COMMUNITY ECONOMIC DEVELOPMENT ACT, 1993 / LOI DE 1993 SUR LE DÉVELOPPEMENT ÉCONOMIQUE COMMUNAUTAIRE
CONTENTS
Wednesday 1 September 1993
Community Economic Development Act, 1993, Bill 40
STANDING COMMITTEE ON GENERAL GOVERNMENT
*Chair / Président: Brown, Michael A. (Algoma-Manitoulin L)
*Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)
*Arnott, Ted (Wellington PC)
Dadamo, George (Windsor-Sandwich ND)
Fletcher, Derek (Guelph ND)
*Grandmaître, Bernard (Ottawa East/-Est L)
*Johnson, David (Don Mills PC)
*Mammoliti, George (Yorkview ND)
Morrow, Mark (Wentworth East/-Est ND)
Sorbara, Gregory S. (York Centre L)
Wessenger, Paul (Simcoe Centre ND)
*White, Drummond (Durham Centre ND)
*In attendance / présents
Substitutions present/ Membres remplaçants présents:
Conway, Sean G. (Renfrew North/-Nord L) for Mr Sorbara
Hope, Randy R. (Chatham-Kent ND) for Mr Morrow
Jamison, Norm (Norfolk ND) for Mr Wessenger
Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND) for Mr Fletcher
Wiseman, Jim (Durham West/-Ouest ND) for Mr Dadamo
Also taking part / Autres participants et participantes:
Haslam, Karen (Perth ND)
Ministry of Municipal Affairs:
Burns, Tim, senior policy adviser, community development branch
Dewar, Diana, manager, municipal planning policy branch
Loken, James, solicitor
Manara, Norman, manager, capital finance, municipal finance branch
Melnyk, Tania M., director, community development branch
Ross, Elaine, solicitor
Taylor, Dale, senior economist, municipal finance branch
White, Drummond, parliamentary assistant to the minister
Yerxa, Kelly, solicitor
Clerk / Greffier: Carrozza, Franco
Staff / Personnel:
Anderson, Anne, research officer, Legislative Research Service
Klein, Susan, legislative counsel
Mifsud, Lucinda, legislative counsel
The committee met at 1006 in the Humber Room, Macdonald Block, Toronto.
COMMUNITY ECONOMIC DEVELOPMENT ACT, 1993 / LOI DE 1993 SUR LE DÉVELOPPEMENT ÉCONOMIQUE COMMUNAUTAIRE
Consideration of Bill 40, An Act to stimulate Economic Development through the Creation of Community Economic Development Corporations and through certain amendments to the Education Act, the Municipal Act, the Planning Act and the Parkway Belt Planning and Development Act / Loi visant à stimuler le développement économique grâce à la création de sociétés de développement économique communautaire et à certaines modifications apportées à la Loi sur l'éducation, à la Loi sur les municipalités, à la Loi sur l'aménagement du territoire et à la Loi sur la planification et l'aménagement d'une ceinture de promenade.
The Chair (Mr Mike Brown): The standing committee will come to order. As members would know, we have completed the public deputations stage of considering Bill 40. It's of note that we heard every presenter who wished to present to this committee, and that is always something that the committee deems to be a good goal. This morning we will commence with clause-by-clause consideration of the bill.
I would bring to members' attention a number of papers that I have before me. First we have one from Anne Anderson, our research officer. She has researched a request that Mr Hope made, so you will see that in front of you. You will also see from the researcher an updated summary of recommendations from Bill 40 that she has also prepared. And there is a letter from the office of the chairman of Metro Toronto, Mr Tonks, requesting to make input at a later date. That's just for your information.
Mr David Johnson (Don Mills): Can I just ask a question on that? I think the Association of Municipalities of Ontario is also setting up a committee to have a look at this bill. If in fact they proceed with that, they will probably want to pass along their thoughts at a later date as well. How does that information from Metropolitan Toronto and from AMO get incorporated into the whole process?
The Chair: Of course, as the committee is scheduled to begin clause-by-clause consideration today, we will proceed with that, according to an agreement by all parties. However, there is an opportunity for any presenter or anyone else who wishes to make suggestions with regard to that bill to the government and to the critics of both opposition parties, and to any other members, as a matter of fact, who may have an interest in this bill, because there is still the committee of the whole stage to go, where amendments can be made, and there is of course third reading debate to come. So there's still an opportunity for changes after today or tomorrow, whenever we complete the clause-by-clause.
Are there any further questions regarding the bill before we actually start the clause-by-clause consideration? If not, we shall start.
I think all members should also have copies of the government amendments that have been proposed, the amendments of the Liberal caucus and the amendments of the Progressive Conservative caucus. If anyone does not have those amendments before them, let the clerk know and we will distribute those for your information.
We'll start by considering the contents as we go. The first amendment I see is a government amendment, subsection 1(1), dealing with equity capital. Mr White, would you like to make a motion?
Mr Drummond White (Durham Centre): I move that the definition of "equity capital" in subsection 1(1) of the --
Mr Bernard Grandmaître (Ottawa East): Mr Chair?
The Chair: Order. Yes, Mr Grandmaître? Mr White will move it, and then we will --
Mr Grandmaître: Well, I don't have it. Have you got it, Dave?
The Chair: Fine, well, we'll have the motion. Mr White, if you'd just make the motion.
Mr White: Thank you, Mr Chair. Perhaps I could pause while the official opposition find their copies of the amendments.
The Chair: If you make the motion, then we'll deal with making sure everyone knows where we're at.
Mr White: Again, I move that the definition of "equity capital" in subsection 1(1) of the bill be struck out.
The Chair: Now, is everyone certain where this amendment goes? Are there any problems? Still looking for it? Let's find where we are. It's a little confusing because there are not a great deal of numbers in this section of the bill. Has everyone found where we are supposed to be?
Mr Grandmaître: No, not yet.
The Chair: Not yet. We'll pause for a moment. In essence, we're just asking that a clause be struck out here. Is everyone understanding where we are? All right. Now, an explanation of your motion, Mr White.
Mr White: The term "equity capital" is only used in section 12, and the meaning of the term is rephrased in that section. Therefore, the definition in subsection 1(1) is no longer necessary and is to some degree confusing.
Mr Ted Arnott (Wellington): Are the definitions the same in the two sections you made reference to?
Mr White: I'm sorry. Can I consult with legal counsel on this? Mr Loken?
Mr James Loken: Yes. Oh, sorry, no. Not exactly.
Mr White: Mr Loken, would you clarify that?
The Chair: Would you identify yourself for the purposes of Hansard?
Mr Loken: James Loken. Could I have your question again, please?
Mr Arnott: I'm wondering if it's being deleted because it's redundant or because the two definitions of "equity capital" are different.
Mr Loken: No, we're not deleting them because they're completely identical, but we want to avoid too many complex terms in the act that have a similar sound to them so that the ordinary person would be confused if it's not necessary.
The Chair: Further questions or comments regarding Mr White's amendment?
Mr David Johnson: Mr White indicated that there was a similar kind of term that was used in section 12, in clause 12, but that it was redefined at that point. Now, is that the government amendment that occurs about half a dozen pages later with regard to clause 12?
Mr Loken: We are not redefining the term; we are rephrasing the term to have the exact same meaning so that we can use a similar term elsewhere.
Mr David Johnson: Now, is the similar term "equity share"?
Mr Loken: No, the similar term is "equity."
Mr David Johnson: Now, is that clause 12(1)(a) and (b) about -- too bad these pages aren't numbered, but about the seventh or eighth page in?
Mr Loken: That's correct. We're deleting that term.
Mr David Johnson: But I'm looking at the amendments. So the definition of "equity" occurs in the original bill or in the amendments?
Mr Loken: The definition occurs in the original bill. We are adopting the essence of the definition and putting that in the amended subsections of 12 so that the term will not be used in the act because it is so closely related to the word "equity," and that being perhaps confusing.
The Chair: Further questions or comments?
Shall Mr White's amendment to subsection 1(1) carry? Carried.
Further questions or comments regarding section 1?
Mr White, I see you have -- oh, (d.1) first.
Mr Grandmaître: I move that the definition of "sponsor" in subsection 1(1) of the bill be amended by adding the following clause:
"(d.1) a business development centre established under the federal Community Futures program."
The Chair: Do you have an explanation?
Mr Grandmaître: What this amendment does is that I believe the BDCs are not identified as sponsors, and yet BDCs are doing the same thing as this bill proposed to do. I would like to move this amendment so that it would be understood that a sponsor could be a BDC.
The Chair: Further questions or comments?
Mr Randy R. Hope (Chatham-Kent): Well, I take it the federal Community Futures program is a non-profit organization, and if a community feels that it's worth its value, they will have the right under the legislation. You just don't have to name them; you can name any non-profit. They are a non-profit organization and they'll have the right if a community feels that they are an appropriate agent to be the sponsor of the program in the community. I don't see where the amendment allows any value other than to name.
Mr Grandmaître: Well, the fact that BDCs are a federal program, I agree with Mr Hope. This is why I want these people to be included. I realize it's a non-profit organization, but it's a federal organization and I want to make sure that they're included.
Mr Hope: Well, what if a community feels the value of their services in that community in doing the mandate of this program does not warrant, that they believe that a different identity ought to do it? Are you eliminating the choice of the community that wishes to stay away from that group?
Mr Grandmaître: I'm simply adding. I'm not deleting anything; I'm simply adding.
Mr Hope: It's redundant. It's useless.
Mr Grandmaître: Well, vote against it, then.
Mr Hope: I will.
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Mr Jim Wiseman (Durham West): I'd like to ask a question and it has to do with the business development centres. One of the presentations that was made, and I forget the presenter, indicated that the federal government was thinking of moving away from community funding to funding large corporations and large businesses, as opposed to the small and medium-sized ones. I'm wondering, if we were to do what Mr Grandmaître suggests, if we were to put that in, would the province then be required at some future date, when the federal government withdraws its support from these BDCs, would it then be compelled to have to pick up what it has withdrawn if we put it in the legislation? I would be very hesitant to want to put it in the legislation unless that question is answered.
Mr White: What you're suggesting, Mr Wiseman, is that by specifically mentioning this program, it creates a link that is not in existence between this program and other non-profit corporations or other cooperative corporations without share capital, as is already mentioned in the definition of "sponsorship." You're suggesting that by that, there's an implied responsibility for the activities of those corporations. Is that it?
Mr Wiseman: That's part of it, exactly. The federal government has clearly indicated that it is thinking of withdrawing. Would we then not have to take up that responsibility ourselves and have no choice because it's in the legislation?
Mr Grandmaître: Mr Wiseman has picked up this information about the federal government getting out of the BDCs. I don't know where you've picked this up.
Mr Hope: It's been known for a while.
Mr Grandmaître: They have been talking about it but it doesn't mean they're going to do it.
The Chair: Order, please. This works a lot better if we just have one member at a time.
Mr Wiseman: My speculation on this comes from two --
Mr Grandmaître: Let's not speculate. Let's deal with the legislation that's before us.
Mr Wiseman: I will not support putting anything in this legislation that has a huge question mark at the other end, especially with reference to the federal government, which we know has been turning its back on Ontario in terms of investment for the last eight or nine years.
Mr Grandmaître: Look, that's another issue.
Mr Wiseman: Since you pushed me.
Mr Grandmaître: I don't think we're here this morning to talk about the federal government, what it's done and what it hasn't done in the last eight or 10 years. I'm concerned about the legislation that's before us. At the present time, BDCs do exist and that's why I want them included.
Mr David Johnson: I was just wondering if staff would comment on this. It seemed to me to be a friendly amendment in the sense that it simply expanded the eligible sponsors. If the BDCs are there, they're there; if they're not, they're not. Who cares, in the sense of this bill. Does the staff have any concern if the BDCs are added as another potential sponsor?
Ms Tania M. Melnyk: It is a bit of a concern, because it designates one potential group of sponsors over others. As Mr White has already said, the need for it is not necessary because they are already covered under clause (c), which talks about corporations without share capital; that is, non-profits. They are non-profit corporations, so there is no problem with them being sponsors. It just raises the question, why not designate other groups as well? Potentially, if that program is cancelled, it leaves something on the books that isn't necessarily timely.
Mr David Johnson: How do you mean?
Ms Melnyk: If that program were cancelled, you'd have sort of an obsolete program on our legislation.
Mr David Johnson: You'd have an obsolete entry in the bill, I guess.
Ms Melnyk: No, it wouldn't be. A corporation without share capital could be any other group, any non-profit corporation that is in existence.
Mr David Johnson: The amendment that's proposed is that sponsorship be extended to include a business, a specific entity, and that's your problem, because it's already covered. That would be similar perhaps to saying that the city of Toronto could be a sponsor, whereas a municipality is already there.
Ms Melnyk: Yes, or under clause (d), a cooperative corporation designating a particular cooperative group. It would be analogous to that kind of a change.
Mr David Johnson: So it's perhaps in that sense a little bit untidy, but I don't understand what sort of damage it could do. Are there any specifics?
Ms Melnyk: It's not a specific concern, it's an issue of why designate one group and open oneself up to potentially providing a linkage and some sense of preference perhaps to that group over others.
Mr David Johnson: You've used the word "linkage." I don't quite understand how there could be any linkage any more than we could assume any responsibilities for any programs that the city of Toronto might incorporate or the city of Sudbury or any city you would care to name under here. Do you honestly think that by specifically mentioning the BDC, somehow we would assume any of the obligations of the BDC itself?
Ms Melnyk: I honestly think that if only that one group were specified, and not a whole list of potential groups, it would leave a suggestion that there is some kind of preference or priority being given to that one group and not others.
Mr Hans Daigeler (Nepean): I just simply want to clarify, and I think Mr Johnson has already, that this doesn't obligate the government to enter into an agreement with the BDC. It simply provides, as was requested by the presenters -- I think we should not forget that the group that did come felt that it was important for them to be included in this and that's the purpose of these hearings.
Whether in the future this is going to be an obsolete section, we have many obsolete sections on the books so I'm not worried about that at all. I'm simply responding to an excellent presentation that was made by the BDCs. They feel it would be a good thing to be included and therefore I think we should move that and vote on it.
Mr Norm Jamison (Norfolk): Simply put, this proposal is redundant. The BDCs are included and I don't believe anyone should receive preferential mention in the bill. I know that locally, and I'm already talking to the people there, certainly, because of the experience, good and bad, that they've had in the same areas, but it's redundant -- why add language to a bill that it is not necessary to put there?
Mr Grandmaître: A question, Mr Chair.
The Chair: You're on the list. Mr Mammoliti.
Mr George Mammoliti (Yorkview): I think most of the things I wanted to say have been covered, but what I do want to talk about is language and how language in acts and language in policies sometimes creates more havoc and more problems than originally set out to create.
I think we need to be careful with language and I think this proposal might create some havoc out there if accepted and might create a sense of misunderstanding to a lot of the other groups that would be neglected if not put in as well. So I think we need to be careful in terms of how much language we put into this piece of legislation and others in the future. That's the only other point I wanted to raise.
Mr Grandmaître: It seems like some members are -- when you mention the BDC program, everybody gets uptight. I know my friend across feels a little uptight. I'm talking about under the federal Community Futures program. I have a question: Is there another federal non-profit program that can be tied in with Bill 40? Name me one.
Mr Hope: The federal government?
Mr Grandmaître: The federal government. This is why my amendment says, "federal Community Futures program," and that involves a number of programs. Right? So forget about the BDCs. I'll take this back. But at least involve the Community Futures program.
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Mr Hope: I've listened to the comments made and why I'm bringing the issue up and I feel it's redundant is that I heard a lot talked about rural communities and about municipal identities and choosing their own destination. Let's say this did go in the legislation. I'll use my own riding for an example. There's only one Community Futures program which covers all of Kent county. If you start putting that into the legislation, what you do is you allow a mechanism to play the strong-arm approach to smaller municipalities. Because you've identified -- listen, and listen very carefully -- the program in the legislation, it allows the strong-arm to say: "Well, why create another one? Put it in here." You don't allow those smaller municipalities like the town of Dresden or the town of Wallaceburg, which want to start their own economic development and prosper through their own moneys and bringing their own moneys into their communities.
You're talking about people investing. People who live in Wallaceburg won't want to invest in the city of Chatham because there's no social return that is there. To identify this program specifically, and I take it from a rural perspective, is a Kent county focus. It's a county focus. When you do that, what you do is you allow the political tools of opportunity to prevail in communities, and I don't want to see that happen. They already identified it as a non-profit organization. They then fall into the non-profit status under clause (c), and it's plain and simple.
If there's another federal program out there -- you're asking the bureaucrats here if they know of any other federal programs. How many know what's alive and what's dead in the federal government? I sometimes wonder if the members are even there. But the thing is, what you do is you allow the community to take that initiative on, not just because -- you know, it's a nice amendment. Yes, you're right, it's a friendly amendment, but we might as well start naming everybody else who has all the other programs and even provincial programs that are currently established or even municipal programs that are currently established or even non-profit groups that are out there that are currently established providing economic renewal into our community.
I know Bradley in my community has a foundation that's already been established which is non-shares. We might as well name them too. So we'll name everybody. We have one simple line that is very simple to everyone, which is (c), which is very clear, and if people choose in their communities to align themselves with one of the identities that are already in existence, then let them do that. Don't let us provoke it through legislation and allow an opportunity by describing them in the legislation.
Mr Grandmaître: I want members to get this straight. Everybody can become a sponsor -- municipalities and everybody else, they're all included -- except what I am saying is that the federal Community Futures program is not or cannot be a sponsor. Am I right or wrong?
Mr Hope: You're wrong.
Ms Melnyk: They can be a sponsor.
Mr Grandmaître: They can?
Ms Melnyk: The BDCs can be a sponsor. They are non-profit corporations, so they are not excluded right now.
Mr Grandmaître: So as to my amendment, by saying "under the federal Community Futures program," you're telling me, like everybody else, that it's redundant, that they are automatically part of this bill.
Ms Melnyk: Yes.
Mr Grandmaître: The Community Futures programs can be sponsors?
Ms Melnyk: Yes.
Mr Grandmaître: We've wasted a lot of time, Mr Chair.
Mr David Johnson: And here I was sticking up for you.
Mr Hope: You're sticking up for Liberal morals.
Mr Grandmaître: I think if the front desk would have told me --
Interjection: We did.
