to job creation, and not just in the short term, but long-term economic job creation.

Among the recommendations moved and passed this morning, every one, either directly or indirectly, relates to that same goal. When I look over the Liberal recommendations to the SCFEA hearings, the top four relate to job creation.

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I'm not sure if the committee can come to some agreement, but I don't disagree with the gist of Mr Phillips's recommendation in that the recommendations of this committee to the finance minister for the upcoming budget or any other moves by ministers in the near future should relate to job creation, towards fulfilling that target that was enunciated in the Common Sense Revolution and the election of June 8, 1995, to help the economy create 725,000 jobs throughout its mandate.

Perhaps there's a way of coming to some sort of agreement that policies recommended to the minister should relate to job creation with an emphasis, I think, on small and medium-sized enterprises, as we had in number 10. I don't think we're that far apart in terms of agreeing on that kind of recommendation.

Ms Bassett: Can you read the recommendation again, just before Mr Pouliot --

The Chair: "Job creation is an important criterion against which the budget is measured. The government should honour its commitment to create 725,000 new jobs between July 1, 1995, and December 31, 2000."

Mr Phillips: Actually, I didn't put "July 1 to December 31" when I read it, only because the Common Sense Revolution talked about a five-year plan and that's I think five and a half years, so I just ended it at "725,000 new jobs."

Mr Pouliot: Speaking and addressing it in support of the resolution, as I mesh what the government's agenda and resolutions this morning said, there was a lot of focus on jobs, a realization that jobs were perhaps the cure to many, if not all, economic ills.

It's the very core of the program and, yes, the government should honour. The member opposite might say, "We're not very far apart in wishing." The key here is that we are very far apart between the commitment of 725,000 jobs in a period of five years -- and I won't haggle over July or August 1. They could have said any number. The thing is, most of them have a better chance of becoming the emperor of China than they have of creating -- this is an administration that says: "We create a climate. The marketplace will give us the results of more employment." Governments don't create jobs. That's what they say. Nor should they be held responsible if there's a shift or an economic downturn where they have little control, if it's global. If it hits the United States, there's no question, everyone will agree, that to some degree we will suffer.

This present government has committed to creating 725,000 jobs. I have yet, and I've searched long and hard, to find in what sector, under what conditions, given what -- it's not that. They could have said 800,000 or 600,000. The thing is it is highly unlikely, and we wish you well, unless there are some developments that are unforeseen. If you take out all your figures, the presenters, even those who were the most optimistic and you use the multipliers -- and maybe that's not the question. As long as you're going forward and you're achieving lots, I must support because, I'll be candid, I'm a member of the third party, critique, opposition, there to challenge and to make them do the best. But if I take all the prognostics, all the forecasts, and you use the multiplier in the true tradition, you do not arrive at 700,000 because it does not generate that many jobs in that short a term. The mathematics simply are not there.

While there's nothing wrong with that, if you help create a climate that will create half or three quarters, this is good, but I can't resist the temptation, resist no longer, the promise is too seductive to let -- the promise won't be there tomorrow, they'll have different spin doctors, a different visage. But let me assure you of something, I hope they do, but I would be very, very surprised, however happily, if you came up with 500,000, with two thirds of those jobs. You should go out and celebrate; it will be cause for a celebration. Because even if the economy goes up by 3.5% or 4% it does not generate, in that short a time, 725,000 jobs.

I support Mr Phillips' resolution that they should honour the commitment. They said it. They're on the hook. They're the people who tried to seduce, sold opium and then cheap drugs to the electorate. Let them live up to their commitment. I support the resolution. I think they will too.

Mr Spina: I'd be prepared to support Mr Phillips' resolution with perhaps one tradeoff, and that is that I think items 1, 2 and 3 in his jobs list would be deleted, understanding that this first principle covers all of them.

Ms Bassett: I would support that.

The Chair: Mr Phillips, do you have a comment on that?

Mr Phillips: I don't see the logic. Each of them are in and of themselves separate. You can support one, and if you agree with the first one you just simply -- you've got the numbers -- vote against the other ones.

Mr Spina: I would think that going along with the new one you've just introduced -- these items 1 to 3 are essentially more detailed items that I think would be very much in line with striving towards achieving that 725,000, and the flexibility then is with various policies to achieve that. As Mr Pouliot says --

Mr Phillips: Well, you voted for it last year. If you want to vote against it this year, that's your own prerogative. You can do what you want to do.

Mr Spina: I'm just asking if we would wipe out 1 to 3 and assume they are sort of covered under this one. We're willing to vote for it obviously. We voted for it before.

The Chair: Further debate? Are you ready for the question?

The motion reads: "Job creation is an important criterion against which the budget is measured. The government should honour its commitment to create 725,000 new jobs."

All those in favour? Opposed?

Mr Spina: On a point of order, Mr Chair: I'm trying to determine whether -- I guess I perhaps should have put it in the form of an amendment, should I have not, my suggestion about incorporating items 1 to 3?

The Chair: The recommendations on the Liberal list, 1 through 3, are not before us. We are dealing with their added motion.

Mr Spina: With this first motion, yes. What I had proposed was that items 1 to 3 would be deleted in favour of the overall encompassing motion Mr Phillips proposed.

The Chair: I heard you make that proposal and I didn't hear Mr Phillips accept it.

Mr Phillips: All I said was that we're voting on something you agreed to last year, and then the government, if you don't like the other ones, the way the thing is set up, you vote against them.

The Chair: He gave you the option of defeating them individually, I believe.

Mr Spina: Thank you. I just wanted to clarify that. I guess we'd better call the vote then, call your question.

The Chair: I think we already have done that and I have but to declare on the voting.

Mr Pouliot: On a point of clarification, Mr Chair: Perhaps someone would read what we just voted in favour of. Do you want to read the resolution for me again?

The Chair: The resolution that has been all but passed in front of this committee reads as follows: "Job creation is an important criterion against which the budget is measured. The government should honour its commitment to create 725,000 new jobs."

Mr Pouliot: Thank you. So this is final, the vote has been taken on that and passed?

The Chair: I have not declared it as passed as yet. Is there any objection to me making that declaration?

Ms Bassett: None.

The Chair: I declare the motion passed.

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Mr Phillips: The next proposal is number 1 under "Jobs." What we're trying to say here is that governments, of all political stripes -- once they get halfway through their mandate it's very difficult to acknowledge there's a problem with something like this. You get into a period where unless you say it's a problem you won't, in my opinion, deal with it. I'm trying to get an acknowledgement that so far, for whatever reasons, the job creation hasn't been there at the rate that all of us had hoped. If we simply assume it's going to go away without any special effort we're making a mistake.

Mr Pouliot: I concur entirely. What you will see here in the third and the fourth year is an ensemble of lame ducks and duckettes. As they get closer to the election the principle and the promises will be gone: "Never mind what I said before. More important, how do the people like it?" Their knees will get weak, they will begin to vacillate, they will begin to stoop. That's the lot of a government that has gone too far out on a limb.

