INTENDED APPOINTMENTS ALI M. OMAR
CONTENTS
Monday 13 September 1993
Subcommittee reports, A-127
Intended appointments
Ali M. Omar, City of Gloucester Police Services Board
David Hobbs, Toronto Area Transit Operating Authority
Claudia Turner Vsetula, Ontario Board of Parole, western region
Edward J. Waitzer, Ontario Securities Commission
Workers' Compensation Board
Brian King, vice-chair, administration
Odoardo Di Santo, chair
STANDING COMMITTEE ON GOVERNMENT AGENCIES
*Chair / Présidente: Marland, Margaret (Mississauga South/-Sud PC)
*Vice-Chair / Vice-Président: McLean, Allan K. (Simcoe East/-Est PC)
*Bradley, James J. (St Catharines L)
*Carter, Jenny (Peterborough ND)
*Cleary, John C. (Cornwall L)
Curling, Alvin (Scarborough North/-Nord L)
*Frankford, Robert (Scarborough East/-Est ND)
Harrington, Margaret H. (Niagara Falls ND)
Mammoliti, George (Yorkview ND)
*Marchese, Rosario (Fort York ND)
*Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND)
*Witmer, Elizabeth (Waterloo North/-Nord PC)
*In attendance / présents
Substitutions present/ Membres remplaçants présents:
Cooper, Mike (Kitchener-Wilmot ND) for Mr Frankford
Haslam, Karen (Perth ND) for Ms Harrington
Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Curling
Owens, Stephen (Scarborough Centre ND) for Mr Mammoliti
Murdock, Sharon (Sudbury ND) for Mr Mammoliti
Also taking part / Autres participants et participantes:
Tilson, David (Dufferin-Peel PC)
Clerk / Greffière: Mellor, Lynn
Staff / Personnel: Yeager, Lewis, research officer, Legislative Research Service
The committee met at 1030 in the Huron Room, Macdonald Block, Toronto.
SUBCOMMITTEE REPORT
The Chair (Mrs Margaret Marland): Good morning. I'd like to welcome Mr Ali Omar. Please have a seat, Mr Omar. We're going to move a subcommittee report, if you can excuse us for a moment.
Mr Rosario Marchese (Fort York): I would like to move concurrence with the subcommittee report.
The Chair: All in favour of the subcommittee report dated Thursday, August 19, 1993? That is carried.
INTENDED APPOINTMENTS ALI M. OMAR
Review of intended appointment, selected by the government party: Ali M. Omar, intended appointee as member, City of Gloucester Police Services Board.
The Chair: Mr Omar, you may wish to address the committee for a few minutes, and then the committee members may wish to ask you some questions.
Mr Ali M. Omar: Thank you very much. I would like to say that I'm honoured to be here to meet all of you. I'm here to answer your questions to the best of my ability. I'm looking forward to servicing the community of Gloucester. Thank you very much for the opportunity you are giving me to answer your questions.
Mr Marchese: Mr Omar, welcome here today. I tend to believe that being involved in the community in a variety of different ways is very helpful when you're part of a police services board, because my sense is that if you have done a lot of different things you get a sense of community, a sense of the problems, and are able to reflect that in the police board. What do you think your challenges will be, or, at least, what do you think the benefits of that experience will be on the police services board?
Mr Omar: I have been involved with the Gloucester police for the past few years, actually since 1987-88. I have experienced a lot of challenges during these years. If I would be sitting on the board, I would use that wealth of experience in promoting the goals we are seeking in Gloucester to service the community the way it should be served, through community policing, for instance.
There are a lot of challenges there and they need a lot of decisions. Being on the board and seeing the information from the other side and being part of the decision-making, I know it's not easy. It will not be easy, but it will be more challenging to me in being challenged all the time in taking the decision.
Mr Marchese: One of the challenges, as I see it, is to make a decision on what I'm about to ask you, and it has to do with the Municipal Freedom of Information and Protection of Privacy Act. What this act does is protect the public's right to information held by the police,and the legislation also guards the privacy of personal information held by them. Police forces are required to balance the public's right to know against the individual's rights to privacy. Of course, these come into conflict from time to time, or at least they're seen to be in contraction in terms of how the law is interpreted. Some police boards interpret the right to privacy very differently from one another, or information is given out in one police service board and not given in another jurisdiction.
How would you deal with this issue of what is of compelling interest that would require a police board to give information or not give it, and how would you react in that kind of situation?
Mr Omar: I'm not sure, to the best of my knowledge, that the Gloucester police have dealt with that issue so far. If the issue comes about for the Gloucester police board to deal with, I would recommend that a consulting process be undertaken in which not only the members of the police force voice their opinion but also the public.
From that point of view, we have to have a consensus on what would be the interpretation, because I think the way the legislation is written is subject to interpretation; therefore. let's go back to the community, let's go back to the police force, let's go back to every member concerned about this issue, including the public, and mandate or try to assist the police chief in reaching the appropriate interpretation for the Gloucester police and the surrounding community.
Mr Marchese: How would you deal with the whole problem that I think the police face, that is, that they are subject to a great deal of criticism these days by a number of different communities in society where they feel, many of them, that the police are acting very harshly, abusing their power with some communities more than others, and, on the other side, trying to understand how the community may legitimately feel this is happening to them and nobody's listening? You have different people taking different sides; some people saying the police are doing their job, and other people on the other side saying yes, but as they're doing their job they are using force a lot more on some communities than others. How do you balance those two differing opinions, or what would you do to mediate those kinds of conflicting concerns?
Mr Omar: There are some elements of all of the above, actually, reported in the media or reflected in some community meetings, whether the members of the community at these meetings are members of visible minorities or blacks or special groups. I think being a police officer is a difficult profession. You want to do your job and sometimes you have to use force to do your job, but when you do it you are subjected to criticism.
I always maintain an opinion, based on my own experience, that some of the criticism may be self-inflicting from the way people see the image of the police officer -- for instance, the minority groups -- in their own home country. The criticism may not be true within the context of the Canadian society but it may be imported as a feeling from the land whence they came. It may not absolutely be true, the perceived impression of the police force using force unnecessarily; however, in some cases it may be true.
My approach would be not to prejudice any act, deal with an issue when it comes and just start from A and discuss the issue. Painting a viewpoint before dealing with the issue is always dangerous, particularly when you deal with some racial issues here.
Mr Marchese: Thank you, Mr Omar. Good luck.
Ms Jenny Carter (Peterborough): Following on from that, we've touched on the need for sensitivity as regards different races and so on, and obviously your background helps with that. I think there's also growing sensitivity to the need to deal with domestic disputes and things like that which the police have traditionally been a little wary of.
I'm just wondering how you feel this should translate into police training, how that should be improved to better cover some of these issues such as, for example, the preconceptions members of different races might have and how police could be sensitive to that yet still preserve the ability to keep law and order, obviously. How can we tackle these problems in the training of police?
Mr Omar: I think, from the training point of view, the best approach is an outreach approach. Seeing a police officer all the time having a gun and in uniform doesn't help the perception; it's seeing the police officer as the law enforcer only, not a human being. The other point is that the police officer is always under a microscope and every action the police officer makes is magnified.
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Outreaching and approaching, getting close to the community, I think should be part of the training, and the training should be mutual information exchanged rather than just one side telling the other side what to do and what not to do.
In Gloucester police we have, through some committees, implemented some measures for outreach. For instance, in summer employment of students part of this summer's employment was from visible minorities, and the beauty of that is that once you get a person working with the police, they feel what the task is all about and they go back to their community and describe their feeling and experience. I hope that experience is positive so it is reflected into the community positively and the entire community looks differently at the police force. I think this is the best way of educating the community about the police force.
Ms Carter: I suppose the actual hiring from minority groups too will help.
Mr Omar: I believe in the Gloucester police, yes, we have some blacks, we have some visible minorities and we have women; I think we have some disabled people. We still didn't fulfil the 50% of women in the Gloucester police, but I think the chief and the previous chief, Chief Thompson, worked very hard to fulfil the equity in the Gloucester police.
Mr John C. Cleary (Cornwall): Welcome to the committee, sir. Just a point of information: Who approached you or how did you go about applying for this position?
Mr Omar: I saw an ad in the Citizen asking people to apply for the position. I said, "Well, that's another ad." I didn't apply when I saw it, but Sergeant Savage, who's a sergeant in the Gloucester police, picked up the phone and called me and said, "Hey, did you see that ad?" I said yes. He said, "Did you apply?" I said no. He said, "Why don't you apply?" I said, "Let me think about it."
I thought about the responsibility, relating to the first question, to be on the other side of the fence, and after really thinking about it I thought I could help in this capacity. Therefore, I submitted my application.
Mr Cleary: In a previous question you talked a little about this. You must come on to that board with a number of things in mind. What changes would you like to see?
Mr Omar: I think the Gloucester police are on the right track now, and I'm applying for the Gloucester police board. It's on the right track in the way of outreach community policing; they have done quite a bit in that regard, and if I were to be on the board I would enhance that process and encourage it more.
Another issue coming, actually, in the region is the regionalization of the three police forces: Ottawa, Nepean and Gloucester. That will be a big issue. If I were to be on the board, that will be the one we'll be dealing with in the next while.
Mr Cleary: I don't know how it is in Gloucester, but I know that in other areas some of the auxiliary police don't think they're used as much as they should be. What's your opinion on that?
Mr Omar: Can you give me some examples?
Mr Cleary: In the little bits of information I have from a few areas, they feel that police officers are being tied up maybe directing traffic or doing things at parades or a number of events, where they feel that the auxiliary police, almost like the volunteers, could be doing that job.
Mr Omar: I think this is an issue under discussion for the region, effectively: Is it effective and efficient to use a police officer just for traffic control or actually use some auxiliary services in the community to do that and then when it comes to enforcing the law you use a police officer. These issues are subject to discussions now in the region.
However, I have to admit there is a police officer in the Ottawa policewho, every time there is festivity or anything in the city, this police officer is there and he's singing on a guitar, and this leaves a positive impression on the community. That doesn't mean he's not doing his job, but the job he's doing is a communication job. In my opinion, that's equally as important as having the gun to arrest a robber or something.
The job has to be balanced somehow, and the facilities and the services in the entire region or in the communities should be utilized to their maximum efficiency and effectiveness, including the service of the police.
Mr Cleary: I guess they were commenting from a taxpayers' point of view more or less. My last comment would be, your police officer who does that is a pretty good entertainer. I've heard him many times. My colleague has some questions.
Mr James J. Bradley (St Catharines): There is a perception in the eyes of many in the police force and perhaps in the public that the police are being restricted in what they may do to carry out their responsibilities. On almost a monthly basis there's something new that they can't do. Those same restrictions, of course, are not put on the criminals.
What new restrictions do you see happening in your part of the province as a result of your participation on the board? Are there any things you would further limit the police in doing?
Mr Omar: I stated, actually, that the police job is a profession, and I would do my best to honour that profession and get it respected by the community. It's not the imposition of limitations. I think it's to highlight the accountability, a responsibility for the actions. In my line of job, sometimes I leave a paper trail for an audit to be conducted on my financial performance later. That doesn't mean I have to be scared every time I sign an invoice, but at the same time I'm being accountable for my actions, and that's a point I will actually emphasize. It's a profession. Every action should be accounted for, and it has to be respected.
Mr Bradley: Okay. In this question I want you to read the words "the Franklin House" as whatever is the toughest bar in Gloucester." Do you believe that all officers who are hired in the police force should be able to break up a brawl at the Franklin House tavern, or whatever is the toughest tavern in --
Mr Omar: Actually, the toughest one is in Hull.
Mr Bradley: I've been told that by others. That's a question it comes down to very often. You know, it's nice to have as many people on the police force as possible, until you say, "Should everybody on the police force who's an active police officer be able to break up the brawl in the toughest tavern" in whatever jurisdiction they happen to be in.
Mr Omar: It depends on the degree of this disturbance in the community and how far did it go. If it's just skirmishes between teenagers and stuff like that for the fun of it without harming either the property or the community, that happens, I believe, everywhere. But if it gets out of hand, I would assume some order has to be maintained.
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Mr Bradley: Let me put it this way. I wouldn't be a very good police officer, because of lack of height and lack of the ability to fight or exercise physical strength. More and more, we are seeing a call to have more people on the police force, so they start breaking it down from the old stereotype of the six-foot-two, 220-pound, strong person who is there to bring about law and order. That's why I'm asking, do you think everybody who's on the police force should have the physical ability to be able to break up that brawl with the local motorcycle gang or whoever it is who's fighting in the tavern?
Mr Omar: I was in a course, actually, in interpersonal communication. The professor who was delivering the course has dealt with a hostage-taking where there was a hostage-taker and the entire police force was surrounding the area and they couldn't do a thing, with all their might. They invited that professor because he was a good communicator, and he communicated with the hostage-taker and resolved the issue. So we have to look at the tools necessary to resolve problems at the time of that problem happening. It may be some communication with some teenager convincing that teenager to get out of it will solve the problem.
Mr Bradley: I don't know if anybody has asked you this. If they have, just say you've been asked the question. There's a movement to allow police to participate actively in the political field. Do you believe that police officers should have the right to participate in the political field, and if so, what restrictions should there be on that participation?
Mr Omar: That's a toughie, because I personally am a federal public servant. I work for the federal government. The issue is a conflict of interest. As a public servant, I'm less under focus than the police officer. They will be more in the spotlight than myself, and any slight appearance of conflict of interest may hurt the cause of the police officer. So I have to be careful to make some judgement on that issue.
Mrs Elizabeth Witmer (Waterloo North): It's a pleasure to have you here. I'd like to focus on the employment equity, after spending four weeks on that committee. As you know, all the police forces in Ontario have been involved in preparing an employment equity plan, and I'd certainly like to ask you what your views are on employment equity as it relates to the aspect of policing.
Mr Omar: I believe the spirit of the employment equity is in the merit. In my opinion, as long as we don't sacrifice the merit issue, the competence, therefore we can live with this. It's not a quota system, and it cannot be a quota system. You cannot just fulfil the numbers because of some selection criteria, but you can direct your policies to fill the required number based on competent people. In this business, competence is required. You cannot sacrifice merit or competence. You have to be competent to do the job of a police officer.
Mrs Witmer: I guess one of the difficulties has been in attracting some of the designated groups to policing. Obviously there needs to be something done in order to recruit or attract those individuals. What do you think can be done in order to make this career, this profession, attractive to those individuals who traditionally have not been attracted to policing?
Mr Omar: More communication, more on-the-job communication or training. in the example I just mentioned, hiring a summer student, the majority of those summer students were from visible minorities, actually, and they had the experience for three months of dealing with the police officer. Sometimes they go in a cruiser and experience how the police officer works. It reflected a very positive effect on these people, so when they go back to their mother or their grandmother -- and I mean that word, because in some communities the mother and grandmother take the decision, not the individual. They go back and tell their parents: "Hey, wait a minute, this is not the stereotype that we're used to. This is different. These are real people. They are there to do a professional job and they are doing it right. They are not just an instrument of the government, as they are in the good old countries."
The stereotype is coming actually from the community, not from the police. That's why when it comes to some friction between the police and some designated groups, as I said, maybe the stereotype is coming from the community, not really from the police. We have to deal with that issue very carefully, because it's dynamite. It's very critical.
Mrs Witmer: I think you've made a very good point in referring to this student employment opportunity these young people have had. Do you know how widespread that program is where young people have a chance to more or less job-shadow and really become aware of what the job entails?
Mr Omar: Within the region, I'm aware that the Ottawa police have implemented this program. It has been successful as well. I'm not sure about the Nepean police. We have repeated it for several years, several summers, and the fruits of that was the employment as police officers of some of the minority people. Actually, you have two blacks and one visible minority now in the Gloucester force.
Mrs Witmer: I find your comment interesting that oftentimes it's the female in the family who helps to make the career decision. So really the entire process has just led to a better understanding and increased communication.
Mr Omar: Absolutely.
Mrs Witmer: With the amalgamation of the police forces, do you think it's going to have a plus or a negative effect on employment equity as it's happening in the region?
Mr Omar: From that point of view, from the employment equity, I don't think it will have an effect -- it may have an effect on some other points -- the reason being that Ottawa, Nepean and Gloucester are all committed to this approach. You can go to the Ottawa police and see the diversity of colours and accents, and the same for Nepean and the same for Gloucester. So getting a regional force, I don't think you will harm this principle of employment equity.
Mrs Witmer: What are some of the other problems that you do anticipate as a result of the amalgamation that need to be resolved?
Mr Omar: I don't think there's a problem, but there are some concerns. You will have a kind of centralized service with different satellites of different interests. If you are in the region, you will immediately realize that the community in Ottawa is different from the community in Nepean, different from the community of Gloucester. If we are talking about community policing that will fulfil the needs of community, therefore you have to centralize but perhaps leave satellite services in localities to look out for the interests of the local communities. That's a scenario which could be adopted.
I don't see major problems. I think there will be some issues that need to be discussed and resolved.
Mr Allan K. McLean (Simcoe East): I'm getting a different story here. Back in April 1991, Mr Farnan made the announcement and he had until May 1992 to bring in a plan with regard to meeting hiring quotas for prescribed groups. You're saying now that that is not the policy of the Gloucester police, that you're hiring based on ability? Is that right?
Mr Omar: No. Perhaps I didn't explain myself quite well. What I'm saying is that employment equity as a target is not a quota, meaning that you have a composition of the community with certain percentages represented in the community and we would like to get these percentages represented in the police force. You have to go through the recruitment procedure and the hiring practices to make sure that whoever you hire is competent and has the merits of being a police officer. You don't have to have the quota fulfilled tomorrow, because if you do, you will hire incompetent people. I think the principle is there, but they are implementing the policies, long-term policies be it, but for the long term to prove that the police are really representing the community they serve.
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Mr McLean: Some of the local police forces have been adopting a policy to release information to the media when they let sex offenders out so that the people in the community are aware of that. What would your view be with regard to that? Do you think all police forces should do that?
Mr Omar: That's a hot issue and it touches on the privacy act -- it might touch on the privacy act. My opinion is, we have to deal with cases on a case-by-case basis and we may seek the opinion of professionals in dealing with these matters as well. As a board member, if I were a board member, I will seek the assistance of people from other professions to give me a better assessment of this issue.
Mr McLean: With regard to the use of weapons, when they draw their guns in public, this policy now, of 30 days, the name still on the list: Do you believe this is a good policy or do you believe it would be better if they didn't have to fill out a report?
Mr Omar: As I said earlier, it's a point of accountability. If the police officer is a professional, responsible for his act, it doesn't matter whether he will write a report or answer verbally to a committee. It doesn't matter because, in his opinion, he did what he had to do in accordance with the procedure and policy. Whatever action he's doing, he can defend, whether in writing or orally. It's a profession.
Mr McLean: The final question I have is: As chair of the police services advisory committee on visible minority recruitment, do you think you would have more input as a full member of the board rather than as chair of the committee you're chairing? I think it's a pretty important committee that you're chairing.
Mr Omar: Actually, it was an important committee, and we pointed out some elements in current procedure which have been changed already. I believe perhaps that was one of the elements of why we see some visible minorities now in the police force, by the way. I have to make it clear, not because of the colour of my skin, that I will be defending all the visible minorities. The difference now is that on that committee I was representing a community, my community; when I'll be on the board, I will represent Gloucester city, and that's the big difference between the two roles here.
The Chair: Thank you, Mr Omar.
DAVID HOBBS
Review of intended appointment, selected by the third party: David Hobbs, intended appointee as member and chair, Toronto Area Transit Operating Authority.
The Chair: Welcome, Mr Hobbs. If you would like to address the committee for a few minutes, then we will go in rotation and they can ask you questions. If you have opening comments, that's great.
Mr David Hobbs: I don't really have any extensive opening comments. Basically, I do have the qualifications and a lot of relevant background experience that will put me in good stead in serving as the chair of GO Transit, particularly in the transportation field and the municipal field. That's very much what GO Transit is involved with, so I think I do have some relevant experience that I can bring to bear. Perhaps I can just leave it at that for members to ask questions.
Mr David Tilson (Dufferin-Peel): Mr Hobbs, I'm pleased to see you again. My colleagues have permitted me to ask this question of you. I geographically represent the north half of the region of Peel and, as you know, the north is the town of Caledon.
The town of Caledon currently has no GO Transit. The last of it was taken away this September for austerity reasons. I had appeared before the GO Transit board on two occasions to hopefully get a GO bus system to the northwest and southwest section of Caledon. I had been scheduled to come back this fall, only to find out, of course, that the board, in its wisdom, had decided to take away the line that runs through Bolton through Palgrave.
I raised this issue in public accounts and of course the Provincial Auditor is going to do an audit of GO Transit, which I'm aware of. In fact, Mr Parsons is appearing before the committee this Wednesday.
I have an invitation for you. I hope you will be appointed to this board; I wish you well if you are. If you are appointed, if you are successful, I would like to have an opportunity to take you around the town of Caledon, to show you the areas and the need for GO Transit, particularly in the town of Caledon. If you're appointed, would you be prepared to do that?