Mr Grandmaître: No, not exactly. Everybody was hung up on BDCs.
The Chair: Order.
Mr White: We specifically referred to the definition, Mr Grandmaître, but regardless --
Interjection.
The Chair: Mr White has the floor.
Mr White: I would suggest that there are a couple of problems with the motion. As Mr Grandmaître says, it is potentially redundant. The other problem is that with new federal programs, if one federal program is mentioned, it by implication excludes an involvement with other federal programs that are set up for similar purposes, as has been recently suggested by the Prime Minister. We hope that that federal program that she mentioned will sustain itself beyond her summer job.
Mr Grandmaître: Can we call the vote, Mr Chairman?
The Chair: Further questions/comments on Mr Grandmaître's amendment to subsection 1(1)?
All in favour? Opposed? All in favour, would you please raise your hands? Opposed? The motion is lost.
The Chair has a question regarding clause (f) of the same section. It says "a community group." What's the definition regarding community group?
Ms Melnyk: It could be a group of interested individuals who are concerned about doing something in their community and are prepared to come together and create a non-profit corporation that then would create a CISC or a loan fund.
Mr White: That might be a church.
Ms Melnyk: Or people from a church.
The Chair: Will this be defined further in the regulations? Thank you.
Are there further questions or comments dealing with clause 1(1)(e)?
Mr White: With regard to subsection 1(1) of the bill, "sponsor," I move that the definition of "sponsor" in subsection 1(1) of the bill be amended by striking out clause (e) and substituting the following:
"(e) an aboriginal community group, including a council of an Indian band within the meaning of subsection 2(1) of the Indian Act (Canada), or"
The Chair: An explanation, Mr White?
Mr White: The wording has been changed to be more inclusive. It allows aboriginal groups other than band councils to sponsor CED corporations. As we know, at the moment there are a plethora of different community groups which represent bands and native peoples, particularly people, say, in an urban community who may not be being represented by a band council.
The Chair: Would that not be included in (f)?
Mr White: They could have been accommodated under (f), but it would be more inclusive to have them included under (e) as well, and the wording was recommended by the Ontario Native Affairs Secretariat.
The Chair: Questions/comments on Mr White's amendment?
All in favour of Mr White's amendment? Carried.
Shall section 1, as amended, carry? Carried.
We're on section 2. We will deal with subsection 2(1). Questions, comments or amendments regarding subsection 2(1)? Shall subsection 2(1) carry? Carried.
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Mr White: I move that subsections 2(2) and 2(3) of the bill be struck out and the following substituted:
"(2) The Securities Act does not apply to the issuance of shares by a corporation pursuant to a transaction in which a community investment share corporation invests in the corporation, but any trade in shares issued pursuant to such transaction, other than as contemplated by subsection (3), shall be deemed to be a distribution under the Securities Act.
"(3) The Securities Act does not apply to,
"(a) the conversion or other exchange of shares of a community investment share corporation for shares of a corporation in which the community investment share corporation has invested;
"(b) the conversion or other exchange of shares of a community investment share corporation for shares of another class of the community investment share corporation;
"(c) the conversion or other exchange by a community investment share corporation of shares in a corporation in which the community investment share corporation has invested for shares of another class of that corporation; or
"(d) any acts by a community investment share corporation in furtherance of a transaction described in clause (a), (b) or (c).
"Deemed distribution
"(4) Any trade in shares acquired as a result of a conversion or exchange of shares described in clause (3)(a), (b) or (c) shall be deemed to be a distribution under the Securities Act."
The Chair: Mr White would no doubt have a simple explanation for that.
Mr White: Would that I did. I would, however, refer to counsel.
Mr Loken: The substance of the amendment is really only to change the processes already set out in subsection (3) concerning the exchange of shares and to extend the ambit of it to accommodate another method of doing that. We based the original drafting on the model that has a precedent in the Saskatchewan legislation, but we've noted certain problems with that. Therefore it was thought that it would be appropriate to put in a little additional flexibility to avoid the legislation being too prohibitive on the method of accomplishing the purpose.
Mr David Johnson: I may be sorry I asked, but for the uninitiated, what does this exclusion --
Mr Grandmaître: It might be redundant.
Mr David Johnson: Yes. What, in sort of simple words, does this exclusion from the Securities Act actually accomplish? You use the words that it would be less "prohibitive" in your explanation. Maybe you could expand on that and tell us what's actually happening here.
Mr Loken: The Securities Act would of course generally apply to securities of these corporations without this exemption that's contained in section 2. We wish to create an alternate investor protection regime that is not as onerous for the corporations and provides a reasonable and appropriate level of investor protection for the investors. We also wish to allow them the possibility of converting their shares in the investment corporation into the shares of the business in which it invests to allow them to participate in any equity growth, depending on the success of the business. That would be an optional program issue.
Mr David Johnson: Without this exclusion --
Mr White: Just as a parallel, Mr Johnson, the technical amendment was requested by the securities commission and the language is such that it is what you might call inaccessible. I recall very clearly, not only in terms of the foundation of the act but in terms of some of the testimony before us, that this very issue is important, that the community loan funds, the CISCs, be accessible to people who are unemployed, who are seeking those kinds of assistance. Should the securities commission language and rigours be applied to them, as is unnecessary, they would find that as inaccessible as we find this language.
Mr David Johnson: Can you be specific as to who would be excluded if the Securities Act was fully applied?
Mr White: Frankly, those are the very groups that Mr Hayday represents, the coalition of groups who are on social assistance, the Social Investment Organization, the Calmeadow Foundation, all referred to community groups who would not be able easily to overcome the obstacles and barriers that the securities commission would put forth that frankly are not necessary in terms of investor protection due to the provincial guarantees.
Mr David Johnson: So if you're on welfare, for example, then you wouldn't be eligible to be an investor in a community investment share corporation?
Mr White: Many of the people, as was suggested, who would be involved in these programs, both as members of CLFs, it might be community groups, might not necessarily be capital corporations or legal counsel.
The Chair: Further questions or comments regarding Mr White's amendment to subsections 2(2) and 2(3)? If not, shall Mr White's amendment to subsections 2(2) and 2(3) carry? Carried.
Shall section 2, as amended, carry? Carried.
Questions, comments or amendments to sections 3, 4 and 5? Shall sections 3, 4 and 5 carry? Carried.
Questions, comments or amendments to section 6? Shall section 6 carry? Carried.
Section 7, subsections (1), (2) and (3), questions, comments or amendments? Shall subsections 7(1), (2) and (3) carry? Carried.
Subsection (4), Mr White.
Mr White: This seems to be a Tory amendment to subsection 7(2). We just bypassed your amendment.
Clerk of the Committee (Mr Franco Carrozza): No, that's on 10. We'll be adding number 10.
The Chair: Okay, fine. We're on subsection 7(4).
Mr White: I move that paragraph 4 of section 7 of the bill be struck out and the following substituted:
"4. The corporation's articles of incorporation restrict the business of the corporation to providing capital to eligible businesses through the acquisition and holding of equity shares issued by eligible businesses and to providing business advice to eligible businesses."
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The Chair: An explanation, Mr White?
Mr White: The policy requires that a business corporation which ordinarily is registered under the Business Corporations Act has the capacity and powers to engage in any lawful business and restrict those capacities and powers in order to be registered as a CISC that would accomplish the policy goals of the program.
The Chair: Questions, comments to Mr White's amendment to paragraph 7.4?
Shall Mr White's amendment to 7.4 carry? Carried.
Paragraphs 7.5, 7.6, 7.7, 7.8 and 7.9: Questions, comments?
Mr Hope: It says section 7, and I've got so many pieces of paper around here. It's a PC that says "section 7" on it.
The Chair: Yes, that comes later.
Mr Hope: Does it come later? Is there another section 7 somewhere?
The Chair: You're in good hands, Mr Johnson.
Shall paragraphs 7.5, 7.6, 7.7, 7.8 and 7.9 carry? Carried.
Mr Grandmaître: Paragraph 10, Mr Hope.
The Chair: Would you just make the motion.
Mr Grandmaître: I move that section 7 of the bill be amended by adding the following paragraph:
"10. The council of the local municipality or the planning board in which the corporation is situate, as appropriate, has passed a resolution supporting the corporation."
Mr Chair, we've been told that Bill 40 was conceived on the Saskatchewan model. In the Saskatchewan model, municipalities are included, whereas in Bill 40 local municipalities are not. The fact that AMO didn't have an opportunity to -- well, did have an opportunity but wasn't ready to come before this committee, and also Mr Tonks. Municipalities want to be involved, and I think that paragraph 10 should include local municipalities or planning boards.
The Chair: Further questions or comments on Mr Grandmaître's motion?
Mr Hope: I'm just trying to understand here the motion that he's putting forward. Are you saying that the municipality is going to have, and I put it in very clear terms, the veto power over any community group that it wishes to establish?
Mr Grandmaître: No. But they should at least know what's happening in the community. That's all I'm saying.
Mr Hope: Well, they should know anyway, not necessarily should it be in legislation. I'm implying that what you're saying here is that the municipalities are going to have total vetoing power over top of that.
Mr Grandmaître: That's not what I'm saying. If this bill is based on the Saskatchewan model, then how come municipalities are included in the Saskatchewan model and they're not included in this one? They don't have a veto power. They simply pass a resolution so that the planning board and the municipality will know what's happening in the community, that's all. I want municipalities to be involved.
Mr Arnott: Perhaps legal counsel could give us some advice on the interpretative features of this.
The Chair: That may be appropriate.
Mr Loken: Municipalities of course are included in the bill as a sponsor. This section of the act is designed to set out compulsory requirements for corporations in order that they may be registered, that they fulfil the purposes of the act in a certain way. Certainly a municipality could pass a resolution and support a CISC, and in fact I think that would be the intention of the bill, that a community group or a sponsor who had the municipal support would probably be a more effective sponsor, adding the support of the broader community.
Mr Hope: What if they didn't? What if the resolution was denied by a municipal council? Then that community group could not establish itself, right?
Mr Grandmaître: That council doesn't have a veto.
Mr Hope: If they don't pass a resolution, then they don't identify them, right?
Mr Loken: Under this section, it's a requirement that all these items be set out, so if this is indeed a requirement --
Mr Hope: That the resolution be passed.
Mr Loken: -- that the council passes a resolution, then the corporation may not be registered.
Mr Hope: If they don't pass a resolution, that means you veto the authority of that community group that wishes to establish. The amendment you're putting forward will give the vetoing power of a municipal council. Say, for instance, I'm not one who's well liked by municipal council and I'm with a group and I meet all the criteria, but for some reason municipal council says, "No, no, they're not part of the élite in our community so we're not going to let them participate. We will not pass a resolution." Then you've taken my right away from me and the community group that I wish to put together to be a participant in the community economic development.
Mr David Johnson: I guess Mr Hope is starting to ask a few questions along the lines there. The lead-in to this whole section, section 7 on page 5, says "A corporation must satisfy the following requirements," and then it lists nine requirements. This would be the 10th.
This 10th requirement that according to the lead-in must be satisfied would be that the council of the local municipality or planning board in which the corporation is situate, as appropriate, has passed a resolution supporting the corporation. I guess, to the legal staff, you're interpreting it then that there must be a resolution from the local municipality or planning board.
Mr Hope: Isn't that what I just said?
Mr David Johnson: Yes, that's what Mr Hope just said, so you're leading into the same thing. The question here is, how would you interpret the words "as appropriate"?
Mr Grandmaître: I'm simply saying --
Mr David Johnson: I guess I'm looking to the legal counsel again at this time. Do the words "as appropriate" have any impact on the requirements?
Mr Loken: I would suggest that "as appropriate" is too indefinite to have any particular meaning. It's not set out anywhere. It doesn't say who decides what is appropriate. Is it the council that decides?
Mr David Johnson: So in your view, that doesn't remove the veto power --
Mr Loken: No.
Mr David Johnson: -- the words "as appropriate." All right. So if the clause was rephrased to say that "the council of the local municipality or the planning board in which the corporation is situate be informed of the creation of the corporation," then you'd have no problem with that. That would simply be information; that wouldn't be a veto power.
Mr Loken: Then the requirement would be that indeed the ministry --
Mr David Johnson: Inform.
Mr Loken: -- whoever you designate to inform, the corporation or the ministry, would inform the council.
Mr David Johnson: And perhaps, "and ask for their comments" or something like that. That would be fine. That wouldn't be a veto, but that would be easy to fulfil and would get the municipality involved.
The Chair: I think the committee's legal counsel would like an opportunity to clarify.
Ms Susan Klein: I think the "as appropriate" was intended to say that in places where there isn't a local municipality, in territory without municipal organization, it would be the planning board. The "as appropriate" was just to identify which of those two would pass the resolutions.
Mr Hope: As one who is not a lawyer, thank God, who can sit here and read this legislation, I'm expressing serious concerns as a community activist that you have in this legislation -- and whatever you mean by "as appropriate." Good Lord, I'm not going to go through legal battles.
Remember, the whole emphasis behind this legislation is to keep it as simple as possible. The community understands what's going on and community groups will participate. We heard that through presentation after presentation, and when I sit here and I read this, you've now given the municipality authority. I heard what legal counsel says, but let me tell you, what I read in here is that you are saying the council or planning board has to approve me before I meet the following requirements.
I'm trying to keep it as simple as possible. As far as I'm concerned my last comment is, I will not support that amendment.
Interjection.
The Chair: Identify yourself for Hansard.
Mr Norman Manara: I'm Norman Manara and I'm from the municipal finance branch of the ministry. Clearly the intent of the program was not to have municipal approval of every single proponent who came forward to set up a community investment share corporation. Municipalities were to be involved by way of being a sponsor. However, if in fact a non-municipal sponsor wanted to set up one of these organizations, it did not have to have a resolution of the local council.
The Chair: Further questions or comments?
Mr David Johnson: Is it possible to amend the amendment?
The Chair: Certainly everything is possible, Mr Johnson. You could make an amendment to the amendment if you wish.
Mr David Johnson: I move that the amendment be amended to read:
"The council of the municipality or planning board in which the corporation is situate, as appropriate, be informed of the creation of the corporation," or, "could be informed of the corporation," whichever legal counsel would advise.
Mr Loken: The registration.
Mr David Johnson: The registration?
Mr Loken: No, we couldn't. It would be inappropriate to inform them of the registration as a prerequisite to registration.
Mr Hope: Well, they should be informed.
The Chair: Order.
Mr David Johnson: Where would it be appropriate to inform them?
Mr Loken: Prior to registration, the application for registration.
Mr David Johnson: All right, "be informed of the application for registration of the corporation." In that sense, there's no veto power; the municipality is simply being informed. They can pass any resolution they want on any topic, including nuclear warfare, but it wouldn't have any impact. It wouldn't have any veto on this bill.
Mr Loken: I would just add to that --
The Chair: The Chair is having some difficulty understanding procedurally where we are. Are you attempting to make an amendment to --
Mr David Johnson: Yes.
The Chair: I'm getting the feeling that this may be a friendly amendment. Perhaps the better thing to do would be for Mr Grandmaître to withdraw his amendment and to place an amendment that is agreeable to both of you.
Mr Grandmaître: Can't we accept the subamendment? That would be more --
The Chair: We can accept it if I know what it is and the members of the committee are --
Mr Grandmaître: Well, tell us.
Clerk of the Committee: If I understand it correctly, Mr Johnson, you wish to amend Mr Grandmaître's amendment by placing after the word "appropriate," "be informed of the application of the creation of the corporation"? Do I have it correct?
Mr David Johnson: Yes.
The Chair: Is that agreeable?
Mr David Johnson: I'm just looking at legal counsel for his final nod of approval.
Clerk of the Committee: We agree on the words.
Mr Loken: I think there may be some difficulty with that. It's that the corporation must satisfy these requirements and it's a question of who will be informing the municipality, if that's the intent.
Mr David Johnson: Is there a corporation there that would inform the municipality at that point?
Mr Loken: There may be, but it's possible there may not be a corporation.
Mr David Johnson: If we said, "At the earliest possible opportunity." I'm just trying to let the municipality know about it, that's all.
Mr Mammoliti: On a point of order, Mr Chair: He is changing the whole thing.
The Chair: There is no motion on the floor, Mr Mammoliti. Mr Johnson is busily trying to draft one.
The committee will recess and reconvene at 11:15.
The committee recessed from 1104 to 1117.
Failure of sound system.
The Chair: -- and replace a substitute amendment.
Mr Grandmaître: Yes, replace it with another friendly amendment, which would read, I move that section 7 of the bill be amended by adding the following paragraph:
"10. The council of the local municipality or the planning board in which the corporation is situate, as appropriate, has been informed by the corporation of its application for registration."
The Chair: Questions, comments?
Mr Hope: A couple of them. First of all, even though it's amended, I still don't agree with it. A couple of things: Dealing with the local municipality, is it upper or lower municipal government that we're dealing with?
Second of all, you say "informed by the corporation of its application." Let me tell you, if a municipal government doesn't know what's going on in the community, then I think they have the opportunity to resign their seats and get out so that we put people in place who know what's going on with their community. We're talking about economic development; we're talking about restoring some prosperity in our communities. Let me tell you, if municipal governments are not paying attention to what's going on in their community, to put this in the legislation is not going to correct their problem and the real fate of understanding what's going on in our communities.
Even with your amended version, it still leaves much to be desired and I believe that a municipal council in this legislation should be taking a leading role in providing economic renewal, not sitting on the back burners of the whole process and letting people inform them about what's going on. They have a proactive approach to take and they should be doing that. If they're not going to do it then, before 1994, get out of the road and allow those who wish to participate in economic renewal in our communities do so.
Mr Mammoliti: I would have again objected to this --
Mr Hope: I'm running for mayor, by the way.
The Chair: Mr Mammoliti has the floor.
Mr Mammoliti: I would have done it through a point of order, but I think it may be more appropriate this way. I still think, in looking at this amendment, that it's out of order. I think that by changing the intent of the original amendment, it would -- I'm sorry, did he replace the original amendment? Is that what we're looking at? I shut my mouth at this point.
The Chair: Further questions or comments?