To give you an example, very briefly as I await our presentation, you shall notice -- and you're already seeing it now: "About welfare, give us another chance," as they massage Mr Mundell through the Association of Municipalities of Ontario. Now we don't know where we live. We don't know who's going to take care of long-term care any more because they've sweetened the pot. In seven short days, a shortfall of $900 million became $1.8 billion. "Oops. Sorry for the mistake." A $900-million mistake in simple accounting. They don't know. We ask the question, what is the cost of this? It's a mess out there. They're backtracking already and the backtracking will cost them well over $1 billion.

They're making commitments left and right. They're getting rid of valiant civil servants, and it's difficult to get figures on how many consultants have been hired. You don't quite get that because it's in the private domain.

I believed everything. Maybe it's my nature. I said: "Well, it's the government. They're duly elected. They're going to do this and all that." I'm not one to be negative nor suspicious in the least. But even with that good disposition, I am at the point where I'm beginning to have some doubts about those people. I think some of them are not telling the truth; I'll go as far as that, if I may be so bold. Excuse the expression, but heck, I think I'm about to be deceived and disappointed one more time.

Mr Hudak: As a member of the committee I disagree, especially with the last part of the motion, because I think we heard some very convincing and comprehensive presentations by various deputations before this committee that said the plans the government has are the best ways of going about the job creation problem. I think we heard very strongly -- at least most convincingly to me -- that we should steer the course in terms of the plans that this government has set out. Perhaps I could move an amendment to this motion to change the end and say the current plans are the best way to solve the job creation puzzle.

The Chair: And the amendment is whereabouts?

Mr Hudak: Chair, on sober second thought, just because of the dual nature of the statement, I ought to pull back that amendment for the time being to see if anybody else has something planned.

The Chair: Further debate? Are you ready for the question? All those in favour of the motion, raise your hands, please. All those opposed? I declare the motion lost.

Number 2?

Mr Phillips: The second one is obvious, I think.

The Chair: "Make solving Ontario's employment problems Ontario's number one goal in the budget. We in the Liberal caucus continue to believe that our most important priority is to make certain that all Ontarians have an opportunity for employment."

Debate? Are you ready for the question? All those in favour of the motion? Opposed? I declare the motion lost.

Mr Phillips: The third one is -- do I need to read these, Mr Chair?

The Chair: I think they should be read into the record, yes, or I'll read them in, whichever you prefer.

Mr Phillips: I can do it.

"Challenge the key players to propose solutions to the problem and include these proposals in the budget. We all understand that this is an extremely difficult problem, but we must solve it. The government can play a key role in getting the business community, other levels of government, the public sector and unions working together to look at creative and innovative solutions."

There are ideas out there, some in the private sector. There is an innovative program around internships going on right now. There are organizations that are looking at creative things. The union movement has some creative ideas.

I predict to you that within six months the government will be forced to do this anyway. They'll have a Mike Harris job summit, and he'll be sitting on some throne somewhere with a big sign behind him. They'll do it, because the problem is not going away. I just think there's an opportunity for the committee to look like we've encouraged the government to do what I think they're going to do anyway.

As I say, there are probably dozens of good ideas sitting out there right now and, to use the jargon, by pulling the key stakeholders together, we could find them very quickly pulled together and the government can pick and choose the ones it feels are most appropriate and move on them.

The Chair: Further debate? Are you ready for the question? All those in favour of the motion? All those opposed? I declare the motion lost.

Mr Phillips: The fourth: "The government should put the same energy and priority in the budget on solving the unemployment problem as they have on attempting to solve the fiscal deficit problem." It's probably self-evident.

Mr Hudak: Really quickly, first, I just don't follow the logic of the argument in that I believe deficit reduction is intricately linked to job creation. Long-term job creation depends on a comprehensive plan to balance the budget by the year 2000-01. When you dedicate a lot of energy to reducing the deficit and balancing the budget at the same time, you are directly putting the same amount of energy and priority to job creation. I see them as linked, so I just have some questions on the logic of the argument.

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The Chair: Ready for the question? All those in favour of the motion? All those opposed? I declare the motion lost.

Mr Phillips: "Downloading": This is a package too. I think the government's going to find it's made a huge mistake in this area. Our caucus travelled around the province. We were in 10 different communities, 11 different hearings. We heard from well over 200 individuals, most representing some significant organizations. Without exception, literally without exception, they all feel the government has made a huge mistake in moving long-term care, child care, health, social housing and social assistance on to the property tax. I know there are some groups trying to patch it together right now, but in our opinion, there's only one solution: The decision has to be revisited and completely rethought. These four recommendations do that.

The first is to urge in the budget that the government not proceed with its plans to do this. By the way, that whole issue -- as we saw this morning, $1.5 billion of health care spending has now gone on property tax, and I don't think the government is still planning to spend $17.5 billion on health in addition to the $1.5 billion that's been moved over to property tax. I'm not sure where that money is going to come from.

The first recommendation is: "The government must in the budget reverse its decision to download social assistance, long-term care, social housing, child care and health on to property tax. The government's decision has been a major mistake and everyone who has looked at the decision believes it would do serious harm to the province."

The Vice-Chair (Mr Tim Hudak): Debate? There being no debate, I'll move the question. All those in favour of Mr Phillips's motion? All those opposed? I declare the motion lost.

Mr Phillips: The second one: "The government must examine the alternatives, including the government's own Who Does What panel's recommendation on how to deal with the download. The government should return to the recommendation of the Who Does What panel since it was that group who have developed the most comprehensive plan for restructuring responsibilities."

By way of background, you're probably familiar with the fact that the Who Does What panel unanimously recommended quite a different approach. They had it all spelled out in considerable detail, arraying the disentanglement, and it was revenue-neutral. It was, I thought, a well-thought-out proposal that, for whatever reason, the cabinet chose to disregard and to take a very different approach. If you return to that as the basis for the solution rather than -- what I'm fearful of right now is that they're going to try to put a bandage on a fundamentally flawed recommendation.

Mr Spina: Part of the problem with engaging in the Who Does What recommendations here is that by the time we get to a budget, these legislative issues will have been resolved with amendments. As a matter of fact, when Mr Phillips talks about the Who Does What panel recommendations, as a result of some of the discussions, the public hearings that have been taking place, I know as we speak that there are amendments being proposed via the committee process that will be brought to the House on April 1, more than a month, probably, before the budget being released.

So this is an academic discussion. With due respect to Mr Phillips, I don't think we have to get into this right now. Obviously, I would oppose it.

Mr Phillips: I'm curious about where the public hearings are going on, because I wouldn't mind going to them. Where are these being held?

Mr Spina: They went on.

Mr Phillips: Where?

Mr Spina: On the Who Does What? You had two weeks of hearings.

