Assemblée législative de l'Ontario

DRAFT REPORT
WORKERS' COMPENSATION BOARD

DRAFT REPORT
ONTARIO FOOD TERMINAL BOARD

CONTENTS

Thursday 27 January 1994

Draft report, Workers' Compensation Board

Draft report, Ontario Food Terminal Board

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:

Abel, Donald (Wentworth North/-Nord ND) for Mr Mammoliti

Murdock, Sharon (Sudbury ND) for Mr Waters

Also taking part / Autres participants et participantes:

Eady, Don, special assistant, policy, Ministry of Labour

Holder, Marianne, special assistant, legislative, Ministry of Agriculture and Food

Clerk / Greffière: Mellor, Lynn

Staff / Personnel:

Richmond, Jerry, research officer, Legislative Research Service

Yeager, Lewis, research officer, Legislative Research Service

The committee met at 1014 in the Superior Room, Macdonald Block, Toronto.

DRAFT REPORT
WORKERS' COMPENSATION BOARD

The Chair (Mrs Margaret Marland): I'll call to order this morning's meeting of the standing committee on government agencies. The work before the committee this morning is to give direction in drafting two reports: The first report will be on our review of the Workers' Compensation Board and the second report will be on our review of the Ontario Food Terminal Board.

You've been handed out this morning from our research officer -- this actually says it's been prepared by Rob Nishman.

Mr Lewis Yeager: That's right.

The Chair: Perhaps, Lewis, you would like to take us through this report, or we can ask the committee how it wishes to deal with this report.

Mr Yeager: Should I explain it first? This is the original briefing report that our branch provided to the committee before the hearings took place last fall. The first half of it is basically factual background information on the board and how it operates. The second half was a discussion of several issues that had been raised in recent times, with some possible questions that members might have wanted to pursue at that time. As is always the case, there were many other areas that were probed during the hearings.

Traditionally, when I've put together a report on an agency, we've used something like this as the framework to begin with, perhaps updating the factual part, which is the first half, and then using the second-half issues to encompass the positions of the members of the committee, working both from Hansard and from the information you can give me now. We can add in other issues that arose during the hearings. I'm entirely at your disposal. But to go through this report in its present form, it's essentially the briefing paper that you were working from at the beginning of the hearings.

I would suggest perhaps that in the comments and queries section in the table of contents we look through the issues that were initially suggested and discuss whether or not we want to pursue those and amplify them in the report. Perhaps each of you could give me direction on areas you would like to emphasize for each of these topics, and we can add in any additional topics.

I'll need some guidance on recommendations. I'm a little unclear whether the committee will wish to put together a consensus report or a report that's substantially consensus with perhaps some additional opinions appended.

That is the first type of thing we have to address, sort of the thrust of the report that I'm going to write, and then the factual content that's going to be covered in it. From that, I would like suggestions on areas you would like specific recommendations on. If you have formulated recommendations already in your caucuses or as individuals, I would welcome any of those, and if there are other areas where you'd like me to suggest possible recommendations that fall out of the Hansard discussions earlier, I would be happy to do that as well. I'm at your disposal on how you would like to proceed.

Mr Allan K. McLean (Simcoe East): To shorten the process, the government members probably have some direction they would like to see the report take. I have some suggestions and perhaps the Liberal member Mr Cleary has some suggestions. Maybe we can start with the government's suggestions and go around. Then we could indicate what we feel should be in the report.

Ms Sharon Murdock (Sudbury): Actually, having attended at the sessions, we did sit down and work out some things and listen to what was being asked and the concerns of the committee. If I might, maybe it would help Mr Yeager that one of the first things was that the memorandum of understanding with the Ministry of Labour was discussed; I believe it was with Mr Mahoney.