Mr Hobbs: Yes. In fact, one of the first things that, if I were appointed, I would want to do is to become more conversant with some of the details of the cuts that have taken place. I haven't up to this point in time, although I've read about what they are. I'd really like to become more up to date on the whole area that GO serves and some of the pressures and some of the concerns that are out there, in terms of either existing services, services that have been cut, or potentially new services, because I hope the situation that GO is in right now is one that reflects the economic situation the province is in and also the fiscal situation the government is in. Hopefully, we can take a look at cuts that have taken place as not necessarily being permanent and that there will be a time when some of these services potentially can be restored and others put into place. One thing is certain: If the whole area that GO serves is going to continue to be a viable and thriving economic area, then GO Transit is going to have to expand over the next few years in order to provide those interregional links.
Transportation is not an end in itself. It's a means to some economic and social ends. If the whole area is going to function effectively, both socially and economically, then there's going to have to be an opportunity to take a look at the kinds of services you feel are needed in the area of Caledon.
Mr Tilson: I look forward to taking you around. Thank you.
Mr McLean: Madam Chair, I had a few questions, but I can see that the answers are going to be long, so I'll kind of get to the meat of the questions I had near the end. I can see you're going to use up our 10 minutes before we get much of a chance.
I can also assure you that you have been appointed; we're just really reviewing your appointment. There's no "if" about it. The committee has never turned down an appointment yet. I think you're safe.
Until recently, you were the Deputy Minister of Transportation. Are you still receiving pay for that position?
Mr Hobbs: Mr McLean, as Deputy Minister of Municipal Affairs, I was offered an early retirement option, which I took and, as has been reported in the newspapers, part of that is the continuation of salary to the end of this year.
Mr McLean: Do you intend to draw salary as the chairman of GO, and what salary has been negotiated?
Mr Hobbs: I have waived the stipend that goes with the position. What I would receive is the per diem.
Mr McLean: Your answers are getting shorter. Now I'll ask you about the amalgamation: The minister in 1993 wanted a task force to study the amalgamation of the 17 systems. Briefly, could you state what you feel the needs and the impetus of this are?
Mr Hobbs: We have an area with 4.5 million people and growing. We have 17 transit systems. We only have one that serves an interregional function, which is GO Transit. We have a situation where there are, I'm told, approximately three million people who are walking across the northern boundary of Metro Toronto to go from one transit system to another. While there've been attempts in the past to put into place some fair integration schemes, there have been very few experiments with service integration. I think a lot of people believe there is a lot of room for greater integration of the transit systems that serve the greater Toronto area.
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I think there was one undertaken under the Liberals, which resulted in something like the twin pass, but the results from that were not very significant. This committee is designed to take a look at, as I understand it, some of the same issues. I would hope it can come up with some recommendations which can be put into place because, personally, I believe there are opportunities for more integration, both from the fare and the service level. I think it's a matter of time. It's something that's going to have to happen to have better coordination among the systems serving the area.
Mr McLean: Is this same committee going to be looking at the sale and the leaseback with regard to the GO rolling stock? There is some talk of a sale and a leaseback on GO.
Mr Hobbs: I think that's being handled -- I don't know for sure -- separately by GO Transit and the ministry and treasury board.
Mr McLean: Do you look favourably upon that type of activity taking place?
Mr Hobbs: Honestly, I don't know the details, but if it can save the government money over the longer term, then I don't think the risk associated, that I saw in the papers once, of some potential loss of control over the equipment is that great.
Mr McLean: A lot of the GO users use daily parking. There's been some discussion with regard to free parking. Do you believe that, with the financial situation of GO, there should be a charge for parking?
Mr Hobbs: It's a difficult issue. It's one that's been around for quite some time. The main objective is to try to get people out of their cars and into transit. I think the free parking is part of the overall GO scheme. It certainly makes that service more attractive and I would hope the fiscal situation or the financial situation doesn't get to the point where people have to seriously consider parking fees.
Mr McLean: What do you see as the major problem at the present that you're going to face as the new chairman of GO?
Mr Hobbs: I think the major issue is going to be the financial issue in the short term and in terms of trying to maintain a high-quality service at a time when there are cutbacks.
Mr McLean: Do you anticipate some line cuttage, routes running less?
Mr Hobbs: They've already done a review and have introduced some service cuts. Frankly, from the standpoint of maintaining the integrity and the effectiveness of the system, I hope it wouldn't have to be entertained again. It's really tough. Once you start cutting services, you cut back on the attractiveness of the transit system. Sometimes it takes a very long time to get ridership back.
Mr McLean: What about further cuts with regard to the GO trains such as the one to Caledon and the one to Barrie? I guess the one to Guelph has been cut. Do you see further cutbacks in those lines?
Mr Hobbs: I would hope not.
Mr McLean: Other than with regard to the finances, are you looking at any major upheaval within the TTC?
Mr Hobbs: I think one of the main things that's going to have to be dealt with is the recommendations of the task force that's been put together on integration. I would hope they can come up with some solid, viable recommendations, but it's going to be a challenge for both organizations.
Mr McLean: Do we have input into that task force?
Mr Hobbs: Mr Parsons will continue on with representing GO, but obviously, as chair, I'll be involved in any discussions that take place around the GO boardroom.
Mrs Karen Haslam (Perth): I have a couple of questions. There was a recent article I saw in the paper regarding the TTC and the fact that they have undercover officers in the TTC because the majority of TTC passengers are women and they are concerned about their safety. Is that a factor in GO Transit also?
Mr Hobbs: Absolutely.
Mrs Haslam: My colleague here thinks that women should not be allowed out after 10 o'clock and he figures that would really solve the problem, but I don't happen to agree with him. I wondered if you had some comments on what could be put in place to give women a more secure feeling. I know I work till 11 o'clock and I know there are women who work past 6 o'clock or past the daylight time. Have you thought of any changes that could be put in place to make us feel more comfortable in those situations?
Mr Hobbs: First of all, in terms of your colleague's view, I don't think it's enforceable.
Security has obviously got to be a major concern. I'm not totally sure of the details. There is a separate security force for GO that was established some time ago. Whether they have a number of undercover people like the TTC article, I don't know, but there was a very tragic situation involving a young woman a couple of years ago, as I recall, and I've got to believe that GO has responded and put into place policies that hopefully are designed to prevent that from happening. But obviously in today's world security has got to be a very, very top priority.
Mrs Haslam: I'm also concerned because I have a niece who travels in to Ryerson and therefore she takes the GO, and if it's a late class -- it's not just women. It's young people, especially young women.
One more question: What do you think the most important goal for GO Transit would be in the future?
Mr Hobbs: I think there are two: One is to try to maintain the very high level of service that has made it one of the most successful interregional transit systems in North America, and the second is to implement the planned expansions of service to help it continue to serve the economic and social development of the area it operates in.
Mr Marchese: Mr Hobbs, you touched on many of the possible questions that I have and others might have, but I'm going to ask anyway in the hope that we might get some different approaches or answers.
In 1992, GO managed to cover almost 62% of its operating costs from revenues, which means there's a shortfall. There will continue to be shortfalls, I suspect, with all of the attendant problems that come with that.
You talked about continuing to provide a high level of service. It's difficult to continue providing a high level of service, of course, if we're cutting back. Because we're losing revenues, we have to cut back somewhere, and we haven't yet found a way to recover those costs. So a high level of service doesn't seem to be what the answer is, although we need to try to do that. But are there no other answers from other Canadian jurisdictions or European jurisdictions in terms of how they have managed to deal with these kinds of problems that we're facing now?
Mr Hobbs: In Montreal, the provincial government provides 100% of everything for the Montreal interregional -- at least, I think they still do. That's going to be very tough. The 62% number that you mentioned is very high for a transit system of the nature of GO Transit compared to other transit systems, in North America at least. There are going to be real pressures to maintain that, and I guess one can hope that through reasonable use of the fare box as a contribution, the continued ability of the provincial government -- and hopefully being able to attract more riders and to improve the ridership is going to be one of the main challenges in terms of increasing the revenue that comes out of the system.
The opportunity is there, I think, because we're not going to be able to build much more in the way of highways in this area --
Mr Marchese: True.
Mr Hobbs: -- and GO Transit was initially put into place to try to take the pressure off some of what were perceived as the roadbuilding needs. But if you can get an attractive service and if the economy does improve, then hopefully the system will be able to increase ridership. It has increased, up until recently, every year, but there's a ceiling, and it takes an awful lot of good operation and marketing to try and get people out of their cars and into transit.
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Mr Marchese: Do the fares compare relatively well with other jurisdictions within Canada? Are our fares higher than other places? Lower? Is there room to increase fares as an answer?
Mr Hobbs: I don't know. I'm a little out of touch on them.
Mr Marchese: The service reductions as an answer to make up the shortfall is, I think, causing greater problems in a number of different ways in terms of the increase of personal use of automobiles, which we're trying to discourage. That in itself is an environmental problem that we'll have to face. There are the questions that people raised about regional planning implications in terms of housing costs, real estate values and so on. When we get into service reduction as an answer, in fact it causes greater problems both for governments and people in general which will be more difficult down the line to solve.
Mr Hobbs: You've raised an interesting point in terms of transit serving the land-use planning objectives of both the province and the municipalities it operates in. Obviously, transportation is very important in helping achieve that, whether it's going to be nodal development or intensification in the greater Toronto area. In the short term, I agree that some of the cuts are going to make achieving those objectives more difficult, and one of the major challenges is going to be to see how you can ensure that transit development and service actually continues to contribute to a lot of the broader land-use planning goals that even areas like York region may have some day.
Mr Marchese: I wish you luck, Mr Hobbs.
The Chair: Thank you, Mr Marchese. No further questions from the government? You have some time left. All right, thank you very much.
Mr Bradley: Don't forget: Any from our party?
The Chair: I'm sorry. You do.
Mrs Haslam: We're sorry he does too.
Mr Bradley: Yes, you may be at the end of these questions.
Was your predecessor, Mr Parsons, fired? Is that how you came into this position? Was he asked not to renew his position?
Mr Hobbs: Well, I think his three-year contract that the Liberal administration put into place came to an end at the end of June. That's my understanding.
Mr Bradley: And he was not asked to resume that position.
Mr Hobbs: That's my understanding. Mr Parsons had been the chair of GO Transit for quite a number of years.
Mr Bradley: In your circumstances, Mr Hobbs, were you asked to retire by the government? Were you one of several deputy ministers asked to retire?
Mr Hobbs: I was offered an early retirement option.
Mr Bradley: So how -- perhaps I can ask it this way. I'm interested in general rather than specific, and you can help me out this way perhaps. When the government says that to somebody, does that mean they pretty well have to take the option?
Mr Hobbs: They can go to court.
Mr Bradley: Okay. That does answer the question. That's very helpful in terms of looking at a number of people who are in the same position as you and trying to figure out what had happened in that instance.
Interjection: Twenty-eight.
Mr Bradley: Twenty-eight is the figure that my friend says. I'm not certain. Looking at the operation of GO Transit, at the leaseback proposals the government has, isn't this just a way of getting its debt off the books so it looks better, rather than being any great advantage to GO Transit?
Mr Hobbs: Well, it's one way of getting debt off the books and, as I said, from my understanding there is a financial advantage over the long term to the government. But in terms of getting debt off the books, that is being done with several other corporations, and that is a method of finance that is used in some other jurisdictions. I'm not an expert in what this means in terms of accounting.
Mr Bradley: Okay. I'm going to jump from thing to thing because there's such limited time, so it may be a bit disjointed, but it has to be that way.
Here's an interesting question from a planning point of view. Do you believe that extending GO Transit service to areas beyond the GTA will in fact put pressure on those areas for the development of prime agricultural land?
Mr Hobbs: That could. I think there's another side to that, though -- I think we have discussed this around a cabinet table before -- and that is trying to ensure that there are good planning practices in place and that there are very solidly based land-use plans that hopefully direct development away from prime agricultural land.
Mr Bradley: So that we don't annoy any municipality, I'll use the word "Utopia." But there's even someone flogging Utopia, I believe.
Mr Hobbs: There is one, yes.
Mr Bradley: Well, "Utorpia" we'll call this one, then, just to be different. Could it be, though, despite all of the restrictions put on the development of prime agricultural land, that by extending GO service to Utorpia, what we really do is encourage Utorpia to become a bedroom community of Metropolitan Toronto?
Mr Hobbs: Potentially. But again, as I say, it has to be qualified by the type of development plans and restrictions there are in and around that community.
Mr Bradley: One of the problems GO has in providing service for people is that there's an assumption that everybody wants to go to downtown Toronto, when in fact you have watched in your capacity with the government a lot of development taking place in places like North York or Scarborough or Etobicoke and so on. How do you see GO Transit being involved in providing service from wherever GO stops to areas other than downtown Toronto? That's the reason many people give for not taking GO, that it's fine if you work in the TD Centre or somewhere in downtown Toronto, but if you work in an office building somewhere else outside of downtown Toronto, it's not as helpful.
Mr Hobbs: That has been the reality of the way GO service has operated in the past, but I think there's an opportunity, in terms of different levels of service, to ensure that there are linkages between other communities. In addition, GO operates a lot of buses. The heavy rail is the main link into downtown Toronto, but there is a role, in conjunction with other transit systems, to try to strengthen the links between communities that exist in the greater Toronto area and not simply funnel people into downtown Toronto.
Mr Bradley: Do you believe that GO Transit should purchase vehicles, be they buses or trains, which are the very best environmentally even if it means more in terms of the capital outlay initially?
Mr Hobbs: That's a good question. I think they have to, in today's environment, purchase environmentally effective vehicles. I can't answer the other part of the question because I really don't know what differences there may be in capital costs.
Mr Bradley: Do you believe that it is wise for a government -- I'll put it generically because I don't want you to be in a position of passing judgement on administrations. But generically, do you believe it is responsible, reasonable and wise for governments to be spending more money on highways when at the same time they're cutting back on transit services such as GO Transit service?
Mr Hobbs: I think we have to have a good highway system in place in the province of Ontario, and I say that not just because of passengers, people who want to travel from point A to B, but roads also serve as the main conduit for goods movement in the province. With the railways in decline in terms of carrying freight, all the pressure is going on to the road system in terms of goods movement, so I think that certainly we have to continue to invest in highways, not just for passengers and for tourism, but for trucks. I know a lot of people don't like trucks and the image that they portray, but as I said before, with the decline of the railways in carrying goods, those are sort of our main economic lifelines.
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You live in St Catharines and you know what travels along the QEW, and the need for improvements for that reason. I think that there has to be continued investment, and hopefully we can strike a balance between what's needed from the standpoint of transit and what is needed in terms of the highway system.
Mr Bradley: What kind of coordination do you anticipate with Via Rail? The reason I put it this way is that I have this contention -- it could be correct or not correct -- that Via Rail or any other rail company in Canada seems to want to get out of the passenger business and does it by a number of different ways and ends up saying, "Well, you don't use the service so we're cancelling it." If you saw how they manipulate the time schedules and everything, you'd see why. Well, you'd well know this. All you have to do is manipulate the time schedules so you can't coordinate trains and you'll know why people don't take them.
The question I ask is, how do you see in the future the coordination of GO Transit with Via Rail to provide reasonable service for people? There seems to be a great opportunity there if you can only get the cooperation with whoever runs Via Rail.
Mr Hobbs: I think there have got to be efforts made -- I agree with your point, by the way -- to try and get much better coordination. GO Transit carries more rail passengers on a given day than Via does Canada-wide. But within this area, I still think that there is plenty of room for much better coordination, and I still believe that the federal government, through Via, has a major responsibility for the continuation of passenger rail traffic in Ontario. I really do not believe that they should be getting out of passenger rail.
Mr Bradley: Thank you, Mr Hobbs. I think you'll be a good person for this position with your experience and the answers you've provided.
The Chair: Thank you, Mr Hobbs, for appearing before the committee this morning.
CLAUDIA TURNER VSETULA
Review of intended appointment, selected by the government party: Claudia Turner Vsetula, intended appointee as member, Ontario Board of Parole, western region.
The Chair: Welcome, Ms Vsetula. If you would like to make some opening comments to the committee, you may, and then we will start the rotation of questioning.
Ms Claudia Turner Vsetula: Thank you. I have no opening statement. We can go straight to the questions.
Mr Stephen Owens (Scarborough Centre): I'd like to welcome you to the committee today. I have some questions about what is, I guess, after the police, the second most contentious part of the corrections system, and that is the parole system. Can you tell me about Maplehurst, the average number of days an offender spends in custody?
Ms Vsetula: It is my understanding that it's between 80 and 100 days. Under 100 days is the average length of stay.
Mr Owens: And what is a cost per day for an offender?
Ms Vsetula: Oh, gosh, I would have to take a guess. I would say in the neighbourhood of $130. I'm not sure of the accuracy of that statement at all.
Mr Owens: Looking at your cv, you have an extensive social work background. You've worked with families, children, young offenders as well.
Ms Vsetula: That's correct.
Mr Owens: Youths in and out of the system. One of the concerns I have is planning for the release of an offender back into society. What are the kinds of things you would see going into a good planning process? What are the kinds of things you would want to see, as a parole board member, in place for an individual who was leaving Maplehurst, for instance?
Ms Vsetula: I would like to see the discharge planning or the parole planning process start immediately upon the offender's entrance into the system. It's something that takes some time and is often transitory, depending on the treatment needs of the individual, their assessment of their needs of treatment and how far that has been able to go within their incarceration.
Also, there is the ability to find appropriate places to live, places of employment, rehabilitation programs. They're just not as available as we would like them to be, so we have to do quite a bit of planning. There is staff available within each of the institutions, whether it be clinical staff or probation and parole staff, along with some community agencies that come in that are to work closely with the offenders in terms of putting together a good, solid parole plan.
Often too, something that the clinicians try to do within institutions is to contact the families or the sponsors of potential parolees and talk to them and find out what areas need work, where they need some support to try to build up a good support network. The whole idea philosophically for everyone is to set this person up for success and not failure.
Mr Owens: Absolutely. In terms of the type of offender that you would be looking at granting early release to, could you maybe provide a quick profile for the committee? What would be the motivational issues that you would look for, the experiential issues?
Ms Vsetula: I think motivation, certainly, and attitude towards their place in life and what they see as their future is one of the primary things one would take into consideration; how they have dealt with their incarceration this time around. Have they taken advantage of those programs and those people who are available to help them? Have they taken a good, hard look at their criminal history and their family background and those elements that have led to poor decision-making? Have they got a good plan of relapse prevention? They've had to predict. The situations that they have found themselves in the past are still out there, and they need to find out.
Mr Owens: Substance abusers?
Ms Vsetula: Most certainly. How are they going to handle that differently? Do they have a good sense of personal insight into their strengths and their weaknesses and how they're going to bolster those strengths and hopefully cope better with their weaknesses?
Mr Owens: I'm dealing with a situation now with a constituent who was viciously assaulted. The perpetrator is a guest in the federal jurisdiction, not provincial, but do you think there's a duty for the judicial system, be it the government, be it the correctional centre, to notify a victim, especially a victim of violent crime, on the exit date of the perpetrator?
Ms Vsetula: I know that there is a system that we have currently, certainly in the institutions that I've been involved in, that if we have any concern about the safety of a victim or of a spouse or of any one related to an offender, we would contact the police in that area.
Mr Owens: Is this a formalized system or is it an informal network?
Ms Vsetula: I don't know whether it's formalized or not. I cannot speak for all the other institutions in the province, I can only speak for the ones that I have worked within, but we would contact the police in that area, who have the option of contacting this other person and saying: "Look, this person gets out on this date. You need to be aware of that."
I don't know what the parole board does with that because I haven't worked with it yet, but I know that within the institutions, if we have any concern about someone's safety, we let them know.
Mr Owens: In terms of a person coming before you and asking for early release, and I asked this before in terms of motivation and things like that, what are the kinds of questions you would want to ask that person? What kinds of assessment would you be looking to make? From what I understand about the system, it's not a long interview.
Ms Vsetula: We've got a lot of information in front of us, from what I gather, and there have been assessments done.
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Mr Owens: How much time would you spend making judgements or decisions with respect to different individuals?
Ms Vsetula: Not having been on a hearing, not having chaired a hearing, I would say it depends on the individual. I think some are fairly clear cut and they would be fairly quick, and the ones who require the attention get the attention. As far as I'm concerned, if I have to be there late, I have to be there late. I want to give each one the attention it deserves.
The kinds of questions I would ask: I would want to know, does the offender have a pretty solid grasp of where he's at right now? Does he know whether or not this plan is a good, solid plan? Is he confident in his ability to make some pretty drastic changes in his life? How does he view the supports in his life? What is happening differently this time? What's he learned?
Sometimes it's a matter of an age or a stage for a person. Either they're young enough that they've really been scared or they're a little bit older and they've seen a number of years in jail and they just don't want to retire there; they don't want to spend the rest of their life in jail. We're assessing their maturity and their ability to make rational judgements about their own situation.
You do that a number of ways. Sometimes you just have to ask one question, and you're giving them enough time and enough opportunity to express themselves and give you some pretty good cues there.
Mr Owens: Right. Thank you.
Ms Carter: I think it's evident that when you are making a decision about a person, you need absolutely all the information you can have about them. It's been suggested that actually the parole board does not necessarily have all the relevant information, that there's a kind of split there. Police might have information, crown attorneys and so on, and it isn't necessarily shared. Do you have opinions on that, and what could possibly be done about it?
Ms Vsetula: It's my understanding that they are currently meeting and trying to develop a more efficient paper flow of information. I feel that it is very important to have all the information available, particularly when you're looking at very serious crimes.
Ms Carter: Yes. Apparently the board might not have a record of a person's arrest, for example, which seems fairly basic.