Mr Phillips: On the downloading of the social assistance and child care and --

Mr Spina: A series of Who Does What bills are right now in hearings, this week and next week, and some of them will be coming forward to the Legislature. Right now, social justice, for example, is talking about the policing issue. That's a Who Does What issue.

Mr Phillips: I don't think I mentioned police in here.

Mr Spina: No, but I'm just saying --

Mr Phillips: I feel really angry about the fact that there isn't a public debate on downloading social services, child care, long-term care. The only committee that tried to deal with it --

Mr Spina: The social justice committee is in Ottawa right now, as we speak.

Mr Phillips: On what?

Mr Spina: On these Who Does What issues.

Mr Phillips: I'm sorry, they're not dealing with what I just told you: social assistance, child care, long-term care, social housing. There's zero public debate. It's a scam. It's all going on behind closed doors. This is the only committee that has had any opportunity even to comment on it. I guess we have a fundamental disagreement.

The Vice-Chair: Any further debate on that motion before the committee? Then I'll call the question. Mr Phillips moves motion 2 on the Liberal recommendations concerning downloading. All those in favour of the motion? All those opposed to the motion? I declare the motion lost.

Mr Phillips: The third one is: "The government must provide a comprehensive analysis in the budget of the total impact of any proposed changes. A constant theme across the province is confusion about what all this mega-change means to individuals in Ontario. The government must provide an analysis of the combined impact of all their changes so we can all understand what Ontario will look like when the mega-changes are fully implemented."

I go back to the fact that without exception, when we were talking to the mayors and the reeves and the regional chairs and councillors and community groups, they unanimously told us, "The government has not given us any indication of what all this is going to cost us." You may recall that we tried to get that from the government through a resolution in the House, which was refused. What better group than this group to be saying, let's have the information on what it's going to mean?

We had a debate this morning around health care. The government told us that the province is going to maintain $17.4 billion of spending. There's going to be an extra $1.5 billion of health care spending on property tax, so that was an increase this morning, I gather, of $1.5 billion on health care. I'd like to see the government spell that out in some detail. I found that useful this morning; that's the first time I'd actually had it clarified for me that it was going to be $17.4 billion in the provincial budget and all the municipal property tax spending was incremental to that, not replacing it. I just think we need that full impact analysis.

Mr Pouliot: No one could have said it better than Mr Phillips. Two weekends ago I attended the annual meeting of the Thunder Bay municipal league, which is made up of small municipalities around the city of Thunder Bay. The keynote address or presentation was that of representatives from the Ministry of Municipal Affairs and the Ministry of Northern Development and Mines. I'd say 17 to 20 small towns, municipalities, as part of the league were at the meeting and were very intent on listening.

Overhead charts were produced, and those mayors, reeves and council members asked: "What is the cost of ambulance service in my municipality? Are we talking about operating cost or are we talking about capital cost, if we need a new ambulance? What will be the cost of policing? What will be the cost of drug programs if you happen to be on general assistance?" They're to pick up 50%. "What about the cost of sewer and water, both operating and capital? What about transfers of this portion of road with the exchange, with the trade-off being a capital grant?"

It went on and on, and I would say 15 or 20 of the most legitimate questions -- because it became a matter of money, who pays for what. No one could come up with a cost.

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When you don't know and when you're a few short months before the next municipal election, you have two things to reconcile. Among other things, you have to say, how much will it cost? As I prepare my budget, the fiscal year is different than the province. Then, what do I know about these new subject matters that I'm about to embark on and I'll have jurisdiction over? So if you have five or six major items that you're familiar with, you have some continuity on council and the clerk-administrator is helping a great deal etc, then you find out that you're about to take over, in a few months, some jurisdiction which you know little about. Well, the positive doesn't win in this kind of environment. If you don't know, you tend to say no. Anxiety leads, if not to fear, to certainly more questions, and sometimes you stop being fair. You stop listening as well, and rumours take on extraordinary proportion.

In fact, in some cases, people have said: "Haven't you heard? We're to be amalgamated but we're to do it voluntarily, and after that, if we are not, then we will be forced to amalgamate." It was a world of confusion and there were many, many big-cost items. The township of Schreiber saw its increase more than 100% in taxes because they're so small, they have no industrial base. They have a very small commercial base and the residential base is a lot. But you see, in that town of only 1,900 people, there are 40 citizens who are over 80 years of age.

Yet the irony of it is that you have, nine miles apart, 14 kilometres away, the striving small community of Terrace Bay; yes, the one that wishes to join Manitoba. What they said is: "Look, please hear our voice. Tell us what it will be like." They're not about to leapfrog Manitoba and Saskatchewan to go to Alberta. I don't say this because of the government as much as the lack of sales tax. So they would even contemplate going to Manitoba: "exploring the possibility" said the resolution.

People feel that there is an awful lot on the plate. They admire the courage of people who say, "Well, let's change." But a lot of it is webbed and it's meshed, and it's important that we know the approximate cost factor. We don't even know which funds are established, what is the accessibility to the fund, and you're pressed. You know very well that come November -- our fiscal year is in April. Theirs starts in January. They have to go to an interim tax levy, which is half the previous year, but it becomes irrelevant in the final analysis. When they come to the last levy, it reflects the extraordinary. The ordinary is what you had known from the previous year, but now you've got all the residual of what you don't know and the new costs and it's all going to happen at once.

I know they're impossible questions. We're all asking the same questions, but it's a tough call for small municipalities. I don't know if you should get on board. You're going to get on board anyway. You'll do as you're told, and it's not all bad. By the same token, we don't know in Manitouwadge the cost of this, not because people don't want to tell us but because they cannot add it up fast enough.

Ms Bassett: I'd just like to point out that although we are moving into a new area, we have as a government released figures about the possible cost in the exchange of services. Not everybody would agree with the figures. That's fine. But we have released figures. We do have contingency funds to help municipalities cover unexpected costs. We are in the process of fine-tuning. As always happens in any new venture, you can't dot every i. You have a grand plan and you move towards it. I can assure the municipalities that they will not be left stranded.

Mr Pouliot: This cannot remain unchallenged. When people perspire sincerity -- well, if people aren't sure, at least they should say it with confidence. Some people do it with a great deal of poise and with some confidence. But from the recent track record, and it's not so much a criticism as an observation, you know what you're doing on the grand lines, but when it comes to the finite -- and I know you can't dot every i -- can you blame us for saying: "Ahem, excuse me. Look at the discrepancy. Now we don't know about this and that"? Maybe "mess" -- I'll withdraw that. Maybe "mess" is exaggerated.

But can you blame me for sensing that there's one heck of a lot of questions there that are yet to be answered? You're going to get into May, you're going to get into June, you're going to work very hard to have other people in the civil service working in July and August, and then you're going to come to an election call, then you're going to come to the election, then implementation on January 1 on a broad, broad front. You are fighting many, many battles. There are no two situations alike. You don't have an analogy to draw from that has validity. This is not a homogeneous situation. Then you risk being consumed by the big seige, that of the city of Toronto and the surroundings. There are 800 others that are going to be victimized. They're asking questions, yet to get the answers.