Mr David Johnson: It's too bad we get into these kind of debates over what really now is a very simple suggestion. That is simply that the local municipality or the regional municipality or both, where the group has taken its headquarters, its main address, would be informed of what's happening. It's been said that municipalities somehow by osmosis, I guess, or looking up in the clouds, should know everything that goes on within their jurisdiction or else just get out of the way. It's pretty hard to understand that sort of thinking. The municipalities get this kind of information if they're informed. This is just a simple request to inform the municipality, let it know what's happening here. They're going to get all sorts of programs, happenings under their jurisdiction that they'll want to know about and this is going to be one of many. Why on earth shouldn't they be informed?
As a further reason, within the bill it permits municipalities to be involved in the startup costs in terms of giving staff time, for example, and it's quite likely that at some point in time some of these community groups that form separate from a municipality may come to the municipality at some point and seek guidance or assistance, and the bill permits that. This amendment that Mr Grandmaître is putting forward simply allows a municipality to know what's going on and to perhaps be aware that it may be approached at some point in the future, and be prepared. I think it's a very simple amendment. I don't know what all the fuss is about. I'll certainly support it.
The Chair: Further questions or comments?
Mr White: I think the amendment is not a bad one. It certainly suggests that a municipality be involved. Certainly, much of the act empowers municipalities to be involved in community development corporations, empowers them to become sponsors of these particular mechanisms and tools and in fact some of our amendments specifically speak to municipal involvement.
The concern I would have, frankly, is by inclusion in this section, which is a requirement for registration, there would be an onus upon that corporation that could perhaps better be described in other sections of the act and, I would suggest, appropriately in the regulations. I would imagine, as Mr Hope indicated, that the municipality would probably be aware of this kind of economic development and probably be not only aware of but involved in most of these economic developments. By putting it in this section of the act, it makes it a requirement, an obligation that I don't think other economic tools are obligated to follow through. We mentioned before about the small business development corporations, the ventures programs. I doubt that they are under those same obligations.
So I would suggest that, while the amendment is an excellent one and it talks about the involvement of municipality, such as this very act does, maybe it should be suggested at another point or, I would recommend, in the regulations under 43(2)(c).
Mr Hope: I just look at this from a point of view -- let's say that a community group -- and I understand what you're trying to do and I believe a municipality should be informed; that's why I made the comments. If they're not, then they'd better look out and get out of the way. Let's say for all reasons a community group puts everything together and because they did not -- it might have seen the mayor or one of the councillors on the street and said, "Look, we're putting in a corporation." Then we get into the technical end of it. You can turn away a community participation by saying, "Oh, one of the requirements you forgot was to notify council." "Well, I did, I saw you on the street the other day and the mayor in the coffee shop" -- where most of them participate in fixing problems of government is in the coffee shop. All we do is lead into a technical problem because the information, so-called, was not transmitted to the elected officials. It just makes more complications for those groups who wish to get going and participate in an exciting program which I feel, especially as a rural member, is an opportunity and I don't need a small technicality that, "Oh, sorry, I forgot to put it in writing, or whatever, to our elected officials about what's going on." That's why, if you want to say that municipal -- I'm sure there are other areas of this legislation where municipal councils can be involved, but not as part of a requirement to be a group named as part of promoting economic renewal in the community.
Mr Arnott: I'd like to speak in support of Mr Grandmaïtre's revised amendment. Look, I think one of the things we're overlooking here, Mr Hope, is the fact that municipal councils are elected; they're the legitimate government of that community. I think your objective is to involve the community in these economic development projects and I think it's absolutely essential that the elected body of government representing that community is involved directly. I don't think it's an extremely difficult encumbrance to ask the proponents of one of these projects to simply make a photocopy of the application and drop it off at the municipal office so the council is informed.
Mr Grandmaître: The fact that we're amending the Municipal Act, section 112, permitting municipalities to provide services -- I call this bonusing -- I think it's only fair that the local municipality, the local council, should be informed of this new corporation that will be taking place. That's it, this is all I'm asking. I repeat, we don't have a veto on the creation of the corporation; I simply want to inform them.
If Mr Hope thinks that everything is done at the coffee shop, then he's sadly mistaken. I don't think he's ever sat on a local council, because this is not where major decision-making process takes place, not in my 14 years of experience, anyway, and I want to involve the local government, I want to improve the local decision-making process and that's why I simply want that corporation to inform the local council of its activities, period.
The Chair: Mr Hope, I think, and then Mr Wiseman.
Mr Hope: Why I bring this in, I take it more personal when we deal with legislation. I look at my own community. I've listened to the words the municipal elected or the governing body -- let me tell you, we had a meeting dealing with the Premier's Council on Economic Renewal. Invitations were sent to all councillors and the mayor felt and stated in the press that he had better opportunity of coaching his son's baseball team than participating in economic renewal. Now, if that's the approach that some municipal councillors are taking, I think it's up to the community, those community people who participate in that report -- the opportunity. When I look at legislation -- because I always try to refer myself back to a community. You're absolutely right, I didn't run for municipal council, but don't hold your breath, I could be there sooner than you think. One of the things is that we are getting into such severe politics, both at the municipal level and of provincial level and federal level, that there is a community out there that is really caring about what happens. Then, when I sit here and look at this as part of a requirement before they can get started, I have serious problems with it. I believe the municipal government should be involved in the process, but not in this section of the legislation. That's the end of the comments I'm going to make on that part of it.
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Mr Wiseman: I just would wonder if we really needed to do this, given that section 5 of the legislation states,
"The minister shall maintain a register of community economic development corporations setting out the names of the corporations and the names and addresses of their officers and directors and any other corporate information as prescribed."
Then in the next section, 5(2), "The minister shall ensure that the register is open for public inspection during normal office hours."
It seems to me that most communities have a business development group or committee, an economic development business community -- whatever you want to call it -- that would be able to access this registry and have all the information that is necessary. I don't think we should clutter the legislation with what I would consider to be unnecessary and redundant sections.
Mr Mammoliti: I wish to speak a little bit about my particular riding and why I think this amendment is inappropriate. Over the last 25 years, my particular riding has been neglected in a number of different ways and it's led to a number of different problems, some of which were and still are social problems, and I blame the municipal government for a lot of the problems that have been created in my particular area over the last 25 years.
Having said that, I would not want the municipal government -- and I still believe this amendment would give it that power -- to have its hand in determining applicants and their eligibility, and I really believe that there are some municipal council members and mayors who like to strategize that way.
In my particular case in North York, I would not want Mel Lastman, quite frankly, to be able to manipulate this way. Over the last 25 years, we have suffered from some of the decisions that North York has made this way, and I really believe that if we were to give this type of authority -- and you might say, "Protocol is important; we need to let them know," but I think it does a little bit more than just give them notice. I think by giving them notice you will give them the opportunity to be able to work against some community groups.
In my particular area, a lot of those community groups have been neglected over the last 25 years, and for me, this piece of legislation gives some of those groups an opportunity to apply for something without being discriminated against for one reason on another. There's that concern, and of course the concern that I raised earlier, that being that you're continually putting in amendments that might want to clutter this piece of legislation, and I object for that reason as well.
The Chair: Further questions, comments?
Mr Grandmaître: Yes, Mr Chair. You know that's not my intention. I don't want to clutter the legislation. I wanted to make it work as well as possible, and I'm very surprised to hear that this provincial government is dead against local government. I'm very surprised at some of the comments that I've heard coming from the members of the government. If you do have a problem with your local government, you're supposed to be the government that wants to work with everybody, a government with no walls, open doors, and you want to consult everybody, but now you want to leave out the local municipality, the local council, out of your decision-making process: "Don't trust them. They can't be trusted." I can't understand your comments this morning.
Also, this amendment doesn't give municipalities any additional powers. They won't be determining their eligibility. I simply want the corporation to inform city council of what's going on. Who knows? Maybe this corporation later on will be needing the municipal council's assistance in providing services, infrastructure, I don't know, but just simply keep them informed of what's going on in their municipality.
The Chair: Further questions? Comments? Shall Mr Grandmaître's amendment carry? All in favour? Opposed? The amendment's lost. Mr Johnson.
Mr David Johnson: This is the one we've all be waiting for. It's been announced a couple times.
I move that section 7 of the bill be amended by adding the following subsection:
"Divestiture plan
"(2) The Minister of Finance shall not give his or her approval under paragraph 9 of subsection (1) unless the corporation has submitted to the Minister of Finance a divestiture plan."
That's the amendment, and the reason or the rationale is that the amendment is intended to ensure that as a condition of registration the corporations can present a reasonable divestiture strategy to dispose of their assets should the corporation fail. It is intended to act as a test of quality management. This was a point that was raised by more than one of the deputants, I think. Certainly one of them was Sharwood and Co, which indicated that investors should know how they get their money back out. How do you redeem? So that's my amendment.
The Chair: Further questions, comments?
Mr Hope: I guess my question would be, I would probably see the plan being put forward to the Ministry of Municipal Affairs and I'm wondering, why would you use the Minister of Finance or Ministry of Finance, whatever you want to -- why wouldn't you use Municipal Affairs, because we're dealing with community economic development? I could see merits in it being changed from Minister of Finance to the Minister of Municipal Affairs, and with that friendly aspect of it -- I don't know. I just wonder why Finance versus Municipal Affairs as being the key.
Mr David Johnson: I guess it was probably deemed that Finance would be more appropriate to look at financial aspects, including redemption, but I think Mr Hope perhaps has a good point when I reconsider and I am prepared to accept his friendly amendment that it be the Minister of Municipal Affairs.
The Chair: So that I understand and the committee understands, you will change the word "Finance" to "Municipal Affairs."
Mr David Johnson: Yes.
The Chair: So there's a friendly amendment.
Mr Hope: If he's agreeing to my amendment, then it's covered under section 43 of this legislation, and that's why I needed some clarification.
The Chair: It would be helpful for the Chair just to know that Mr Johnson has moved that "Finance" be replaced by "Municipal Affairs."
Mr David Johnson: Just before I sign off on that, is it the Minister of Finance that gives the approval under paragraph 9? Who gives approval to the community investment share corporation? Maybe I could ask staff. Who is it who actually gives the approval?
Ms Klein: I think you're right. In paragraph 9 there, it's the Minister of Finance.
Mr David Johnson: All right, so it can't be --
Ms Klein: Yes.
Mr David Johnson: The reason, Mr Hope, is that it is the Minister of Finance that actually gives the approval, not the Minister of Municipal Affairs.
Ms Klein: That's only under paragraph 9, only to the security offering and the offering statements. The general registration decision comes later on and that's handled by the Minister of Municipal Affairs, but there's one specific requirement under paragraph 9, that is, they ask that the Minister of Finance give his or her approval to the security offering and offering statement.
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Mr David Johnson: So I'm suggesting at that point, where it's with the Minister of Finance already, the divestiture plan be available and the Minister of Finance would then give approval, if all conditions are met, including that a divestiture plan is available. So in that case it has to remain as the Minister of Finance.
The Chair: All right. So we're clear the amendment is as originally placed.
Mr David Johnson: Yes, that's right.
Mr White: I'd like to thank my colleague for bringing forth this amendment. The amendment, however, I think is unnecessary for a couple of reasons. One, if I could draw your attention to clause 30(1)(a), "The corporation applies and files all material required in accordance with the regulations," and the ministry is including the divestiture as part of its regulations and procedures. It's certainly being contemplated, so that will be in the regulations.
I would also, with the committee's indulgence, draw your attention to clause 43(2)(d.1), which is an additional amendment. While we haven't as yet gotten to that point, I'm sure you'll be pleased to see that the issue of the prescription and regulations is further dealt with under that so that concerns in regard to the involvement of municipalities, such as were discussed recently, and of course this issue about the community investment share corporations and their activities, their divestiture plans etc, can be further regulated under that section. So again I want to thank my colleague for bringing forth that recommendation and that amendment but feel that it's really not necessary.
Mr David Johnson: I thank the parliamentary assistant and centre-fielder for bringing that to my attention, but one of the problems you're dealing with when you're going through this bill is that there are so many -- I think I counted about 205,000 of them where they're prescribing terms or it's going to be described later in the regulations and you have no idea what the regulations are going to be. This bill is largely by regulation.
I guess the routine here now is that my amendment would get voted down, undoubtedly, but I think I'll leave it on the floor anyway.
The Chair: So cynical.
Mr David Johnson: I'll leave it on the floor anyway, and after it does get voted down and when the regulations come in, I'll have a look for how you're dealing with divestiture in the regulations.
The Chair: Mr White.
Mr White: I just wanted to add to that, very simply in response to my colleague's concerns, that having mentioned that those are a part of the approval process as is currently being worked on by the ministry, they should appear in regulation and we are certainly now giving you a foretaste of what will be in there.
Mr Grandmaître: Is that a promise?
The Chair: Shall Mr Johnson's amendment carry? All in favour? Opposed? The amendment is lost.
Shall section 7, as amended, carry? Carried.
We have a government motion to subsection 8(1).
Mr White: I move that subsection 8(1) of the bill be amended by adding the following paragraph:
"3. Charitable, labour and not-for-profit organizations, as prescribed."
The Chair: And an explanation for that, Mr White?
Mr White: I think very obviously it's desirable that the opportunity to purchase such shares be open as widely as possible to as many community groups as possible that wish to participate.
Many of the CISCs of course will have aims and goals that will be similar to the CLFs and to those non-profit groups and their activities in the community. Although the power is already prescribed in regulation, it's felt that it would be more accessible, to clarify in the act this policy intent. And of course it reflects the submissions we heard last week and yesterday.
Mr Hope: I'm glad to see, first of all, the amendment, because I know it was brought up during the presentations that were delivered and it does show that the government does listen to the public hearing process, which is a good part. I remember previously, before getting into government, a lot was said but nothing acted on. I am very glad that this is an opportunity, because when we talk about social values, there are a lot of community groups out there that have a lot of social value in their communities and churches, and others are a key factor in participating in the process of social responsibility; nor will they be looking at the big dividends that they draw off their investment. So I'm extremely pleased that the ministry officials and the minister's office have agreed to allow a broader perspective of a community in allowing participation in community economic development.
Mr Grandmaître: I thought I was told a little while ago, when we were talking about sponsors, that everybody was included. Now, here's an amendment that's saying "charitable, labour and not-for-profit organizations." What's the difference? If they're all included, why bring this amendment?
Mr Hope: Read the section.
Mr Grandmaître: I just did.
Mr Hope: What does it say?
The Chair: Order.
Mr Mammoliti: When was it said and how was it said?
The Chair: Mr Mammoliti?
Mr Mammoliti: I'm asking him the question. When was it said and how was it said? I think he's exaggerating the point. I don't think it was said in that way.
Mr White: Within this section, those groups would not automatically be included. "Corporations other than community economic development corporations,...other ...classes of corporations" etc wouldn't necessarily describe the groups that are included under paragraph 3. Obviously again, under regulation that can be prescribed, but I think the input of this in legislation gives those groups added potential to invest without there being any question about their legitimacy in that role.
The concern my friend brings up, though, of course is legitimate. Where does one include and where does one suggest simply that this can be prescribed under regulation? We suggest here that this is an area where it's best that they be explicitly included.
The Chair: Further questions or comments regarding Mr White's amendment?
Mr Hope: I'm the one who said that everybody was included in all the process, and I know what he was getting at, but when you talk about the issue, class A securities, it was very specific in that. All it did was open that up, so it's now even clearer who can get the class A securities. That's why I said to read the section. I didn't mean it in sarcastic terms, but the part is who is entitled to class A securities. I think that's the important part that was brought up through the presentations and also which is now in the amendment.
The Chair: I have a technical question regarding the tax status, particularly through the charitable part of that. Could someone explain if that has implications regarding tax status to charities etc?
Mr Loken: Charities are in fact restricted on the type of investments they can make. There may be certain types of charitable organizations that may be able to indeed purchase these types of securities. It would depend on their governing legislation. We would hope in negotiations with Revenue Canada to clarify that and perhaps add these securities as a type of holding that a registered charity could have or a foundation.
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Mr Hope: With that, part of the process is that the federal government, because it has publicly stated it has no money for jobs, I'm sure will have no problem in allowing those individuals of the charitable organizations amendments to the legislation that governs them on this part and will open it up so that those charitable organizations can contribute to their community and put people back to work. We've heard from the federal government. They don't have the money. So this is an easy route out for our federal colleagues, to amend it so that it allows them the opportunity to invest back in their communities.
The Chair: Further questions or comments regarding Mr White's amendment to subsection 8(1)? Shall Mr White's amendment carry? Carried.
Subsection 8(2): Mr White.
Mr White: I move that subsection 8(2) of the bill be struck out and the following substituted:
"(2) A community investment share corporation shall not issue any class A securities to a person if the issue would result in the person and the person's associates holding class A securities issued for an aggregate consideration exceeding a prescribed amount or amounts determined in a prescribed manner."
The Chair: That's very clear. You'll explain it?
Mr White: Yes, of course.
Mr Grandmaître: It's in the regulations.
The Chair: Order.
Mr White: The issue that has been brought up during committee hearings was the prescribed amount or amounts, and that will be not in so fixed an amount as to limit them. We're taking out those numbers, and we are here standardizing some of the wording between this section and the wording of complementary sections dealing with community loan funds as well, which is under section 18. It's a fairly straightforward amendment.
The Chair: I thought so.
Mr David Johnson: In the original, as I understand it, an investor was limited to the lesser of $25,000 investment in the share corporation or 10% of the total amount that was raised. This is simply removing those specific amounts. Could we have some sort of forecast as to what will appear in the regulations? Will it be greater than this? Is that the idea? I assume it will be greater.
Ms Melnyk: Yes, it is. We hope it will be greater.
Mr David Johnson: Is it going to be much greater or is it going to be a little bit greater? What are the determining factors?
Mr Hope: It will be appropriate.
Mr White: I think we have indicated the direction. I'm not sure we can be explicit in terms of the precise percentages or numbers, but certainly in the direction of being larger than the present prescribed number.
Mr David Johnson: The board for the corporation is appointed or -- what's the proper word -- elected by -- for example, shareholders are included in determining who sits on the board. Now, if this limit is going to be raised, then I presume it would allow for the possibility of some one individual purchasing a greater amount in the corporation and therefore having a greater say on who sat on the board. Is there any possibility that, if you raised the amount to a considerable degree, one person, through having more money in, more shares, could have an undue influence on who served on the board of directors? How do you guard against that?
Ms Melnyk: The intent primarily was to not unnecessarily restrict ourselves in the legislation with specific numbers. The concern of domination is a great one, and it is intended that these investment share corporations be as broadly based as possible. But to put in specific numbers, particularly dollar amounts, often is a difficult thing to live with after a couple of years.