Ms Vsetula: We may indeed have that information or similar bits of information in other pieces of reports, through the pre-sentence report, through the institution information. There is a number of reports that are available to the parole board, and there might be duplication of those pieces of information. But if something is seen to be very critical, from my point of view, you would then make sure you had that piece of information before continuing with the decision.
Ms Carter: Okay, thanks. I'll defer to Ms Haslam.
Mrs Haslam: I'm interested in some questions around the victims of crime. I don't understand a lot of it because I've been lucky not to have had a situation where I've had to follow up on a crime or have been a victim. If per chance I was a victim of crime or my daughter was a victim of crime or a relative was a victim of crime, it would be up to me right now, I believe, in the system to follow when that man's parole or that woman's parole was coming forward. I was wondering what your feeling was. Should I be notified if that person's parole is coming forward, or should it be something that I have to do on my own? That's number one.
Number two, I wanted to know a little bit about the parole board. Do you see the parole board's main responsibility being to the community or to this person and evaluating this person going back into the community?
Ms Vsetula: The first part of your question: I think there are two ways of looking at that. Certainly from some victims' point of view, they don't want to have to be the aggressor in terms of finding out when this person is being released and where they're being --
Mrs Haslam: Let me make a clarification, because I know in some cases there has been a delegation to the parole board saying, "I want to make a presentation to the parole board, because I don't wish this person to be released." They're usually very prominent cases, but in all cases, do you feel that the victim or the victim's family should have that opportunity, and in order to make use of that opportunity, should they be pre-informed of the parole coming up or should they have to follow it themselves? That's what I'm looking for.
Ms Vsetula: Certainly, they have the option if they wish to. I fully agree with that. There are other people who would find that very intrusive, who perhaps have been the victim of a crime, who have dealt with that and are trying to no longer feel victimized, who would find the reminder of that situation very intrusive. I would have difficulty making that decision on their behalf.
Mrs Haslam: Okay, fair game. The other one: Do you see --
The Chair: Ms Haslam, were you going to ask another question?
Mrs Haslam: No, no, I'd already asked it. This is just the second part, about whether the responsibility of the parole board is to the community or to the individual whom you are evaluating.
Ms Vsetula: I think it goes hand in glove. Certainly, we have to assess the risk in the community in terms of his risk for reoffence and the seriousness of that offence should he reoffend, but that is also considering the needs of the offender: We're there to set him up for success, not for failure. We're not doing him any favours by putting him in a situation where the risk for reoffending is high, whether the reoffence be something very serious or not very serious, so I think you're serving both purposes.
Mr Cleary: Welcome to the committee. How did you become interested in this board? How did you find out about it? Were you approached to apply?
Ms Vsetula: I've worked very closely with the parole board within my role as a clinician in both the Guelph Correctional Centre and as an administrator in Maplehurst, so I'm very aware of it. It's always been a goal of mine. I became aware of this position through a colleague of mine, someone I knew who had said, "By the way, there's a position coming up." I think I probably made it clear to them that when something does come up, to let me know.
Mr Cleary: With all the press, and most of it is bad press, wherever you read the newspaper or turn on the TV, do you feel the parole system has lost a lot of credibility with the public and with law enforcement officials?
Ms Vsetula: I think we're in a position, I agree, where we're not going to get a lot of positive press. The only thing I can hope is that people in the public and people with the police services may have individual relationships with either parole board members or community members or people who have successfully completed parole, so that they can make judgements based on their own personal relationship with somebody or something rather than going along with the popular theory that it doesn't work, ever, under any circumstances.
Mr Cleary: Do you have any other ideas how you as a member could turn that around, to bring the credibility back to the board?
Ms Vsetula: I would encourage public speaking within the community. Working within Correctional Services over a number of years, I've fostered that as much as possible, because that is a very misunderstood ministry. I think that would be very positive. I think we could probably let somebody know about our percentages of success. If it's couched properly, that might be considered newsworthy.
Mr Cleary: When you mention speaking in the community, does that mean you as a board member?
Ms Vsetula: I would say myself as a board member, part-time board members and offenders who have successfully completed parole and who have seen it as an integral part of their re-entry into the community.
Mr Bradley: My question would be, first of all, when you're sitting in judgement as a member of a parole board, how do you overcome the problem of a good performance? In other words, and you've had some considerable experience so you know what I'm talking about, there are some people who put on a good show and get themselves out, and others who are inarticulate and do not have the ability to present themselves in such a way as to favourably impress members of a parole board. How do we overcome that problem of the silver-tongued people getting out and the less silver-tongued people not?
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Ms Vsetula: No, I find the silver-tongued people have a harder time getting out. They're the ones I pay close attention to. First of all, we have a lot of information longitudinally from the time of the offence to the time of their incarceration and around the time of the parole plan, so we have a number of pieces of information that reflect people's view of this person and their strengths and weaknesses and their ability for success.
I would say for myself, with my clinical background and training, I would do it all the time when I was making a decision as to whether or not someone was going to be in therapy or not or whether they deserve some attention for a temporary absence pass; it's something you kind of get used to over a period of time. Gut feeling tends to carry a lot of weight sometimes.
Mr Bradley: So your experience, quite obviously, is going to be helpful to you in that regard.
Ms Vsetula: I think so.
Mr Bradley: Should the availability of adequate services within the community be a requirement before someone is released into the community? Even though you may have someone who is a good prospect to be released from prison, do you believe that person should still be released even if there are not adequate services to deal with that person in that transition period of parole?
Ms Vsetula: Each individual case is based on what that person's needs are, and those needs are always addressed within their parole plan. It's usually concrete. If they've decided they're going to go to an alcohol/ drug treatment program, then there's one established and sometimes there has been a preassessment such that there is a date of entry. We sometimes have plans that are less concrete. However, it's a part of the parole disposition that this take place in conjunction with the time spent with their parole officer. If this person was very needy and was wanting to go to an area where those needs are not being met, it wouldn't make a lot of sense, I don't think, to put them in a position where you're making these expectations of this person but you're not giving them the tools to achieve those expectations.
Mr Bradley: You have a difficult chore, I needn't tell you, in determining who should be out and who shouldn't be in terms of the public perceptions. My read as a political representative of the public perception is that they think there are far too many people who are getting out on parole or on day passes or having favourable treatment by the system, yet a person who has been involved with the system, such as you, would recognize that if there's not a period of transition -- that is, a supervised period of transition -- what in fact happens is when the person finally hits the streets, the chances of that person coming back are much greater. So I understand that dilemma.
How are you going to wrestle with the problem, however, the public perception that there are simply too many crooks on the streets, and that reinforced by police officers who will confirm that for the public's edification?
Ms Vsetula: I think the earlier statement that you made is one based on certainly some knowledge and education, and I don't know that that's widely known by people. I don't know that that philosophy of, "Look, they're going to get out anyway, so let's give them some supports," is known by a lot of people. I don't know that we're putting that as much to the fore for people to wrestle with. As I stated earlier to the other gentleman's question, I think we need to be aggressive in our public relations and let people know our successes and the kinds of things that we're doing to ensure that things go well. We're dealing with fallible people, so there's going to be a mistake now and again, but they need to know that the percentages are very low.
Mr Bradley: Have you observed on the other side of the desk, if I can put it that way -- this is a very hard question. You may say, "I don't want to answer it." That's fine; whatever you want to answer is fine. Have you observed that over the years in your experience, the appointment of political hacks to parole boards has been detrimental to the system?
Ms Vsetula: I have not known that many people who have been in full-time positions which would have -- I guess the people I have known who have been appointed, most of them are community members. I would not know very much about their background in terms of why they've been appointed or how they got there. I just know they're there and I've worked with them. So I really cannot speak from a lot of experience, myself.
Mr Bradley: That's as good an answer as I could think of. Mr McLean is eager.
Mr McLean: I have a few questions. I'd like to start off with the Maplehurst complex. How many residents are there? What is the facility for? I haven't heard it put on the record today. Is it young offenders? Is it two years less a day? What is the facility and how many people are there?
Ms Vsetula: Maplehurst complex is a combination of a maximum-security detention centre --
Mr Bradley: The Milton Hilton.
Ms Vsetula: Yes, the Milton Hilton, a maximum-security detention centre which holds, I believe, 265 beds of those people who are in the court process. Most of them have not been convicted. A very few of them would have been convicted to short-term sentences and they would serve those within the institution.
Mr McLean: Why is it classified as maximum?
Ms Vsetula: Yes, it is; it's maximum security. That has only been around for about two and a half years. Prior to that, since 1975, Maplehurst Correctional Centre was a low-to-medium-security provincial facility for those offenders who have been convicted to serve sentences of under two years less a day.
Mr McLean: You work for Correctional Services?
Ms Vsetula: You bet.
Mr McLean: How many years?
Ms Vsetula: For Correctional Services? Let's see. In 1984 I believe I started with Guelph Correctional Centre and then worked with Maplehurst --
Mr McLean: From 1989 to the present you've been the social programs director?
Ms Vsetula: Yes.
Mr McLean: You had indicated earlier on that you hadn't worked with the Board of Parole yet. Have you not had any involvement with that board?
Ms Vsetula: I have in terms of preparing clinical assessments for the board, yes, but I have not worked as a member of the board.
Mr McLean: You had talked about helping the people get back on their feet, doing some rehabilitation. Isn't that part of your duties, to help rehabilitate people?
Ms Vsetula: Yes.
Mr McLean: But it did not appear to be very successful. Is that wrong, in my estimation?
Ms Vsetula: I'm not sure I understand.
Mr McLean: For rehabilitating people to put them back out into the community, what programs are there in place to rehabilitate?
Ms Vsetula: Within the institution there are a number of programs. We have a very large school, certainly within Maplehurst, and all institutions actually have school programs available. There are clinicians, social workers, psychologists, psychiatrists within every institution, so there is a great deal of work being done. We have volunteers that we use: We rely heavily on volunteers to come in and do groups with inmates. There are a wide variety of rehabilitation programs within the institutions.
Mr McLean: So you think, then, the program is successful?
Ms Vsetula: Success is an individual thing, based on the offender's ability to integrate the information that they receive in these programs. So the programs exist, yes, and we try as much as possible to meet the needs of the offender, but it's all a matter of timing.
Mr McLean: Talking to some of the guards who work in the system, they don't feel that there's any assessment or any rehabilitation being done in most cases. They're just in. They're short of staff. They're not being rehabilitated at all.
Ms Vsetula: Some will say that and some will say that there is some evidence of change going on, so it depends on who you talk to about it.
Mr McLean: The public is very concerned about it and I think they kind of agree with the guards. They don't feel that there is a lot of rehabilitation and some of the people who have come out have said that there was nothing done with them.
Ms Vsetula: "Done with them" or "done to them" is something that really does not produce successful change. Change is dependent on an offender's attitude and ability to incorporate those programs that are available to them. You can offer all sorts of programs, and if they're not ready to take them, if they're not ready to do something about them, no, they're not going to change. It depends on the individual's ability to absorb at that point in time. But there are large numbers of inmates who never return to the system. You don't hear about those very often.
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Mr McLean: According to your résumé, you were in private practice from 1983 to 1990 doing individual family therapy. When did you do that: on weekends?
Ms Vsetula: Well, I was home for a number of years with small children and I did a lot of court-ordered assessments for custody and access matters, and once I went back into working, yes, I would do some court-ordered assessments on the weekends. I would have one or two going at any point in time.
Mr McLean: But your résumé said from February 1989 to the present you were the social programs administrator.
Ms Vsetula: Yes. While I was working I would continue very, very small --
Mr McLean: Did you have a few years off in that time?
Ms Vsetula: Yes, I did. I was home with children for a number of years.
Mr McLean: Oh, okay. This wasn't in here.
The other question I have is with regard to the normal days. It's six to eight days a month that you will be spending on the parole board. Are you going to take time off work to do that, or how are you going to manage to do this?
Ms Vsetula: My position is that of a full-time member, so I will be there for 36 or 40 hours a week or whatever the week is. I won't be a part-time member. My intention is to be a full-time member of the board.
Mr McLean: On the parole board?
Ms Vsetula: Yes.
Mr McLean: So are you going to be paid then by the Correctional Services? Are you going to get per diem on the parole board as the others will?
Ms Vsetula: I believe that I will receive a yearly salary. I believe a per diem happens with part-time members. I will be on a yearly salary and I will be taking a leave of absence from my current position.
Mr McLean: Oh, okay. I thought you were still going to be working as program --
Ms Vsetula: No, I'm taking a leave of absence.
Mr McLean: Okay. So you're going to be a full-time board member?
Ms Vsetula: Yes.
Mr McLean: What does a full-time board member make?
Ms Vsetula: Fifty-five thousand dollars a year.
Mr McLean: Hey, that's just about --
Mrs Haslam: Gee, we should all apply.
Mr McLean: There are a few members here who, after the next election, would love to have that position, I'm sure. No further questions. I wish you good luck.
The Chair: Thank you, Ms Vsetula, for appearing before the committee this morning.
EDWARD J. WAITZER
Review of intended appointment, selected by the third party: Edward J. Waitzer, intended appointee as member and chair, Ontario Securities Commission.
The Chair: Welcome, Mr Waitzer. You may make opening comments or we may just start.
Mr Edward J. Waitzer: Why don't you start.
Mr McLean: I read somewhere that "The other major part of the commission is an administrative agency comprising more than 230 lawyers, accountants, investigators, managers and support staff," a pretty large industry.
Mr Waitzer: Everything is relative. It's about the same size as some law firms. It's always scary to get that many lawyers together in one place, isn't it?
Mr McLean: It's amazing. We did some hearings with regard to the Ontario Securities Commission a few years back and I happened to be on the committee when we were dealing with that. It's amazing, the amount of turnover of lawyers who come in, go back to their law firms, or come in out of law school, get a job with the commission and then go to a law firm. What's the reason for that? Is it experience?
Mr Waitzer: There are a couple of reasons. One is that there's a tremendous disparity between pay scales at the commission and in private practice. I think over time the practice has evolved, which I'm not sure is that bad, that the Ontario Securities Commission is a good training ground for lawyers and accountants, because you really sit in the centre of the capital markets when you're at the commission, so most good securities practitioners have spent some time during their career up at the commission. In part it's public service, in part it's good training for them.
Mr McLean: I've always had a concern with regard to insider trading. It's my understanding that any one of these directors can trade in stocks and mutual funds. Is that true?
Mr Waitzer: Directors at the securities commission?
Mr McLean: Yes.
Mr Waitzer: Don't hold me to precise details. There is a policy which I'm not yet fully familiar with, but I'm sure I will be very soon, relating to senior staff at the commission which restricts their ability to trade and requires full disclosure of all their trading to more senior staff, possibly even myself, at the commission, so there is some control mechanism in addition to the statutory controls that apply to anybody with respect to insider trading.
Mr McLean: Do you feel that people who work inside, as they do, should be able to trade in the market?
Mr Waitzer: I'd be hesitant to put an absolute restriction. I think the requirement that they make full disclosure and comply with a policy statement probably reinforces for staff the significance of their position. I think most people at the commission are aware of the sensitivity of the work that they do. Having said that, when I worked at the stock exchange, one of the things I wasn't allowed to do was trade in securities, as will be the case now. It was probably one of the more fortunate implications of my job. I probably did far better with someone else trading securities on my behalf than trading myself.
Mr McLean: Were you working for a law firm when you were trading stock on the stock market?
Mr Waitzer: No. I have traded stock in the stock market, but I also spent some time at the Toronto Stock Exchange as a regulator when I didn't trade stocks.
Mr McLean: "The OSC chair should seek the power to prohibit an undesirable person from becoming a director of a public company and must seek to provide better protection for shareholders." What is your opinion with regard to the power to prohibit an undesirable person from becoming a director of a public company that wants to trade on the stock market? Should somebody be looking into that, a person you would feel to be undesirable? How would you act on that type of thing?
Mr Waitzer: The power is rarely exercised, and as you probably know, there are appeal provisions from the exercise of that power. It's one of many powers that are built into the Securities Act to ensure that the commission and its staff have the power to not only ensure integrity in the marketplace but ensure public confidence of that integrity. It's important that there be a range of remedial powers available to the commission. As I say, that power is rarely exercised, but I can think of occasions where the director of the commission or the chair of the commission has exercised that power as a way of preventing someone from having immediate access to public securities markets.
Mr McLean: The previous chair indicated that the delay in the OSC enforcement powers with regard to amending the regulations will be stalled for about 30 months and suggested this delay is an important reason for a large number of settlements struck recently with people facing OSC allegations. What are your comments on that?
Mr Waitzer: The fact that the commission has had gaps in its remedial arsenal I think has contributed, I agree with the past chair, to the incentives to settle cases because the commission, moving forward into an enforcement mode, knows that it isn't fully armed. I'm not sure where the past chair comes up with the 30-month delay. Certainly, I think getting that legislation or a good portion of that legislation forward is an important priority for the commission in terms of its ability to function effectively.
Mr McLean: It's been indicated that you're a proponent of shareholder rights and disclosures. I sometimes wonder, with regard to some of the ads that you see in the paper, about some of the higher interest rates being offered by companies. I forget the one that we had dealt with in committee here a few years ago. Was it Re-Mor trust?
Mr Bradley: Re-Mor and Astra Trust.
Mr McLean: And Astra; I was on those hearings when we were dealing with them, and I can tell you that a lot of older people thought that was a great investment. What are your views with regard to prohibiting that type of thing from taking place?
Mr Waitzer: I'd like to step backwards. Let me try to answer the question. I'm not sure I understand precisely the question. Clearly, self-regulation is the most effective kind of regulation in a financial marketplace. By self-regulation I mean disclosure, the industry policing itself, disclosure in the form which is really consumer protection.
It's also clear that self-regulation isn't enough. For one thing, the industry always has competing objectives. On the one hand, they want to keep out the bad apples; on the other hand, the industry is looking to promote itself vis-à-vis other financial services providers and others. So there's this tension between the promotional aspect and the regulatory aspect. There has to be some oversight. In terms of how you deal with financial institutions that fail, again, you have to look at the financial institution. I think what you're talking about now is a deposit-taking institution. The securities commission doesn't regulate trust companies or other deposit-taking institutions per se. If you'd like me to talk about my views on deposit insurance or other aspects of regulating deposit-taking institutions, I'd be happy to do that. It's not really the bailiwick of the securities commission.
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Mr McLean: No, I'm not interested in that, because my time is short and I only have a couple of more questions. I wanted to ask you about the executive salary compensation, your views on disclosure of executive compensation and the policy direction that you would recommend to the government with regard to that.
Mr Waitzer: I've written extensively in the past on it. I favour disclosure. As I said before, I think disclosure is the best means of self-regulation. It forces a level of accountability. People don't do things they're going to be embarrassed about if there is disclosure.
Having said that, my understanding is that the current commission has made certain recommendations which are under review by the government right now, and I'm not sure it's appropriate for me to be second-guessing its judgement at this time.
Mr McLean: What would your views be on how Ontario should approach financial disclosure by dealers? How should they go about doing that?
Mr Waitzer: Right now, there's a fair level of financial disclosure to the commission. One of the big projects that the commission and other financial regulators have been looking at, and I suspect will continue to look at for some time to come, because the nature of the market is evolving very rapidly, is how you measure capital adequacy of a financial institution. I think that's an important issue.
Mr McLean: My final question is just a short one. It has to do with regard to the OSC's approach to insider trading issues. Are they sufficient?
Mr Waitzer: Historically, the commission has probably not been that effective at enforcing insider trading. In the last couple of years, they have brought a couple of significant cases forward, which have focused people's attention on the fact that there are insider trading rules and they are enforceable. I think the legislation that the commission has put forward will assist the commission in that effort.
Mr McLean: Thank you very much. Good luck.
Mr Marchese: Welcome, Mr Waitzer. I don't think Mr McLean asked the question why you want this job. That's my first question.
Mr Waitzer: A complicated question; let me give you a couple of answers. The simplest answer is that when you've enjoyed the benefits of a system for a long time, it's very hard to say no when you're given an opportunity to put something back into the system.
I've been involved in the financial services sector for a long time. I started out as a regulator with the stock exchange. I spent several years at the stock exchange. I enjoy policy work. I think that capital markets are a key sector of the economy and play a very significant role in this province's welfare, and the securities commission has a large role to play in how efficient those markets are. It's very hard to turn down a chance to try to shape policy and be of public service in this context. How's that for a try?
Mr Marchese: That's good. My understanding is that the federal government is developing a parallel system of regulation, which suggests to me, first of all, it is already doing things that may be overlapping with what we're doing provincially. If they are not doing it at the moment, they will, and so that overlap will create some problems, presumably, for us and them as a government, as it does in so many other areas of public policy matters.
Do you have an understanding of what some of those overlaps are at the moment, and if presumably they want to regulate as well, what kinds of problems will we face and how would we approach this issue as a province?
Mr Waitzer: I'll be a little bit overly simplistic here. There have always been overlaps, and the financial services sector, as I say, is one of the most dynamic areas. It changes quickly. The most dramatic change in recent years has been the decision to allow banks and other federally regulated financial institutions into the securities business. As you know, banks have always been the dominant financial institution in Canada, so once banks are allowed to get into the securities business, there is of necessity an overlap because the federal government has exclusive jurisdiction over the regulation of banks, and banks now dominate, to some extent, the domestic securities industry. They each went out and either acquired or established a securities dealer subsidiary, and they have the lion's share, although not an exclusive share, over that industry. There's, of necessity, an overlap.