What I'm saying is, you can sit with a great deal of confidence, just the right amount of mannerism. The thing is, I'm sceptical because you've not only changed your mind as a government, but the discrepancy in numbers was not a bagatelle. It was consequential, it was very large, which led me to believe that this thing is haphazard at best in some sectors. The intention is immaculate; no question there. But in terms of the transition and the delivery, because of the complexity of the situation, the timetable that you're under, you're placing yourself under a state of seige. People voted on amalgamation -- no. People voted on not knowing, on the anxiety out there. It mostly turns to the negative in our endeavour. They voted on the downloading. Downloading became --

Interjection.

Mr Pouliot: No, the transfer of powers became sort of a downloading. It's like somebody who doesn't want to move to the suburbs talking about urban sprawl and prejudicing the case by expression. So beware. I don't deserve that kind of facile, gratuitous comment when I too am asking questions on behalf of Manitouwadge and they're not given. "Trust me. Be happy." I will have the answer, but it's not the best sort of concoction. I think you picked that one off the shelf and you put it into a saucepan. This is not the most palatable of things. We're about to miss the boat.

We want some answers. We want direct answers: How much is it going to cost? How is it going to affect Ms Jones in Schreiber? Are you going to pick the last dime, the last nickel, the last penny out of her wallet, out of her purse? We want to know what her future is.

The Chair: Further debate? Are you ready for the question? All those in favour of the motion? Opposed? I declare the motion lost.

Mr Phillips: "The government must slow down and invite Ontarians to participate in what the government plans to do to them. The government is now moving well beyond anything promised in the Common Sense Revolution and the government has no authority to ram its plan down Ontario's throat. If the government wants to fundamentally change Ontario, in a way never articulated in the Common Sense Revolution, there is a necessity to provide Ontario with an opportunity to participate in that decision."

Just by way of background, firstly, the Who Does What panel fundamentally disagrees with what the government's doing here. As I said earlier, our caucus talked to 200 groups and individuals around the province who say it's a big mistake. If you had run on a campaign, if you had told senior citizens that their long-term care was going to be contingent on property tax, I can assure you that there are a lot of seniors in my constituency who would have been very upset about that, or if you had told them that social housing -- and remember, a majority of social housing is seniors' housing. When you look at social housing, that's who you are talking about, putting their housing on to property tax.

The government made that decision. I don't know whether your caucus was consulted on it or not, but suddenly it came out of nowhere, much to the disappointment of organizations like the board of trade, like AMO, like the Who Does What panel. Now we find that all of the discussion is going on behind closed doors. There's absolutely no chance for seniors to participate in the discussion: Is this a good idea or a bad idea?

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It's all being done -- I think there's a meeting this Thursday -- behind closed doors, just negotiating this stuff without any public input. That's wrong, in my opinion, dead wrong. As I say, there's $1.5 billion of health care going on to property tax. All of these seniors' homes that right now are funded by the province are going to be put on to the local property taxpayer. Eventually I think there's going to be a revolt around the thing, but at the very least we should say, "Let's give people a chance to express their view on whether this is a good idea or a bad idea," and not simply turn it over to some politicians to negotiate around not whether the policy is good, but just around the detail of how we're going to divvy this thing up. That's the purpose of number 4.

Mr Pouliot: Recommendation 4 under "Downloading" is again a reminder. The first line says, "Slow down, you're going too fast." We're to the point where people are beginning to ask, "Will it matter more who governs, what policy, or will it matter just as much, if not more, where you live?"

This is not revenue-neutral. As bold as the administration may be, as new as they pretend to be, as fresh as they would like us to believe they are, I doubt that any democratically elected government would attempt to do so many in-depth, serious changes if it were revenue-neutral. The risks are immense. What if it doesn't work, all this? What if you antagonize more people than you make friends? Why, if it's revenue-neutral? Why don't we piecemeal it?

This is not revenue-neutral. It said it was going to be $1.4 billion or $1.5 billion. What's happening is that the more predictable cost, that of education -- and it makes immense sense to have it from the public purse -- in lieu of that, you pick up a mishmash, an ensemble of services. It seems that if the adding machine says you're $400 million short, it says, "Okay, $400 million? Give me a program that resembles $400 million and I'll throw it into the hopper, the balance, and see what it does." Now we're about $1.5 billion, $1.7 billion short.

I was surprised when your mentor, Mr Eves, in his mini-declaration -- because we were waiting for a budget but they choose to separate the good from the not-so-good news -- made the commitment to have the same transfer payments towards education. We were expecting, I know our caucus was, anywhere from $750 million -- a wide margin -- to $1 billion.

Then we dreamed this scheme, that not today but in 1998, when you can have them in front of you, when education is your responsibility, you are the employer -- and I've made the point to remind people; hopefully I'll be dead wrong. When you can no longer resist the lure of $43 billion in the teachers' superannuation plan -- this is something -- and then find that you have to fork over, to pay, anywhere from $350 million to $500 million in the plan each year, will you still choose to see that $500-million responsibility as your responsibility, or will you plead that all actuarial figures point that no matter under what, for the next 35 to 50 years they will be able to meet their obligation that there is no unfunded liability?

The plan has been doing so well because of the rising market, being genius, and to withdraw the right to -- to withdraw your labour or, if so, to legislate them back. So tell them to get used to charter, a model where you'll have all the grey matters, those who suffice to test the best so you don't fall flat on your face, in the alternative. Then you will have vouchers not only for the grey matters but for all of us. These are little things. I'm not saying by design. Nobody has that much time to think about all the intricacies. But slow down.

It's funny. People say, "I don't want to change. My lot is okay. A devil I know," etc. But when pushed to change, people will create opportunities. Don't get me wrong. I'm not against change. I hear that from people I listen to more often. People want some change. They don't always articulate that. That's your job. But in this case you must admit the plate -- you can only wear one set of clothes at a time and you can only eat one meal at a time. Even gluttony in its extreme would allow the digestive process to do some working. This is too much. You're wasting too much on the plate here and people must get accustomed.

You know the history of this province. You have a family, you have ancestors, friends that have the same. They know Ontario very well; they're so much a part of it. Hey, put the brakes on. People will not be harsh. People will understand. The same people who say, "I respect you because you're doing what you said you would do," are the very same people who in the final analysis want to see some flexibility and some human dimension.

If the seniors need a new roof, it's simple. It's going to cost $75,000 to contract out, because we don't do the job; somebody else does it. Great. It's not a big roof, but we don't have the $75,000. Where's it going to come from? "We're fine-tuning the thing." Maguire's "Show me the money," and as they get very close to it, that's what they're going to do. There are hundreds of municipalities like this.

It's not all bad news, but what I'm saying is, when you don't have the answers, when you don't take the time to piecemeal, it doesn't mean that you put the brakes on, but you're advancing on a heck of a lot of fronts. But you're welcome to it. If you wish to get to Viet Nam, you have the force to do that. You might never get out of it, though, and make sure you have the guns. What do you say if it's going to cost you more if you rush?