Mr David Johnson: How will the board be selected? If you have a class A share, do you get one vote in terms of who will sit on the board, or how does that work? Has that been set up yet? Has that been determined?
Mr Loken: That's the intention, yes. But it will be set out in the articles that we require under section 7.
Mr David Johnson: So I assume at the very least you're aware of that concern?
Mr Loken: Certainly.
Mr David Johnson: Can we take it as a guideline, you would not allow one person to have over 50% of the shares so that they could appoint the majority of the board members and therefore control the whole corporation? Would that go without saying?
Mr Manara: I would just say that we are aware of that problem and that basically the intent again of the program is not to have any one person controlling the corporation. I think the point here is that the ownership of the shares in the corporations ideally would be as wide as possible, so that you'd have a great number of people being shareholders in the corporation, so you'd have it fairly diffuse.
Mr David Johnson: That's the ideal, but you can't guarantee that. Mr Arnott raised the possibility the other day that he knows a farmer who has $500,000 that he's interested in investing. You may have that one farmer and 10 other people with $1,000. What do you do in that case?
Mr Manara: I think the point is again, in terms of the requirements under the program, it had been made very, very clear that people wouldn't be able to put those types of resources into one of these corporations to the extent that they would have undue control over that entity.
Mr David Johnson: They wouldn't be allowed to have majority control, for sure.
Mr Manara: That's correct.
The Chair: Further questions, comments?
Shall Mr White's amendment to subsection 8(2) carry? Carried.
Shall section 8, as amended, carry? Carried.
Questions, comments or amendments to sections 9 and 10? Shall sections 9 and 10 carry? Carried.
I think we have done an admirable morning's work. The committee will reconvene at 2 pm this afternoon.
The committee recessed from 1158 to 1404.
The Chair: The standing committee will come to order. When we completed this morning's section, we had completed up to section 10. We will now consider section 11.
Mr White: I move that clauses 11(1)(a), (b) and (c) of the bill be struck out and the following substituted:
"(a) the investment will result in community investment share corporations holding equity shares carrying voting rights sufficient, if exercised, to elect more than a prescribed percentage of the board of directors of the eligible business;
"(b) the investment will result in more than a prescribed percentage of the equity of the eligible business being provided by community investment share corporations;
"(c) the investment will result in more than a prescribed percentage of the equity of the eligible business being provided with government financial assistance of any kind;"
The reason for these revisions is fairly simple. It deals with the amount and percentage of the control of the CISC and the corporations, and of course it also deals with the companies involved not being companies which are otherwise supported by government ventures.
The Chair: Further questions or comments on Mr White's amendment to clauses 11(1)(a), (b), and (c) of the bill?
Shall Mr White's amendment to clauses 11(1)(a), (b), and (c) carry? Carried.
Clauses 11(1)(d) and (e), questions, comments or amendments? Shall clauses 11(1)(d) and (e) carry? Carried.
Mr Grandmaître: I move that clause 11(1)(f) of the bill be struck out and the following substituted:
"(f) the investment is intended to be used by the eligible business for any purpose, including retiring or refinancing a debt, other than the development of the eligible business;
"(f.1) the eligible business has applied under federal legislation for bankruptcy or other protection against creditors; or"
Mr Chair, I simply want this amendment to protect the investors and their investment.
Mr Hope: You've got to convince me if you want me to vote for it.
Mr Grandmaître: Don't you want to protect the investors and their investment?
Mr White: I've discussed this amendment with Mr Grandmaître already and the government is substantively in agreement with his amendment --
Mr Grandmaître: Adjourn.
Mr White: -- and feels that it's consistent with the intent of the legislation. However, we do have an amendment to his amendment which simply clarifies the issue of bankruptcy protection, if I might be permitted to read that amendment.
The Chair: So the Chair understands that we have a friendly amendment.
Mr White: The friendly amendment is the addition of clause 11(1)(f.1), and that is to read:
"(f.1) the eligible business is an undischarged bankrupt under the Bankruptcy and Insolvency Act (Canada) or a compromise or arrangement has been proposed between the eligible business and its creditors under the Companies' Creditors Arrangement Act (Canada); or"
Mr Daigeler: Would you repeat that in French, please?
Mr White: I'm sorry, I don't have the French translation.
The Chair: So that we're clear, Mr White --
Mr Wiseman: Ben, I liked the way you said it. I understood it a whole lot better.
The Chair: Order. So, to be clear, Mr White, that is an addition.
Mr White: No, that would be a substitution for (f.1).
The Chair: It replaces (f.1).
Mr White: Yes.
The Chair: And that's agreeable?
Mr Grandmaître: Might as well go for 50% of my amendment. Carried.
The Chair: I take it, then, Mr White's friendly amendment -- do you have a copy of that for the clerk?
Mr White: Yes.
Ms Klein: Actually, we don't have it as a motion. Can I write it up as a motion to amend that wording?
The Chair: Yes, that would be a good idea. We will stand that down for --
Mr Grandmaître: Next week.
The Chair: You have a question, Mr Hope?
Mr Hope: Well, I'll wait till the stand-down and then we'll deal with it. I have some questions. I'd just like to know where the Liberals federally are going when they change the Bankruptcy Act.
The Chair: We'll stand this down while the motion's being rewritten and we'll deal with clause 11(1)(g). Questions, comments or amendments to clause 11(1)(g)? Shall clause 11(1)(g) carry? Carried.
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Subsection 11(2), Mr White.
Mr White: I move that subsection 11(2) of the bill be struck out and the following substituted:
"Interpretation
"(2) For the purposes of clauses (1)(b) and (c), `equity' means share capital of the corporation, loans advanced to the corporation by its shareholders subject to prescribed conditions, and other prescribed forms of contribution made to the corporation by its shareholders, calculated in the prescribed manner."
The reason for this is, as was earlier indicated and is consistent with the last clause, that it basically clarifies and defines to some degree what is to be considered equity and includes under that definition shareholder loans etc.
The Chair: Questions, comments or amendments to Mr White's amendment to subsection 11(2)? Shall subsection 11(2) carry? Carried.
Clauses 12(1)(a) and (b), Mr White.
Mr White: I move that clauses 12(1)(a) and (b) of the bill be struck out and the following substituted:
"(a) have equity shares issued and outstanding for consideration paid in money of at least a prescribed amount; and
"(b) hold investments in one or more eligible businesses, as permitted by sections 10 and 11, for which aggregate consideration was paid in an amount equal to at least 80 per cent of the consideration in money received by the corporation from the issue of its class A securities."
The reason for this is to remove -- in the original legislation the fixed amount was numbered, as you can see in subsection 12(1), $50,000, and of course we're wanting to encourage more flexibility, as was suggested during our hearings. That's the principal reason.
The Chair: Questions or comments on Mr White's amendment to clauses 12(1)(a) and (b)? Shall Mr White's amendment to clauses 12(1)(a) and (b) carry? Carried.
Subsections 12(2) and (3). Questions, comments or amendments to subsections 12(2) and (3)? Shall subsections 12(2) and (3) carry? Carried.
Shall section 12, as amended, carry? Carried.
Sections 13, 14 and 15. Questions, comments or amendments to sections 13, 14 and 15? Shall sections 13, 14 and 15 carry? Carried.
Section 16, Mr White.
Mr White: I move that section 16 of the bill be struck out and the following substituted:
"16. In this part, "eligible borrower" means an individual, partnership or corporation located in Ontario, that,
"(a) applies for a loan from a prescribed class of financial institution for the purpose of financing a new or expanding business; and
"(b) meets other prescribed criteria."
The Chair: Questions, comments or amendments? An explanation, I guess, would be in order.
Mr White: The present wording would restrict the loan fund corporation from providing collateral for a loan for a borrower who has not yet established a sole proprietorship. It also restricts the use of the program by individuals hoping to use their individual loans to found collective enterprises such as workers' co-ops, as we have heard during our hearings.
The Chair: Questions or comments on Mr White's amendment to section 16?
Shall Mr White's amendment to section 16 carry? Carried.
Shall section 16, as amended, carry? Carried.
Subsection 17(1), Mr Arnott.
Mr Arnott: In the absence of Mr Johnson, I move that subsection 17(1) of the bill be amended by striking out paragraph 3.
The Chair: Could I ask for an explanation of that, Mr Arnott?
Mr Arnott: This amendment was suggested by the Community Enterprise Centre and it's intended to ensure that existing community loan funds that are already in place that wish to register under this act are in no way penalized. It's intended to make sure that loan funds are accessible to all who qualify.
The Chair: Questions and comments?
Mr Hope: What was the explanation behind that?
Mr Mammoliti: Because somebody asked for it.
Mr White: Could Mr Burns speak to this amendment?
The Chair: Could you introduce yourself for Hansard?
Mr Tim Burns: I'm Tim Burns from the community development branch of Municipal Affairs. A couple of issues there: Firstly, I think there's the legal one with respect to any liabilities that an existing corporation could be bringing into the program, and therefore the impact that might have on the provincial guarantee which would be extended under the program. There's a strong argument for incorporating a new entity to operate under the program. Secondly, there is startup in operating support under the loan fund program, so any of the the expenses related to that are in fact covered. So our recommendation is that the loan funds be operated by newly incorporated entities and therefore there is the requirement there in paragraph 3.
Mr Arnott: You would recommend against our motion?
Mr Burns: Against the motion.
Mr Hope: I want to know why they want to strike that out. The problem I see actually lies in some of the bankruptcy stuff. If you took that out, a current corporation then could access this program.
Mr Arnott: An existing community loan fund would then be able to access that program.
Mr Hope: A current company then could access moneys through the new program. Is that what you're saying? By striking paragraph 3 out, are you saying that you want to allow current businesses to have access --
Mr Arnott: Community loan funds which are similar in concept but may in fact be non-profit should have the opportunity to participate as well. That's what we're trying to say.
Mr Hope: That's not what that's saying, though.
Mr Arnott: There may be existing community loan funds. Again, this was suggested by the Community Enterprise Centre.
Mr Mammoliti: I'd like to ask a question whether or not these community loan funds, even with paragraph 3 in, would qualify.
Mr Burns: In my understanding, they would qualify as sponsors by virtue usually of being non-profit and many of the individuals concerned would also be involved in the new entity. However, the corporate entity, to be registered under the act, would be a new corporate entity. So although it may involve some of the same players and it may have some of the same sponsors, for the purposes of registering under the act and issuing the class A notes and so on, it would be a new corporate entity. The same partners could be involved, but it would be new.
Mr Mammoliti: It would be new. What's the reasoning behind that?
Mr Burns: I think the most important reason -- I'll ask James, if I may, to come in and correct me if I'm wrong here -- is any liabilities or judgements against an existing entity which they might bring into the program, and therefore you could place the province's guarantee at risk if there were a judgement against them and they would have to pay out, and money that's been money that's been raised with a provincial guarantee would be called upon to pay out on those judgements or those liabilities.
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Mr Mammoliti: With that explanation, Mr Chair, I would expect that the Conservatives drop this amendment. I would think you would agree with this. No, Mr Arnott?
Mr Arnott: I think there's still merit to what we've suggested in terms of ensuring that existing community loan funds have the opportunity to participate. You're suggesting that in fact they will have that opportunity under --
Mr Burns: The same as individuals who want to be involved.
Mr Arnott: I hadn't considered that particular point. I'd still like to move the motion.
The Chair: Further questions or comments?
Shall Mr Arnott's amendment to subsection 17(1) carry? All in favour? Opposed? It's lost.
Mr White: I move that paragraph 4 of subsection 17(1) of the bill be struck out and the following substituted:
"4. The corporation's articles of incorporation or letters patent restrict the objects of the corporation to establishing, financing and operating a community fund that provides collateral for loans to eligible borrowers and to providing business and other advice to eligible borrowers."
The reasoning behind this is that the present wording is unnecessarily and overly restrictive, and of course that has been brought up on a number of occasions during the hearings.
The Chair: Questions or comments on Mr White's amendment to 17(1)4?
If not, shall Mr White's amendment carry? Carried.
Shall the balance of section 17 carry? I'll give you an opportunity, actually, for questions and comments. We have not done 1, 2, 5, 6 and 7, and I believe the Liberal Party has an amendment adding a paragraph 8. We'll deal with everything that is not included.
Shall paragraphs 1, 2, 5, 6 and 7 carry? Carried.
Mr Grandmaître: Mr Chair, I thought my amendment was to --
The Chair: It adds a new paragraph 8, at least the copy I have does.
Mr Grandmaître: It's the same great amendment I introduced this morning.
I move that subsection 17(1) of the bill be amended by adding the following paragraph:
"8. The council of the local municipality or the planning board in which the corporation is situate, as appropriate, has passed a resolution supporting the corporation."
I have a subamendment to delete "passed a resolution supporting the corporation," to be replaced with "has been informed by the corporation of its application for registration."
The Chair: An explanation?
Mr Grandmaître: The same explanation I gave this morning.
The Chair: That's concise.
Mr Mammoliti: I still have the same concern I had this morning.
The Chair: That's also concise.
Mr Hope: I'll just refer to Hansard from this morning's discussion, as to why I am voting no.
Mr White: I would like to make reference to the fact that the government's position is very clear, as it was this morning, that it should be consistent between the CISCs and the community loan funds.
The Chair: Further questions or comments?
Shall the amendment, paragraph 17(1)8 carry? All in favour? Opposed? It's lost.
Subsection 17(1.1), Mr Arnott.
Mr Arnott: Again on behalf of Mr Johnson, I move that section 17 of the bill be amended by adding the following subsection:
"(1.1) A corporation shall not be registered under subsection (1) unless the minister is satisfied that the corporation has,
"(a) clearly defined goals and objectives of what can be accomplished through a loan fund;
"(b) the technical skills required to manage the fund; and
"(c) three-year financial projections, including a plan to cover operating costs and attract capital."
This was an idea that was suggested by the Calmeadow people. Again, it is there to attempt to ensure that as a condition of registration, the corporations are fully aware of all the aspects of operating the fund and that they possess the complete expertise to do so. It's again a test of the quality of the management, of the individuals applying.
Mr White: I think these are excellent suggestions and the government certainly agrees with the intent. The question is where they should be placed. They really do speak to the quality of management services and the kind of education that is frankly part of the intent of the program that this legislation will put into action. For those reasons, it should really be more in a program guideline. For example, we have the three-year financial projections, specific issues that may change over time. I would suggest also that clause 43(2)(c) allows provisions for additional regulations based on program experience. I frankly think they're excellent suggestions but should be in a program guideline as part of the ministry's work in education, which is a substantive part of the moneys dedicated to this thrust.
Mr Arnott: As parliamentary assistant, what assurance can you provide us that in fact these criteria will be reflected in guidelines of the program?
Mr White: It's not a substantive problem. I've certainly spoken to you about my substantive agreement with the intent of your motion. These are fairly standard management practices as part of the kind of expertise that the ministry would offer and the kind of counsel and advice that the ministry would offer in the establishment of these funds. We've heard certainly during our hearings from many people who have a wealth of experience and that experience grows over time. I would think that not only does this reflect what we presently know, but our experience, our ability to manage these kinds of funds and to assist with them will also change over time, which is also why I'm suggesting that we wouldn't want to limit ourselves by making those qualifications within the legislation.
The Chair: Further questions or comments on Mr Arnott's amendment 17(1.1)?
Shall Mr Arnott's amendment 17(1.1) carry? It's lost.
On subsection 18(1), we have an amendment from the government. Just before you begin, I think we'll deal with 18(1)1 and 2 and then you can add your new section.
I'm sorry. the clerk has informed me I neglected to call 17 as amended.
Shall section 17 carry, as amended? Carried.
Paragraphs 18(1)1 and 2: questions, comments?
Shall 18(1)1 and 2 carry? Carried.
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Mr White: I move that subsection 18(1) of the bill be amended by adding the following paragraph:
"3. Charitable, labour and not-for-profit organizations, as prescribed."
The reasoning for that is fairly obvious, given the hearings. We want to be as inclusive as possible. I see that there is an amendment forthcoming which is very similar.
The Chair: Further questions or comments? Shall Mr White's amendment carry? Carried.
Subsection 18(2). Questions?
I am sorry, subsection 18(1).
Mr Grandmaître: I move that subsection 18(1) of the bill be amended by adding the following paragraph:
"3. Charities, as defined in subsection 149.1(1) of the Income Tax Act (Canada)."
Mr Hope: How can you do that? It's out of order.
Mr White: The Chair has ruled.
Mr Mammoliti: It's out of order, Ben.
Mr Grandmaître: Mine was in first.
The Chair: That amendment is out of order. We've just dealt with a very similar amendment.
Now we're dealing with subsection 18(2). Questions, comments or amendments? Shall subsection 18(2) carry? Carried.
Shall section 18, as amended, carry? Carried.
Now I think this would be a good time to revert to dealing with the stood-down clause, 11(f). I'll give members an opportunity to find it. We were dealing with Mr White's amendment to Mr Grandmaître's amendment. Do all members have that in front of them? Are there questions or comments regarding Mr White's amendment? You've read that in, I believe. Shall Mr White's amendment carry? Carried.
Questions or comments to Mr Grandmaître's amended clause 11(1)(f.1)? Carried.
Shall section 11, as amended, carry? Carried.
Sections 19 and 20; questions, comments or amendments to sections 19 and 20? Shall sections 19 and 20 carry? Carried.
Subsection 21(1), questions, comments? Shall subsection 21(1) carry? Carried.
Subsection 21(2), Mr White.
Mr White: I move that subsection 21(2) of the bill be amended by inserting after "amount" in the fourth line "or a prescribed percentage of the corporation's assets."
This is a technical change and it simply consolidates restrictions in the same section.
The Chair: Questions, comments on Mr White's amendment to 21(2)? Shall Mr White's amendment to 21(2) carry? Carried.
Section 21(3): Questions, comments? Shall section 21(3) carry? Carried.
Shall section 21, as amended, carry? Carried.
Section 22: Section 22(a), Mr White?
Mr White: I move that clause 22(a) of the bill be struck out.
The Chair: An explanation for that, Mr White?
Mr White: It is a technical change and it consolidates restrictions in the same section.
The Chair: It is also out of order. You can simply vote against the clause, as it's called.
Clause 22(a), all in favour?
Mr Arnott: Mr Chairman, may I hear again the explanation for the rationale behind the amendment?