There's also an overlap, of course, between the various provinces, because while we have this fiction that securities regulation is provincially regulated -- and of course Ontario is the dominant capital market for Canada; there are other capital markets and each province continues to have its own securities commission -- when you say that there's an overlap now, the federal government does not have a lot of capacity. They don't have very many resources dedicated to securities regulation. They don't have the expertise or the experience. One of the unique resources of Ontario is that it has the premier securities commission, and it's recognized as such both within Canada and internationally, so that any move to harmonize securities regulation to better integrate the regulation of the financial services sector, which is something that I think is essential and will happen during my term, starts from the resources that are currently available. I think Ontario will play a key role just because Ontario has the expertise, the experience, the reputation.
Mr Marchese: Do you know, I was anticipating jurisdictional conflicts on this and confusion within this sector, so my thought is, unless we find a way to harmonize exactly this regulatory problem, it will be difficult to deal with it.
Mr Waitzer: It's a very competitive business, financial services providers. They're big, but there's also a lot at stake. There are also political considerations involved. Yes, there will be conflicts. Having said that, I think everyone wants to see a more sensible and more efficient system than we currently enjoy.
Mr Marchese: I'd like your opinion on what kind of independence you think the OSC should have vis-à-vis the government. Presumably there's always conflict, because when agencies perceive themselves to have an arm's-length relationship, it sometimes suggests to them that they can do what they want. That's not always the case in terms of having paramount authority to do what one wants, but how do you see the relationship between the OSC and the government?
Ms Waitzer: There are really two different aspects to the OSC. On the one hand, it's a statutory tribunal. It sits and hears cases -- for instance, insider trading cases or takeover cases -- and, acting in that capacity, it is essential, and the statute was designed so as to ensure, that the commission act independently. It's really acting in a quasi-judicial capacity.
The other side of the commission is the side that is almost like a utility. It's there to make sure that the capital markets work well. It processes prospectuses and it sets policy. In that capacity, I don't think anyone would argue for independence. Clearly, the commission is accountable to the government through the Minister of Finance. Indeed, in today's environment there has to be a close working relationship because so many of the issues that we're talking about -- for example, better integration of federal and provincial securities regulation or better integration internationally -- are of necessity issues that require input from the government because they are only susceptible to political or legislative solutions. I think there has to be a very close working relationship between the commission and the government on that side.
Mr Marchese: Fine; it's a good answer for me.
With respect to revenues, I forget how much we raise, but do you have a view about the ability of OSC to raise further funds for itself, for the government, obviously? If so, what ideas do you have about what more could be generated through the OSC.
Mr Bradley: Did Floyd tell you to say this?
Mr Waitzer: I'm treading on sensitive ground here, so if I get into trouble, I'm sure I'll be grabbed from behind.
Mr Marchese: I don't think so.
Interjection: You're on your own.
Mr Waitzer: I'm not an expert on this. I'll tell you, in basic terms, that I think that the commission right now is underfunded. It has had a history, year after year, of significantly exceeding whatever allocated budget it's had available to it. I think the commission has to be properly funded. There are problems with being chronically underfunded. It's led to problems in terms of recruiting people. It's led to problems in terms of getting it's job done well. When you recall that this year, for instance, the commission is generating about 200% in terms of revenues of its budget, that money comes from the financial services sector, users of the system who expect the commission to do a job. At a certain point, the government loses credibility and the commission loses credibility if it can't do its job properly, because you're really overcharging for services.
Not only that, but most of the sophisticated users of Ontario's capital markets have choices. Because of technology, there are no longer any boundaries. Anybody who feels that the Ontario market is not an efficient market can go to New York, can go to London, can go to Montreal. The commission has to function efficiently.
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Now, whether that requires more money, whether there are productivity gains that can be achieved, I think to the extent that the commission functions well, its users aren't going to have a big problem paying fees, and even paying more fees than the commission requires, because in the big scheme of things the fees that are paid are relatively minor to the significance of what the capital markets do for the economy and for the users.
Mrs Haslam: I'll get all my questions out; it's easier then for you to answer. Do you think that the public has lost confidence in the OSC? Is this the key issue or problem in the securities industry? If not, what is the key issue or the problem that the OSC will have to deal with during your term?
Mr Waitzer: Public confidence in the commission and in the securities markets isn't the key issue; it's sort of the eternal issue. It is the precondition of everything. If the public lacks confidence in the integrity of the markets and in the effectiveness of the securities commission, you lose your market very quickly, because, as I said before, there are other choices. That's a prerequisite in that you sort of assume that in defining what your priorities are in terms of -- if we can assume that for a second -- key issues.
There is always a range of policy issues relating to how to make the markets function more effectively, more fairly. In today's environment I think the questions that were just raised about better integration of financial services regulation intraprovincially, as between the various agencies within the province, and interprovincially, between the provinces and the federal government, and internationally are all key issues. The funding issue I think is a key issue in terms of building up the capacity and morale and effectiveness of the commission. There's a long list of key issues.
The Chair: Mr Waitzer, we're out of time. Thank you for appearing before the committee this morning.
Mr Waitzer: It was a pleasure.
The Chair: I'm sorry; this is twice I've done this this morning. The Liberals have not had their turn. I wondered why we had so much time on the clock.
Mr Bradley: We'll try to keep it relatively short, because the witness should know that the legislative research service provides background for the members and some interesting questions to be asked.
Mr Waitzer: They haven't done that for me.
Mr Bradley: I noticed that all of the questions that have been suggested by the legislative research service have been dealt with. Therefore, it leaves the members entirely on their own to ask questions, which is always dangerous, particularly for somebody whose greatest risk is to invest in a Canada savings bond each year.
But I was very interested in one answer you had, because the present administration, when in opposition -- the New Democratic Party, as used to be said -- was very interested in the disclosure of executive compensation. I would've thought that, the third year into the mandate of the government, almost the completion of the third year, that would have been implemented. You suggested that you are in favour of the disclosure of executive compensation. Are you in favour, however, of the same provisions which exist in the United States, which I understand are more radical than those which have been proposed in Ontario?
Mr Waitzer: I hesitate to venture into this area, just because I know it's under consideration by the government. The commission has made recommendations. Let me give you a longer-term answer, which is, as I suggested earlier, that markets are becoming increasingly integrated. Canadian issuers are raising money in the United States all the time. The borders don't matter anymore. I think we will come to a common standard. I hope and I think it's the case in securities regulation that we'll move to the highest sensible standard as opposed to a kind of a race to the lowest possible standard, because it just doesn't make sense. Everybody has too much of a stake in making sure that the system works well. I think my answer would be that over time, I suspect, we'll move more towards US-style compensation disclosure and I think there's some logic to that.
Mr Bradley: One of the arguments against it has always been that somehow someone is going to kidnap the executive when we find out that she is making $750,000 a year or, more likely, $4.7 million a year, that there's going to be an immediate attempt to kidnap that person and hold the person for ransom.
How much validity do you place in that argument?
Mr Waitzer: I think empirical evidence has tended to erode the effectiveness of that argument over time. There are some flaws. I don't want to leave you with the impression that I think the US model is ideal. For instance, I think one could argue as to whether some of the disclosure requirements in the US model are cost-effective. There's a whole new cottage industry among accountants right now figuring out how to value stock options. It's a very difficult problem, the question of whether the value of that disclosure to individual shareholders is worth all the money that individual shareholders collectively are paying to have that work done. But I don't get too concerned about kidnappings.
Mr Bradley: My final question deals with the government wage restraint initiatives and how they will affect the OSC's ability to attract and keep good employees who have expertise in certain areas. Is the attraction of having experience with the government and having that on one's résumé, and indeed establishing connections, if that's of any use in the securities commission, still sufficient to attract people, even in light of the fact that the government has placed wage restraints and compensation restraints on those who would be employed by the commission?
Mr Waitzer: I'm not going to give you an absolute answer because I don't think there is one. Let's step back. The commission -- and I say this as someone who's dealt with a lot of government agencies in private practice and in various policy roles -- really is a unique agency. It's not that big. Mr McLean talked about how many lawyers, but, you know, 230 people is not a very large agency. It's unique in that there is a sense of purpose and commitment and expertise at the commission that I think you would be hard pressed to find at most other agencies. I'm not saying that it's the best agency around, but there really is a culture there. To some extent, the people who work there, including the chairman, make sacrifices in terms of compensation for the opportunity to be part of that culture and to shape policy. To some extent, they work there because it gives them a chance --
Mr Bradley: Something like going into politics.
Mr Waitzer: Yes, not at all dissimilar in certain circumstances.
Mrs Haslam: You've taken a pay cut in that job?
Mr Waitzer: Yes, a very significant pay cut.
To some extent, they work there because it's good experience and it provides them entrées back into the private sector. There are non-monetary incentives for being part of the commission.
Having said that, as I said, the commission has got this chronic funding issue. The social contract and current wage restraints certainly compound that and it's a factor in terms of morale that's going to have to be dealt with. I don't think it's the end of the world, but it has certainly had a significant impact on morale at the commission.
Mr Bradley: The argument was made, successfully in one case, that, for instance, in something peripherally similar, the government had to pay crowns much more money because the crooks -- sorry, the accused -- were getting all the good lawyers who made big money and the other lawyers who weren't so good went into the public service where the money was peanuts. That's why I asked that question, whether there was a danger that the people on the other side of the ledger would have the better experts on their side than those in government. That's why I asked. Your answer is inter-esting in that light, because what the government did was simply pay the crowns more money to attract them.
Mr Waitzer: You see, that created another problem for the commission, because what it meant is that the lawyers at the securities commission, because of that action, are getting paid more than the accountants, so there are now sort of class disparities within the commission that create other problems. But I think the answer is that the commission and its staff are very highly regarded by practitioners. The commission also regularly retains outside practitioners on certain matters. So I wouldn't worry about it from the point of view of the commission being able to do its job well. I do worry about it as a managerial problem, in terms of maintaining morale.
The Chair: Thank you again, Mr Waitzer.
Could we have a motion please?
Mr Marchese: I move concurrence, Madam Chair, with all of the intended appointments.
The Chair: Right, the appointments this morning of Mr Ali Omar, Mr David Hobbs, Ms Claudia Vsetula and Mr Edward Waitzer. All in favour of the motion to approve those appointments? Opposed, if any? The motion is carried.
May I just remind the committee that we are starting at 1:30 this afternoon in closed session.
The committee recessed from 1231 to 1330.
The committee resumed in closed session from 1330 to 1359.
SUBCOMMITTEE REPORT
The Chair: I call this meeting to order, a meeting of the Legislative Assembly standing committee on government agencies, to deal with the agency review of the Workers' Compensation Board. Just prior to starting with the opening statements of the board representatives, someone is going to move the subcommittee report.
Mrs Haslam: I'd like to move the subcommittee report, with these amendments and these details:
We're meeting from 10 to 12 and from 2 to 5 from Monday to Thursday.
We've set a framework for ourselves: Monday we'll have an overview; Tuesday in the morning our framework will be on fraud, and in the afternoon we'll be looking at the action plan the WCB has been place; on Wednesday, in the morning we'll be looking at finances in general and in the afternoon there's a possibility of a tour of the WCB building, and we will be discussing that and making a decision tomorrow; on Thursday am we'll be looking at the building, and the afternoon looking at the future and what's going to be discussed for that. I so move with those amendments.
The Chair: Any discussion? All in favour? Opposed, if any? The motion is carried.
WORKERS' COMPENSATION BOARD
The Chair: Mr King, are you the first spokesperson this afternoon?
Mr Brian King: Mr Di Santo has been waylaid by some people in the hallway, but he's on his way in and he will be making the first statement. Here he is now.
The Chair: Good afternoon, Mr Di Santo and Mr King, and welcome to the committee. If you would like to start your presentation, we would appreciate it.
Mr Odoardo Di Santo: Thank you, Madam Chair and members of the committee. On behalf of the Workers' Compensation Board, thank you for your invitation and the opportunity to participate in these hearings. With me today are Brian King, vice-chair of administration of the board, and Dennis Schweitzer, who is vice-chairman of the board representing the workers. The Honourable Robert Stanbury cannot be present today, but he is the vice-chairman representing employers; he will attempt to participate in the next three days. Also present are several senior members of our administration who are here to help us answer your questions and, more importantly, learn from these proceedings how we can better fulfil our mission.
As the first person to speak for the Workers' Compensation Board at these proceedings, it is my responsibility to establish the outlines of our perspective, our point of view, on the subjects this committee wishes to discuss. In order to help you put yourselves in our shoes for a little while, I have to explain how we at the Workers' Compensation Board see the province and our unique role in it. I can best do this by sketching out for you the daily reality with which we work.
During just the four days this committee will meet to discuss the board, over 5,000 workers in Ontario will be injured on the job. This distressing statistic is actually understated, because we know that, for a variety of reasons, not all workplace injuries are reported to the board, especially those many industrial diseases that slowly invade and usually shorten many workers' lives.
About one in 10 of those workers who claim for compensation will live with their injuries for the rest of their lives. Many of these permanent disabilities are visible, but most of them are not. Most of these workers are eventually able to return to some kind of productive employment, if they are lucky to get their old job, but many cannot, and of those who cannot return to work, most slide quickly into poverty and a quiet daily despair.
The cumulative effect of more than 400,000 workplace injuries per year is resulted in a very large, if largely invisible, group of permanently disabled people in our province. A growing number of them are women, many of them young mothers who are new to this country and who worked in repetitive jobs with their hands, so hard and so fast and so uncomplainingly that they can no longer pick up their own children.
Another statistic, which we don't like to talk about, but we must, is that during these four days it is likely that two, three, four or more workers will be killed outright on the job, somewhere in this province. It could be happening right now. Let us pray it isn't. But what is most certainly happening right now is that some workers, too many workers in this province, are being exposed to some hazardous substance, probably a carcinogen that will significantly shorten their lives.
I'm telling you about this, the grim reality that is our task to face and deal with every day at the Workers' Compensation Board, so you can better understand our occasional and forgivable feeling that there has been a lot of attention and a lot of debate about the cost of workers' compensation in this province but little, if any, attention given to the pain and long-term human suffering behind that cost.
Yes, we know we have to be as prudent and efficient as humanly possible and we are always striving to do that, as you will see, but please do not forget that we deal with and we try to help people in pain, people whose lives have been shattered by serious workplace accidents, people who have been productive, contributing working citizens all of their lives until they become permanently disabled. Sometimes, these people are the families of those who have been killed on the job.
What is an acceptable cost for providing these victims the kind of humane, compassionate, caring and timely service we would all wish for ourselves if we were in their shoes? This is a difficult and troubling public issue that will probably never be resolved to everyone's satisfaction, but we must keep trying.
I realize that it's statements like this, which I have been making for 25 years, that have caused people to label me as pro-worker. It is a label I wear with pride, because the very existence of our workers' compensation system is based on compassion and justice for the injured worker, as Judge Meredith said at the outset when he set up this system.
I cannot imagine a chair of the Workers' Compensation Board who was not pro-worker. The law even requires us to give the benefit of the doubt to the worker in many difficult judgement calls and requires us to make significant efforts to help the worker with his or her rehabilitation and make those efforts quickly. The very nature of our work is pro-worker. How could it be otherwise?
But I totally reject the implicit assumption of some that being pro-worker means being anti-employer. That is not true of me or any of my colleagues at the board. We understand that Ontario's future prosperity will depend, as it always has, on thriving, competitive business and industry. We are as distressed as everyone else in this province about ravages of our prolonged economic recession and our diminished ability to generate jobs, and we worry about the effect of workers' compensation costs on the Ontario economy. We continuously seek efficiencies and innovation in our service.
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I must add that for the first time in the history of the Workers' Compensation Board, this administration is costing every new program, every new initiative that the board of directors undertakes, and we consult more than ever before with employers, who pay the costs of the system. In fact, I am confident in saying that since our administration began over two years ago, there has been an unprecedented level of formal and informal consultation with Ontario's employers on practically everything, from the design of the form they use to report an accident to the issue of compensation for the effects of workplace stressors.
Of course, we also consult with workers, principally through their well-organized representatives, and whenever possible we bring both groups together in the same room to seek common ground and the kind of enduring consensus that gives us at the board greater confidence in our work.
Obviously at some point decisions must be made; consultation cannot go on for ever. As legislators, you understand that. Our major policy decisions of course are made by our board of directors, which is also in effect our highest consultative body. This board, I want to remind you, Madam Chairman, and the committee and the media, is made up of four representatives of employers and four representatives of workers and is an active, informed and decisive group of concerned citizens who are in close touch with their respective constituencies. They are not as visible, perhaps, as myself or Brian King, but our compensation system is profoundly influenced by their decisions, which are in the vast majority of cases arrived at by consensus.
By law, the daily work of the Workers' Compensation Board staff is making real-life decisions on the interpretation and administration of the Workers' Compensation Act. It would take an entire day just to recite the types of decisions we must make, from what are reasonable travelling costs to receive effective therapy, and that's a simple decision, to what are realistic occupational goals for a teenage store clerk who was gunned down while at work and left paralysed for life. Millions of decisions, large and small, are made by the board staff every day, every year.
Are all those decisions correct? That would be impossible. There are too many variables in every slightly complicated workers' compensation claim to guarantee that our decisions in the case will always be correct in both law and simple human justice.
With the number of decisions we must make, even a tiny fraction of wrong decisions will accumulate in the experience of those who watch us closely, who are also the ones with whom we most consult.
This has created something of a paradox for us. Our new openness, which we believe was long overdue, has focused attention on those mistakes we do make, even though they are, we know, far fewer than they have been in the past. Brian King will give you some rather startling figures on the error rate of the computerized workers' benefit system, errors which we have now corrected, and this is just one example of how we are actively seeking out our mistakes and submitting them to scrutiny by our clients so that we can get better and faster. The strategy is working. We are making better decisions, or at least that's what our clients are telling us, which makes it ironic from our perspective that all the attention is on our mistakes, or alleged mistakes, and not the permanent improvements that arise out of this open, continuous self-examination that is now the way we do business the at Workers' Compensation Board.
Our intensive outreach to employers during the last two years has affected me personally very positively. As a way to better understand employer concerns, I have visited many workplaces in this province. I am pleased to report that it is now easy to find workplaces in which the employer's regard for the health and safety of the workforce and their commitment to vocational rehabilitation is truly outstanding and, to me, truly exciting. Moreover, I know that the places I have visited are only a small indication of what is happening out there all over the province: growing awareness, growing concern and more innovation in the areas of health, safety and rehabilitation in the workplace.
So I would ask our critics to continue to criticize us, constructively if possible, but please check the record before you label us as anti-employer. The facts simply do not support such a charge.
What the facts do support is that we should all have a major and urgent concern about the future of workers' compensation in Ontario. To some degree, every province's workers' compensation board shares the same problems, but here in Ontario, because of severe shrinking in our assessment base, due both to the recession and the offshore movement of manufacturing, we are suffering more than others.
Every concerned person will have his or her opinion on what the Workers' Compensation Board should be doing to address this fundamental problem. But it is clear that there is no simple formula that will allow the board to rise above inexorable economic forces. Like everything else in nature, we too must adapt or die, and I think it is clear from human history that the most successful strategy for adapting to changing environments is cooperation. As a province, as a country, as a world, we must all cooperate more if we are to survive and prosper, and nowhere else does this apply more clearly than in issues related to workers' compensation.
That is why we have dedicated our administration to building the consensus on which cooperation can be based and building the cooperative structures through which further consensus is achieved. If the successes we have had have not been in the headlines, it's because consensus-building is by its nature a quiet, undramatic, incremental process that attracts no attention. And we have had successes, which you will hear about as we progress in our presentations.
When we came to the board in 1991, myself and Brian King, we appeared before the standing committee on resources development. The focus was on service delivery -- or, rather, inadequate service delivery -- by the board to its clients. At that time we admitted to serious service delivery problems and explained in some detail the unique combination of circumstances that led to the noticeable and in many cases measurable deterioration of client service that had been taking place during the last few years. These were not excuses but explanations, a litany of challenges we had to overcome if we were to arrest the deterioration and make noticeable and measurable improvements:
-- Our telephone system, which was poorly planned and even more poorly implemented.
-- Our state-of-the-art imaging system, which, for all its merits, actually slowed down decision-making.
-- The high turnover of adjudication and rehabilitation staff, which meant a relatively inexperienced workforce during the most stressful time in the board's history.
-- A blizzard of policy changes resulting from Bill 162.
-- A payment system with an astonishing error rate.
-- A decentralized decision review process that slowly issued lower-quality decisions, not because the staff were lower quality but because it was poorly thought through and not supported.
-- An employer reclassification program that seemed expensively out of control.
And these were just the major problem areas we discovered.
I confess that there were times during my first few months as chair that I privately marvelled at how our staff could actually keep the system running in the face of such adverse conditions.
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I ask you to reflect for a moment on the complexity of administering three different acts, depending on the date of the worker's accident. We have a pre-1985 act, we have Bill 101 and Bill 162, a tangle of legislation that consumes a lot of resources and expertise to administer.
But if we came to you now, more than two years later, and still cited those circumstances we found as reasons that we have not improved service delivery, you'd rightfully question our credibility and our ability as chief administrators of the Workers' Compensation Act and the board, because at this point in our administration they would be excuses, not explanations.
Fortunately, we have improved service delivery, both noticeably and measurably. Brian King will be talking more specifically about this when he addresses you. But unfortunately we still have a way to go before we are satisfied. We cannot improve 100% overnight, or even in two years, given the size of the board and especially given the fact that we are tremendously strained by sheer economics.