There was accountability of the Workers' Compensation Board -- I'm just looking at it in terms of broad subject areas -- to anyone in terms of both policy development and principle of value for money. There was fraud: The issue was definitely discussed. There was controllership of the Workers' Compensation Board's internal controls. there was strategic planning and how that's working. There was vocational rehab and return-to-work concept. Of course, there was the whole issue of Simcoe Place, the building. There was the corporate culture in terms of what the action plan is, as Mr Di Santo had stated in his presentation. Last was the funding strategy, which is the big issue of the day in terms of assessment ratings.

Mr Rosario Marchese (Fort York): Ms Murdock just mentioned the list of things that we would be speaking to. Perhaps what she could do is speak to each one and we can debate each item that we have, as opposed to going through the whole list, because it's very long. We can go through each one, and if there are additions or changes, people can make them. If there's agreement, we can move on to the next.

The Chair: Is that agreeable to the committee? Okay.

Ms Murdock: The Provincial Auditor recommended in his report that he expected that the Workers' Compensation Board should have a new memorandum of understanding with the Ministry of Labour which would clearly delineate the power of the Workers' Compensation Board and provide an accountability framework for decision-making. We're in accord with that. We think that is a wise decision. So it would make sense to have that as one of our recommendations, I think, but to be open for discussion of course.

In terms of the accountability issues, all of us were, I believe, if my memory serves me, unanimous on the committee that the Workers' Compensation Board cost any new policies that it was putting forward in terms of implementation and then that there be some accountability to ensure "economy, efficiency and effectiveness" -- I think that's a quote -- "in service delivery to both the workers and the employers."

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Then one of our recommendations would be, "All new initiatives in policy development and program delivery undergo rigorous scrutiny to ensure clear objectives and built-in controls prior to implementation." That would be one of the recommendations we would be seeking.

Secondly, the committee would recommend that, "The WCB enshrine the principle of value for money into the development and delivery of all programs. Furthermore, the WCB institutionalize the idea of good spending by establishing management responsibility for reporting performance, plans and budget and conducting regular reviews to ensure adherence to stated objectives."

The Provincial Auditor's report also suggested a value-for-money consideration -- look at everything it does in terms of a value-for-money principle. We agree with that.

Mr Marchese: Madam Chair, perhaps we might stop there and see whether there are comments.

The Chair: Good idea. Other comments?

Mr McLean: Does the value for money that you're talking about include the 90% they get with regard to payments? There are some cases where I believe they would get more in payments than what they were making on the job. Is that value for money?

Ms Murdock: The benefits packages to employees would come under your policy review. If the policy of the board and the legislation say that X is to be paid, then that's what they do. For instance, they purchased all the imaging equipment a number of years ago. I guess it was in 1987 or 1988 they purchased all this imaging equipment, massive amounts -- each terminal cost something like $18,000; it was very, very pricey -- without looking at whether or not the whole business could even take it in or whether or not the employees were ready for that kind of equipment, whether training had been done and that kind of thing.

I'm not an accountant and I don't know exactly how value for money works but just on a commonsense level it would be every single thing. The process that's used within the organization would have to be looked at in terms of whether you were getting the biggest bang for your buck.

Mr McLean: Would it include the value-for-money auditing and internal spending controls?

Ms Murdock: Yes, but I'm probably speaking more to what you're talking about in terms of what I'm calling the controllership of the changes in the Workers' Compensation Board, which is another subheading.

The minister's assistant just gave me some information. I did mention that the legislation controls basically how you're going to run that, so benefits is legislated, so that would not come under value for money.

Mr Marchese: Is there a sense of time lines that you would want to include in this? Is there a reasonable time line by when we might expect the board to institute these good practices?

Ms Murdock: Yes. They have an action plan which was presented and submitted to this committee. The board has already instituted the action plan that it has, long-range planning.

Mr Marchese: It says here: "Furthermore, the WCB institutionalize the idea of good spending by establishing management responsibility for reporting." I assume they are not doing that.

Ms Murdock: Yes. Prior to the action plan being put into place there was much not being done.

Mr Marchese: Right. So if we want them to institutionalize these good management practices, do we have a sense of when we would like them to do it for, a year?