Mr White: Mr Arnott, what we're dealing with is a technical procedure. I cannot actually move against a government amendment, but what I can do in this is simply indicate this is where we're going and we want to strike it out.
The Chair: He wants to know why you want to strike it out.
Interjections.
The Chair: Order. On a point of order, Mr Hope?
Mr Hope: I am asking a procedural question and I understand what everybody's doing, but under section 22, how can you break it up into the (a) and the (b) when you're voting on a section without an amendment? How can you break it out without an amendment, that section 22? How can you separate it?
The Chair: We can separate subclause (c), and that's what we're doing.
Mr Hope: So then (b) would have to be amended to read (a), right?
The Chair: Yes, but legislative counsel generally renumbers the bill. That's not a great and grand problem.
Mr Hope: Okay, I just want to make sure that we're doing something right here. When I'm voting against something you ask me to vote against, I want to make sure I'm voting against a particular area, not the whole section.
The Chair: We appreciate your assistance, Mr Hope. Mr Johnson?
Mr David Johnson: I gather here again, Mr Chairman, as this morning, then, just having read this unseen, I look for verification that what's being said is that the collateral will be described in the regulations.
Mr Loken: No. What's being said is simply that we've amended subsection 21(2) to include what is set out in 22(a), so it is no longer necessary and it simplifies the drafting of the bill in consequence.
The Chair: Further questions or comments to 22(a)? Shall 22(a) carry? No. It's lost. 22(b)?
Mr Grandmaître: I move that section 22 of the bill be amended by striking out "or" at the end of clause (a) by striking out clause (b) and substituting the following:
"(b) The loan is intended to be used by the eligible borrower for any purpose, including retiring or refinancing a debt, other than the development of the business of the eligible borrower; or
"(c) the eligible borrower has applied under federal legislation for bankruptcy or other protection against creditors."
The Chair: Thank you. An explanation?
Mr Grandmaître: It's simply a protection, Mr Chair, for the investors, an additional protection for the investors.
The Chair: Mr Mammoliti?
Mr Mammoliti: A question to staff, I guess, or to the parliamentary assistant: In similar circumstances, I guess, in other policies, do we often run credit checks, and if so, how often do we do them? Would we usually run credit checks?
Mr Burns: Credit checks would be run on all applicants in the loan fund program, so any kind of standard, routine credit problems would show up in the credit checks.
Mr Mammoliti: So we wouldn't go in with our heads down, right? We would know the applicants, right?
Mr Burns: Correct. The board of the loan fund would have before it a full credit history and could make its decision on the basis of that.
Mr Mammoliti: So with that explanation, Mr Chair, I would expect the Liberals to drop this amendment as well.
The Chair: Can we get a clarification of the government's position on this, Mr White?
Mr Mammoliti: Mr Chairman?
The Chair: Yes?
Mr Mammoliti: Would it be out of place for me to ask for a five-minute recess at this point so that we can --
The Chair: Actually, I think that would be a good idea. We've just been discussing this privately and it looks an awful lot like clause 11(1)(f). So we'll take five minutes. We will reconvene at 2:45.
The committee recessed from 1441 to 1449.
The Chair: Mr White, you have an amendment to Mr Grandmaître's amendment?
Mr White: I move that Mr Grandmaître's motion for section 22 of the bill be amended by striking out clause (c) and substituting the following:
"(c) the eligible borrower is an undischarged bankrupt under the Bankruptcy and Insolvency Act (Canada) or a compromise or arrangement has been proposed between the eligible borrower and the borrower's creditors under the Companies' Creditors Arrangement Act (Canada)."
That's obviously consistent with one very small change; that is, from "company" to "borrower," or from "business" to "borrower," from our earlier discussion. The government has no problems with that slight articulation of Mr Grandmaître's motion on clause (c), although we do have difficulties with the other clause. Thank you.
Mr Grandmaître: I'll go along with the change to clause (c) of the bill. Can I get an explanation on clause (b), why the government is opposed to this clause?
The Chair: Let's deal with Mr White's amendment and then we'll deal with --
Mr Grandmaître: Very good. So I go along with the changes introduced by Mr White.
The Chair: Shall Mr White's amendment to Mr Grandmaître's motion carry? Carried.
Interjections.
The Chair: The copy's coming, but it's almost identical to what happened in clause 11(1)(f).
Mr Grandmaître: We're changing one word. That's all. Now, can I get back --
Mr Hope: Some of us do follow what goes on in this process and we just want to keep our paperwork in order.
The Chair: Thank you.
Mr Grandmaître: Now can I go to clause (b) of my amendment, which was turned down, I'm told, by the government? Can I get an explanation on that one?
The Chair: Wait a minute. I'm confused.
Mr White: Could I ask a process question, Mr Chair?
The Chair: You certainly may.
Mr White: In the event, as Mr Grandmaître and myself agreed, that the amendment carried which changed clause (c), were the amendment itself to be defeated, would the amendment to the amendment still exist; ie, would (c) be in existence?
The Chair: No.
Mr Grandmaître: No.
Mr White: Sorry. Could I consult with the legislative counsel in that regard?
Ms Klein: I'm confused.
The Chair: All right. I think we need another recess.
Mr David Johnson: Why don't we come back to this?
The Chair: All right. That's a capital idea. We will stand this section down, with unanimous consent. Agreed.
Section 23? Section 24? Section 25? Questions, comments or amendments? I've got Mr Hope.
Mr Hope: In the other sections that we just put or had percentages in, we have amended those percentages. I'm just curious for an explanation through the parliamentary assistant to staff. Wait a second. Sorry, my mistake. Forget it.
The Chair: Further questions, comments or amendments? Shall sections 23, 24, and 25 carry? Carried.
Section 26.
Mr White: I move that subsection 26(1) of the bill be amended by striking out "other than a municipality" in the fifth and sixth lines.
The Chair: And an explanation, Mr White?
Mr White: The amendment will allow municipalities to become eligible for matching startup assistance as sponsor of a community investment share corporation. This will ensure that municipalities, particularly small rural municipalities, will not consider themselves restricted from the program on the basis of their inability to fully bear the costs of establishing the CISC. Certainly we have had a discussion earlier today and just recently about the importance of involving municipalities in these economic tools.
The Chair: Thank you. Questions or comments?
Mr Hope: I would just like to comment and compliment the ministry for the change, because it does recognize the unique needs of rural Ontario and small municipalities that do not have a lot of money. I think it's an important milestone in today's history in Toronto where we start recognizing outside of the Toronto boundaries that there is an Ontario called rural Ontario. I compliment the Ministry of Municipal Affairs for its efforts in identifying that important part of Ontario.
The Chair: Thank you, Mr Hope. Questions, comments or amendments?
Shall Mr White's amendment to subsection 26(1) carry? Carried.
Subsection 26(2). Questions or comments? Shall subsection 26(2) carry? Carried.
Shall section 26, as amended, carry? Carried.
Subsection 27(1). Mr Johnson.
Mr David Johnson: I move that subsection 27(1) of the bill be amended by inserting before "expenses" in the sixth line "reasonable."
This amendment is to ensure that only reasonable startup costs are covered by the province. What is reasonable would be set out in government regulation, along with a number of other things. It is intended to prevent overpayments or fraud. As I can recall, this was a suggestion by Calmeadow. Calmeadow, as you can recall, made quite an extensive brief to us.
The Chair: Questions or comments on Mr Johnson's amendment?
Mr Mammoliti: The motion is reasonable.
The Chair: Thank you. Further questions or comments?
Shall Mr Johnson's amendment to subsection 27(1) carry? Carried.
Interjection: It's unanimous.
Mr David Johnson: To the nearest hospital. Take me, quick. Emergency.
The Chair: Subsection 27(2). Mr Johnson.
Interjection: Don't get cheeky or we won't give you another one.
The Chair: Order.
Mr David Johnson: Pushing my luck to the limit, Mr Chairman, this is essentially the same situation again.
The Chair: Perhaps you'd like to read it in.
Mr David Johnson: I move that subsection 27(2) of the bill be amended by inserting before "operating" in the last line "reasonable."
Again, this is to ensure that only reasonable operating costs are covered by the province. What is reasonable would be set out by government regulation; again a suggestion by Calmeadow, and intended to prevent fraud or overpayment.
The Chair: Questions? Comments?
Mr Mammoliti: The amendment is reasonable.
The Chair: Further questions or comments on Mr Johnson's amendment to subsection 27(2)? Shall Mr Johnson's amendment to subsection 27(2) carry? Carried.
Shall section 27, as amended, carry? Carried.
Mr Mammoliti: Only because he's a good ballplayer.
The Chair: Section 28. We will deal with subsections 28(1), (2), (3), (4), (5) and (6). Are there questions or comments?
Shall section 28, subsections (1) through (6), inclusive, carry? Carried.
Subsection 28(6.1). Mr White.
Mr White: I move that section 28 of the bill be amended by adding the following subsection:
"(6.1) The province of Ontario shall not deduct from the amount it is otherwise liable to pay on a guarantee any amount paid to the eligible investor by the community economic development corporation as a dividend or interest on the class A security."
The reason for this is that it clarifies the policy intention that dividends or interest previously paid by a CED corporation should not be deducted from the guaranteed payment by the province if the corporation subsequently becomes insolvent. We had that, obviously, brought up during our hearings, and this is a response to those concerns.
The Chair: Questions? Comments?
Mr David Johnson: This may be obvious, but the first part of subsection 28(6) is: "The province of Ontario shall deduct from the amount it is otherwise liable to pay..." Now there's a second clause being added that it shall not deduct. Could somebody explain to me what the difference is between the first section and the section that's just been inserted?
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Mr Grandmaître: "Shall" and "shall not."
Mr David Johnson: When does one kick in and the other not?
Mr Loken: It simply is a clarification of subsection (6) to indicate what is not to be deducted.
Mr David Johnson: In the first section it says, "shall deduct from the amount it is otherwise liable to pay on a guarantee...upon the redemption...in respect of the amount" --
Mr Loken: The purpose is to deduct from the guarantee money that the investor would receive back from the corporation, from its assets, but the amendment clarifies that any dividends or interest paid prior to that would not be included in that deduction.
Mr Grandmaître: The next question is, why? Can we take another 15-minute break?
Mr Burns: Subsection (6) refers to any assets that might be in the corporations at the end of term whereas the amended (6.1) refers to any dividends which may be paid out before the end of term to ensure that there isn't a double payment. For example, if you get 40 cents on the dollar at liquidation, you don't get another 40 cents back on payment of the provincial guarantee. That's counted separately. You go back to the province for the difference only.
Mr Grandmaître: You're distinguishing between assets and dividends and interest.
Mr Burns: Yes. There may well be a call on the guarantee, but not for 100 cents on the dollar.
The Chair: Further qustions or comments? Shall Mr White's amendment to 28(6.1) carry? Carried.
Subsections 28(7) and (8), questions, comments or amendments? Shall 28(7) and (8) carry? Carried.
Shall section 28, as amended, carry? Carried.
We're going to return to section 22, which has been stood down. We're in a position where Mr White's amendment to Mr Grandmaître's amendment has carried. I understand that the motion, though, will not carry. I think members have a copy now. Mr White is prepared, with the agreement of the committee, to put an amendment to section 22 that makes it similar to 11(1)(f.1). So the suggestion is either we vote on Mr Grandmaître's motion, which has been amended by Mr White, which I'm told will lose, or you can withdraw that and we'll just have Mr White put the amendment.
Mr White: Which is in agreement with you with that second clause.
The Chair: Have you got a copy? Do all members have a copy? You don't have a copy of the new section?
Mrs Karen Haslam (Perth): No. As a clarification then, that would mean in the original motion by Mr Grandmaître the (b) section is not there and we would only be voting on a new revised (c) section as an individual.
The Chair: You've got it. That is perfect. Do we have that? So you have agreed, with unanimous consent, to withdraw your amendment.
Mr Grandmaître: Agreed.
The Chair: Now we have Mr White with an amendment.
Mr White: I move that section 22 of the bill be amended by striking out clause (b) and substituting the following:
"(b) the eligible borrower is an undischarged bankrupt under the Bankruptcy and Insolvency Act (Canada) or a compromise or arrangement has been proposed between the eligible borrower and the borrower's creditors under the Companies' Creditors Arrangement Act (Canada)."
This is substantively similar to the earlier motions and I believe Mr Grandmaître is in agreement with that.
The Chair: Questions, comments? Shall Mr White's amendment to clause 22(b) carry? Carried.
Shall section 22, as amended, carry? Carried.
Sections 29, 30, 31, 32, 33 --
Mr Hope: Mr Chair, sorry to do this to you. There now have to be changes in the printed form that we have on the amendment that was being produced.
Mrs Haslam: Yes, (c) is to (b), as read.
The Chair: Have we got legal counsel?
Ms Klein: This is the one you have received? There's a new motion that was just read in; that was (b).
Mr White: The new motion that was read in was the correct one. What you have circulated isn't.
The Chair: All right. We'll return to dealing with sections 29, 30, 31 and 32. We'll give members a moment to have a look at those sections. Questions, comments or amendments to sections 29, 30, 31 and 32? Shall sections 29, 30, 31 and 32 carry? Carried.
Section 33, section 34 and section 35: Questions, comments or amendments. Shall sections 33, 34 and 35 carry? Carried.
Section 36 and section 37: questions, comments or amendments. Shall sections 36 and 37 carry? Carried.
Subsections 38(1) and (2): Are there questions, comments or amendments to subsections 38(1) and (2)? Shall subsections 38(1) and (2) carry? Carried.
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Mr Grandmaître: I have an amendment to subsection 38(2.1) of the bill.
I move that section 38 of the bill be amended by adding the following subsection:
"Tabling
"(2.1) The minister shall table in the assembly every year copies of all the annual and additional returns that were filed under subsections (1) and (2) in the past year."
The reason for this amendment, or this addition, is that instead of adding a sunset date to new programs, as was suggested some time ago, the minister table the year-end report for the Legislature.
Mr Mammoliti: Again, we're talking about language that I don't think is necessary in this piece of legislation. I would ask staff if there's anybody who's familiar with perhaps the freedom of information act whether or not this type of information can be gathered through that form as opposed to throwing it into this bill.
Mr Loken: It's my understanding that corporate information of this nature is not subject to the freedom of information act.
Mr Mammoliti: Not subject to the freedom of information act?
Mr Loken: If these returns were to be placed in a register.
Mr Mammoliti: So this type of information is not free to the public? Is that what you're saying?
Mr Loken: It's free to the public.
Mr Mammoliti: It is or it isn't?
Mr Loken: It is not protected under the act from disclosure.
Mr Mammoliti: Can the average person on the street ask for this information and get it when they want? I think that's what the concern is here.
Mr Loken: It will I guess depend on the type of returns that are prescribed in the section and the information therein.
Mr Burns: I could point to two areas where there will a considerable amount of information available to the public. First of all, there's the register under section 5. It has the names of the directors and the corporations invested in and so on. And then as a result of the investor protection regime, there has to be continuous disclosure to investors. In order to get the offering statements approved, the loan funds would have to commit to making annual statements available to all their investors. So there will be information routinely published on the activities.
Mr Grandmaître: So what you're saying is that you don't see any problems for the minister to table a report at the end of the year.
Mr Burns: No, that's not what I said.
The Chair: Mr Mammoliti actually has the floor.
Mr Grandmaître: If the information is available, then, you know.
Mr Mammoliti: Is there a need for this to go into the act?
Mr Burns: I don't think so. Obviously that's the parliamentary assistant's prerogative, but not in my opinion.
Mr Mammoliti: If you were the parliamentary assistant, would you have it in the act?
The Chair: It's not really appropriate for Mr Burns to respond to that.
Mr White: In terms of the openness of public records, for example, the Stratford Festival in Ms Haslam's riding has a fairly substantive level of public support but I don't believe that their records are necessarily tabled in the Legislature every year, nor are those of the National Ballet company or a number of other facilities that are publicly supported. I think if we're looking at the tabling of some 65 or 70 year-end reports, that's a fairly extensive amount of documentation which we as legislators already have. That amount would simply weigh us down and I'm not sure it would be presented in a way that would be either readable or terribly interesting to us, but it would be accessible through the Freedom of Information and Protection of Privacy Act.
The Chair: I have Mr Hope, Ms Haslam and back over to you.
Mr Hope: I personally have some particular concerns with that part of the amendment that's being put forward. I guess I look at it from a community perspective which is willing to take opportunities in creating a business or developing jobs in its community -- in the revealing because it says also the returns prescribed by information prescribed by regulations.
If the information is in quite detail -- and nor do I believe there would be corporate espionage or whatever, but you never know -- the opportunities that could be there of another sector trying to invade in the company you've established or the work that you've done.
I would be a little fearful in just revealing everything that is possible without the protection of freedom of information act or the corporate act or whatever act is out there.
I understand what he said, but what you're asking in the amendment -- you're asking that in addition the returns would be tabled and also the annual reports to be tabled. You're asking all information now that is being referred to the minister -- because we don't know what's in the prescribed regulation or the information they're going to be looking for -- everything of that nature to be tabled before the Legislature.
One whose community feels the opportunities of this -- and I'm looking, I'm being protective of my own community. I'm a little concerned about the amount of information that's being revealed on what we are doing. I guess my own personal view and that of others is that I have a particular problem in putting this piece into the act. I believe that if people are concerned in my community and want to know about it or somebody else wants to find out about it, they will go through the proper channels that are currently in place to access information.
Mrs Haslam: Well, I look at it in a different way. I just see it: There will already be annual reports. There will already be a lot of things on file. To just package that up and then reintroduce it into the Legislature, I don't see the use of bringing it to the Legislature and tabling these 70 things at the Legislature when they -- to me, that's a duplication of what is already out there in the public venue.
Mr Grandmaître: The fact that this is a new program and a lot of our presenters were a little leery about this program, I think it's only right to table a report at the end of its first year of operation. If it's a good program, well, let's carry on. But let's examine, let's examine.
Mrs Haslam: But you say every year in this, not just the first year.
Mr Grandmaître: Well --
The Chair: Further questions --
Mr Grandmaître: If it doesn't work after the first year, I'm sure the government will cancel it. I'm sure the government will do something else.
Mrs Haslam: But if it's working, you're not just asking for first year, you're asking every year and then you get 70 --
Mr Grandmaître: Well, let's find out after the first year. If it works after the first year --
Mrs Haslam: But your amendment says every year.