It would be irresponsible, or at least unrealistic, if we simply asked ourselves, "What is the best level of service delivery we can achieve?" and then set about doing that. The question we must answer is this: Given our resources, given the ability of the Ontario economy to support the system, what are the board's service delivery priorities and how do we most efficiently achieve them?
There are many more things we would like to do to improve services for both workers and employers, but, simply, we have to choose our priorities. For example, we think we could greatly reduce the stress that small and medium-sized employers experience over workers' compensation matters through an innovative training and information service for both workers and employers. I'm sure you'll agree that a lot of the board's service delivery problems stem from an inadequate understanding of how the system works and each client's rights and obligations. This lack of understanding is predictable. It's a complex system because it's a complex law which attempts to deal with complex human events and processes. A person operating a small or medium-sized business cannot be reasonably expected to learn in advance how to deal with the Workers' Compensation Board until he or she actually has to do so. There is no lack of ideas on how we could bridge that gap between the law and how our clients understand it. It's only the economics that force us to make choices, as I said before, choosing priorities. At this time of prolonged economic crisis, of course those are factors that have a major impact on our operations.
Nevertheless, we have made several significant improvements in service delivery by delineating our priorities and acting on them to the best of our economic ability. In fact, though, our priorities have been delineated for us: first by the Legislature itself through the report of the standing committee in the spring of 1991, which called for, among other things, an operating review of the Workers' Compensation Board, which was accomplished; secondly, by the task force on service delivery and vocational rehabilitation, which I initiated in 1991 and which was a tremendously successful and unprecedented consultation with our clients all over the province; and thirdly, through an equally unprecedented internal consultation with all our staff, very ambitious in scope, very innovative and, once again, very successful.
Out of all these influences on just what our priorities must be, we have shaped an action plan centred principally on the five main themes of the task force recommendations. The plan will be pursued by 16 teams of staff from all levels of the board that will develop precisely targeted programs, explore innovative service delivery concepts and even hire staff through extensive consultation with a range of client groups.
If I may, not just in the interests of our time here today but also because it is the single most important compensation issue to me personally, I would like to specifically address just one area of concern being taken by the action plan, the area of vocational rehabilitation, returning injured workers to productive meaningful employment as soon as they are able.
To a permanently injured worker, the idea of compensation must include rehabilitation. Personally, I would be happier if our organization were called the compensation and rehabilitation board, to give public weight to what is surely one of our basic values as a society, the restoration of human potential and dignity after a setback.
Allow me to illustrate at this point with a brief story about one of our clients whose recent history embodies my goal which I set out when I assumed this office, to build an institution, a Workers' Compensation Board with a human face.
In November last year a 26-year-old father of two young children lost his right arm and leg in a railway accident. For weeks his life hung by a thread, but he did survive, although he has many times every day wished he hadn't. John had no desire to live for the next 50 or 60 years as a double amputee, a normal human being trapped in a mutilated body that made everyone around him uncomfortable.
In his own words, it wasn't until he came to the workers' compensation rehabilitation centre in January of this year that he began to see a glimmer of hope. By the end of that month he had a new arm; by March 1 a new leg. Then his work really began, learning to walk, eat and, most important of all, learning to focus on the future and draw on the deep and powerful human drive to recover and carry on despite great suffering and adversity.
His progress astounded his doctors. By April he was driving and he now swims, plays squash and can walk two kilometres without a break. He is learning to write with his left hand and is looking forward to the day that he can return to work. I would immensely wish he could be one of our workers counselling other injured workers.
John is a truly remarkable man, the kind of person we feel privileged to help, and if you talk with him you will hear about the personal, compassionate, professional and motivating help he has been getting from the staff at the rehabilitation centre: "I owe the staff here a lot," he told us. "They were there for me each step of the way. They took the time to get to know me and my interests. This is true from the janitor up. There were lots of days when I just couldn't pick myself up, but someone was always there to help me through it."
John's is, thankfully, an unusual story, but it is far from unique. It describes the board at its very best and we should not be shy in talking about our best. But there are many thousands of less dramatic but still tragic stories of permanent injury in Ontario every year, workers who need and deserve the best, most caring rehabilitation services we can provide. We are not doing enough for permanently disabled people in Ontario and, as a result. we are losing a staggering amount of human potential in destroying many good people's souls.
When I first arrived at the board I asked about the prevalence of modified work programs. I wanted to see how they were working and learn from those that were successes. I was extremely impressed with what I saw at workplaces in different parts of the provinces. At Inco, Falconbridge in Sudbury, UTDC in Thunder Bay, St Marys Paper in Sault Ste Marie, Bell Northern in Ottawa, Levi Strauss in Hamilton, Cuddy Food in London and Ford in Windsor.
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But as impressive as these programs were, they were only a handful of employers. The realization that modified work programs and the early return to work benefited absolutely everyone was not yet general. In fact, it still isn't but it soon will be. There are now 2,000 modified work programs that we know in Ontario, almost all of them of recent origin. This statistic undoubtedly accounts for a large part of our success in reducing the average time between accidents and return to work during the last two years.
Vocational rehabilitation is as good for employers as it is for injured workers. I think that statement is now beyond question. But let me take one step further. I am convinced that what is good for rehabilitation is good for Ontario. We at the Workers' Compensation Board are a major part of the social net, but for too long we have been isolated from others who work with the disabled. In a modest way, my office has tried to connect with them so that we can share our expertise and by speaking with one voice do much for employment equity for the disabled of Ontario.
I know that more and more people share not just my views on this, but my passion as well, as evidenced by the result of our task force and action plan. The Workers' Compensation Board has always been a leader in rehabilitation, as John's story attests, but there is still much to be done, in our view. I publicly pledge, as long as I am chair, to continuously promote and direct even greater measures to restore injured workers' self-esteem, earning potential and ability to contribute to their society.
I must add, Madam Chairman and members of the committee, that one of the problems we at the Workers' Compensation Board are experiencing is the fact that although we are making inroads with the modified works program, I want you to understand there is an incredible shift in the perception on the part of the employers of the injured workers. Until recently, injured workers were considered to be a liability to the employers for many reasons -- because they were thought to be prone to recurrence, because they were non-productive -- but the cases that I mentioned to you from Inco, where 10% of the workforce is made of injured workers or people with disabilities, to smaller companies like Levi Strauss, all prove that injured workers can become an asset for the employers and therefore can alleviate the Workers' Compensation Board of any credible burden, because the compensation expenses are a very large expenditure in our budget.
We need the cooperation of the other partners in society, from the legislators to the public employers to private employers. We cannot operate on our own, because you realize that until now, except for a provision of reemployment in Bill 162, the board has no power to reemploy or to employ injured workers. We can only plead with the employers; we can only try to convince them. But there is not legislation that allows us to place injured workers back, or other people with disabilities. Therefore, a change in legislation as well as in the public's perception is necessary, and I hope that you as legislators will promote exactly that.
I want to move now to another subject. There is one subject that rightfully troubles all of us that I want to address in a very straightforward way. That's the issue of fraud at Workers' Compensation Board. At the outset, let me point out that, contrary to what some interested critics are saying, the sources of fraud or potential fraud at the Workers' Compensation Board are several. Frauds can be originated by employers, by workers, by suppliers and by Workers' Compensation Board employees. In the last two years, we have uncovered instances of fraud from all four sources and we have as a result learned better how to prevent, detect and discourage it.
I know I speak for all our staff when I say that every one of us at the board feels betrayed by every instance we discover of outright fraud, whether or not it is publicized by the media. We know this reflects on all of us. It makes our work more difficult and inevitably results in more stress for the vast majority of our clients who are scrupulously honest and cooperative. Injured workers in particular suffer because their claims can often be delayed by the screens we erect to discourage or detect unjustified claims. This is very unfortunate because, as a percentage of the claims we process -- last year we processed 377,000 claims -- a very small number could be legitimately called fraud.
Mr McLean: Point of privilege, Madam Chair: I wonder how much longer your presentation's going to be, sir. Any idea: 15 minutes or half an hour?
The Chair: It's been 35 minutes up to now. You have been 35 minutes, Mr Di Santo.
Mr Di Santo: I'll be probably 10 or 15 minutes, but I'm in the hands of the committee.
Mr McLean: That's fine. I was just curious.
Mrs Witmer: On the same point of order, Madam Chairperson: How long will Mr King then be?
Mr King: Again, I am at the pleasure of the committee. If you want me to speak for five minutes, I will. If you want me to speak for the rest of the afternoon, I'll be hard-pressed, but I probably will as well.
Interjection: More or less the same.
Mrs Witmer: More or less the same, 45 minutes? So it'll be about an hour and a half. By 3:30 we should be ready for questions, then? I guess I just wondered how much time we would have for questions.
The Chair: An hour and a half is a long opening statement, I think.
Mr Di Santo: Madam Chairman, we were not given any direction, but we thought since we are being here for five days, we should give you a most thorough exposition of our point of view, but as we said, we are in your hands.
Mr Daniel Waters (Muskoka-Georgian Bay): Personally, I don't see an hour and a half for these two gentlemen to make their presentation as being a long period of time. They're talking about a lot of issues that are important to all of us and they have a lot of information stored in their heads. I'd be more than happy to have them impart that to give us the basis of what we're going to be discussing here over the next four days, so I would very much be supportive of this.
The Chair: Please continue, Mr Di Santo.
Mr Di Santo: This is very unfortunate because, as a percentage of the claims, as I said, a very small number could be legitimately called fraud. I think that a worker who deliberately fabricates a disability is as rare as an employer who deliberately understates a payroll or fails to report an accident. It happens and that's deplorable. We go looking for it hoping we won't find it, but we do.
We knew that when we greatly increased our efforts to detect attempts to defraud the Workers' Compensation Board from any source, there would be no good publicity as a result. The bearer of bad news is never thanked. But even though we were prepared for it, it is still painful to be the author of some of your own bad publicity.
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Nevertheless, our credibility as an institution and as an important part of Ontario's economy is at stake. We must not only do, we must be seen to be doing everything we can to reduce and eliminate all types of fraud, and we are. That's the good news. In fact, the Workers' Compensation Board has been recently a leader in recognizing and aggressively addressing institutional fraud. Think of the very recent public attention that has been given to fraudulent practices in health care and private insurance fields. I think it was significant news when our board of directors -- employers and workers, I want to remind you again -- unanimously adopted our administration's strategy to combat fraud, and Brian King will outline for you in more detail the measures we have taken towards this end.
The bad news, however, is that there are limits on what we can do -- not hard-and-fast policy limits, but economic limits, statutory limits, operational limits. The price of eliminating all possible fraud would be higher than Ontario's employers would be willing to pay, and in the process we would be severely punishing the overwhelming majority of honest workers whose only crime was to get hurt on the job.
By analogy, think of our concern with traffic accidents. How many people are killed on our roads every year? Who among us does not personally know someone who was killed or severely injured in this way? Theoretically, we could easily eliminate virtually all traffic accidents by slowing traffic down to the speed of horse-drawn wagons and rigorously enforcing it with a police officer every kilometre or so, 24 hours a day. Yet despite the tragedy of auto accidents, there is no chance that this will happen. It would be too expensive and too impractical. We make compromises with our objective of eliminating deaths on the road and settle instead for increasingly sophisticated methods of reducing them, while still retaining the convenience of rapid transportation.
And so it is with the Workers' Compensation Board. It is easy to conceive a foolproof compensation system that subjects every claimant to a process that reduces the chances of fraud to virtually zero. It would take quite a large number of people to do this, but we could. Similarly, we could install an enforcement official in every place of business to ensure that the payroll report was scrupulously accurate and every single accident was reported without delay. Or we could closely monitor every doctor involved with the claim, or follow every supplier around to ensure that we receive full value for every dollar we spend. We could devise a system of spying on our staff to ensure that they don't walk away with as much as a paperclip. We could, if we wanted to, do all of this, but it would be clearly unacceptable and totally outside of our main social and political values.
Most people are honest. Most people want to earn their living. Most people meet their obligations, and even though they may complain sometimes, they feel good about being responsible and contributing to their community. It would be Orwellian to fashion a system that assumed and behaved as if everyone who approached it did so with the intent to commit fraud. I would certainly not want to work for such an institution, let alone head it, but neither do I want to head an institution that is discredited because dishonesty is rewarded as a matter of course. For these reasons, I am as zealous as any one of you about exposing and penalizing fraud from any source. But I know that we must make compromises so that service delivery to those who deserve it does not suffer and create hardship for them, their families and their business. I hope that after hearing from Brian, you will agree with the initiatives to control fraud that we have taken and the compromises we have made between security and service.
There is one last thing I wish to say on this subject of fraud, especially to those who make it their business to personally expose instances of worker fraud that come to their attention or that they seek out. As I said before, that's only one source of potential fraud. There are hundreds of thousands of workers in Ontario who rely to one degree or another on income from the Workers' Compensation Board. Even the wildest estimate of fraud would assume that the vast majority of those workers are entitled to their benefits in every legal and moral sense.
Think about what such a relentless charge of fraud must do to those workers. Think of how you would feel to be constantly lumped in with the tiny minority of dishonest people, tarred with the brush that was meant for them. Think of how it must cheapen the tragedy of permanent disability and then undeservedly diminish their self-image of what their family and friends may feel.
In my career I've met too many thousands of workers who have greatly suffered because of their work-related injuries and diseases and their subsequent reliance on compensation. It is an awful experience to feel constant, disabling physical pain and yet know that many people think that you are faking or exaggerating an injury just because you are on compensation. This is a grave injustice that we visit on people who are already victims.
And on their behalf, Madam Chairman, may I ask you, when you are talking about fraud in the future, to take pains to acknowledge that most workers are deserving of the help they get from the pioneering system that was set up for them by Mr Justice Meredith nearly 80 years ago.
In conclusion, I want to thank you for this opportunity to publicly address urgent public concerns. If what I've not covered is not to your minds adequately addressed by others from the board during these hearings, I give you my personal guarantee that you will receive every available piece of information which you require as soon as we can possibly provide it.
Ours is a complex institution, and we have problems but, as I said, it's a completely open one. We share with you a desire to make it work as intended, better than intended in fact, always guided by our most important social and economic values and always mindful of the motto that was coined by Mr Justice Meredith to describe our mission: justice and humanity speedily rendered.
The Chair: Would the committee like to proceed with Mr King's presentation or would you like to question Mr Di Santo?
Mr Waters: Move on with Mr King, please.
The Chair: Mr King, please proceed.
Mr King: Thank you, Madam Chair and members of the committee, and thank you, Odoardo. I will attempt to keep my remarks as concise as possible.
Let me begin by saying that my welcome to Ontario about two and a half years ago was before a standing committee of the Legislature on resources where the question of service delivery at the Ontario Workers' Compensation Board was the key issue or key criticism. I hope that my appearance before this committee doesn't augur my departure from Ontario.
There were four issues, I think, that were keyed in upon by the Workers' Compensation Board, flowing from the standing committee testimony, testimony which came from workers, from employers and from interested stakeholders in workers' compensation.
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The first is that we had to provide much better service delivery to our clients. We simply were not providing them with the kind of service that they felt they had to have from what is basically a monopolistic system.
The second area that was keyed in on as being vitally important to our clients was the whole area of rehabilitation, of getting workers off benefits and back into the workplaces as productive members of society, productive not only to their workplace but to their families and to their communities.
A third area -- although it wasn't covered in the same way at the standing committee, it was certainly one of the pillars of a properly managed system like workers' compensation -- is the whole area of controls. The chair, Mr Di Santo, and I worked out early on that we must bring the workers' compensation system under control in Ontario if we are to have a respected and viable system.
Finally, it was apparent to us, if not to everyone else in Ontario, that the very financial viability of the workers' compensation system was being called into question with the ever-increasing rise in the unfunded liability of Ontario workers' compensation.
I wish to address you today on the service delivery issue, on the new economic reality in Ontario, which involves the need to manage in a much smarter way and with fewer resources, the need for the controls aspect to deal with the question of the unfunded liability. As well, I would like to say a few words, perhaps somewhat more personal and maybe supported by either the chair of the Workers' Compensation Board or the board members, about a possible future for the workers' compensation system. Let me begin with service delivery.
I remember most vividly the critique that came forward at the standing committee, followed by the critique contained in the task force committee on service delivery, that the workers' compensation system wasn't doing many things: It wasn't answering its telephones, it wasn't answering its mail, it wasn't dealing with its appeals on a timely basis, and it was not dealing with customers or clients in the way that the clients had the right to expect -- that is, with professionalism and with empathy. It was based upon that critique and on that problem identification that we determined the service delivery agenda.
I will first state that what we didn't do is throw a bunch of money at a problem. I think that, from our experience, is seldom the answer to the problem, which is to throw more money after it; but rather, we attempted to identify ways to deal with the problem that were more creative, that were more based upon the utilization or the reassignment of existing resources. For instance, with respect to things like telephones and with respect to mail, we actually began to measure on a monthly basis our responsiveness in the area of telephones and in the area of mail. Once we had a sense of what we were doing, we set clear standards of performance for the Ontario Workers' Compensation board, standards that we measured monthly in order to determine whether people could achieve and maintain those standards.
For instance, along with the appointment of a new vice-president of client services in July 1991 went a series of directions or standards that I and the chair expected client services to meet for our client public, including the turnaround time in responding to telephone calls, which has varied somewhat depending on client needs but which is now in the neighbourhood of 24 to 48 hours for us to return a telephone call; and the turnaround time for mail of 10 working days to respond to a letter from a client. Those were very real standards and specific standards that were set for our employees.
Additionally, in the area of things like the initial acceptance of a claim or the initial handling of an appeal within the system, we have set, and they're available to the members of this committee and to the public, our standards of performance, standards of performance which people may argue are not good enough but which we are measuring ourselves against and reporting monthly to our clients and to our stakeholders on.
A fourth area of service delivery is harder to measure and to quantify, and that is one of attitude towards your client group or attitude towards your customer. You can't measure how long it takes for someone to be professional and kind or whether he or she is professional at the other end of the telephone, but we are increasing our education to our employees in the whole area of customer service, client service, and explaining to them what we expect about responsiveness.
Those were the initial moves that were made; that is, define what we expect from our employees, measure against what we expect, and let people know how we're doing versus those measurements. In addition, there were many other things undertaken in the service delivery area.
One of the key critiques of the standing committee on resources development in the spring of 1991 had to do with the adjudicator assistant position; that is, some 230 or 240 people who were there to assist adjudicators in gathering the paper, in taking the phone calls and in responding to the injured workers and to employers. Injured workers and employers told us in no uncertain terms that they didn't want to deal with an assistant; they wanted to deal with a decision-maker. So steps were taken to eliminate 240 positions as adjudicator assistants and give those people training as adjudicators and as rehabilitation case workers so that the public of the Ontario WCB were able to deal with the actual decision-makers and not the assistants to the decision-makers.
We relied on training. Any manager will tell you that training is essential in order to move forward as a modern business in our economy today. Let me give you some idea of what training means at the Ontario Workers' Compensation Board.
For those who initially accept the claims, we provided in the first year over 1,600 working days of training to that group to allow them to understand better what the policies and procedures are, how they should deal with our clients, how they should respond to the telephone and to letters. We gave over 1,600 days of training to those who were responsible for the day-to-day administration or case management of claims. We gave almost 600 days of training to managers to let them know what their responsibilities were in the workers' compensation system. We gave over 160 days of training to telephone answering clerks so they could understand what was meant by a professional, empathetic approach to our public. And there were over 1,200 days of technical training given to those who have to advise on very technical matters.
There are statistics, which I won't quote right now, as to how that allowed us to respond in the area of service delivery, except to tell you that our report called Monthly Monitor is available. We track and report monthly on how we do against predetermined service delivery expectations at the board and are able to monitor it on a monthly basis as to whether we're providing the type of service we're promising.
Let me speak for a minute to what Odoardo mentioned is his most beloved part of the WCB, which is vocational rehabilitation. Anyone who has worked in the field of vocational rehabilitation knows beyond any doubt that the earlier you can get intervention, the better the worker is and the better the employer is in terms of the ultimate return to employment.
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I will give you a couple of examples of where we hope we are doing much better in vocational rehabilitation. The standing committee on resources cited the heavy case loads of vocational rehabilitation case workers. That case load is down from an average of 80 workers per case worker a couple of years ago to 60 per case worker in 1993, which is a rather significant reduction in work for each case worker, allowing them to give better service.
Activation: In 1991, less than three quarters of the cases were referred to rehabilitation within six months; in 1993, 98% of cases are referred to rehabilitation within six months, so there are some very real and measured statistics that allow us to show positive results of the initiatives that are being taken.
I feel very gratified myself to have worked with one of the action planning teams that Odoardo mentioned, an action planning team composed of equal members of our local union, CUPE 1750, and non-bargaining-unit members who were elected to the position on this team. These eight people were asked to go out and talk to our clients, to talk to our customers, to talk to the organization, those responsible for rehabilitation, and bring back that individual who could have the respect and with whom the clients and the employees of the board would work in rehabilitation.
This team brought me several people. It went out and it did the selection process and the vetting and it brought me back a chief vocational rehabilitation officer, one of the key recommendations of the chair's task force, the bipartite task force of employers and workers. Catherine Rellinger started on August 15 as the chief vocational rehabilitation officer.