The Chair: Mr Yeager is wondering, Ms Murdock, if we could have a copy of what it is you're working from so he doesn't have to copy all these notes, and Hansard would too.

Ms Murdock: I don't have any more. Can you get me some more? We didn't know you were going to ask us so directly.

The Chair: It probably would be helpful for everybody to have it and then there's less repetition. That way we can move along more quickly.

Mr Marchese: I'm just wondering whether you would want to put a time line as to when we might expect these practices to be in place, whether one year is reasonable or six months or longer.

Ms Murdock: I can't remember what the frame of the action plan is. Is it five years, Don? You've got to remember that it's an 80-year-old institution that is trying to change direction in a short period of time. It's already changed.

Mr Marchese: This would be in the five-year plan, in other words. Is that the idea?

Ms Murdock: Yes, it would be within the confines of the action plan.

The Chair: Any other questions on that point? Ms Murdock, would you like to move to the next point?

Ms Murdock: I've forgotten where I left off.

Mr McLean: Principle of value for money. You're going into fraud next.

Ms Murdock: That's right. Thank you. I started and then Mr Marchese suggested we stop there.

Just before I get into the fraud issue, I should point out that when Mr Di Santo and Mr King were appointed to the board in May 1992 there was only one person designated in the entire board who would look at any kind of possible fraud, one in the department. Since that time, since they came on line, with Mr King as the operational manager, they have hired 35. As a consequence of that, they have found that there has been fraud not only from the employer side and the injured worker side, but also from those who provide support staff such as pharmacists, doctors, rehab specialists and so on.

I must admit that they are really working hard on that and they have caught out, I would say, large-scale operations in a couple of instances. They are already working on that and I think Mr King made it pretty clear when he was in here about how much work they have already done in this area. That's why we're writing that the committee would like to have the board "continue its excellent efforts to prevent and detect internal and external fraud.

"The committee expects the Workers' Compensation Board to immediately find ways," and I emphasize this, "to tighten controls on access to Workers' Compensation Board systems." The two areas that are mentioned here, this one, the tightened controls on the access to the Workers' Compensation Board systems, and the high-risk areas of business, are basically two areas of weakness that so far have had very little done.

"More research is needed to identify those high-risk areas of the business and ensure that close monitoring and tough anti-fraud controls are put into place." There hasn't been that in the past, so I think it's fair that this committee should say that's what we want them to do.

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Mr McLean: What do you mean by access to WCB systems and high-risk areas of business? What's your definition of that?

Ms Murdock: Of high-risk areas of business?

Mr McLean: Yes. Mining, lumbering?

Ms Murdock: No. High risk in terms of fraud and not high risk in terms of accident experience.

Mr McLean: Okay, fine.

Ms Murdock: The next subject area we looked at was controllership, which basically flowed exactly from what the Provincial Auditor recommended in his report and what he was talking about in terms of controllership.

"The WCB's internal controls have not kept pace with the rapid technological changes in the workplace. The presence of fraud in the system, in part, points to the weaknesses in the Workers' Compensation Board's internal controls." I'm on page 2, top of the page. "The board must address this situation by developing a controllership function to provide its employees with clear roles and responsibilities and assist managers to minimize waste and prevent fraud.

"A controllership function needs to be put in place to strengthen the efforts of the Workers' Compensation Board to deliver efficient and cost-effective service delivery. To this end, all employees must understand the values and core beliefs of the organization. Well-defined control activities, such as authority and approval limits, must be in place. Systems must be in place to provide operational and financial compliance-related information. Above all, the controllership function must ensure a proactive approach to remedy system weaknesses and allow for fast corrective action."

I should suggest here too that "controllership" is the new working word of the 1990s in terms of business management, but basically it's making sure that you have a system in place that will ensure you're not overspending your budget, that if you can get it cheaper, you will do that, that there are mechanisms of control along the way so that you don't go out and buy huge rooms of art without some kind of checkups along the way.