The Chair: Could we have one at a time?
Mr Grandmaître: Yes.
Mrs Haslam: Oh, okay.
The Chair: Further questions/comments.
Mr Grandmaître: The vote.
The Chair: Shall Mr Grandmaître's amendment to subsection 38(2.1) carry? All in favour? Opposed? The amendment's lost.
Subsection 38(3): questions, comments or amendments? Shall subsection 38(3) carry? Carried.
Shall section 38 carry? Carried.
Section 39: questions, comments, amendments, section 39? Shall section 39 carry? Carried.
Section 40: I believe we have a government amendment. Mr White might want to get a drink of water.
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Mr White: The committee may wish to have a short break. I move that section 40 of the bill be struck out and the following substituted:
"Definition
"40(1) In this section, `document' includes a book of account, bankbook, voucher, receipt, correspondence and any other record, whether the document is on paper or is in electronic, photographic or other form.
"Audit powers
"(2) For the purpose of determining whether there is compliance with this act, an employee of the ministry who is so authorized by the minister may conduct an audit of a community economic development corporation, eligible business or eligible borrower, and in conducting an audit,
"(a) may enter any place during normal business hours;
"(b) may request the production for inspection of documents that may be relevant to the audit;
"(c) upon giving a receipt, may remove from any place documents produced under clause (b) for the purpose of making copies or extracts and shall promptly return them to the person who produced them;
"(d) may question a person on matters that are or may be relevant to the audit subject to the person's right to have counsel or some other representative present during the examination; and
"(e) may call upon experts for such assistance in conducting the audit as the employee considers necessary.
"Identification
"(3) When exercising a power of entry under this section, an employee of the ministry shall produce identification and evidence of his or her authorization if requested to do so by the owner or occupier.
"Dwellings
"(4) No person conducting an audit under this section shall enter a place that is being used as a dwelling without the consent of the occupier except under the authority of a warrant issued under subsection (5).
"Warrant for search
"(5) If a justice of the peace is satisfied on evidence upon oath that there are in a place documents that there is a reasonable ground to believe are relevant to the carrying out of an audit, and entry has been denied or will be denied, the justice of the peace may issue a warrant authorizing the person named in the warrant to search the place for any such documents and to remove them for the purpose of making copies or extracts.
"Execution and expiry
"(6) A warrant issued under this section,
"(a) shall specify the hours and days during which it may be executed; and
"(b) shall name a date on which it expires, which date shall not be later than 15 days after its issue.
"Extension
"(7) A justice of the peace may extend the date on which a warrant expires for an additional period of not more than 15 days before or after the warrant expires upon application without notice by the person named in the warrant.
"Admissibility of copies
"(8) Copies of, or extracts from, documents removed from premises in the course of an audit and certified as being true copies of, or extracts from, the originals by the person who made them are admissible in evidence to the same extent as, and have the same evidentiary value as, the documents of which they are copies or extracts.
"Obligation to produce and assist
"(9) If an employee of the ministry so authorized makes a request under clause (2)(b), the person having custody of the document shall produce it to the employee and shall at the employee's request,
"(a) provide such assistance as is reasonably necessary to produce the document in a readable form, including use of a data storage, processing or retrieval system; and
"(b) provide any other assistance that is reasonably necessary to the employee conducting the audit.
"Obstruction
"(10) No person shall hinder, obstruct or interfere with an employee of the ministry conducting an audit under this section or otherwise impede an employee of the ministry in carrying out his or her duties under this act.
"Offence
"(11) Any person who contravenes subsection (9) or (10) is guilty of an offence and on conviction is liable to a fine of not more than $5,000 on a first offence and not more than $10,000 for each subsequent offence."
The Vice-Chair (Mr Hans Daigeler): Any comments?
Mr Mammoliti: Mr Chair, I didn't hear that.
The Vice-Chair: Any comments? No comments?
Mr Hope: It's like a novel that somebody has written overnight. I guess I seriously have to ask, why is this in such detail, through the parliamentary assistant to the staff? You know, somebody must have spent the wee hours of the morning putting this together. Has this, with the auditing and stuff like that, been done through the Provincial Auditor? Looking at it, does this all fit in the scope of -- like, I'm just wondering, we went from a little piece to a giant-size, humongous thing of definition and I'm just curious why.
Mr White: Basically, the issue is that balance between a protection of the provincial guarantee on our investment and a freeing of local talents at a local level. Obviously, these powers are not going to be generally or widely used, but in the event that there is a need to control, audit or verify the expenditure of public funds, it's important that the minister have these powers, and the present legislation that exists is considered to be insufficient and needs to be strengthened and articulated as it is here.
The Vice-Chair: I think the question really was as to why was that not included in the original bill.
Mrs Haslam: No, that's not what the question was.
The Vice-Chair: Was that not the question? Anyway, it's up to the questioner to clarify his own question, unless he's satisfied with the answer.
Mr Hope: I look at a section, section 40, somebody just read a novel off. It went into fines and everything else. It talked about, may only enter during normal working hours, and I just ask the question, why all of a sudden is there such a tightening? Was there consultation with the Provincial Auditor on auditing process? You're talking about fines and everything else that's going to be levied. You talk about if one person hands a piece of paper over, make sure it gets back to another one and that's -- I'm sorry for slipping out during your reading of that, but my coffee had to be relieved. But I'm just looking at it and I'm saying, Jeez, why all of a sudden such a drastic change? I guess I really would like to know.
Mr White: I think the articulation, Mr Hope, sounds drastic in its length and doesn't come trippingly to the tongue, but the clause here does reflect a number of concerns that were raised. I recall that the Conservative critic, Mr Johnson, raised these concerns, both here and in the Legislature, and they were brought up during testimony by the Ontario Federation of Agriculture, Mr Pell, by the CODA, Portcam International and, I believe, Mr Sharwood.
I think again it's a matter of balance. On the one hand, we're extending greater flexibility in terms of the community loan funds and in terms of the CISCs, in terms of the proportion of shares etc; on the other hand, while we're doing that and we're freeing them up to act in a creative way in the local communities, we also want to have both those protections for public funds and for the taxpayers' investment.
Mr Mammoliti: I, like Mr Hope, am concerned about language and cluttering up the bill. I'd like to refer to a concern I have with the obstruction paragraph, which would be subsection (10), and the offence, subsection (11). Are you saying there is no other act in Ontario that might cover us when it comes to somebody hindering or obstructing an auditor when they're doing the books? If there is another act, why do we need this language in here? I assume that act would probably supersede this one or take charge when somebody is hindering an audit.
Mr Loken: The legislation would require a specific offence for an action to be carried out under the legislation. I'd just note in response to the concerns that these audit powers have been worked out with the Ministry of the Attorney General and reflect current policy and are fairly standard with recent legislation. There's nothing extraordinary here that does not appear in other recent bills of this nature.
Mr Mammoliti: So it's consistent with other bills and this type of language is in other bills as well?
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Mr Loken: Yes, the Employment Equity Act, I believe it is, presently before the Legislature contains very similar --
Mr Mammoliti: I would assume then that if this language isn't in any of the other acts that are in Ontario, any individual who would work for the particular ministry could in essence hinder or obstruct an audit when it's taking place. Am I to assume that we need this type of language in every act to stop this from happening? I don't think the solution is to add this type of language to every act. I would argue that maybe we need to draft up a form of legislation or an amendment to the Criminal Code or something that would address this issue. I'm concerned about language, that's all.
Mr Loken: Well, it would certainly be a criminal offence if someone assaulted someone, but what we require here is a specific offence under the act to allow our auditors to carry out the work to enforce the --
Mr Mammoliti: So it's necessary to have the language then.
Mr Loken: It simply makes it a provincial offence to hinder an auditor in his work.
Mr Mammoliti: Okay.
The Chair: Further questions or comments on Mr White's amendment to section 40? If not, shall Mr While's amendment to section 40 carry? Carried.
The Chair: Section 41. Mr White?
Mr White: I move that clause 41(1)(a) of the bill be amended by adding at the end "or the regulations."
The reason for that is very straightforward, that the act and the regulations are part and parcel of the whole program and therefore the contraventions of one are contraventions of the other.
The Chair: Questions, comments? Shall Mr White's amendment to 41(1)(a) carry? Carried.
Clauses 41(1)(b), (c), (d), (e), questions, comments? Shall 41(1)(b), (c), (d) and (e) carry? Carried.
Subsections 41(2), (3) and (4), questions, comments or amendments? Shall 41(2), (3) and (4) carry? Carried.
Shall section 41, as amended, carry? Carried.
Section 42: Questions, comments or amendments? Shall section 42 carry? Carried.
Questions, comments or amendments to subsection 43(1)? Shall subsection 43(1) carry? Carried.
Subsection 43(2)? Mr White.
Mr White: I move that subsection 43(2) of the bill be amended by adding the following clause:
"(d.1) prescribing terms and conditions to be included in any agreement entered into by a community investment share corporation for the purpose of investing in an eligible business."
In straightforward terms, the ministry may require the authority to prescribe certain terms and conditions for such agreements; for example, the CISC shall not invest until the eligible business provides assurance that it is in compliance with the act.
The Chair: Questions, comments regarding Mr White's amendment? Shall Mr White's amendment to 43(2)(d.1) carry? Carried.
We will have a look then at 43(2)(a), (b) and (c).
Mr White: And (d).
The Chair: Clauses 43(2)(a), (b), (c) and (d). Thank you. Questions, comments? Shall 43(2)(a), (b), (c) and (d) carry? Carried.
Clause 43(2)(e).
Mr White: I move that clause 43(2)(e) of the bill be amended by inserting before "registered" in the fourth line "trusts governed by."
The reason for that is obviously a technical clarification. Securities may be purchased through self-directed RRSPs directly and there's no change in the meaning of the act.
The Chair: Questions, comments? Shall Mr White's amendment to 43(2)(e) carry? Carried.
Clauses 43(2)(f), (g), (h), (i), (j), (k), questions or comments? Shall clauses 43(2)(f), (g), (h), (i), (j), (k) carry? Carried.
Clause 43(2)(k.1), Mr White.
Mr White: I move that subsection 43(2) of the bill be amended by adding the following clause:
"(k.1) defining any word or expression used in this act that has not already been expressly defined in this act."
The Chair: Questions or comments?
Mr David Johnson: I think it speaks for itself. I don't know if I expect an answer on that, but it seems to me that there are a whole lot of things that are being left to the regulations. Is this normal? Not having a long history here, I think I would ask for a more impartial source, but I guess there are no impartial sources, are there?
The Chair: This isn't the place.
Mr David Johnson: It seems to me like a lot of things are left to regulations. You're sort of waiting till the regulations come out to know what you've really got.
Interjection: When in doubt, don't do anything.
Mr David Johnson: This one speaks for itself in that regard.
The Chair: Questions, comments? Clause 43(2)(k.1) carried? Carried.
Clauses 43(2)(l) and (m): Questions or comments? Shall 43(2)(l) and (m) carry? Carried.
Mr White.
Mr White: I move that subsection 43(2) of the bill be amended by adding the following clause:
"(m.1) prescribing information that may be collected from individuals or corporations by the ministry or the Ministry of Finance for the administration or enforcement of this act."
This motion would give specific authority to collect information to assist the ministries of Municipal Affairs and Finance.
The Chair: Questions or comments on (m.1)? Shall Mr White's amendment to 43(2)(m.1) carry? Carried.
Clause 43(2)(n): Questions or comments? Shall clause 43(2)(n) carry? Carried.
Shall subsection 43(2), as amended, carry?
Subsections 43(3), (4) and (5): Questions, comments or amendments? Shall subsections 43(3), (4) and (5) carry? Carried.
Shall section 43, as amended, carry? Carried.
Section 44 and section 45: Do we have questions, comments or amendments? Shall section 44 and section 45 carry? Carried.
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Section 46: We'll deal with section 46 and we'll deal with subsections 112.1(1) and (2). Questions or comments? Shall those sections carry? Carried.
Subsection 112.1(3). Mr White.
Mr White: I move that the French version of subsection 112.1(3) of the Municipal Act, as set out in section 46 of this bill, be amended by striking out "l'empêchent" in the second and third lines and substituting "lui imposent des restrictions."
As a matter of fact, I recall having had that same discussion during our last debate in the last bill. The very same phraseology was changed, as I recall, although a different clause in a different bill.
The Chair: Questions, comments?
Mr Grandmaître: May I ask you to explain the difference between "l'empêche" et "lui imposent"?
Mrs Haslam: You're the one who speaks French. We were hoping you would tell us.
Mr White: Perhaps I could ask an impartial source, such as the critic for francophone affairs.
Mr Grandmaître: If you're being "empêché," you're being restricted; and "lui imposent," by imposing something, you're still restricting something.
Mr White: I don't disagree. I have enough trouble with making these arguments in English.
Mr Grandmaître: I'm going to win this amendment.
The Chair: I think that perhaps we should ask Mr Daigeler.
Mr Daigeler: It's probably the legal language that makes a distinction, as the English does between "restricting" and "prohibiting." I guess you'd have to ask the legal expert.
The Chair: We have a staff member. Would you introduce yourself.
Ms Kelly Yerxa: Kelly Yerxa from Municipal Affairs, legal services branch. The change in the wording is to provide consistency really with subsections 112.2(4) and 112.2(5). The same wording is used in those subsections as well. It's mainly for consistency.
Mr Grandmaître: That's the only thing it does.
Mr Daigeler: You're right.
The Chair: Further questions or comments? Section 46 and subsection 112.1(3), Mr White's amendment. Shall 112.1(3) carry? Carried.
Subsections 112.1(4), (5), (6), (7), (8), (9), (10), (11), (12), and (13): Questions, comments or amendments? Shall section 46, subsections 112.1(4), (5), (6), (7), (8), (9), (10), (11), (12) and (13) carry? Carried.
Shall section 46, section 112.1, carry, as amended? Carried.
Section 46, subsections 112.2(1), (2), (3), (4) and (5): Questions or comments?
Shall section 46, subsections 112.2(1), (2), (3), (4) and (5), carry? Carried.
Mr White: I move that subsection 112.2(6) of the Municipal Act, as set out in section 46 of the bill, be struck out and the following substituted:
"Prohibited assistance
"(6) The power extended to a council of a municipality in this section does not include the power to, either directly or indirectly, obtain, guarantee or purchase an interest in,
"(a) an asset or liability, including a contingent liability, of a community development corporation;
"(b) a security acquired by a community development corporation; or
"(c) a guarantee of a community development corporation."
This basically articulates the way in which municipalities can operate in regard to CLFs, CISCs, community economic development corporations, and states very clearly that while they can sponsor, be involved with, they cannot have an equity share, a profit derived from that venture, nor themselves make a direct investment.
The Chair: Questions, comments? Mr Johnson.
Mr David Johnson: On clause (c), when it says "a guarantee of a community development corporation," that means if the community development corporation needed money -- is that the way this works -- that it couldn't be the guarantor? Is that what you're saying, or what are you saying through clause (c)?
Mr White: That's right.
Mr David Johnson: Okay.
The Chair: Questions? Mr Hope.
Mr Hope: I'm reading the one that was in print in the bill and I'm looking at the amendment that's being put forward and my question would be, the only changes I see in this are in (a), in the second half of it, and then (b), and I'm wondering, what do you mean by "security acquired by a community economic development"? I'm wondering from legal if they can explain their (b) section of this amendment. Because everything else is currently in the legislation; the only change I see is the (b) in the amendment.
Ms Yerxa: That's right. The only change is clause (b) and that's just to ensure that if a community development corporation does acquire shares the municipality can't somehow indirectly or directly purchase those shares through the community development corporation or somehow participate in that purchase.
Mr Hope: What would your definition of "indirectly" be?
Ms Yerxa: Perhaps where operating funding is given by a municipality and then that operating funding is used by the community development corporation to purchase the shares. That would be indirect assistance.
Mr Hope: Okay.
The Chair: Further questions or comments?
If not, shall Mr White's amendment to section 46, subsection 112.2(6), carry? Carried.
Section 46, subsections 112.2(7), (8), (9), (10), (11), (12), (13), (14) and (15), questions, comments or amendments? Shall section 46, subsections 112.2(7) through (15), inclusive, carry? Carried.
Shall section 46, subsection 112.2, as amended, carry? Carried.
Shall section 46, as amended, carry? Carried.
Section 47, questions, comments or amendments to section 47? Mr Hope.
Mr Hope: It might sound like a stupid question, but if you don't know the answer you ask the question. In your definitions, you've got the county of Oxford. Is there a special piece of legislation that deals with it and that's why you have to identify it in each of these sections?
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Ms Yerxa: That's correct.
Mr Hope: So it's because of a special piece. If there was a special piece covering any other municipality, this would have to be amended. Let's say, for instance, that a year down the road there's another amendment dealing with a piece similar to the county of Oxford. How would you make that change to accompany that other changed legislation?
Ms Yerxa: If I'm understanding your question, if another municipal entity is created that's not covered by this definition, then it would either have to be covered in the legislation that creates that new municipal entity -- and that would be the preferable approach -- or an amendment to this legislation.
Mr Hope: Yes, because where the concern arises is in rural communities where we know the financial hardship means a lot of smaller rural communities might pull together and unify themselves and then create legislation. I'm wondering: If they did that, they would have to amend in that legislation opportunities under this?
Ms Yerxa: If by that amalgamation they were no longer classified as a municipality, a local municipality or a metropolitan or regional municipality or a county, then yes.
The Chair: Further questions or comments to section 47?
Mr Grandmaître: Also, if I'm not mistaken, the county of Oxford was created under its own legislative act, so that's why we need to include it, because it would be left out, in other words, because of the Oxford act.
Mr Hope: That's what I was concerned about. I keep seeing it in print and I'm just wondering, for clarification.
The Chair: Further questions or comments regarding section 47? Shall section 47 carry? Carried.
Section 48, 210.1(1) and (2), questions or comments? Shall section 48, 210.1(1) and (2) carry? Carried.
Mr White: I move that subsection 210.1(3) of the Municipal Act, as set out in section 48 of this bill, be struck out and the following substituted:
"Contents of agreements
"(3) Agreements under subsection (2) may allow for the lease, operation or maintenance of the facilities by any person and, despite subsection 191(1), for the sale or other disposition of municipal land or buildings that are still required for the purposes of the municipality."