The chair had mentioned that in addition to the service delivery -- which involved responding to the telephones, the letters, those sort of quantitative things, those numbered things you can measure -- there's a qualitative side to service delivery as well. We went out and actively looked for areas where we were suspicious that we were not doing a good job from a qualitative point of view.
The chair mentioned a huge computer system called the workers' benefit system. We had an audit done of that system. We didn't have to, but we were concerned as to whether it was providing the sort of quality service that our customers deserved. It's very unfortunate. That audit found significant problems. That audit found that 40% of the temporary compensation payments going out were in error. Now, that's not something I like to report about the Ontario Workers' Compensation Board, but that is something that was inherited, that was dealt with face-on, was looked at and was corrected.
So we established a special payments unit. We gave them intensive training on the proper calculation of benefits to workers. Within a very short while, we had the accuracy rate up to 98% as measured regularly in that unit. I want to stress that I'm not too sure you could ever achieve 100% accuracy because of slightly different interpretations different people might put on the same facts.
The imaging system, which again came up for much discussion at the standing committee as being a horrible thing to import into the workers' compensation system -- it's basically a paperless office. Basically, people don't have to touch paper at the Workers' Compensation Board in certain jobs, but can do all of their work on a computer screen or on an imaging screen. I, along with the chairman, walked the floor of the Workers' Compensation Board. In addition to the standing committee telling us that imaging was a problem, we were told by the front-line workers at the Workers' Compensation Board that imaging was a problem.
We set about to develop a plan to recover imaging, to make the technology fit the work rather than trying to make the workers fit the technology. Let me give you a couple of things that were done. Some 1,700 employees of the Ontario Workers' Compensation Board received intensive training on how to utilize imaging to the best advantage possible. We sent around a user satisfaction survey to tell us: What do you think of this technology? Where did it go wrong? What can we do to improve it? And we began the improvement process.
To give you some idea of how much improvement there is, in 1992 the average request for a document to come on to screen was one and a half seconds. Now, that might not seem like a lot of time, but any of you, especially any of you who have children who are playing with their computer, know one and a half seconds can seem like an interminable amount of time if you have to keep calling different data up. We were able to reduce that response time in the imaging system, in one year, from one and a half seconds average down to less than half a second average per document. That's the kind of thing that is happening in the imaging system.
Finally, in terms of service delivery, it's not enough for Mr Di Santo or myself to say we're doing better. Some of you might actually not believe that. So we set about to develop and to undertake a client satisfaction survey. This is a massive survey. It's professionally done. It was done in 1991 and the same survey of the key stakeholders was done in late 1992 and was reported in early 1993.
This satisfaction survey goes out to injured workers and it says: "Tell us what you think of what we're doing. Do you like it or don't you like it?" It goes out to the employers of Ontario on a random basis and says, "Tell us whether you like what we're doing or don't like it." I think this is important because I can say whatever I want, as can the chair, but our customers or our clients told us the following:
In 1991, when we measured, 30% of the employers in Ontario were very unhappy with the service provided by the Ontario workers' compensation system. That's almost one third of the employers. When we measured in December of 1992, or two years later, 19% were unhappy. Now, that doesn't please me that 19% of the employers in Ontario were unhappy, but we showed over a 30% improvement in those employers who feel we're doing a better job or who are not unhappy with what we're doing.
The contrasting figure: On a scale of 0 to 5, employers marked us a 3 in 1991 in terms of satisfaction; in 1993, they marked us 3.4. In other words, we moved up from 60% satisfaction to 68% satisfaction.
In 1991, 17% of the workers were unhappy with what the Ontario Workers' Compensation Board was doing. The contrasting figure in 1993 is 13%.
Mr Bradley: You should give the figures of the constituency offices; they clash with those.
The Chair: Mr Bradley, if you could wait until Mr King is finished. Thank you.
Mr King: I'm prepared at the appropriate time to comment on constituency offices, Madam Chair, but I'll perhaps move on from these remarks.
I'll maybe skip the prepared text for the next while merely to point out that a good deal has been said about the economic position of the Ontario WCB. A good deal has been criticized, and people have thrown numbers around, sometimes mistaken numbers -- one hopes those are honest mistakes; sometimes I'm afraid they aren't -- about the financial situation of the Ontario Workers' Compensation Board.
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I would argue that this is a non-partisan issue. I'll take you back to 1983, if you want to be non-partisan, to tell you that in 1983 the unfunded liability of the Workers' Compensation Board rose 42%, or $600 million. I'll take you to 1985; the unfunded liability of the workers' compensation system jumped by 100%, almost $2.7 billion. I will take you to 1989, when the unfunded liability of the Ontario Workers' Compensation Board jumped 15%, or $1.1 billion.
The year that Mr Di Santo and I arrived, the unfunded liability increased by $1.2 billion. We inherited a $1.2-billion increase in the unfunded liability. That is a figure that many people throw out as, "The board is losing $100 million a month."
Let me tell you what the projections for the half-year are now, in 1993, in Ontario. We project the lowest increase in the unfunded liability in the past 10 years, both as a percentage and as a dollar value. In terms of the percentage, we project the unfunded liability to increase only 4%, or $440 million. Contrast that with $2.7 billion, $1.2 billion, and I would argue that perhaps we should consider this to be less of a partisan issue.
Mr Bradley: I was in the House back in the days when there was a different opposition. They wanted a partisan issue --
The Chair: Excuse me. Mr King, would you continue, please.
Mr King: How is this being achieved? I think I have tried to describe, through what some might consider self-serving comments, that it has been service delivery, it has been attention to the customer or to the client, it has been improvements in the way we're doing our business and in rehabilitation, and the figures on duration show that we're coming down rather dramatically on the average time lost on each claim. Again I won't go into lengthy statistics at the present time.
Let me move on to take on a question Mr Di Santo dealt with, that is, the area of fraud. Some people in Ontario seem to believe that three weeks ago fraud began occurring in Ontario in its workers' compensation system. I believe it was about four weeks ago that the Insurance Bureau of Canada said: "We have a lot of fraud in our system and we're going to do something about it. We're going to appoint a task force to study what to do about this." Well, at the Ontario Workers' Compensation Board, we began over two years ago to put ourselves in a position to deal with the problem presenting itself in the area of fraud and workers' compensation and, as Mr Di Santo pointed out, not in the more limited sense that some people think but in four areas: employers who are attempting to pay less than their fair share; workers who may be attempting to take benefits to which they're not entitled; suppliers of the WCB who may be billing us beyond what services they're providing; and very unfortunately, in some limited cases, employees of the board.
We reported in some detail, in April 1992, to our board of directors what we had been doing in the area of fraud detection and fraud prevention, and our board agreed with us at that time that we should have a comprehensive strategy. Fraud strategy doesn't mean you have a whole bunch of policemen at the far end out investigating when someone has robbed the cookie jar. A fraud strategy involves several steps.
It involves, first and foremost, prevention. Prevention doesn't come by setting a whole bunch of screens in front of employers registering or workers claiming benefits. Prevention comes from having in place the proper human resource policies so that the employees you hire and promote can be the kinds of employees you can trust or have more trust in than not.
It involves having a systems development that has the checks and balances that allow you to see red flags go up when there are unusual behaviours. It involves doing spot audits in a real and comprehensive way. It involves working with our external audit and with the Provincial Auditor.
Prevention is board-wide. It's education. It's part of that training that I mentioned. Every employee who is in a position to identify or prevent fraud is receiving fraud detection and prevention education. It's detection. It's the sorts of systems programs and spot checks you have.
Finally, it is investigation and pursuit.
We have moved in two years from having one person who didn't do any primary investigating at all but who was merely there to look at a suspected problem and to refer it to law enforcement agencies, to where we have now over 20 people primarily investigating, looking at cases, determining which ones need the professional investigators, the law enforcement investigators we've hired; looking at ones where we should partner with law enforcement agencies in Ontario whose resources are very limited and who don't want us coming to them with a bunch of false alarms.
We have gone out and actively sought partnership with the Unemployment Insurance Commission, with the Health ministry, with Canada pension plan officials, with federal and provincial and municipal law enforcement agents. We have partnerships with the RCMP, with the OPP and with Metro and local police forces so that we share information that will help us all combat and deal with a significant problem during these difficult times.
Again I juxtapose the response that the Ontario board began two years ago with that of the private insurance industry which several weeks ago was saying, "We should appoint a task force to look at the problem."
Let me move quickly on to the future. I think Ontario has one of the most historically interesting and sometimes challenging workers' compensation systems in North America, if not internationally. It has formed part of the fabric of Ontario. I think the system needs reform. I think it needs reform beyond what we probably are capable of achieving at the board. I think Mr Di Santo, in his role as the chief executive officer, can bring policies forward for our board of directors to consider, policies which will reflect better rehabilitation, a better human face on the Workers' Compensation Board, a better and fairer treatment in the bipartite agenda between workers and employers.
But we have other problems. I've had experience in visiting 11 of the other 12 Canadian jurisdictions, and it's apparent to anyone who looks that the system in Ontario is the most adversarial system going today in Canada. It closely mirrors the American system whereby lawyers for the two sides, the employers and the workers, fight it out before a disinterested administration as to whether benefits should be paid or whether they should be terminated.
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That isn't the system that Chief Justice Meredith recommended for Canada. The system that he recommended for Canada was a system of administrative law where an independent board made an inquiry and workers didn't have to fight for rights that they had under the Workers' Compensation Act. The administration guaranteed those rights. Employers didn't have to fight to be treated fairly under our workers' compensation system, didn't have to hire lawyers or advocates in order to make sure that their assessment rates and their position in front of an appeal of a worker's case were properly handled. That was the responsibility of the administrative body.
In my opinion, this adversarial system is next to out of control in Ontario because we cannot run those 400,000 claims through the system in a timely, in a professional and in a fair manner unless we're given some relief from what is basically an adversarial or litigious system that is more amenable to the courts than it is to an administrative tribunal.
The second area that I think needs some work in Ontario is in the area of assessment rates. Right now, the Ontario system is trying to match what I will call the actuarially based insurance industry's view of how you set a proper price for a product or an assessment rate. That drains our resources incredibly. Millions of dollars are spent by the WCB in order to set up some sort of pricing system for employers that comes in a collective liability system where all employers are collectively liable for all of the costs of the system, and I think people have to look at that.
What is the board doing? The board has a strategic planning process under way that is rapidly coming to a conclusion. It involves eight different areas and it involves some of the areas that I've spoken of or that Odoardo has spoken of today, and this strategic plan I trust will deal with many of these endemic problems in workers' compensation, including the costing of the system or the underfunding of the system.
Secondly, enormous efforts are being made to debureaucratize the WCB. The WCB is a huge organization and it's a very layered and structured triangular, top-down organization involving almost 5,000 employees spread between Thunder Bay and Ottawa, between Sudbury, Timmins, North Bay, Hamilton, all across Ontario, and we simply must get the decision-making to the very front end of the system if we're to meet the needs of those who are our clients.
One of the key steps to that was in action planning, and that was an attempt to democratize the future, and some very real decision-making was placed in the hands of the workers. I mentioned to you already that in partnership with our collective bargaining agent, 15 or 16 action plan teams were established and they were asked to help us meet several planning objectives. They were given a guarantee by the chair and myself that, provided they were able to come up with plans that met the objectives in front of them and were met within the resources available, the employees of the board would be allowed to plan the future way we do business. I think the action planning is our future.
I think that I'll cut short any other comments and my prepared remarks in the interests of some comments that have been made by members earlier that they wished to proceed on to questions.
The Chair: Thank you, Mr King. Originally, we were going to go in 20-minute rotations, but there's an hour and a half left this afternoon. Would the committee like to take 30-minute rotations each caucus? Okay?
Mr Steven W. Mahoney (Mississauga West): That's agreeable.
The Chair: All right, that's agreed, and we would start with the official opposition, Mr Mahoney.
Mr Mahoney: Thank you, Madam Chair, and thank you, gentlemen, for your presentation. A couple of very brief comments, and then I have some questions, and I'll leave it up to you to decide whether Mr King or Mr Di Santo wants to answer them. I'll just ask them and you can determine. Perhaps I'll go through Mr Di Santo as chair and he can coordinate it there.
I was interested in a couple of comments, one that Mr Di Santo made having to deal with economics forcing many difficult choices. Clearly, all government agencies, and indeed governments and individuals in our province and in our country, are certainly faced by that. That's probably, in today's climate, the overriding factor for most decisions, although I would certainly agree with the sentiment that it should be and hopefully would be the goal of any workers' compensation system to provide rehabilitation and, in the interim, sufficient compensation to those workers who are injured. I don't think that it need be an issue of being pro-worker or pro-corporation. Both are needed in this instance. The corporations are needed to fund the operation and the workers, certainly with the injuries, have to take that into account. The economic concerns clearly, I think, are very critical.
Another comment that I think Mr King made was that you look for red flags to pop up from time to time when you're analysing the operation, whether it be in analysing service delivery -- which I frankly would agree is the key in this whole issue. But I think before we get to service delivery and whether or not there are red flags, I have very real concerns that not only surround the new headquarters but surround specifically the process that has been used in purchasing and acquiring some of the products and the contracts that have been given out in relationship to this particular building.
I would refer you, Mr Di Santo, to the issue of the access flooring that was recently awarded in the form of a contract and the fact that the Workers' Compensation Board decided to go cross-border shopping and indeed buy an American product, manufactured in the United States, albeit distributed by a local firm but still an American product, clearly in contradiction or in the face of economies that could be saved had you decided to use a locally manufactured, in fact Oakville-manufactured, flooring system. This is about $3.5 million in the form of a contract and, for committee members, it is access flooring that simply is like a subfloor that is installed that allows you to put your computer wires, electrical wires, telephone wires etc underneath the floor.
There was a request for bids. There were four companies that were called in and asked to submit their specs. Those four companies' products were approved -- I'm sorry, three of the four were approved to submit to a tender. The three are local firms. One of them went so far as to suggest an alternative flooring system, one that, it just so happens, is currently being installed in the Ontario Provincial Police building in Orillia, currently being installed in that government building. They suggested a flooring system that, I would show you here, Mr Di Santo, has an approval stamp from the Ministry of Housing of the provincial government and it is 100% manufactured in Canada, in Ontario, in Oakville, by a company called ASP who manufacture this particular flooring. They submitted this as an alternative flooring system that meets the specifications of the provincial government and is currently being installed in the Ontario Provincial Police building.
I have letters and research documentation that will show letters have gone from Mr King to this company telling them that they're out of luck, from Mr Di Santo to this company giving them reasons that the decision was made and by ending it up with Mr Di Santo saying, "This decision is final and I trust that you will abide by this decision" -- somewhat heavy-handed, I might add. In any event, the decision was made to use the American system that is manufactured in Grand Rapids, Michigan, contrary to a proposal. I haven't said yet, Madam Chair, but you might be interested to know that Canadian flooring, again acceptable to the Ministry of Housing, acceptable to the Ontario Provincial Police, was $500,000 cheaper than the American flooring that was purchased by the Workers' Compensation Board.
Mr Di Santo, can you help me in understanding why you would ignore -- I might add, ASP pays $50,000 a year in workers' compensation premiums, they're one of your supporters and have 50 workers who are going to be out of work as a result of your going south of the border to acquire this product. Can you help me and explain why you did that, sir?
Mr Di Santo: Madam Chair, I will ask Brian to give a more comprehensive answer to this question, but in general terms what I'd like to say is that I had some correspondence with the company that Mr Mahoney talked about. As you will see, as on any coin there are always two faces, also in this there is something that probably Mr Mahoney doesn't know about. But in general terms, I want to say that when I came into these hearings where we are to review the Workers' Compensation Board, an institution that affects the lives of 400,000 workers every day who have accidents, and the way we deal with them, the only question that I was asked by the press was about the floor. I must say, that's really disappointing.
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Mr King: I think the question of what kind of technical flooring should be used in an office tower that is over 30 storeys high may be the sort of question that professionals should deal with on the basis of professional judgements rather than to relate it to the fact that the OPP may be building a building somewhere else in Ontario. But let me just quickly respond.
The type of floor to be used in Simcoe Place was reviewed by design engineers, by architects, by electrical engineers and by the developer. It was their unanimous opinion to go with the type of flooring that is now ready to go in Simcoe Place. They did look at the alternative of the woodcore flooring that you referred to in your question, and unanimously agreed not to go with that.
The particular contractor you're referring to was pleased to participate in bidding on the type of flooring that we are using in the building or intend to use now. It was only after being unsuccessful in achieving the bid that they began to lobby heavily for this other type of flooring. I'm not too sure it's fair that once you've lost an open and honest competition you then begin to ask for different rules to be set or for a different game to be played than the one you entered.
Thirdly, I don't call myself qualified to comment on the professional side of whether a woodcore flooring or a concrete flooring is best to be used. I have to rely on the advice of the experts, those professional engineers and architects. They told me, when I was asking about it, they have concerns about the potential combustibility, the potential for expansion if there should be water leakage into the system and that it has not got the same acoustic properties. I have to rely on professionals whom I hire to advise in the areas such as this.
Having said that, that was after the fact, because the WCB was not the one to ultimately make the call on what type of flooring went into a building. That was the decision of a developer who was there to provide us with the best building for the money; a value-for-money building, if I dare use that term.
I will point out that 80% of the materials used in the present contract are Canadian and that any reference to initial costs may be far outweighed by any potential long-term costs in the preferred flooring of the unsuccessful bidder on the contract.
Mr Mahoney: Mr King, you'll forgive my unprofessionalism when it comes to the construction industry, I'm sure, but my information does come from professionals who have analysed this. Let me clarify the record here very clearly. ASP did not launch a campaign after having lost the initial bid. ASP advised the Workers' Compensation Board that it could save half a million dollars prior to even submitting the bid if it would only consider using the same system that's currently being used by another government agency, namely, the Ontario Provincial Police, and approved by the Ministry of Housing. So you should be clear that they didn't launch into some campaign out of bitterness after having lost some kind of contract; they attempted to communicate with workers' compensation, with all of the agencies.
Let me tell you that one of their responses in a letter from Mr Di Santo says that this supposed group of representatives from the developer Cadillac Fairview, as well as key consultants involved in the selection of the access floor product for the new facility, have taken considerable time to meet and review each of the concerns that were raised. They did not, however, meet with the proponent. The proponent was trying to save workers' compensation half a million dollars, yet you refused to meet with the individuals to try to understand why.
The reasons that Mr Di Santo gives in his letter dated March 9 for going to the -- and let me say that you may be disappointed, Mr Di Santo, that the only question from the press was on the flooring, but this is an issue that goes to the whole heart of the organization. With respect, it's an issue of leadership, it's an issue of governance, and it means that if the decisions are being poorly made in the construction of the new building and the individual contracts that are being let out, then that rests squarely at your feet. If that is the question of the day, then I think, so be it, because we the public, we the opposition, we the legislators, we the media must have confidence that things are being done properly at workers' compensation. In relationship to this particular bid, I do not have that sense of confidence.
You give the reasons:
"Better acoustic properties." This is your letter, Mr Di Santo. I would ask you, do you have a study that shows that concrete has better acoustic properties than compressed wood?
Your second reason: "use of non-combustible materials." Do you have some information that would indicate that compressed wood encased in steel is combustible in some way? I don't understand that, but maybe you can enlighten me.
"Ease of field cutting" was another reason. Is it easier to cut concrete than it is to cut wood? Maybe you can enlighten me on that.
"No dust in the cutting process" -- these, again, are your reasons. Is there no dust in cutting concrete versus sawdust in cutting wood?
"Better load performance": There are statistics and studies in Ministry of Housing-approved documentation that shows that the load performance of the wood with the proper flexibility is in fact superior because it doesn't crack and is not subject to the stress that the concrete would be subject to. But you, sir, answered Mr Mead of this ASP Access Floors Inc in Oakville with a letter wherein you said that your strategy team has met and decided that, for all of these reasons, the particular system that you bought out of Grand Rapids, Michigan, is a system that is superior to the system that was being offered as an alternative.
It's my understanding that it's quite common in government-tendered business for companies to indeed suggest alternatives because those companies are also looking for ways to save the taxpayers -- ie, themselves, in most cases -- money. So they submitted an alternative that is acceptable to other government agencies.
You've given them all these reasons, and I would ask if you have any kind of statistical data, expert data, that could substantiate the six reasons you gave this company for turning down their all-Canadian product.
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Mr King: I have to correct --
Mr Mahoney: With due respect, Madam Chair, this letter is from Mr Di Santo and I asked Mr Di Santo. He has signed the letter. Mr King did not sign it. I have a letter from Mr King, which is very short and simply says, "You're out of luck." If Mr Di Santo wishes to defer to Mr King, fine, but it's your letter, sir.
Mr Di Santo: I want just to clarify that, as has often been said about the building, there is not one single penny of taxpayers' money that is going into the building. It's the employers' money through the investment fund, and the employers on the board of directors have approved the building. So I want to clarify that at the outset, because this has been repeated and I think the public must know that there is no public money at all going into the building. It's the investment fund of the Workers' Compensation Board, and the employers, who are those who pay into the fund, approved the deal unanimously on April 25, 1981.
Second, as I said in the letter, the call has been made by the developer, because we have a leasing agreement with the developer and the developer is the one who is going to give us the best product. The developer of course has consulted all the technical people necessary, and we have agreed with their call.
Now, I don't think that, because a bid was not accepted because one of the suppliers was not accepted, we have to take that as the best offer. I want Brian to comment on this.