The Chair: Any comments on section 4, controllership? No questions. Okay, strategic planning.

Ms Murdock: Strategic planning is something that actually has been discussed in two other committees and was presented here, but not a lot of time was spent on it.

"Crucial to the planning for the future and ensuring the viability of service to its clients is a strategic plan. The WCB board of directors" -- I would point out that the board of directors right now is a bipartite board -- "will shortly begin consultation with its stakeholders on such a plan. The committee expects the Workers' Compensation Board to keep the committee updated on its strategic plan addressing the challenges facing the compensation system in Ontario now and in the future."

Obviously, the employer groups and the employee groups or the injured workers' groups are the stakeholders in this and they should be talked with in terms of determining how they're going to proceed at the board. I know that the consultations are going on in other areas as well in different subject areas as they go along, but this is looking at how the board is going to operate over the next few years.

Mr Yeager: I was wondering if you were proposing a specific mechanism by which this committee would be kept updated on the strategic plan developments. Would you like a recommendation in a general form like this or would you like to specify some sort of process?

Ms Murdock: I sat in in the last session when the entire upper management staff of the Workers' Compensation Board was here for the whole week, and I believe the comment was made that you wondered how much work was getting done at the Workers' Compensation Board because they were all here. They've been at two other committees for lengthy procedures as well. I would just say that the three committees that can hear them have heard them now and it would be nice to give them some chance in order to do some work.

If the committee is recommending a time frame that they report back, maybe they could do interim reports on a regular basis, but I personally would not agree with a recommendation to have the directors come in here, say, every six months. I wouldn't think that would be functional, but I think a written report submitted to the committee probably would be. I don't know how the committee wants to handle that.

The Chair: When would you want the written report? Are you proposing a time frame to respond?

Ms Murdock: That's what Mr Yeager's asking me.

The Chair: I know. I'm asking you whether the committee wishes to give some direction for a response from the board.

Ms Murdock: Obviously.

Mr McLean: It doesn't really matter, Madam Chair. What we do here is we make recommendations in our report. It goes to the board. It's up to the board to do what they like. They don't have to report back to us if they don't want to. All we can make are really recommendations, in my opinion. If there's something different than that, I'd like to know.

Ms Murdock: I don't know whether I agree. I know that the present administration takes these committees very seriously in terms of what they're recommending. It's worked out that so far what the committee wants to do and what the board is trying to do are in sync, but it's the time frame. We'd like to have it done yesterday, and it just will not happen that way. I think we have to allow them some time. I'd suggest a year. I'm open to any suggestions from the committee members as to time frames.

Mr McLean: That would be a minimum.

Mr Alvin Curling (Scarborough North): You say it would take a year to respond to any recommendations, from the Workers' Compensation Board?

Mr Yeager: The suggestion, if I've copied it down correctly, is that related to strategic planning, the WCB might be asked to provide this committee with an annual written report of its progress in succeeding with its strategic plan objectives.

Ms Murdock: That sounds fair to me.

Mr Yeager: Sort of a letter outlining perhaps the aspects of the strategic plan and progress in each area.

Mr Curling: You're asking if a year is adequate?

Ms Murdock: That's what Mr Yeager was asking me, what time frame we want, and that's what the committee is supposed to decide. I'm suggesting a written report to let us know how the strategic plan is working.

Mr Marchese: Isn't that part of the annual report?

Ms Murdock: That's right, because the strategic plan, which is going to be worked out, will no doubt be included in their annual report, but I don't know whether that's sufficient for the purposes of this committee.

Mr Curling: I don't know. We've gone through this extreme exercise on the Workers' Compensation Board and then you say we've got to almost regiment it back to an annual report now. They can state their progress through the annual report thereafter. Don't we want a quicker response at the initial stage on where it is at?

Ms Murdock: You know how this place works, Alvin. It'll be six months before it even gets there.

Mr Curling: I don't know how it works; that's the problem. No, I agree with you. I think it will take some time. If the consultation process is just going to start, then by the time they get that together it will take about a year to really put it down. I agree with that.