This amendment is technical in nature and is meant to clarify the wording to reflect the policy and to allow for the provision of municipal capital facility through a coventure and the temporary disposition of municipal property involved in that type of arrangement will be permitted. Without this amendment, a municipality can only dispose of municipal land and buildings if they're no longer required for municipal purposes.
The Chair: Questions or comments?
Mr Hope: I have to ask, through the parliamentary assistant, through legal -- I want to give you a hypothetical situation where we're seeing plant closures are happening because of some federal policies. Municipalities have the option of for $1 to purchase companies or plants and the capital structure that's there. Would this in any way hinder that relationship between the economic development and the municipality if they were to take over that building for $1 and then a lease-back arrangement with -- like you say, it clarifies. Let me tell you, it just confuses the shit out of me.
Mrs Haslam: Ooh. Withdraw it.
Mr White: You're going to withdraw that last analogy, I'm sure.
Mr Hope: No. I'm sorry for being quite frank, but Jeez --
Mr White: Could I refer that issue to Dale Taylor, with the Ministry of Municipal Affairs, municipal finance.
Mr Dale Taylor: I think we're talking about basically a different kind of question there than what is provided for here, which is providing municipal facilities to carry out municipal purposes. So to that extent, they're really unrelated. It wouldn't affect the kind of issue you're talking about. Also, we may have a legal comment on whether they're able to do the kind of thing you were talking about.
Ms Yerxa: This section, this amendment to the Municipal Act, is only allowing municipalities to coventure for provision of municipal capital facilities, not to allow them to purchase private sector facilities and operate them.
Mr Hope: The only question why I raised this is because when I was reading the whole section through, municipal capital facilities -- if they purchase it, then it becomes a municipal capital facility, and then I heard your explanation saying "under normal operations." Do you understand where I'm coming at with this? No. I'm trying to get clarification of the legalese that you have here.
Ms Yerxa: I can take that question. "Municipal capital facility" will be defined somewhat in regulations and "municipal capital facility" is intended to only include facilities that municipalities normally operate. So at this point I guess it's not contemplated that it would be pulp and paper mills but sewage treatment plants.
Mr Hope: Why I posed this question is dealing with the issue, and those who understand the program that is going on in Nova Scotia with the incubator process that they have there; there is municipal involvement and the capital structures could be there. Your definition -- you've just cleared it for me. You say under the regulations they're going to define "municipal capital." I'm hoping before somebody actually makes a total decision on that, when you're considering the definition, remember that municipalities do have the option, when companies do close their doors and move to Mexico or the United States, that there is an opportunity for some municipalities through, they call it corporate citizenship, to buy the structure that is there for $1.
Just when you're defining "municipal capital facilities," remember if a municipality purchases a facility, it becomes, in definition, a capital facility, but in actuality they just purchase it in order for economic development. We can talk later about it. I'm concerned about your definition in the regulations around "municipal capital facilities," because that option is there for municipalities to buy for $1. Then it becomes in their realm. Oh, it happens. Let me tell you, with the free trade agreement and the plant closures, it's been happening quite frequently. Campbell Soup is just trying to do it.
Mr Grandmaître: Would it be fair to say "existing municipal facilities"? Because he's going beyond this.
Ms Yerxa: Subsection (2) of this section provides for the provision of "municipal capital facilities," and "provision" is intended to mean newly constructed facilities.
Mr Hope: We'll see when the regs come out.
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The Chair: Further questions or comments?
Shall section 48, subsection 210.1(3), carry? Carried.
Section 48, subsections 210.1(4), (5), (6). Questions, comments? Shall subsections (4), (5) and (6) carry? Carried. Mr White.
Mr White: I move that subsection 210.1(7) of the Municipal Act, as set out in section 48 of the bill, be amended by striking out "taxes" in the second line and substituting --
Interjection: Did you say 21.1?
Mr White: 210.1(7) --
Mrs Haslam: It's 210.1.
The Chair: Order, order.
Mrs Haslam: I just don't want you to make a mistake and have to change something. That's the teacher in me.
The Chair: Questions, comments.
Mr White: Excuse me -- and substituting "taxation for municipal and school purposes."
The purpose of this is strictly technical in nature, to clarify the wording to ensure that it reflects that this policy is for either municipal or school board taxes.
The Chair: Questions, comments on Mr White's amendment? Shall Mr White's amendment to section 48, subsection 210.1(7) carry? Carried.
Subsections (8), (9), (10) and (11). Questions, comments or amendments? Shall subsections (8), (9), (10) and (11) carry? Carried. Mr White.
Mr White: I move that subsection 210.1(12) of the Municipal Act, as set out in section 48 of the bill, be amended by striking out "taxes" in the fifth line and substituting "taxation for municipal and school purposes."
That's identical to the last amendment.
The Chair: Questions or comments? Shall Mr White's amendment to (12) carry? Carried.
Subsections (13), (14), (15), (16) and (17). Questions, comments, amendments? Shall subsections (13), (14), (15), (16) and (17) carry? Carried. Mr White.
Mr White: I move that subsection 210.1(18) of the Municipal Act, as set out in section 48 of the bill, be struck out and the following substituted:
"Taxes struck from roll
"(18) Until the assessment roll has been revised, the treasurer of the local municipality shall strike from the roll taxes that are exempted by reason of a bylaw or resolution passed under this section."
Of course, the reason for this amendment is the same as the last two.
The Chair: Questions and comments? Shall Mr White's amendment to subsection (18) carry? Carried. Mr White.
Mr White: I move that section 210.1 of the Municipal Act, as set out in section 48 of the bill, be amended by adding the following subsection:
"Assessment Act
"(18.1) The tax exemption under subsection (7) or (12) shall be deemed to be an exemption under section 3 of the Assessment Act, but shall not affect a payment required under section 27 of that act."
The Chair: Questions or comments?
Mr Grandmaître: What does it mean?
Mr White: I'm glad you asked. This amendment is to ensure that municipal capital facilities provided under this section are treated in exactly the same manner as facilities owned and operated by the municipality. This is achieved by ensuring that a tax exemption provided under subsection (7) or (12) is an exemption on the assessment roll, but that payments now made by some municipal facilities under section 27 of the Assessment Act -- that public utilities continue to be paid.
Mr Grandmaître: Did you read the amendment right?
The Chair: Mr Johnson.
Mr David Johnson: What is section 27 of the Assessment Act? Does it pertain to utilities? Is that what I heard?
Mr White: I'll refer it to legal counsel.
Ms Yerxa: Section 27 of the Assessment Act gives a definition of "public utilities" and requires those facilities defined as public utilities to make payments in lieu, even though they're not paying taxes.
Mr David Johnson: This then says what? How does this pertain to a hydro utility?
Mr White: It doesn't. They're not included.
Ms Yerxa: No. Hydro utilities wouldn't be covered.
Mr David Johnson: Well, you were talking about utilities.
Ms Yerxa: Perhaps waste disposal or landfill sites.
Mr Taylor: And sewer and water. Basically, the environmental services-type facilities are covered in that section of the Assessment Act. This is one area where municipal facilities do make payments. The basic principle in this whole section is that facilities that are provided under agreements in this section are to be treated exactly like municipally owned and operated facilities are now. For most means and purposes, they are tax-exempt on the assessment rolls, but we wanted to make sure that where municipal properties of some sort do make payments in lieu of taxes, that's also continued. We're trying to maintain the same treatment.
Mr David Johnson: So the basic assumption here is that some such facility would somehow come under either a loan fund or a share corporation?
Mr Taylor: No. This has nothing to do with the other parts of the bill. This is standalone. It's in here because it relates to economic development, to have and keep up our local infrastructure.
Mr David Johnson: Can you give me a scenario?
Mr Taylor: In this section, we're basically talking about municipal offices or infrastructure, whether it's the physical infrastructure, like the hard services, or some type of recreation or social infrastructure that requires municipal tax financing to provide the facilities through conventional means. This makes available alternate means to provide those public facilities so that they don't have to put municipal capital dollars up front. They can, through a partner, finance and procure those facilities.
Mr David Johnson: You're talking about the partnership arrangement.
Mr Taylor: That's right.
Mr David Johnson: These utilities would still have to pay whatever they would normally have to pay.
Mr Taylor: That's right. We want to make sure that they are treated as if the municipality were wholly owning and operating them in the conventional way.
The Chair: Shall Mr White's amendment to section 48 of the bill, adding subsection 210.1(18.1) to the Municipal Act, carry? Carried.
Shall subsection 210.1(19) carry? Carried.
Shall section 48, as amended, carry? Carried.
In the interests of sanity, we will take a 10-minute break.
The committee recessed from 1609 to 1624.
The Chair: We have returned after a recess and we are now dealing with section 49. I think we should have Mr Johnson make his motion and I'll rule it out of order.
Mr David Johnson: That's very kind of you. Do I get to say why I'm moving it first?
The Chair: Yes.
Mr David Johnson: As you probably know, we got correspondence. I don't think we had a deputation, but we got correspondence.
The Chair: Would you like to make your motion?
Mr David Johnson: I move that section 49 of the bill be amended by striking out subsection (1).
The rationale for that is that we did receive correspondence from the regional commissioners of Ontario. Just quoting briefly from their letter -- these are the commissioners, presumably, for whom this is intended to be a benefit, because this is aimed at the council, regional, metropolitan or district level. But the regional commissioners representing the municipalities of Ontario have said:
"We question the wisdom of the ministry assigning delegated powers to a municipality without the formal consent of its council." Without the formal consent. It doesn't say notification; it says the formal consent of its council. "The number, qualifications and integrity of planning staff seem to be important factors in the decision to delegate. Without formal council support for delegation" -- that's formal council support for delegation -- "how can the ministry and all other agencies involved in these approval processes be assured that these resources will be maintained by the municipality if delegation is assigned against council's will? In the aftermath of the expenditure control program and social contract, a lot of municipalities may no longer have the ability to maintain the resources to carry out new additional responsibilities assigned to them."
So they are speaking against this assignment of responsibilities, and I'm suggesting at this time that we recognize that.
I consulted with the planning staffs of the two municipalities that I represent, North York and East York, and both concurred with the regional planning commissioners that this was not an authority, I guess, that they wanted to see the provincial government take on. So they're both opposed to this section as well.
The Chair: Thank you, Mr Johnson. As you know, or should know, your motion is out of order because you can strike this by voting against the section.
Now, section 49, subsections (1), (2), (3) --
Interjection.
The Chair: Mr White. I'm sorry.
Mr White: I move that subsection 4(2.1) of the Planning Act, as set out in subsection 49(1) of the bill, be amended by adding after "may" in the first line "after the prescribed notice is given."
The reason for this amendment is to require that notice be given to the public before the minister delegates his or her approval authority to a municipality. The way in which notice is given will be prescribed by regulation. This will ensure that the minister's decision is made in an open, consultative way and that the public is fully informed of this delegation of powers.
The Chair: Questions or comments? Mr Johnson.
Mr David Johnson: Mr Chairman, if I can just ask of whatever staff -- is this the staff that's involved with this? In view of the fact that the regional planning commissioners don't support this -- and my own municipalities as well, whatever that's worth -- what is the rationale behind doing this?
Ms Diana Dewar: The purpose of the amendment is to remove the requirement that a municipality has to request the minister for delegation before the minister would delegate the approval authority. Consultation with the municipality would always occur, and only municipalities which were capable of undertaking the authority and which had the staff and the administrative capability would actually be considered eligible for delegation.
Mr David Johnson: Can I assume that this is an initiative from the provincial level but not from the municipal level? In other words, have you had a great number of requests from the municipalities to do this? Any requests?
Ms Dewar: To do the amendment?
Mr David Johnson: Yes.
Ms Dewar: The amendment was initiated at the provincial level.
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Mr David Johnson: At the provincial level?
Ms Dewar: Yes.
Mr David Johnson: So notwithstanding that the municipalities don't want it, you still think it should go in.
Mr Mammoliti: That's an unfair question to ask staff, I would think. Ask the parliamentary assistant.
Mr David Johnson: Well, it's an obvious one. The parliamentary assistant is free to answer.
Mr White: The argument that you're putting forth actually has to do, I would suggest, with the clause and not with the amendment. The amendment has to do with public notification. Perhaps when we deal with the section as a whole rather than the amendment, we should return to that debate as you brought up in your proposed amendment.
Mr David Johnson: That'll be about one minute from now, but we could wait that long. You think I'll forget, do you?
The Chair: Mr Hope.
Mr Hope: Well, I will wait until we deal with the total section, because I was going to comment on some of the comments that have been made. I'd sooner wait and deal with the section as a whole.
The Chair: That's fine.
Mr Hope: Just put me back on the list, that's all.
The Chair: Shall Mr White's amendment to subsection 49(1) of the bill, subsection 4(2.1) of the Planning Act, carry? Carried.
Can we carry 2.1, as amended?
Mr David Johnson: Do you want me to ask my question now?
The Chair: This would be a great time, yes.
Mr David Johnson: Would you like to respond now?
Mr White: You put forth an interesting and important question. The issue is the capability of the municipality, which would be ascertained by the minister. If that municipality, particularly and most likely an upper-tier municipality, has the capacity, it should be assuming that role. That's certainly consonant, as we know, with the recommendations by Mr Sewell, and we haven't received any major objections from municipalities; that is, the local municipalities.
The issue here is that those costs involved in approving plans should be dealt with on a staged level, and again we had described being consonant with the planning commission's recommendations and not necessarily assumed at the provincial level.
Mr David Johnson: Just to comment on those comments, first of all, in terms of who is able to assume the responsibility, I gather that is the interpretation of the province as opposed to the council, I guess in this case the regional council. So there could well be a difference of interpretation there. Some of the regional county councils may think they don't have the wherewithal, don't have the resources to do this, and I suspect that some of the opposition is a concern that this may be forced on them, with the provincial government saying, "We think you have the resources to do it, or we think you could raise your tax rate and hire more people and do it," and that sort of thing, and the regional councils feeling that they may not wish to go that route.
Secondly, in terms of no opposition, there would be very few municipalities that would know this clause is in here other than perhaps the regional planning commissioners and, you know, people of that ilk. So I suspect that's why there may not be a whole lot of comment on it.
Thirdly, in terms of the Sewell report, if you don't think there's going to be opposition on the Sewell report, look out.
Mr White: Indeed.
Mr David Johnson: I mean, I know here in Metropolitan Toronto there's going to be a great unrest with this aspect of the Sewell report. In the first draft of the Sewell report, the regional municipalities were not given this extra authority. Out of nowhere, at least in the view of the local municipalities, the Sewell report in its final version did give more authority to regional governments. I know the local governments are most concerned about that, and that concern is the same sort of concern that the planning commissioner for East York expressed in opposition to this particular clause when I asked him to specifically have a look at it. He wouldn't have had a look at it if I hadn't asked him, nor would the planning people in North York, because they weren't aware of it and they have other things to do. But when I specifically asked both of them to have a look at it, they raised opposition and they raised concern about the Sewell report going in the same direction that this is.
I guess you're intent to proceed with this, but reality is that there will be opposition to the Sewell report, and it's the same sort of opposition that you're going to find to this.
Mr White: I quite appreciate that, and I think there are several factors that weigh in here. This issue of course is something which we had lengthy discussion about recently, and certainly you may recall that last Monday afternoon this very issue came up, the upper-tier municipalities, especially with the amendment that that delegation will occur with full public knowledge and also, of course, there will be consultation with the upper-tier municipality in terms of that delegation.
The issue that you mentioned in terms of the difference of opinion between the upper-tier municipality and the province in terms of whether or not they have the capacity to do that function is something which I will ask Diana Dewar from Municipal Affairs to comment on. But before that, I'd just simply indicate that when you mention the regional planning commissioners of Ontario, those powers already exist in most of the regional planning commissioners through most of the regions in the province of Ontario at present. This only extends that where the criteria are met and where it is appropriate.
Ms Dewar: Most municipalities, most regions and counties, already play a major role in the planning approval process. By removing the requirement for provincial approval and delegating it to the region or county, it is eliminating one level of approval authority. So most of them are already dealing with applications and the other agencies and doing quite an extensive review.
Mr Hope: I've been listening to some of the comments that have been raised, and as I was reading both, currently a lot of municipalities already go under the reviewing-planning process. I was interested in listening to the letter, saying, well, it's dealing with social contract and expenditure control plans that are put in place. I guess we all have to take financial responsibility when we're dealing with our community. I find it hard to use that as an argument, to make sure that justice is being served in your own community. You talk about the minister offloading. I'm sure it will be done in proper consultation after a proper review and proper notification whether to exercise the powers that have been bestowed upon here.
But I would ask, because I know in some of my own communities in rural Ontario -- and I don't know where townships would fall in this process, because you're saying county governments. I know some of my townships would like to get away from the county planning and would sooner deal with their own because the townships are closer to it. Under all of this section, where is the process for townships to have this authority, townships which would probably like to take it on and to make sure that they're playing an overall economic renewal strategy in their communities? Where is the power to be bestowed to them? I don't know if it's something I'm missing where you've got county, you've got region, you've got metropolitan and you've got towns and cities, but I don't see anything mentioned about township responsibilities.
Ms Dewar: It's already in the existing legislation.
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Mr Hope: So that would fall under the existing --
Ms Dewar: The existing legislation, yes.
Mr Hope: I beg to differ. I don't know where these commissioners are. I don't know whether they represent all of Ontario, but I know a lot of people in rural Ontario who would like to see more power put to them in designating that power to choose their own destination on economic renewal. I believe they're willing to take that on. Yes, there is a cost associated, but there is also a cost associated if you don't take it on, because if you ever tried moving the paperwork through the provincial system, it takes for ever. If they have the jurisdiction, they can expedite and probably help stimulate a lot of economic growth in their community.
Mr Wiseman: I'm just going to follow up where Mr Hope came from on this paperwork business. It's precisely because of the amount of duplication in the system and so on that this kind of amendment has come forward in order to expedite processes and allow for some of those processes to be done to get some of those projects that are mired in paperwork unglued and ongoing. I guess I have to question whether the objection of the commissioners and some of the local municipalities of Metro is a product of their really not wanting this kind of power or a product of a power play between the municipal council of Metropolitan Toronto and the tug of war that it's having with some of the local councils and the whole battle that is about to be fought in the next election over whether local municipal councils should be eradicated or whether the Metro council should be eliminated as a level of government. Perhaps these are just positioning points, because I don't really think their comments really reflect what this section in this amendment are in fact trying to do.