Mr King: Just to correct the record, it has been stated that the Access Floors group was not a participant in the concrete-filled steel panel bid. That is an error.
Mr Mahoney: Who said that?
Mr King: I would have to have the Hansard record checked on that. That's certainly what I heard.
Mr Bradley: Now he's calling you a liar.
Mr Mahoney: I never said that. They did submit a bid. What I said is that they submitted an alternate bid at the same time with their Canadian-made product. But very clearly they were one of the three companies that were approved to submit a bid and indeed do a mock-up. The company you selected was a fourth company that was not on the original list and they were allowed to come in one week prior to the closing of the tenders -- one week -- to submit their own bid and make their own deal.
You say they made it with Cadillac Fairview. Are developers now making the decisions on behalf of government agencies when it comes to awarding work in this province? If they are, sir, I'd be very interested to hear you say that.
Mr King: Can I just quickly respond? I will allow Hansard to determine what you may or may not have said regarding ASP Access Floors' involvement in the tendering process. In order to properly respond to many of the questions you raise, it would require bringing forward technical people, such as engineers, such as architects, such as electrical engineers, such as the developer. I suppose we're at the wishes of the committee as to whether they wish to have that sort of technical testimony brought forward. We could do so. We could bring forward the sort of analysis that was done of the bid that was put in by ASP Access Floors on concrete-filled steel panels that they were unsuccessful in winning the bid on and compare the experts as to why they chose concrete-filled over wooden-filled panels. I'm not too sure what purpose would be served, because it is a debate that I'm not too sure could have any conclusion. We went through a proper tendering process. We involved design engineers and architects and electrical engineers.
The specific question was asked, does the government not get involved in the building? Number one, the Workers' Compensation Board isn't the government.
Mr Mahoney: Government agencies, sir: Do you want to check Hansard again?
Mr King: The Workers' Compensation Board is a government agency. The Workers' Compensation Board is involved in an arm's-length transaction. The Workers' Compensation Board is involved with the developer in terms of its investment wing to construct an office tower. The Workers' Compensation Board is involved as a tenant in renting a part of that office tower. We do not have nor do we wish to have an interfering position over developing and delivering that building in the most value added way possible, saving the taxpayers of Ontario the most money. I think that if we began getting involved in questioning the developers' decisions, we would not be delivering a building which is to come in over $20 million under its original estimate.
Mr Mahoney: I understand what Mr King has said. I wish that had been the answer to Mr Mead and the Oakville flooring company at the time. Had you indeed said that this was not within the realm of your responsibility or authority to deal with, then perhaps that would be a different argument that the individual could put forward. But that indeed is not what happened, either by Mr King or Mr Di Santo.
I'm also interested to hear that you are interested in saving the taxpayers' money, according to Mr King, and I accept that as a given, but I hear Mr Di Santo saying there is no tax money in this. I find that statement somewhat incredible. The money that you receive, sir, the money that the Workers' Compensation Board receives, whether it be in pension contributions or whether it be in rates provided directly to your agency, is money that comes from companies, I'm sure you agree, throughout the province of Ontario, which are legislated to pay it. They have no choice. You can call it a premium if you like, you can call it a rate if you like or you can call it a tax if you like. They are taxpayers, each one of these corporations.
This company in Oakville is a taxpayer and paid you, in addition to the provincial taxes it they paid of approximately $200,000 last year, a rate, a premium or a tax, call it what you will, of $50,000 to provide coverage for its employees. They do not begrudge that or complain about that. That's a fact of life that is part of the cost of doing business. But to describe it as anything other than tax revenue, directly or indirectly, I think is being misleading and unfortunate in that regard.
Mr King goes on to say that we should leave this to the professionals. Why should we question it? Call it what you want. This building is being built by and for the taxpayers, directly, indirectly, however you want. You have a system of tendering that in my view has gone haywire in the case of the flooring that has led you to cross-border shop into Grand Rapids, Michigan, and to buy the product in the United States instead of sitting down with this company.
By all means, the tender information is here on the first tender. Quotes were provided by this company in Oakville to Jackson Lewis and to PCL, two of the contractors. Their quote was $3.495 million. The next lowest was $3.535 million by Camino, ultimately the company that won the distribution rights to provide you with the American-made product. There was another one at $3.6 million and another one at $4.1 million. Of the initial go-round, ASP Access Floors Inc of Oakville, Ontario, was lowest until the new company came in from Grand Rapids, Michigan, with one week to go to the closing of the tenders, until they were literally allowed in the back door to submit a bid that was not part of the original process.
How can anybody have confidence in the management at workers' compensation, sir, when you allow this kind of thing to happen to a local taxpayer, to an Ontario company, to provide you with a quality product? Why would you not at least, at the very least, instruct your strategy, technical, professional team -- call it what you will -- to meet with this company, to review the alternate bid that it was proposing that would have saved your corporation, your agency, half a million dollars and provided you with flooring that's acceptable to the Ministry of Housing and acceptable to the Ontario Provincial Police? Why would you not do that, sir?
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Mr Di Santo: We can prolong this discussion as much as the members want, because we are in the hands of the members, but I want to repeat again that I don't think that this is the most overwhelming issue of workers' compensation in Ontario today, and I want to repeat for the last time that, first, as Mr Mahoney said, ASP presented this bill to the contractor, not to the Workers' Compensation Board, and his dealings were with the contractor. If Mr Mahoney thinks that we should intervene in any phase of the construction to check what the developer is doing, I think that he hasn't understood what the process is, because we have a leasing agreement with the developer and the developer is in charge of the construction of the building. I don't think that it's in the interest of the board to interfere in its operations. We want the building finished, the end; that's what we're going to get.
Now, if the dealings of ASP didn't go according to its desires, I suppose that when ASP participated in the first building, if it had received the job, it wouldn't have protested and it wouldn't have then said, "We'll give you $500,000 back so you can save money." If he started complaining when his bid was not accepted by the contractor --
Mr Mahoney: Absolutely not true. I've said that in response to Mr King. They told you people the Premier is aware of this, the Minister of Labour is aware of this. They want to put you down as being an arm's-length agency that they have no influence over. They've written to this gentleman to tell him that, and now you're trying to lengthen your arms away from the issue by saying it's Cadillac Fairview's decision.
ASP came to the strategy group, came to workers' compensation, and showed you how you could save half a million dollars. Whether you want to call it taxpayers' money or not, I call it taxpayer's money. They showed you how to save the money, how to buy Canadian, how to support an Ontario company paying rates to you on an ongoing basis, sir, and I haven't heard any justification, in answer to your letter -- it's your letter. I didn't make it up. You gave them all these reasons, and I haven't heard you tell me anything, statistically or in any way, that would prove that these reasons are justifiable.
A final comment, Madam Chair, before I go back to Mr Di Santo. Mr Gary Dunlop, senior vice-president of construction of Cadillac Fairview, on two occasions stated that this had not been brought to his attention with regard to the woodcore flooring and that he would not oppose it. If the Workers' Compensation Board wants a woodcore system, he would use the woodcore system. Now you're telling me it's not your decision. Senior vice-president of Cadillac Fairview in construction says, "If you want it, you'll get it." Why didn't you buy it?
Mr Di Santo: Mr Dunlop never made a presentation to me, never told me what he told, obviously, ASP. What I am repeating to this committee is that if this committee's interested in knowing the reasons why the present flooring was chosen, we can bring the experts here, because unfortunately I'm not an expert. I spoke to you about what we're doing about service delivery and I'm willing to answer every question about service delivery because I think that's the job of the Workers' Compensation Board, to serve injured workers. I spoke to you about rehabilitation. I'm willing to answer everything there. I'm not a bricklayer; I'm not an engineer; I'm not an architect. I cannot answer this question. So if you want, Madam Chair, we can bring the experts and they will explain to you and give you the technical reasons why that flooring was chosen.
Mr Mahoney: If Mr Di Santo is not an expert, I accept that. If he's not willing or able to answer these questions, I accept that. I would simply point out that you did answer them in writing in a letter to the company in question dated March 9, 1993. Maybe your experts wrote this letter for you. Perhaps you should have allowed them to sign it.
One quick question. You say in here, "The Workers' Compensation Board is unlike many of the corporations you have mentioned" -- corporations who use this flooring -- "in that it has different operational requirements." Could you tell me, sir, what is so special about Workers' Compensation in relationship to other companies -- banks, Ontario Provincial Police headquarters etc -- that makes it so special that you couldn't operate with the same flooring at a savings of half a million dollars for our taxpayers?
The Chair: Mr Mahoney, that question will have to be answered in your next round, because you're 31 minutes now. Ms Witmer.
Mrs Witmer: Thank you very much for your presentation this afternoon. However, I think it's become abundantly clear that the recent reforms and changes that you have attempted to make have failed miserably and there are still many systemic issues that need to be addressed. I can assure you that I met with a group of employer representatives and workers last week and I can assure you the criticism of the Workers' Compensation Board is persistent, it is growing louder all the time and we're also finding an increased polarization within the two communities. It appears to me that at the present time, the only solution that's going to be found is to set up a royal commission, because I can tell you there is absolutely no confidence, either from the worker or from the employer community, in the Workers' Compensation Board at the present time.
You referred to the fact, Mr Di Santo, that it's a social safety net. That's what's so unfortunate: Rather than remaining true to its original conception as a workplace accident insurance plan, it has become a universal system to compensate everyone for everything. That, with all due respect to you, sir, is the problem; that is not the solution. Yet when I take a look at Mr King's presentation here today, I see that's exactly what he is proposing, a universal system.
So I'd like to start my questions with the unfunded liability, which Mr King did make reference to. Could you indicate to me exactly what the current unfunded liability figure is?
Mr Di Santo: At the moment, the unfunded liability is $11.27 billion.
Mrs Witmer: The management section on the Premier's Labour-Management Advisory Committee reported at the meeting on September 7 that the unfunded liability, assuming that there were going to be no new programs -- and we know you have some in the wings -- and also they were conservative cost assumptions, was going to increase to $31.5 billion by the year 2014. This projection, by the way, is based on data provided by the board. Can you tell me what actions you intend to take to stop this unacceptable escalation in this unfunded liability?
Mr Di Santo: This requires quite a complex answer that I will give in order. Let me start by saying that the people you met with were probably unhappy with the Workers' Compensation Board, and what I have problems with is your conclusion that the worker community and the employer community have absolutely no confidence at all in the workers' compensation.
Perhaps you have evidence to support that statement, but I must repeat in no uncertain terms, as I said before, that the Workers' Compensation Board is run not by Odoardo Di Santo and Brian King; it is run by the board of directors of eight members, four of whom represent employers and four of whom represent workers. If you look at the minutes of the board, the majority of the decisions are taken with a consensus, without a vote, unanimously, which means that the employers who represent the employers on the Workers' Compensation Board must be there thinking that they are representing the interests of the employers.
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You may disbelieve what we are saying, but if we take a client satisfaction survey, which is done professionally -- and you cannot just dismiss it and say, "That's self-glorification." We told you that in three years' time, the employers and the workers have shown more satisfaction with the operation of the board, and that's the reality. It's not something that we are making up. So for you to make a general statement that no one has confidence in the Workers' Compensation Board I think doesn't serve the purpose of this review, because I expect that the legislators come to us and tell us, "You have no confidence for these reasons, because you are failing on this."
When I came to the board we had a 22,000 backlog in decisions review. Now it's down to zero. Is that a failure? No, it is not. It means that we have dealt with 22,000 appeals and now the system is working. When we came to the board, we had thousands of non-economic losses to be decided because of the new legislation, not because the board wanted that. We are dealing with that. We had to give FEL, future economic loss. It's a requirement of Bill 162. We are dealing with that. We have no backlog at all. So is that a failure? I cannot accept a statement in general terms without any evidence.
Let's come to the unfunded liability. I must say at the outset that of course there are many people who are telling the world that the finances of the board are in a shambles. In 1985, the liability of the board was, as Brian described, increased by $2.7 million, from --
Mrs Witmer: I know that, Mr Di Santo. I guess I want to refer to the future, in the year 2014. Will it indeed be $31.5 billion?
Mr Di Santo: I'll come to that. If you don't give me time, I cannot answer you. The unfunded liability increased substantially in 1985, as it increased in 1989 for reasons that are justifiable. We are not blaming anyone, because the implementation of Bill 162 required that certain transitional rules be implemented, and they cost money. That's why the unfunded liability in 1989 increased substantially.
In 1985, if the board had to pay all its liabilities, it would pay only 32 cents out of a dollar; 32%. In 1993, we can pay almost 38 cents. So our situation has not deteriorated, so the board is not going bankrupt from that point of view. But you're saying that the Premier's council was mentioned -- how much did you say?
Mrs Witmer: They used the data provided by the board and it indicated that by the year 2014, the unfunded liability would be $31.5 billion.
Mr Di Santo: Okay. In 1984, when the government realized that the unfunded liability was going to be a problem in Ontario, the Davis government called Wyatt Co and they made a report and out of that report a strategy was outlined, that in 30 years the unfunded liability will be retired.
Mrs Witmer: That's right.
Mr Di Santo: If you read the Wyatt report, you will see that the unfunded liability will increase more than the assets until the year 1998, and then it will decline steadily until the year 2014, when the liability will be retired. What happened in the meantime would be that the assets would go from probably $3 billion to $41 billion and the liability will go from -- at that time it was $5.7 billion, to $41 billion and then neutralized, because there was no liability.
So it was in the Wyatt report an expectation that the liability will keep increasing until the year 2000. So I don't know where that figure came out, but in the year 2014, if that strategy had been respected, we would have $41 billion liability, $41 billion assets.
Mrs Witmer: Yes, I know that.
Mr Di Santo: The fact is that no administration before us has ever respected that strategy. In fact, in 1985, if the strategy had been followed, the rates would have been increased by 30%. They were not increased. In fact, the government decided that it was not feasible because of the economy. So that's why the unfunded liability is increasing; 1993 is the first year in history where we have the lowest debt --
Mrs Witmer: Yes, and you have repeated that several times.
Mr Di Santo: Yes, and I have to repeat that because otherwise people don't understand that this is the best fiscal year in the history of the board since 1980.
Mrs Witmer: Could you take me to the year 2014? Will the unfunded liability indeed be $31.5 billion?
Mr Di Santo: Last year, the board of directors, and I have to repeat again that it's made of representatives of the workers and employers, decided that we had to deal with the unfunded liability and we wanted to do that in a consultative way, by going to the stakeholders, because it is easy to say that it's the taxpayers' money, but in fact those who really pay into the fund are the employers.
So we went to the employers and the workers and we had exhaustive public hearings with the employers and the workers, and we couldn't find a consensus. Why we couldn't find a consensus is because there are some crucial issues at the bottom of the workers' compensation system that have to be solved with the consensus of the workers and the employers. That's a real issue and you know very well that right now the Premier's council on management and --
Mrs Witmer: Mr Di Santo, will the unfunded liability be $31.5 billion by the year 2014 based on the data provided by the board? Yes or no.
Mr Di Santo: I could say yes; I could say no. It depends on many -- this is not a simple --
Mrs Witmer: You see, that's the problem. There is no credibility with the Workers' Compensation Board management. There's no credibility. "I could say yes; I could say no." Obviously, there is a response.
Mr Di Santo: I take it that there is no credibility from your point of view, but I'd like to explain to you how the situation can evolve. In fact, the Premier's council is dealing with that very problem.
Mrs Witmer: So you're saying, yes, it will be $31.5 billion by the year 2014?
Mr Di Santo: By the year 2014 it will be $40 billion if we follow along the present strategy. What we have to look at is we have to decide how -- not with the board; collectively, our society -- what type of system we want and that will have an impact on the funding of the system because we have now a system that supposedly is to be funded 100% and is not funded 100%.
There are alternatives to that and that's what the Premier's council is studying, that's what the board of directors is studying in the strategic planning. That's not us; it's the board of directors, the representatives of the workers and the employers.
So if we come to the conclusion and if you read the papers that we released last year, we proposed a number of options. If you require full funding, then you require to increase the rates at a certain level every year or you require to look at benefits because there are employers who are saying that 90% benefits are too high. Now, is it acceptable to the workers? Of course, it's not acceptable. So what I'm saying is that if there is no consensus among the workers and the employers, this cannot be done arbitrarily.
Mrs Witmer: I guess that's what I mentioned to you. There is increased polarization within the communities that are being served and I guess I would say to you that there are systemic issues that need to be addressed and that the recent reforms have failed. They have not restored confidence in the Workers' Compensation Board.
Mr King: Can I perhaps be allowed a response? The question was really whether or not there is going to be a $31-billion unfunded liability in the year 2014. Let me pause at an argument that we have brought down the expenditure side and continue to bring down the expenditure side in a dramatic fashion.
In 1989, there was $4.2 billion spent on the expenditure side of workers' compensation. In 1993, there is going to be $3.3 billion expended, almost a billion dollars of reduction in expenditures. What has happened is that Ontario has gone into a very deep recession. The revenue we received in 1989 was $3 billion, and in 1993 it's $2.8 billion, or $200 million less.
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If we don't do something or if the actuary doesn't update to the reality that we are bringing down the costs, then there may be a $31-billion unfunded liability in 2014. What I am saying to you is we are bringing the costs down, and part of the exercise in strategic planning in the Premier's council is to see if there's a consensus on either the revenue side or expenditure side to do better.
I didn't mention to you that the reduction in expenditures under the service delivery initiative I spoke of in my opening remarks is going to bring down the costs of the compensation system $400 million in 1993. If we can continue that type of service, then I think the $31-billion figure is based upon a faulty premise. It was based upon a status quo premise.
Mrs Witmer: Just to continue, you're indicating to me that the reason for the problem at the WCB has to do with the economic downturn that this province is experiencing. Personally, I believe the problem is related to the fact that the board is unable to responsibly and effectively manage the system and the funds available to it. However, you have suggested in your presentation today that one of the ways in which we could resolve the funding issue is to move towards a flat-rate WCB premium for all industry in this province. Could you please respond? What is it that you intend to do or would like to do? Is it your intention to bring all industry, such as the financial services, in this province under the scope of the WCB?
Interjection: What page is that on?
Mrs Witmer: That's on page 18, bottom of the page.
Mr King: You cited mismanagement at the workers' compensation system. I think it apparent from some of the things that we went through that perhaps some mismanagement of the system has occurred, and I think it quite apparent from the remarks that we're getting a control over mismanagement. In fact, some of the things that we've had to deal with have been difficult to get our hands on, some of the things we inherited.
I suggest that rather than $150 million of off-balance on something like experience rating, the board may be better off to indicate that all industry in Ontario is in the same category and that maybe it's time we looked at a UIC-style rate, which doesn't seem to charge employers and workers depending upon whether there's a lot of unemployment in the industry, but rather charges a flat rate which is reflective of the fact that society is a whole, is a holistic problem.
Secondly, any suggestions as to expanding the coverage under workers' compensation are not a subject that the board can deal with. That is a subject that requires regulatory change through government.
Mrs Witmer: Well, it's interesting --
Mr Di Santo: Can I complete the answer?
Mrs Witmer: Yes, you can, Mr Di Santo.
Mr Di Santo: As I said before, we are willing to be criticized constructively, but I think we have an obligation to correct the record. I don't understand what you meant when you said "mismanagement" at the Workers Compensation Board.
Mrs Witmer: Of the funds, the money.
Mr Di Santo: Of the investment funds?
Mrs Witmer: Too much money is being expended on workers' compensation.
Mr Di Santo: The administration for which myself and Brian King are responsible shows, and that's the record that we can leave with the committee, that in 1986 the administrative expenses increased by 15%; in 1987, 24%; in 1990, 15%; when we came -- and that's the record -- 1992, 1.2%; 1993, a flat rate budget; 1993, we are decreasing our expenses by 3%, and because of the social contract, a further 5%.
As I said before, despite that reduction in administrative expenditures, we have been able to get rid of the backlog, to increase our rehabilitation programs, and this with the approval of the board of directors. I don't think that can be called mismanagement.
Mrs Witmer: Well, I'd like to pursue the line of questioning that I was on, because I don't think I received a satisfactory answer. Mr King indicated that there was a revenue problem, and on page 18 you indicate that we have the smallest percentage of our workforce covered by the act.
"Large and historically prosperous sectors of Ontario's economy have always been outside the act, for reasons that are lost in the mists of time. If keeping this arrangement is in the public interest, then so be it. But we suggest that it be reconsidered...be discussed and resolved....One such issue is the advisability of moving towards a flat rate WCB premium for all of Ontario's industries, similar to unemployment insurance and the Canada Pension Plan."
Is it your intention to bring all industry in this province under the scope of the WCB?
Mr Di Santo: I think that we have to make clear at the outset that the Workers' Compensation Board cannot bring over the industries that we want. It requires a legislative amendment, and you will be part of the process. What we can do is we can make recommendations.
Now, the facts that you are saying are very true. In fact, we cover only 60% of the workforce in Ontario, unlike many other provinces, where every other sector is covered. Now, if that's desirable or not is debatable, but that's obviously one option that we have to put forward to the government. Personally, I think that coverage should be expanded because there is no reason why certain workers, only because they belong to different groups, are covered or not covered. If you are an accountant with a bank, you are not covered, but if you work for your own, you are covered. They do exactly the same job. I think, personally, that's an option that should be looked at.
As far as the decline in revenues, I want to bring to your attention that according to a Statistics Canada labour force survey, between 1990 and 1992 in Ontario, we lost -- permanent job loss -- 286,000 jobs. Most of them are in the three major sectors: construction, manufacturing and mining. Some of those jobs are not coming back again. So we are dealing with a very harsh reality, and despite that, I think that we are performing well.