I fully agree with my friends to the extreme right, that of the Liberal Party.

Mr Spina: First of all, with regard to Mr Phillips's comment about this being well beyond anything promised in the Common Sense Revolution, you love the book so much, Mr Phillips, pages 16 and 17 talk about spending smarter, talk about less government --

Mr Phillips: Where's the seniors?

Mr Spina: Pages 16 and 17: "Spending smarter," "Less government." The purpose of the whole Who Does What exercise is to eliminate the duplication and waste as a result of both the provincial government and the municipal governments working on the same objective but overlapping each other, duplicating each other.

How did we propose to change that process? We got into what Mr Pouliot was beginning to talk about, which was downloading. I prefer to refer to it as exchange. We take the cost of residential property assessment for education, $5.4 billion, up to the provincial level. In exchange, we give the municipalities various services that are currently either shared by the province or paid for entirely by the province.

I understand, Monsieur Pouliot, about some municipalities perhaps experiencing a shortfall. You said that we'd better have the guns when that happens. In Mr Eves's speech, Mr Leach's speeches, we've clearly indicated that a reserve fund, as a result of savings of the exchange, will be there to assist those municipalities.

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I would also suggest to you that some of them should perhaps look to the region of Peel, the city of Mississauga, the city of Brampton, where they welcome the exchange. I can quote the CAO of both the region and the city of Brampton, as well as the mayor and the chair. They will at the very worst break even. In fact they anticipate having as much as between $5 million and $6 million in a reserve fund strictly held aside as a contingency to assist in the assumption of the social housing costs. These are well-managed, well-operated, very efficiently run governments.

I realize not all municipalities in the province are in the same boat. In fact, in all fairness, I recognize that in some municipalities the cost of the education portion of the property tax was not as high as it was in Peel, which was an average of 64% -- some of them were in the 50% range -- and I understand that, but that is where the province is prepared, as part of the transition process, to address it.

I wanted to get that on the record really as a counter to your argument, but I will harken back and reiterate what I said earlier, and that is that the bulk of this exercise will probably have been completed by the time we get to the budget.

Why the haste? We feel it is the right thing to do, first of all, but second, the reality is that the longer you delay, the higher the cost of government that will be a burden to the taxpayer of this province, and it will only go up if we delay any further. That is the reason we feel it is just to get this thing through as soon as we possibly can.

Mr Pouliot: I don't want to prolong this. What's the use? Then I get beaten up by the hoards.

Let's make no mistake about this air of pretence, of sanctity, of I think the Immaculate Conception. I'll leave this one at that. I don't wish to get into too much trouble. It's like a charlatan. They feel they've been shortchanged by the transfer payments from the federal government and they're the first people to say: "You keep sending the regulations, the standards, and the cheque in the mail isn't the same amount. It's gone down." So what do you do as merchants? You pass it, you download to the common denominator, the people you do business with, the consumer. Your clientele are the municipalities and the boards and commissions. You write the regulations.

One example, subject to change, is a lot levy. It's going to benefit the consumer if they get the full -- well, if they get some of it anyway. There are always costs associated with these matters and you don't want too much scrutiny. Lawyers get in the way; accountants slow things down. But assuming that the developer would pass the savings to the consumer, the thing is, the municipalities will have to make up the shortfall because they won't get the revenues from the lot levy.

I'm sure that Peel and Mississauga, with respect to the administration of Her Worship Hazel McCallion, are always a good example. Don't we wish that we were to be blessed with commercial, industrial and municipal assessment? It's a success story extraordinaire. It's a case where they can hardly spend it fast enough. But that's not the example of the city of Toronto, is it? This has been managed growth; manna from heaven. No one thought it would have been that, and we want to wish them well. That's okay too, but it doesn't resemble -- they have a better ability to put money aside, set infrastructure etc. I look at the assessment dollars, and my God, when I was at transportation I could see in the seamless system how well prepared they were, of course. They're doing quite well.

The thing is, this is not a secret. They're downloading. Let's go back -- and Mr Phillips has emphasized it -- you need to find in relatively short order $3 billion. The economists will tell you that when you ask them. The bond rating agencies will tell you the same thing. The jury is out on whether it's a $100-million or a $200-million difference. It's $2.8 billion to $3.2 billion. That's new money. You've got to go out and find, in order to meet your commitment, a minimum of $3 billion. So let's call it what it is here. This is an exercise to facilitate $3 billion. Your problem, your challenge, is that you need it in short order.

Many of those changes cost money in the initial stage. When you retire people, when you go to the hospitals that are going to be shut down, what will be the cost of retiring by way of contractual arrangements or precedent the golden whatever handshake? In one case it was three years' salary, thank you. You can't toss people down. It's going to cost a lot of money. So it takes more time. Sure the duplication is well-thought-out, but you never spend as much.

You can dislocate, dismantle. I'm not saying it's wrong. Most of us agree that fewer school boards are necessitated, but what are you going to save? One hundred and twenty-five million? That's okay. It has to be saved there too. One hundred and fifty million dollars? The only way you're going to take $1 billion out of that system is to go after the salaries -- you know that and I know that -- because that's where the money is. The risks are immense. You can do this and do that, but unless you go where the money is -- and the money is built into the collective agreements. The money is in things like accumulated sick leave and salaries, and rightfully so. I don't think they're overpaid; far from it. But I'll be around, all of us will, when the other shoe falls and people come and say, "It's not the same in my situation."

I want to caution you about one -- I did 10 years of the most relevant form of politics, the fascinating world of sewer management at the regional and local level, before I got here. If you ask me what the bill is, it's like a job description. I can work 24 hours a day and I'm going to be submitting a bill to you because you've asked me what the cost was. Then you will begin to understand that when you have so many entities, get the adding machine ready, because there's a lot of costs that are built in. People don't bother. They do it matter-of-factly. Some 20% or 30% of their job description has nothing to do with the job that they're doing because they overlap and they do a lot of good things without charging. Now you're going to get the bill for these things, I can assure you, and be prepared to pay.

I never thought I would find the argument of the official opposition so compelling. I'm certainly not a Liberal. If you ask me in the morning, "How are you, Gilles?" I'm apt to say, "Comme ci, comme ça." I'm neither good nor bad, but I find their recommendations well-thought-out and certainly commonsensical. They seem to have established a balance as an alternative for a lot in a hurry.

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Mr Phillips: To Mr Spina, if this were disentanglement, I wouldn't feel strongly, but as Crombie's panel said: "It is going to undo much of the work accomplished by the disentangling proposals. The panel strongly opposes such a move. We are unanimous in the view that you shouldn't do this."