The Chair: Further questions, comments? Shall subsection 49(1) carry? All in favour? Opposed? It's carried.
Subsections 49(2), (3) and (4): Questions, comments? Shall subsections 49(2), (3) and (4) carry? Carried.
Shall section 49, as amended, carry? Carried.
Sections 50, 51 and 52: Questions, comments or amendments? Shall sections 50, 51 and 52 carry? Carried.
Subsection 53(1), (2), (3) and (4): Questions or comments, amendments? Shall subsection 53(1), (2), (3), (4) carry? Carried.
Subsection 53(5), Mr Johnson.
Mr David Johnson: I move that subsection 34(31) of the Planning Act, as set out in subsection 53(5) of the bill, be amended by adding at the end "and the board shall notify the clerk of the municipality of that order."
This is simply allowing -- it's probably a good idea -- certain aspects of planning to proceed while other aspects of a proposal may be under appeal. But my amendment would ensure that the municipality was notified of what was proceeding and what was under appeal. It's simply to provide the notification to the municipality. It's possible that this was intended, at any rate; I'm sure it would be, you would think so. At any rate, this firms it up and makes it mandatory.
Mr Hope: I guess my question would be to the ministry officials, through the parliamentary assistant, dealing with the Ontario Municipal Board issuing orders. Do they currently under the process notify the clerks or clerk-treasurers -- in some cases, if smaller municipalities, the clerk-treasurer -- of what's going on in a process -- I guess through the parliamentary assistant or the parliamentary assistant, through staff -- about that?
Mr White: I think that's an excellent question. The present procedure is that they do always give notice to the clerk of the municipality. It's a standard practice; it has been followed up for some time. This amendment is not really necessary. It does create some anomalies with other provisions under the Planning Act, but the earth wouldn't split up as a result of it being passed.
The Chair: Further questions?
Mr Mammoliti: Here we've heard from the Conservatives who have put the motion forward. Mr Johnson has said it's necessary for this to happen and the parliamentary assistant is now saying that the earth is not going to split up if it was passed. My concern, again, is, if it's not that necessary and if the Conservatives can recognize the fact that it's not that necessary, then they'll agree with me when I say that we don't need the language in the act. All you're doing with language -- and the more language you put into an act is just confusing. The whole issue --
Interjection: It puts the Planning Act out of sync.
Mr Mammoliti: Yes, as my colleague has said, it puts the municipal Planning Act out of sync as well.
I hope I've got my message across today in terms of the amount of unnecessary language put in this act and others. We need to control it, we need to put the language in that the average Ontarian can understand as well. By throwing this stuff in, if it's not necessary, it's in my opinion a waste of paper and time and money as well because with every word, I guess, you draft into a piece of legislation, a lawyer somewhere is probably making a mint off that one word. If they aren't making that mint this year, they will be next year and they will be for the next 100 years. If it's not necessary, I would strongly recommend, Mr Chair, that the Conservatives reconsider and drop the motion. There's no need to even have a vote. It's not necessary.
Mr Grandmaître: What Mr Mammoliti is saying is we should be introducing bills with three pages and have 15 pages of regulations. Is that what you're saying?
Mr Mammoliti: What I'm saying is, with Conservatives and Liberals ruling over the last 60 years, I can tell you that there are many rich lawyers out there and that if there's anything that I can do, as a part of this caucus and part of this government, effectively -- I think one of the most positive things I can contribute is the fact that I am somewhat concerned about the interpretation of legislation. The average person just can't understand it and we've made laws not to accommodate individuals when it comes to their reading of our acts, but to accommodate the lawyers out there and how much they charge for interpreting pieces of legislation you have drafted up over the years. In opposition, and I'll be very critical, you are continually doing this by throwing amendments at us that are useless. We've heard from the parliamentary assistant, we've heard from staff, that this is not necessary and you continue arguing your point and making sure that you are out to represent, not the Ontarians we were all hoping you would represent, but lawyers and the amount of money that they make. I would strongly recommend again that you drop the motion and that there isn't a vote on this.
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Mr Grandmaître: And keep people in the dark.
Mr Mammoliti: Mr Chair --
The Chair: I really don't remember giving you the floor, but you may continue.
Mr Grandmaître: You don't have to, Mr Chair. My mike is on.
The Chair: I remember giving you the floor.
Mr Grandmaître: Thank you.
Mr David Johnson: I'll try to be a little subdued and comment. I doubt that there are too many lawyers who are going to make a mint out of this little amendment here but I guess it is possible. Anything is possible. I suppose, in terms of who represents the people of the province of Ontario, the polls will be instructive in that regard as to where the parties stand. We'll say no more about that.
My only concern here was this is a new procedure. The Ontario Municipal Board will be permitted to issue orders partially approving zoning bylaws, which is different from today. I don't think we could automatically assume -- at least, I didn't automatically assume -- that the same procedures that are in place today would automatically apply to this new procedure. If I can be assured by the staff and if they can tell me how this would be accommodated within the existing structure and process that is in place today, then I have no objection to withdrawing this motion. But this is a new procedure and we just want to be assured, as Mr Grandmaître has indicated, that the public is informed.
Mr White: Can you help?
Ms Elaine Ross: Elaine Ross, Municipal Affairs, legal services branch. The board has a whole variety of approvals under the Planning Act. In most cases, we say absolutely nothing about the fact that they need to notify people of the orders when they're made and the board always, as a matter of course, lets the municipality know what's happened. In fact, in most cases, the municipality is going to be a party at the hearing in any case. I can't even imagine a situation where they'd be there with their comprehensive zoning bylaw and not be a party. But if for some reason they weren't, the board has assured us that it would always give them notice.
Mr David Johnson: Mr Chairman, with that assurance, I'll withdraw the motion.
The Chair: Can we deal with subsection 53(5)?
Shall subsection 53(5) carry? Carried.
Shall section 53 carry? Carried.
Sections 54 through 60, inclusive, questions, comments or amendments.
Shall sections 54 through 60, inclusive, carry? Carried.
Subsection 61(1), the parliamentary assistant.
Mr White: Thank you very much, Mr Chair. I apologize for the rough-and-ready state of the amendment that has been circulated. I move that subsection -- it is so rough in writing, I'm not quite sure where to start moving. Excuse me.
I move that subsection 54(2.1) of the Planning Act, as set out in subsection 61(1) of the bill, be amended by adding "(4)" after "(2)" in the second line.
The rationale for this is that it is a technical amendment which should have been available earlier. I apologize to the committee for that oversight, but it is now present and will be part of the bill, if passed, in final and good copy.
The Chair: Questions or comments on Mr White's amendment to subsection 61(1)?
Mr Grandmaître: What does it do?
Mr White: We're talking about a technical amendment which I will ask counsel to comment on.
Ms Ross: We basically missed subsection (4) when we were grouping those subsections in the bill. We did (1), (2) and (5) instead of (1),(2), (4) and (5).
Mr Grandmaître: Thank you.
The Chair: Shall Mr White's amendment to subsection 61(1) carry? Carried.
Shall section 61(2.1), as amended, carry? Carried.
Subsections (2.2)? Carried.
Subsections (3) and (4). Questions or comments? Shall subsections (3) and (4) carry? Carried.
Shall section 61, as amended, carry? Carried.
Section 62. Questions, comments? Shall section 62 carry? Carried.
Section 63. We'll deal with subsections (1) through (7). Are there questions or comments about subsections 63(1) through (7)? Shall subsections 63(1) through (7) carry? Carried.
The Chair: Shall section --
Interjections.
Mr White: I'm sorry, Mr Chair, there's some controversy at the moment, if you don't mind a second.
The Chair: We're having a little numbering problem, are we?
Mr White: Yes.
The Chair: Subsections 63(1) through (7) have carried, so we're now dealing with section 63, subsection 57(8).
Mr White: I move that subsection 57(8) of the Planning Act, as set out in section 63 of the bill, be amended by adding after "certificate" in the fourth line, "or order."
Mr Mammoliti: What does that mean?
The Chair: I was wondering whether somebody would ask that.
Mr White: This is a minor technical amendment to provide for consistency in wording within subsection (8) of the section. The amendment inserts the wording "or order" after the word "certificate" in the fourth line in order to be consistent with the second and third lines of the paragraph.
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The Chair: Good. Questions or comments? Shall Mr White's amendment to section 63, subsection 57(8), carry? Carried.
Section 63, subsection 57(9). Questions, comments? Shall section 63, subsection 57(9), carry? Carried.
Shall section 63, as amended, carry? Carried.
Shall 64 of the bill -- Mr Johnson, you have a motion?
Mr David Johnson: Yes, my motion, which I'm sure you'll like, Mr Chairman, is that section 64 of the bill be struck out.
The rationale behind that is in line with the concerns that have been expressed by the Ontario Home Builders' Association. You will recall, Mr Chairman, in the brief from the Ontario Home Builders' Association that it outlined how the housing starts this year will be slipping below the 50,000 level, probably as low as 45,000, which over a period of time -- it may be up a little bit from the previous year, but very low in a traditional sense and they're very concerned about the housing market in the province of Ontario.
They've also outlined in the same brief that there are 100,000 jobs that have been lost in the home building industry over the last period of time and that this is a tremendous human toll that I'm sure we're all concerned about here on this committee.
When posed the question of what these extra fees that we're looking at in section 64 would mean, they indicated that it's just another disincentive, another cost on the home that will have to be passed along to the purchaser that the purchaser's not able to bear. The bottom line is that it'll be another disincentive to the home building industry. As such, they're not in favour of it. Construction jobs are going to be lost and more people I guess on welfare depending on some sort of social assistance.
That's in line, I might say, with the article in the Toronto Star today which indicated that the growth in the province of Ontario is expected to be lower than anticipated in the budget. The key reason that was outlined was the $2-billion increase in taxes through the recent provincial budget that we saw this last spring.
That just shows that when you tack more costs on, whether you call them fees, whether you call them tax, whatever you call them, they hurt. They cost jobs and that puts people out of jobs and it's certainly going to be a disincentive to the home market here.
I would say this is not the time to do it. There may come a day when this particular amendment might make sense, but it isn't 1993. So if you rule it out of order, I'll certainly vote against the clause.
The Chair: Thank you, Mr Johnson. You prejudged me. I am going to rule it out of order because you can indicate your lack of support for this in the appropriate voting pattern.
We will then deal with section 64. Questions, comments?
Mr Hope: Well, to question and comment on some of the comments that have already been raised about the so-called prediction or the think tank, I think you should also outline, if you're going to put the bare facts on the table, that they also indicated that Quebec was a contributor. I believe that the process that is in charging fees is in line with what municipalities currently do in providing fees.
If the ministry and government are to do work similar to that, they should have the opportunity to put forward the fees that are there. I also know that sometimes the fees are evenly spread out after the fact anyway, on the home aspect of it.
You talked about the loss of jobs. A lot of those lost jobs are because of another economic policy that has been established by our colleagues in the federal government which has had a more devastating impact, at least to my community, which I can speak very strongly of, which has been faced through plant closures.
So your arguments that you put forward about the housing starts being down is not because of a budget that was produced, but it would be because of something that was outside of the workers' control. It's called the free trade. In future, it will be the North American free trade agreement. I predict probably if NAFTA goes through, we'll see our housing starts down even further because we'll put more people out of jobs.
But when I sit here and I look at the amendment that's being put forward to remove it, there is an opportunity for services rendered, which I believe is important. When you get a service, you should have to pay for it, which most people usually do.
The Chair: Thank you. Further questions, Mr Wiseman?
Mr Wiseman: Yes, I'd like to just put on the record my thoughts on this very briefly, and that is that the opposition seems to be very concerned with increasing taxation. I can tell you that for every subdivision that's built in a community that exists, the taxes for the rest of the community go up because the new subdivision does not have a tax base large enough to support the new infrastructure that is necessary in that community in order to maintain education, roads and other infrastructure needs, so the taxes go up.
You only need to look at Ajax, for example, over the last six years, which has almost doubled the number of houses in the area and so has the taxation. That is a very serious element to consider, why taxes are going up. For example, in Pickering, the study has shown that they need $50 million worth of reconstruction of the road systems there now, and as you add more roads, that reconstruction is going to have to take place on top of it. New schools, there are millions of dollars' worth of new schools needed in the community and there isn't a tax base to pay for it in the new subdivisions that are being created.
Studies have shown that frontages of 22 1/2 to 25 feet are more economical than 40- and 60-foot frontages. Communities that are created on 2 1/2- and 5-acre estate lots, the busing and the infrastructure that's necessary there causes the taxes to go up on everybody else's property and therefore the rest of the community winds up subsidizing those people who live on those big lots.
I think it's very important for us to understand that taxes are going to continue to go up as long as this kind of improper development continues to take place, and as urban sprawl continues, so will the tax increases necessary to pay for it. We can no longer afford to pass those taxes on to the rest of the communities that live in that area. Therefore, I think that when we talk about fees, we talk about the real costs of building subdivisions, we need to talk about it in its entirety and not just in terms of building one house. Thank you.
Mr Grandmaître: That's why you support lot levies.
The Chair: Mr White.
Mr White: Thanks very much, Mr Chair. The purpose of this section is to allow the ministry to recoup some costs that are involved in making these planning decisions. The Home Builders' Association has a very valid concern about the costs it incurs during the process of applying for planning approval etc. However, I think it's only fair that across the province, the same level of fees -- and you have the undertaking, certainly, of the ministry that fees charged by the ministry would be in line with those that are presently charged by municipalities throughout the province. So there will be a fairness across the province that home builders will be paying more or less the same fees.
The areas that we represent I believe are already governed by lower-tier and upper-tier municipalities that charge fees. The number of homes built in Metro Toronto or Durham would not be significantly affected, in fact would not be affected at all by this section, as their upper-tier and lower-tier municipalities do charge fees. We are only asking that where, in some isolated areas of the province, an area requires the ministry to do work that it could otherwise have done itself, or where it is not able to do it itself, those fees that the ministry charges should be reasonable and be a recompense for the work done so there's a fairness across the province.
The Chair: Mr Arnott.
Mr Arnott: I've listened to the parliamentary assistant's argument and I think he makes a good argument. However, it's irrefutable that higher fees, more money sucked out of the economy, will mean that there will be a higher end cost to the product, which is housing, which will mean, ultimately, less affordable housing which means, ultimately, there will probably be fewer houses built, which means ultimately there will be fewer Yorkview construction workers employed. I think that that argument is irrefutable and I leave it at that.
1710
The Chair: Further questions or comments on section 64? Shall section 64 carry? All in favour? Opposed? Section 64 is carried.
Section 65: Shall section 65 carry? Carried.
Shall section 66, clauses (a), (b) and (c) carry? Carried.
Mr White, section 66: You have an amendment adding clause (d).
Mr White: Section 66 of the bill, amending section 70.1 of the Planning Act.
I move that section 70.1 of the Planning Act, as set out in section 66 of the bill, be amended by adding the following clause:
"(d) prescribing the manner in which and by whom notice shall be given under subsection 4(2.1)."
This is a complementary amendment which is needed as a result of the government amendments to section 49 of the bill in terms of public notification. This amendment will give the minister the power to make the regulations prescribing public notice under subsection 4(2.1) of the Planning Act.
The Chair: Questions, comments? Shall Mr White's amendment to section 66, clause (d), carry? Carried.
Shall section 66, as amended, carry? Carried.
Questions, comments regarding sections 67, 68 and 69?
Mr Grandmaître: Can I ask a question at this point, Mr Chair? In the Parkway Belt Planning and Development Act, isn't the NEC, the Niagara Escarpment Planning and Development Act, wouldn't it be part of this? Why?
Ms Ross: There's a completely different act. There's a Niagara Escarpment Planning and Development Act --
Mr Grandmaître: I know, yes, and they're not being affected.
Ms Ross: They're not being affected, no. We're talking about zoning orders that are issued under the Parkway Belt Planning and Development Act, and the Niagara Escarpment Commission has its own process of development control permits, so it's not affected.
Mr White: If I might just add to that response, it's simply that the Niagara Escarpment is under a different ministry and that's why the Parkway Belt Planning and Development Act, which is under Municipal Affairs, is included here while the other is not, as well as, of course, the fact that they have different procedures.
Mr Mammoliti: On a point of order, Mr Chairman: I've been pretty patient for 15 minutes. I had a meeting 15 minutes ago that I had to go to. I've been very flexible --
The Chair: And your point of order is?
Mr Mammoliti: If we want to carry on this conversation, then I suggest we adjourn. If not --
Mr Daigeler: Mr Chairman, on a point of order.
Mr Mammoliti: -- then we hurry up and we carry on. I have to get going. I really do.
Mr Daigeler: Then leave. You were the one who held us up.
The Chair: On the same point, Mr Daigeler.
Mr Daigeler: Yes. I think the whip of the government has a nerve to say that, I mean, when he held up the proceedings at length after 5 o'clock.
Interjection.
Mr Daigeler: Well, that's precisely it. We agreed to extend beyond 5 o'clock.
The Chair: Further questions, comments to sections 67, 68 and 69. Mr Grandmaître.
Mr Grandmaître: One very short question to the parliamentary assistant, Mr Chair, and I'm not trying to delay it, George. Stay awhile. Learn something.
Now, to the parliamentary assistant: You say that the Parkway Belt Planning and Development Act is not under the same ministry as the NEC. It's under the same minister.
Ms Ross: Not any more. The responsibility for the Niagara Escarpment Commission was transferred to the Ministry of Environment and Energy over a year ago.
Mr Grandmaître: You're right, you're right.
Mr Grandmaître: You learned something, see?
Mr Mammoliti: I've learned never to stay another 15 minutes. That's what I've learned.
The Chair: Order. Further questions or comments to sections 67, 68 and 69? Shall sections 67, 68 and 69 carry? Carried.
I need unanimous consent to have the French version of the amendments adopted. Agreed.
Shall the bill be reported to the Legislature? Agreed.
This concludes the clause-by-clause consideration of Bill 40. I would like to thank all those who have been involved and particularly the clerk, our researcher, Anne Anderson, the parliamentary assistant and all members for their diligence in dealing with this bill. I would remind members that we did see all people who wished to make a deputation and we'd like to thank everyone for their cooperation. The committee is adjourned.
The committee adjournd at 1716.