Ms Murdock: Okay.

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Mr Curling: If we go back to the strategic planning, you are saying then, in the third sentence, "The committee expects the WCB to keep the committee updated on its strategic plan addressing the challenges facing the compensation system." Is there any update before the time for the strategic plan coming about, in other words, to keep the committee updated on the strategic plan addressing the challenges? So you're saying, first, to put a strategic plan in place, which would take a year. It would take about a year before they get that done.

Ms Murdock: They have already got their action plan set up as to what the board wants to do operationally. Then in terms of the strategic planning of ensuring service to both employers and employees, they have to set up that part of the strategic plan. The idea came when I listened to you speak that once they get the strategic plan set up with their stakeholders, then they could send us a copy of it. They could keep us informed that way. We can sit here and say in six, eight, 12 months, they'll have to notify us. I don't know.

Mr Curling: We can sit here and say a year or two. I really don't know. Would the strategic plan be ready within a year, or can it be ready in six months and then a report of how the strategic plan is going annually?

Ms Murdock: Okay, I see what you're saying. The other thing too is that given we don't know how long it's going to take the stakeholders to figure out their own strategic plan, it would make sense then that the committee be notified by the Workers' Compensation Board when the strategic plan is ready, with a copy to the committee. I would think that within a strategic plan the stakeholders would have set up their own time frame. Then we can determine, as a committee, what kind of reporting, if any, we need to have done after that.

Mr Curling: I can go along with that. I can go along with the fact that you said: "First, I can't determine when they'll have the strategic plan. I don't want to say a year. I don't want to say in six months it'll be ready, then we start to pace it." They'll set their pace and say, "These are the things we will do, as stated in our strategic plan, our time frame." But what I was hearing before is that in a year's time the strategic plan will come.

Ms Murdock: They could have a strategic plan ready in a couple of months, for all I know.

Mr McLean: Are we not making some recommendations that Mr Yeager can take, and when he hears from all parties, make some recommendations back to the committee at another date? You're going to formalize what these recommendations are and then you're going to report back to us, to deal with them one by one again.

The Chair: What we're dealing with this morning is giving direction to the researcher to prepare a draft report that the committee will then respond to.

Mr Yeager: My proposed plan would be to take the recommendations and the comments today and take information from Hansard and other sources and frame a discussion around those from what people's comments have been. Then we can take a subsequent look at it and focus in more clearly on it. But I'll try to take this and use it as a framework to beef up the whole discussion leading up to these points.

Ms Murdock: Okay. Number 6, vocational rehabilitation and return to work: I stated earlier that the board operates on a bipartite basis right now. It was a unanimous decision by both employers and employees that the earliest possible return to work for the employee was in the best interests of the employee and of the employer. I think that was stated here in the presentation by the board and the questions in the summer.

I thought one of our recommendations would be that they maintain that focus on the voc rehab and return-to-work concept. I'm not reading it all, obviously; I'm summarizing what it says there. Unless you want me to put it on the record.

The Chair: That's up to the committee. Do you wish Ms Murdock to read it? Are there any questions?

Ms Murdock: Mr Yeager has it.

The Chair: Mr Yeager has a copy of it. All right, so we'll go to corporate culture, number 7.

Ms Murdock: The action plan teams, in responding to the recommendations of the chairman's task force, began a process which for the first time saw the employees being involved and empowered in the key decision-making. That's still in the works; it's still in the process. I still think it has some work to do in that area. The example that was used when Mr Di Santo was here was that it was formerly a pyramid and he wanted to flip the pyramid over, so that in terms of how things were done within the board, you would have more input from the front-line workers. We should recommend that this should be an ongoing commitment on the part of the board to continue in that.

The Chair: He wanted a pyramid, not a triangle.

Ms Murdock: No, he called it a pyramid. He wanted it a flipped, upside-down pyramid, and obviously to continue the training, service delivery.