If you look at what Crombie and his group proposed, it was disentanglement, and what actually got done was re-entanglement. You've taken seniors now, and the province has some responsibility and municipalities have some responsibility. You've taken child care and you've got it split 50-50; social assistance split 50-50. You've got the health units now funded exclusively off property tax. Ambulances are funded off property taxes when you'd think they would be part of an integrated health system. You've got businesses paying education property taxes and residences not paying them. Now you keep hearing rumblings that the municipalities are going to take over the operation of the school buildings. This has turned into a re-entanglement mess.

The other thing I'd say is that it is going to add $1 billion the way it's spelled out right now. You'll begin to appreciate, at least I believe you'll begin to appreciate -- and Gilles and I both went through this, because as you know, we were in government at one time -- that the toughest audience for a cabinet minister is the cabinet minister's own caucus because that's where the gloves come off. When there isn't a question and a supplementary, there's a pitched battle sometimes, if your caucus is anything like any other caucus. So sometimes the government back bench runs the risk of being given as much cloudy information as the opposition is given.

I just say that, and it may be different with you, but if it is different, it's different than it was with other governments.

Mr Pouliot: That would be a first.

Mr Phillips: What I'm saying is that I don't think there's any doubt that the government has got three funds to try and help municipalities. Two of them, though, are just short-term funds. One is a transition fund and the other is this social assistance fund that is a rainy day fund. There's only one fund, that $1-billion fund, which you have to subtract the $666-million existing fund from. Mr Wettlaufer will remember. I think Mr Snobelen gave a speech in Kitchener at the end of mega-week and he said, "We're going to have a $1-billion fund which is 50% bigger than the fund it's replacing." If you listen carefully to that, ah ha, 50% bigger. It's replacing the $666-million fund with $1 billion, so the extra money is $335 million. When the smoke all clears three years from now, that's all you have budgeted, $335 million, to cover what in our opinion is at least $1.3 billion in extra costs.

I guess that's a long, rambling way of saying, first, if this were disentanglement, then I could see your argument. Crombie proposed disentanglement, and this spells it all out in detail. You can see that the province takes 100% of the responsibility and the municipality takes 100% of responsibility, and there's probably 30 items here. That was disentanglement. What you actually proceeded to do was to re-entangle, and as Crombie and his panel said, it's undoing much of the work that was accomplished.

The second thing I'd say is that in our opinion you're adding $1 billion to property tax. You can choose to say, "Well, that's just you opposition people," but I would urge you to get in behind the numbers on the basis that the caucus is the toughest sell for a cabinet often. They'll never lie to you obviously, but sometimes you've got to draw the full story out.

The Chair: Further debate? Are you ready for the question? All those in favour? Those opposed? I declare the motion lost.

Mr Phillips: The last one is the tax cut: "The budget should not proceed with further tax cuts. It's increasingly clear the tax cut is driving expenditure cuts which are too deep. In addition, the promised job creation as a result of the tax cut has failed to materialize."

I don't think there's any doubt that Mr Eves gave out strong indications he's planning to proceed with another tax cut. My own judgement is that he's of the school of thought that the government is a beast that has to be starved. I understand some government members may feel that; I just think the tax cut is driving expenditure cuts too deep. It's letting one set of revenue horses out of the barn. It's gone. I've always said the government's financial problems don't occur now, they probably don't occur next year, they occur three years from now when the full tax cut hits and it's $5.5 billion. You will start to see the real impact of health spending at $17.5 billion in 1992, $17.5 billion in 1999, and all the strains that will put on the system. I would say if this were a business, you wouldn't be doing this. You would be saying, "I'm going to get my fiscal house in order before I declare the dividend."

Mr Pouliot: A few days ago I did what I do every year and started looking at -- mine is a simple lot.

Interjection.

Mr Pouliot: Thank you kindly. I will be brief.

The Chair: You can be brief now.

Mr Pouliot: I start looking at doing my income tax report. I run a small ship. I'm an ordinary person. I looked at the tax cut. That's the final item that our friends from the Liberals are proposing. When I was finished, I looked at the CPP, the Canada pension plan, and how much I was going to pay. They are so complex. I have to work quite hard at most things. They don't come easily, and that's okay. Then I saw "health levy." It was on one of the pink things. From memory, Ontario, that's the province. So I added this up. I had read about Mr Martin saying that they don't want to overburden generation X, or while you burden them, you burden you too. So they spent the money.

Remember the pension plan, 1966, Lester B. Pearson? They went on a bender. That was going to be put into a special fund. We don't know where: borrowed from the province, your cousin came calling, the nieces and nephews? Anyway, they failed to pay it back, so now we've got to pay it -- la payola big time -- in order to make up the shortfall. So CPP's going up. Health levy. I thought we were going back. Mr Nixon got us out of the health levy. It was to come from the general purse. But this was for my own edification, my own education. I was supposed to learn about the tax cut as I went through that.

Then I looked at my paycheque and said really what's about to hit on the property level, the health levy, the CPP, all the distortion, the anxiety and the hurt and the unfairness, because if you make a lot of money, the more you make the better off you are under the tax cut. You should have capped that. You cap the poor, don't you? You could have said, "Okay, if you make more than $1 million a year...." That's a hell of a lot of money, no matter what you do. That's more than a commendable salary. Should you benefit more? They say you're going to create jobs. The chairpeople of the banks, Mr Brown, make a lot of money, $3.5 million, $4 million, when you take in the bonus plus the salary, and they get that big tax break. You don't create any jobs. In fact, the Royal Bank cut 5,000 jobs in one year -- so much for job creation -- while the person, the bank baron, filled his pocket and now he's saying thank you to you.

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It doesn't make sense. I think morally it is wrong. It's not wrong to give people an incentive, but to have 30% on the provincial income tax rate on somebody who makes $25,000 -- it's percentage here, it's not dollars -- and I know I exaggerate because few people make that amount of money, I agree, but it strikes me as a little difficult to swallow. I don't wish I had that money or that tax break. I'm not that envious, I'm not jealous, but you know, for the public out there it's pretty hard to swallow that if you make -- Frank Stronach made $38 million in one year, a lot of money by any standards. That 30% tax break will save enough that you could have given 3,000 people an increased tax break. That's 3,000 consumers. I don't begrudge him, I want to wish him well, but sometimes I have some -- I think we all do -- problems with these things. But no one is perfect.

I find the presentation that comes straight from your office there, the high-priced help there, both the political staff and some ministry staff -- they abound down there. When I blend this with the -- not this thing. This is a rehash. If you want to talk about commonsensical, about some thoughts, equilibrium, balance, you go to this. If you want to hit people hard and serve a select clientele, you go to this here. This is a show we don't have access to. Only the rich -- mainly the rich -- benefit and, I've said it before, those who can run the fastest.

If you read between the lines here, the poor are not even on the back page. They've been dealt with the first time around. They don't have a voice. They're dislocated. They're shy. They're easy to intimidate. When you move here, you're moving up the food chain -- Pacman. They're moving up to the middle class and you have further erosion; not more of the middle class, further erosion. But for those who can run the fastest, who can push away from the field, they will be the winner take all.