Mrs Witmer: Well, I guess it's unfortunate because we have a board that can't deal with the number of workers presently under its jurisdiction and here's a proposal to somehow include all the workers in this province under the scope of the WCB. I mean, if we feel we've got a mess at the present time, we're going to see that mess expanded.
I'd like to just ask you: What are your thoughts considering the privatization of the WCB?
Mr Di Santo: The privatization of the WCB? Well, I know this is an opinion that has been expressed by some people without thinking it too much through, obviously, and I'll tell you why in a minute. I think that health and safety and dangers on the job and occupational decisions must be a public concern, especially because of the changing workplace that we are faced with and the changing nature of the workplace.
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We have examples, of course, of privatization, but if you look at those examples, I don't think that you'd subscribe to them. You look at the United States, where there are most of the private insurers, and if you look at the expenditures of those boards, you will see that the top expenditure is for legal fees, the second-highest expenditure is for medical care, and the lowest expenditure is for benefits. You may think that if you have privatization, you have a better system, a less expensive system. That is a fairy tale. In fact, if you look at the figures in the United States between 1980 and 1991, the average compensation paid for US claims goes from $4,300 to $12,300 -- threefold -- because of those legal expenses, because of those medical expenses.
I think, personally, that Justice Meredith was very right when he thought that employers and workers should make a fundamental covenant by which the employers would pay into a fund and that fund would compensate for injuries and for disabilities arising out of the workplace.
Mrs Witmer: Justice Meredith was on the right track 80 years ago. However, what we have here is not a workplace accident insurance plan; it's very much becoming a universal system to compensate everyone for everything, and we know that one of the areas being considered for expansion is stress. We've got the coverage for workplace stress, and we know that could add $178 million a year to the cost of the WCB. I'd like to know: What is the current status of the workplace stress proposal?
Mr Di Santo: Madam Chair, I think I have to correct the statement made by Mrs Witmer, the statement that this is becoming an insurance for all. It's not an insurance for all. We are governed by the Workers' Compensation Act. You are a legislator and you contributed to pass or to oppose that act, but our obligation is to comply with the act. We cannot compensate at whim only because we want to compensate.
Workplace stressors are obviously a real issue. It's not something that has been invented by the Workers' Compensation Board. I must tell you that the Honourable Robert Elgie, who was the chairman of the board, was the first chair who directed his attention to this issue, not because he wanted to, not because one morning he decided, "Well, we have to deal with stress," but because there were disabilities that were claimed by workers, and today Ontario is not compensating chronic stress. It is not.
Now, you mentioned the California --
Mrs Witmer: No, I didn't mention California.
Mr Di Santo: Okay, let me rephrase. The $178 million that you mentioned was based on the experience of California. You would have had a different figure if the parallel was made with Saskatchewan or with Quebec, because they have different approaches to chronic pain.
However, when I came to the board with Brian King, we found that the board had a discussion paper, and the board of directors collectively -- not us -- decided that we should go out and talk with the stakeholders. In fact, the Honourable Robert Stanbury and Jim Goodison, who were at the time the two vice-chairs representing workers and employers on the board of directors, went out for long months and received hundreds of presentations. Of course, what they found was that there is no consensus in society, because if you listen to the jail guards, you would have compelling examples of chronic stress. If you listen to firefighters or police or nurses in mental institutions, you would have that. On the other hand, there was a position taken by the employers that the cost of compensating chronic stress would be excessive, so there was no consensus.
As I said before, the board is not run by a person, by decree; it is run by the board of directors. If they decide at that point that we want to deal with this in a strategic way -- and the board of directors, as I said before, is developing a strategic plan to look where this board is going in the next 10 or 20 years.
At the same time, I must tell you that that has been the concern of the Premier. The Premier's council on labour and management has been asked to deal with the crucial issues of workers' compensation. One of the crucial issues is what workers' compensation should compensate, and regardless of what Brian King or I think, it's the government, hopefully with the consensus of the employers and workers, that will devise a new course for the workers' compensation. One of the outcomes may very well be a royal commission, and I agree with that. What I don't agree with is that because I've been there only two short years, I've been made the scapegoat for all the problems of the world, because that is not so.
Mr Marchese: In reference to what Mr Mahoney has raised, I want to suggest that you do bring some technical people to talk about this matter, because I suggest that Mr Mahoney will raise it again and you'll have to repeat the same answers, and whatever technical knowledge you're referring to may not be trusted because obviously, both of you pointed out, you're not the technical people with that expertise. So I would recommend that you bring somebody along the next day, because I think that issue needs to be addressed with the kind of expertise that you have been relying on.
Mr Bradley: You'll be dragging Hydro in because they're experts. They'll snow you under for 10 minutes.
Mr Mahoney: Could we get a bigger room?
Interjection: We had to listen to you, so now you can listen to us, guys.
Mr Marchese: My questions are more on the service that we give to injured workers, because I know that we'll get back to these other matters in the next three days, and that is the concern I have because of the kinds of clients we get in our constituency office with the problems they speak of. But before I get to the clients, I want to ask you another question.
Part of my experience as a teacher and as a politician with the school board before was that whenever you make reforms to service delivery or to methodology or whatever it is that you're doing, if you're not involving the workers, we have learned that reforms fail, because they sabotage it if they want to and they can sabotage for years and years. The question I want to ask you is, in the reforms you have planned or you are planning, to what extent have you involved the workers at the compensation board in a way that we get the best from them so that reforms are meaningful?
Mr Di Santo: When we came before the standing committee on resources development in June 1991, there was a large group of people who made presentations. As we said and we recognized readily, service delivery was indeed a problem. That was not because we wanted to blame the previous administration or the previous government, but because the way it had developed at that time, a new technology had been introduced. The board had the largest computer system in North America and it wasn't working well. They introduced a workers' benefit system that was very fast but unfortunately made too many errors. Nobody was condemning anyone, but we said we have to deal with the problem, because we received at that time more than 20,000 phone calls every day. The board tried to solve the problem by introducing recording machines, which of course multiplied the problem.
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We responded immediately to the standing committee and I appointed a task force which, I have to repeat, was made of representatives of workers and employers. If Dennis Schweitzer was ill, it was one of the workers' representatives. They had the mandate to look at service delivery and rehabilitation.
We had also seven advisory groups in the regional offices, and the employers and workers went out with the task force and they came with the task force report, and I must say, for the first time in history, given the climate in 1992, it was a miraculous report because it was unanimous. It was a consensus report of the employers and the workers, so we decided that we would implement the report.
You know what our governments do most of the time. They appoint a royal commission, a task force to gain some time, and then the reports end up on the shelves. We decided we are going to implement this report, and in fact the board of directors approved the administration plan and we committed ourselves to develop a plan.
One of the things that I wanted to do when I came to the board was to change the corporate culture at the board. For 70 years, the board has been a pyramid where all the orders were coming from the top and the staff, the employees at every level, were the recipients of orders that came from a very small group of executives. The result of that was that the morale of the board was very low, and when we came to the board, it was at an all-time low, so we decided that we would change that; we would involve the staff. No more demotions or changing classifications without the involvement of the staff.
Bill 162 was a very complex piece of legislation, and to implement Bill 162 required an incredible amount of energy and an incredible amount of policies being developed. If you add to that the fact that the staff was not trained, for objective reasons, because the turnover was immense at that time, the result was that there was an incredible accumulation of papers on the adjudicators' desks and their inability to make decisions and to make the right decisions.
We decided that we would change that. How would we change that? By involving the staff in the decision-making process, from the bottom. I toured, personally, all the offices in Ontario, the regional offices and every ISU. I spoke with the staff and Brian King did the same, and we told them that we want to democratize the workplace and that we will do that with the help of the workers.
We decided to implement the action plan, not as it is usually done where you have a group of experts who know everything and they decide what is the best for the corporation and then they outline the action plan. We decided that we would involve the staff and in fact we asked the staff to appoint their own people, and 16 teams were selected. The union appointed its own people. The non-union staff, because as you know, at the bottom we have a situation where half of the staff is unionized and half of the staff is not unionized because of the act -- the union appointed its own people and the non-union people voted and elected representatives.
We told each team: "These are the guidelines. You go ahead and implement the action plan." We went to the point where action plan number one -- we have Rumina DiValentin and Nigel Hunte here. They were asked, I must say for the first time in the history of the board, to go out and find a chief rehabilitation officer. That was one of the recommendations of the task force. They posted the ad in the papers, they interviewed the candidates and they chose the chief rehabilitation officer.
I think that's a profoundly democratic process that has helped us to change the morale inside the board. What that really means is that now we have more participation from the staff in the decision-making process of the board.
Just one more point and then I'll allow you, otherwise I'll take all your 30 minutes and you won't be able to criticize me.
Mr Marchese: If we don't do it today, we'll do it tomorrow. Do you want to make a point?
Mr Di Santo: The point is, that is happening also in the policy decision-making process, where we are comparing the uses of the policies, if those policies are good or not, and not only on the 20th floor some bright people developing policies that they think are the best.
Mr Marchese: Mr Di Santo, I did get snippets of the answer that I wanted and to some extent they answers the question. I believe you when you say that you've been involving the workers from the bottom up. I want to give you a comparison of what I mean by "the bottom up."
When, in the board of education, we decided to reform the education system at the secondary level, what we did was to involve teachers and principals by area. Hundreds of teachers came and we raised the questions. They had the questions in advance. They came and participated in that discussion. We knew exactly what they wanted to say. I have to tell you they spoke very frankly about what they saw as reforms that we should be making and what their fears were about what direction they felt the trustees were going in. We also involved the parents by area. So we involved all the clients and all the people who have to implement whatever results from those consultations. That's what I mean by involving the stakeholders.
If you do that, in the end what you have done is to buy in the support of the people who have to deliver the service. In this case, with the compensation board, I'm assuming you've done this with the employers, as you mentioned, and the workers. But I go beyond simply calling on a union representative or an employer representative by suggesting that we involve as many of the people who are adjudicators or people who work in pensions or finance, in all of the fields. That was my question in terms of, have you done that, and to what extent are you thinking of doing that if you're going to buy in their services in a much more cooperative way?
Mr Di Santo: As I said in my introductory remarks, one of the tasks we undertook, Brian and I, when we came, was to open consultation with the stakeholders. In other words, we had a double approach: (1) to change the corporate culture inside the board and involve our workers in the work of the Workers' Compensation Board; and (2) to involve the stakeholders.
As you know, we have already an external consultation group which is made up of representatives of unions and industry and we consult with them.
I want to give you an idea of how widespread is our consultation. We set the rates for next year in July 1993 and we consulted with employers and workers throughout the province. We have an issue with schedule 2 employers. We had consultation from January 27 to June 14, 1993.
Coverage for training participants, which was a thorny issue -- we had an incredible range of consultations from October 1992 to February 1993 and again in May because of the events that led to the government's decision; the use of medical assessments -- these are issues the public doesn't know, but we have consulted with each workers' group and employers' group. We had consultations on occupational diseases, on nasal cancer. The public doesn't know that, but there are cases at Falconbridge where workers -- and we have consulted with the union, with Falconbridge and with the employers. We have been consulting on lung cancer, which is a big issue for workers, after two years, if they are not at full potential or if they're not working again.
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Worker independent operator: It's a big issue in Ontario. Madam Witmer was talking about extending coverage. That's a very troublesome area and we had consultation. We consult because we think the input that the stakeholders, those who have a stake in the system -- it's crucial for us to make decisions. On top of that, as I said before, we have a bipartite board where both stakeholders are represented.
Mr Marchese: I want to ask Mr King a question. You'll be able to fit it in, I suspect. With respect to the clients, what you said is that you have introduced standards of performance now as they relate to telephone calls, as they relate to mail, client relationship and so on. I'm interested in two things in relation to that. First, how do you specifically measure that? That's of concern to me. The other matter is, do any of these standards of performance connect to performance review of the workers as well? I presume it does.
The third question -- I thought I had two, but I have three -- is, how do we deal with the language problems that I'm sure you're very familiar with, and that I am familiar with as an MPP in my riding where most of my clients are Portuguese? When they call in and they find an answering machine, it becomes very complicated for them. Of course, when they do that, they'd have to use other people, because if they do it on their own, many of them find those machines very confusing and very difficult. Are you also dealing with that as part of your standards of performance and performance review?
Mr King: I think the chairman was being a little too self-effacing when he described how much consultation occurs with our employees. I don't believe there has been a chair of the Workers' Compensation Board who has visited more of the employees of the board, spoken to them face to face, asked them what their concerns were and then helped me to try to understand, as the chief operating officer, what those concerns were as expressed to him in this very informal and non-threatening setting. I believe it's fair to say that the chair has toured the regional offices as much as anyone to try to get an understanding not only of what it's like to work at 2 Bloor but to understand what it's like to work in Sudbury, Thunder Bay, North Bay, Timmins, St Catharines, Hamilton, Ottawa, Peterborough and Sault Ste Marie. I apologize to any member who's from another geographic area that I missed. So first, the chair takes very seriously the need to get to know the employees and to listen to them.
In terms of my own initiatives in listening to the employees and trying to make them a part of the operation, as a part of the planning process to deliver a better service with fewer resources, I evoked or asked all of the staff to become involved: How can we do a better job for those we serve in a more efficient way?
By the way, we developed this before something called social contract. This wasn't in response to, this was well in front of others realizing perhaps that the resources had to be diminished.
One of the things that was done was a mail-in campaign: "Here are the ideas of the employees of the compensation board on how we might do a better job;" if you will, a suggestion box. Hundreds and hundreds and hundreds of Workers' Compensation Board employees returned this. There was an optional space for people to put their name and telephone number.
In a threatened organization where employees don't feel a part of it or feel threatened, you would think most people would remain anonymous. The vast majority of those hundreds and hundreds of employees who came forward signed their name proudly and put their telephone number so I could call them and talk to them about their ideas.
This is no small achievement given the fact that two and a half years ago when Mr Di Santo and I arrived, only about 11% of the employees of the board trusted the senior management at the Workers' Compensation Board.
Mr Bradley: What did we do before you guys arrived?
Mr King: These are facts that are available for people who wish to look at facts.
The Chair: I think perhaps we shouldn't interrupt when someone else is speaking.
Mr King: Thank you, Madam Chair. Finally, in terms of the involvement of the employees, our unit is split, strangely, into two equal numbers of groups. About half of our employees are unionized, with CUPE 1750 being the bargaining agent, and about half of them are non-bargaining unit employees. Hopefully, if sector reform comes forward, our employees all will have the choice as to whether they want to be represented by a bargaining agent.
Notwithstanding, we have approximately 2,500 employees who are not represented by a union. When it came time to consult with them about the social contract and what would happen to them, we allowed 2,300 people to vote who didn't have any rights to vote under a collective bargaining plan, but as non-bargaining agents, we sent them all a ballot after a series of information meetings.
To show you that this is not false horn-blowing, almost 2,200 out of 2,300 people during the holiday period voted on what they wanted to see us achieve. When you get a higher level of people voting than vote in a provincial election, I think you've got some involvement of your employees. If you want lessons, maybe we could assist.
Mr Mahoney: Secret ballots?
Mr King: These were secret ballots. The question was measuring service. The service delivery requirements or expectations of the WCB were developed in close consultation with our stakeholders, employers and workers, in the presence of the two vice-chairs of the board of directors, one who represents workers and one who represents employers. They went out to their constituencies and gave to us suggested measures of performance for answering the telephone, for answering letters, for getting an appeal through the system and, in some cases, we measure precisely, such as delays or any delays there are in appeals. We track each appeal.
In terms of the telephone, our system is able to monitor the times we don't answer the phone when people abandon the phone calls. There's a computer program that actually monitors every call that comes in to determine whether it's answered before people abandon it, so we measure it and report on that every month.
In terms of letters, we do random samples of letters to determine whether or not we're meeting our service delivery expectations and report that.
A further question is how we deal with language issues, and I think I'll defer to my colleague Mr Di Santo, who has made it probably one of his wishes in life over the past two decades to assure that the workers' compensation system is sensitive to the multicultural community at large.
Mr McLean: On a point of personal privilege, Madam Chair: On the very question that was asked, the gentleman gave the indication with regard to the phone calls that are monitored. Could we have that presented to the committee tomorrow? I would be interested in knowing just what types, how long the phone calls and who doesn't get answered.
Mr King: Yes, we can provide that information.
Ms Carter: I'd like to put some of this into a wider context. First of all, I'm glad to hear you say that your emphasis is to help injured workers and obviously to do it efficiently and in a financially sound manner. We still have a very terrible statistic as to how many cases are coming before you, the number of people who get injured or who get sick. Accidents are very easy to pinpoint because there's a definite occurrence, but of course there's the other field of work-related diseases which are much less definable, much less easy to pin down.
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I understand that asbestosis and mesothelioma are now listed and eligible for benefits, but I'd like you to let me know where we stand on that. For example, I know that in the past there have been problems with arsenic connected with gold mines and ground level ozone. Of course, one point that I think needs emphasizing is that a lot of these work-related problems are actually at the basis of problems which affect the broader environment, so that if they're dealt with at the workplace level, then we're looking at improving the environment for everybody. I think acid rain, ground level ozone and tritium are examples of things like that.
I remember, for example, the fight that there has been over lung cancer and uranium mines. I have even spoken relatively recently to people in my own area who tell me of health problems which arise in specific industries and which would be preventable. As a society, we're tackling cigarette smoking very effectively, but I understand that works synergistically in a lot of workplaces with the problems that are found there.
I know that the workplace hazardous materials information system regulation has made a difference, but I'm just wondering whether you're satisfied that you're progressing as you should be in keeping the number of cases down or whether there's still a lot more that has to be done.
Mr Di Santo: When I came to the board, this was one of the priorities that I chose because I realized that Ontario was lagging behind in recognizing and compensating occupational diseases in a variety of fields. Even today, this is, I must say, a very complicated area. I spoke Friday with an injured worker from Bracebridge who came to the board with a respiration device. He has scars on his lungs and he was a smoker and he has very serious health problems, but because of medical know-ledge, because probably the doctors who looked after him at the time when the disability developed were not equipped, he is still fighting to be recognized, and I don't know if he will make it.
Ms Carter: Well, that's my concern, the amounts that are being recognized.
Mr Di Santo: It is very serious and very real. When I came to the board, we started developing an agenda for occupational diseases, and I must add that on the board of directors we have a former miner from Sudbury, Homer Seguin, who is a very strong advocate for occupational diseases. As you said before, we were able to compensate for lung cancer for gold miners. Unfortunately, I must say, most of the people we compensated were widows because the workers were not there any longer.
We have scheduled, as you said, asbestosis and mesothelioma. Now it has been approved, it's in the schedule and we are working with the Industrial Disease Standards Panel to update the schedule; the IDSP is the agency that is developing policies about occupational diseases. We are working also on nickel lung cancer and on occupational asthma.
I must say that we at the board are working in total cooperation with the workers and employers, because we realize that this is a very difficult area and we need consensus of employers and workers. We haven't been able to compensate for nasal cancer. One of the things that unfortunately complicates this area is that the scientific evidence and the medical evidence is developing slowly and for many people, unfortunately, as I said before, it's too late. But we are moving in this area and we hope that we can complete our agenda before my term expires.
Ms Carter: I did want to ask another question, but we're short of time so I'll defer.
Mrs Haslam: Mr Di Santo, I'm going to talk fast. I don't know you, but I like you. There's a reason I'm telling you that. I don't know everything about the WCB, but I certainly know it's not working according to a lot of the workers in my riding and according to the workers in my own constituency office, saying that it needs help. The reason I'm saying that is that I'm glad to be here to listen to your presentation. I didn't come with a pre-issue and I didn't come with pre-written questions. I really wanted to listen and I'm very pleased. I think I'm the only here who really listened and read what you had to say in your speech, and my questions are going to be about that.
Now, I said I liked you, because I'm going to be very blunt. I'd like you to be as brief as possible. Okay?
Ms Sharon Murdock (Sudbury): It may be difficult.
Mrs Haslam: Yes. I want short, concise answers. First of all, in your presentation, Mr Di Santo, on page 6, you said that you consulted. I was interested in how you consulted on practically everything from the design of the form they use and so on and so forth to the effects of workplace stressors. I understood you to say that the employers were very pleased with that type of consultation.
Mr Di Santo: Yes.
Mrs Haslam: I wanted to know if it has helped the board in any way because you've increased the consultation with the employers, or has it cut down on the adversarial aspects of that?
The Chair: Excuse me. In fairness, we've been very strict all day, and as Mr Mahoney asked a question which will have to be answered in the next round, Ms Haslam, to be fair, you're 31 minutes as well; we will let your question be answered in the next rotation.
Mrs Haslam: Then I would like to be placed first. Does that mean that we then have to go through both opposition parties before you come back here?
The Chair: Yes.
Ms Murdock: Are we not rotating? They started today, so we start tomorrow with the Conservatives and then so on? Are we not rotating that way?
The Chair: No, I think it has to rotate; otherwise somebody's going to miss a turn.
Mrs Haslam: Well, I've just missed my turn, so I would like to be very clear here that I'd like to be first on the list.
The Chair: You can be first for your caucus.
I thank you all for your attendance this afternoon. This committee stands adjourned until 10 o'clock tomorrow morning.
The committee adjourned at 1658.