But if they're okay, everybody else should be okay too. They have their heads buried in the sand. That's not the way you run a society. You don't have be a Liberal or a so-called pink or red socialist. I think it's the weakest link is gone and it reflects on them. They have the chance, they have the hammer, they have 82 seats.

I'll tell you what: When I see this here, if your parents, in this context, were born before you, if you're blessed with the dineros, if you can buy all the goods and services, you couldn't care less about the downloading. You're going to buy your own. Don't negotiate with them. They'll convince them that a side insurance and a two-tier health system are okay and they will try to convince us that you no longer have to wait for heart surgery, because you're not number 235. Because 15 have gone on to the other system, you're now number 220 and you should be thankful.

I'm disappointed, but first I believe, I said: "It's a change of government. That's how we got the job in the first place. We tried our best in a more difficult situation." But we would never have gone to this extent when times were bad. Now times are favourable, but they're still doing it. It's in their nature. Look at them.

Thank you, and I'm anxious to be very brief in our presentation. I feel when I blend the two, in the final analysis, this one is to be commended, this one is so bad but so predictable, and this is the answer here that I'm about to present.

Mr Phillips: Well, we've waited all day for it.

Mr Hudak: I strongly disagree with this motion because again -- and they're not only personal feelings, but reinforced by a number of deputations to the committee -- the tax cut is key to enhancing economic growth for the sake of long-term job creation. I certainly think that if Ontario had not moved to reduce its income tax rates, we would have been at the bottom of job creation in Canada and wouldn't have met our deficit targets. I think the tax cut's important to both job creation and long-term deficit reduction.

I'm curious too to see where the Liberal Party will be on this issue in the run-up to the next election, to see if they will stand for higher taxes, to put tax rates back up to 58% of the federal tax or if they will finally see some common sense and support the tax cut at the end of this mandate.

Mr Wettlaufer: I'm a little bit flabbergasted, really, by this recommendation, in that I went through five years of Liberal government when there were increases in taxes. As a small businessman, I saw increases like crazy when there was absolutely no need for government to be spending to the extent it was. I don't believe I ever heard that government ask the public whether or not the public wanted the government to spend that kind of money. I didn't see any reductions in taxes or in spending by the previous government. I cannot support this recommendation.

The Chair: Further debate? Are you ready for the question, recommendation 1 under "Tax Cuts"? All those in favour of the motion? Opposed? I declare the motion lost.

I understand the recommendations from the third party have been distributed. There's a preamble and six recommendations. Mr Pouliot, do you move the first recommendation, "The current fiscal program of the government to cut taxes and spending at this time should be terminated"?

Mr Pouliot: Yes, thank you. You will allow me, since it is so brief, Mr Chair, and we've already agreed that other people have some commitments, and what was scheduled to be the final day tomorrow becomes the final day today -- so I'll be brief.

The fiscal program of the current government is not achieving its stated objectives. The government is short on its job creation goal of 145,000 jobs per year by some 55,000 jobs. Even more troublesome is the fact that there are currently 25,000 less people employed now than there were when this fiscal and economic agenda was begun.

Let me go to the recommendations. The first one is, "The current fiscal program of the government to cut taxes and spending at the same time should be terminated." In the course of the morning and afternoon, we spoke at some length about the time to put the brakes on, that we don't have a bad situation. If it ain't broke, like friends opposite like to say, well, don't fix it. But when you break things and you feel compelled to fix them -- simply put, we've had about enough of the Common Sense Revolution. Some of it was welcome. You've won, okay? You're the big guy, but don't bully the eternity out of us, the last breath out of us. We get the message: Things need to change. We wish the government would take a breather and listen to an increasing number of people out there who are beginning to have doubts as to the zeal and the determination of the government.

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The Vice-Chair: Further debate on that motion? Then I'll call the question. The motion reads, "The current fiscal program of the government to cut taxes and spending" -- Mr Wettlaufer?

Mr Wettlaufer: I'd like to move that we vote on items 1 to 6 all at one time.

Mr Pouliot: I know the essence of time. We went through the presentations one by one and that was okay. People had a chance to explain and to lay out some rationale. There's not a great deal of items. Then we went to the official opposition and we did the same thing. Now we have six recommendations, which is no lengthier than yours or the official opposition's. Some of us may not have had an opportunity to lay credence to each of the six. I'm willing to listen -- it's not likely I will win -- but why a departure from this format when it would take a few minutes more?

Mr Wettlaufer: Having reviewed the recommendations and comparing them to the recommendations of the opposition party and ourselves, our government, I notice that there is a great deal of similarity to the opposition's recommendations. Substantial debate has been carried out today on the Liberal recommendations and our own. They are so similar that I think debating it further is just a lot of repetition, a lot of rhetoric, and I don't see any need for it.

Mr Phillips: Actually, I find each of them somewhat different and I really think that in fairness to all members of the committee we should deal with them individually. We did each other the courtesy of giving each a chance to explain their recommendations. Four of these I can support and two of them I'd like to support, it's just that I'm not sure of the intention of them, so I have difficulty in voting for them as a block. I would think we'd want to do what we did with the other recommendations.

Mr Bassett: I would concur in the interest of doing the same thing for all three parties. If we've debated the issue, then if we go one by one, obviously we won't repeat ourselves, we just don't need to speak. I would vote we handle them one by one.

The Vice-Chair: Mr Wettlaufer.

Mr Wettlaufer: Okay.

The Vice-Chair: Very good. So the motion on the floor, Mr Pouliot's motion, is, "The current fiscal program of the government to cut taxes and spending at the same time should be terminated."

All those in favour of the motion? All those opposed to the motion? I declare the motion lost.

The second motion, Mr Pouliot.

Mr Pouliot: I have spoken at length on number 2 so I will not be repetitious. Suffice it that I will read it one time only: "This budget should endorse a fiscal program of balanced deficit reduction by maintaining the income tax revenue base."

The Vice-Chair: Debate on the motion? Seeing no debate on the motion, I'll call the question. All those in favour of the motion? Opposed? I declare the motion lost.

The third motion, Mr Pouliot.

Mr Pouliot: "This budget should introduce real job creation programs targeted specifically to youth and low-income earners with emphasis on training and education."

We have debated this. We all feel we're right about the issue. I think people would wish to -- the mechanism might be slightly different. I will say no more. I've said enough on this matter.

The Vice-Chair: Further debate on this motion? All those in favour of the motion? Opposed? I declare the motion lost.

Mr Pouliot, the fourth motion.

Mr Pouliot: "This budget should introduce economic stabilization also aimed at the long-term social and economic health of the province with the introduction of a child income benefit. The federal government's announced plans will do little if nothing to eliminate child poverty or provide for income stabilization leading towards increased consumer confidence."

This is a staple. This is a long-standing tradition, not only with our party, but others have endorsed that as well. I think the wording speaks to the matter and it speaks for itself. I will say no more.

The Vice-Chair: Further debate on the motion? All those in favour of motion 4? Opposed? I declare motion 4 is lost.

Mr Pouliot, motion 5.

Mr Pouliot: "Following the recommendation from the National Forum on Health and given this government's intention to cut hospital care in the province of Ontario, this budget should guarantee the coverage of home care as part of the Ontario health insurance plan."

We all share the fear that when the finality, in some cases the padlock, closure appears, the main question we ask ourselves is, will the alternatives be in place? When you begin to cross the street, there won't be any going back; you'll have to finish crossing it. On the other side will there be a facility that will address my needs? I think I've said it all when I say this: We're concerned that given the magnitude, so many changes, an increasing number of people will fall through the cracks and won't have a home to go to, not literally but figuratively, to answer their needs. We're asking the government, even if it takes a little more time, when you make your transition you must have the community alternatives in place.

The Vice-Chair: Further debate on the motion on the floor? Seeing no more debate, I'll call the question. All those in favour of motion 5? Opposed? The motion is declared lost.

Mr Pouliot, motion number 6.

Mr Pouliot: "This budget should announce the government's intention to abandon the download of health and social services to municipalities and ensure that property taxes are protected by introducing real property tax reform which stipulates that only "hard" municipal services such as garbage pickup, road maintenance, water and sewer services be paid for through the property tax."

It would be prolonging the agony to repeat again and again. We're anxious to see the other shoe drop and hope, as I finalize, the government -- it will claim to be reasonable -- will also be consistent and predictable in the formula, that once you establish a program, you do not change the rules in midstream unless it's mea culpa, that you've really made a bad mistake. People want to know where they're going and they want your help in seeing them through in the transition.

The Vice-Chair: Further debate on this motion? I'll call the question. All those in favour of motion 6? Opposed? I declare that motion lost.

Are there any further motions with respect to recommendations on the report on pre-budget consultations?

Ms Bassett: I have another motion I want to make. I just didn't know whether you were wrapping up that.

The Vice-Chair: I was just seeing if there were any more motions with respect to recommendations for the report, that's all. Seeing none, this is another recommendation with respect to the subcommittee?

Ms Bassett: Yes.

The Vice-Chair: Please go ahead.

Ms Bassett: I move that upon final approval of the subcommittee:

(1) That the report be sent for translation and printing;

(2) That a copy of the draft report be forwarded to the Minister of Finance; and

(3) That the Chair of the committee table the final report, when printed, with the Clerk of the House if the Legislature is not meeting, or in the Legislature if it is sitting.

The Vice-Chair: Any discussion on the motion?

Mr Phillips: We'll be submitting a minority report. When is that due to be in?

Clerk of the Committee: The Chairman was suggesting that perhaps the subcommittee could meet on the 31st to review the report at that time. You can discuss when you wish to see the report presented and so forth. It would be the 31st or April 1, when you're all here.

Mr Phillips: So we'd meet -- I think the 31st is a holiday, probably -- on the 1st. When would the minority reports be due?

Clerk of the Committee: It could be due on that day, because then we'll have to send it to the printers, once it is approved there.

Mr Phillips: That's okay with me.

Ms Bassett: That's fine with me. So we're going to meet April 1 and the minority report will be tabled then?

Mr Phillips: That's fine with me.

Interjection.

Clerk of the Committee: If I may, it's a minority opinion, not a minority report. There's only one report.

Mr Pouliot: There's only one?

Clerk of the Committee: One report with a minority opinion.

The Vice-Chair: To clarify for the record, the Chair's understanding then is that on April 1 the subcommittee will convene with the report and the opposition opinion will be brought forward at the subcommittee at that time.

Mr Phillips: Both of these were presented last year as dissenting reports, but I guess they were incorrectly presented.

Clerk of the Committee: If I may clarify, Mr Phillips, the standing orders specifically say there is only one report, which may contain minority opinions.

Mr Phillips: Okay.

The Vice-Chair: Mrs Bassett has moved the motion with respect to the subcommittee. All those in favour of that motion? Carried.

Mr Phillips: It's procedural. It's straightforward. There's not the word "agreement" or anything in there, is there?

Ms Bassett: No, there's not. Do you want to look at it?

The Vice-Chair: The Chair's understanding is that this motion is the same motion that was passed last year and traditionally by the finance committee in terms of when the report's presented to the finance minister and how, and how it's presented to the House.

There's one more final item of business. The research officer will need to put the recommendations in the body of the report. To what extent should the research officer flesh out the recommendations? Does sufficient background already exist in the report or should she flesh out the background a bit more on the particular recommendations? Secondly, could we give the subcommittee the ability to supervise that process and to approve the final recommendations that are put into the report?

Mr Phillips: I think it's difficult for the research person to put all the rationale into the recommendations, so I'd be inclined to just go with the recommendations. I think you put the research person into some editorializing one way or the other, and it's almost impossible, I think.

The Vice-Chair: That was one of the questions the committee was asked to address when we first started going over the report, on page 1, if you still have your reports, if there was sufficient background on the context of the issues the committee made recommendations on. Mr Phillips seems to feel that context exists and the research officer should just put the recommendations in the body of the report.

Ms Bassett: As printed.

The Vice-Chair: As printed.

Ms Bassett: Okay, that's fine.

The Vice-Chair: As adopted by the committee.

Mr Pouliot: A leap of faith. It would be unfair to burden the government with the rationale and substance to qualify what they've put down on paper. It's an ideology and a leap of faith; that's all it is.

The Vice-Chair: Is it agreed that the research officer will be able to put the recommendations, as passed by the committee, into the body of the report for approval by the subcommittee? Agreed.

Ms Bassett: Can I question one thing? When you say the body of the report, do you mean as we go through or at the end of the report, before you get to the minority report or whatever?

Mr Phillips: The recommendations.

Ms Bassett: Yes, how do they go?

Mr Phillips: My judgement would be as they've been in previous years. There's a page at the end called "Recommendations."

Ms Bassett: That's what I would agree to. I just wanted to clarify it.

Ms Drummond: The individual recommendations have also been attached to the section of the report that they're most relevant to, as well as all being collected at the end. Would the committee prefer to just have them at the end?

Ms Bassett: I think at the end, because so many of them refer to so many different things. You'd have to keep repeating our recommendations all the way through. Have a page of recommendations. Is that fine?

The Vice-Chair: So is it agreed that the recommendations of the committee appear at the end of the report?

Mr Phillips: Fine with me.

Ms Bassett: Fine with me.

The Vice-Chair: Agreed.

It looks like we have finished our business, folks, so we will not have to meet tomorrow. We'll give you a day off tomorrow for your other business. I will adjourn this committee until further notice; April 7, I understand. For everyone's information, the advertising on the committee hearings when we're travelling and for the Toronto hearings has gone out today. The first day we're back is April 7 here at 1 pm, committee room 151, with the presence of the minister himself. I'll adjourn the committee until that time.

The committee adjourned at 1444.