The Chair: If he wants the input from the base and the grass roots, I think it would be a pyramid in its normal position.

Mr Donald Abel (Wentworth North): Do you think it really matters?

Ms Murdock: It doesn't really matter.

The Chair: Once you use an example, we better all understand what the example means. It does matter.

Ms Murdock: The decision-making is made by the employee group and filters down, instead of the reverse where some power on top makes -- obviously you have to have a final arbiter -- all of the decisions and then you had better abide by them.

The Chair: Number 8, Simcoe Place.

Ms Murdock: This was a heated discussion in both committees that it was discussed in. Some members expressed concern about the decision of the WCB to relocate. "The Provincial Auditor...directed the WCB to report back in 1996 with detailed information on all costs associated with the relocation." He included a very lengthy list of "final rental rates and annual costs; total staff that are relocated; space occupied; projected rate of return on investment based on actual building costs; moving costs; leasehold and furniture costs; and any administrative savings that have been achieved by the relocation and consolidation of the head office, such as staff reductions."

Mr James J. Bradley (St Catharines): The horse will be out of the barn by then.

Ms Murdock: He also "directed the WCB to assess long-term staffing projections in light of savings possible from reduced claims, downsizing and automation, and determine the effect this may have on reducing space requirements." We're recommending that, "The committee agrees with these recommendations and expects the WCB to comply in full."

The Chair: Could I ask for clarification on this?

Ms Murdock: I copied that right out of the Provincial Auditor's report.

The Chair: Okay. I just want to be sure that is accurate, because I'm not sure that it wasn't a resolution of the standing committee on public accounts that Simcoe Place would be looked at again in 1996, and maybe the ministry staff can clarify that. I think it was a resolution of the committee that the next time Simcoe Place would be looked at would be 1996 and here it attributes that decision to the auditor. I'm not sure that is correct.

Ms Murdock: If I may, Don Eady, the minister's policy assistant.

Mr Don Eady: The auditor himself recommended that the WCB return in 1996 with reports on those sorts of things that were stated there: rental rates, actual costs, that sort of thing. Then, if you recall, the public accounts committee voted to adopt that recommendation, which was taken out of the Provincial Auditor's report, so the auditor said the WCB should come back in 1996 and then the public accounts committee voted also to adopt that recommendation that the WCB come back in 1996.

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Mr Curling: Why are we doing this? The fact is, what if in 1996 we found that the WCB wasn't financially feasible and all of these types of things? Are we going to get the money back? The building is going up; the thing is being done. Then you say: "You know what we should really do? We should assess the moving costs" -- we have moved already -- "the building costs" -- we have done the building already -- "the leasehold and furniture costs" -- we have bought them already -- "and the administrative savings" -- we didn't save.

Then you say this is 1996. So big deal, what are we going to do with it? Why are we going through the motion of saying, "You know, we should do that"? It's normal that the auditors go in and do an assessment of these agencies all the time and come out with that. Why then tell them: "You know what we should do? In 1996, we should check whether this move we're doing now is feasible or is economically sound?"

The Chair: I only raised the question for accuracy, and obviously Mr Yeager can confirm what the resolution of the public accounts committee was. I think that should be part of Mr Yeager's comments back to the committee. I'm only raising it because I was a member of that committee when that vote was dealt with and I just wanted to be sure that this was accurate. That was all. I'm not debating it.

Mr Eady: I'm not debating it. Just to clarify, the auditor made a number of recommendations in his report, such as the memorandum of understanding, which was covered earlier, that the ministry and the WCB should conclude or negotiate a new memorandum of understanding. He made a number of other recommendations in terms of accountability and then one of his recommendations was the return in 1996. Both the ministry and the WCB have said all along that they were willing to comply and are complying with those recommendations from the auditor's initial report.

The Chair: In any case, there was a decision made by the public accounts committee that it would not be discussed again until 1996.

Ms Murdock: On that point, one of the reasons we put it in here was because it was discussed. We spent a fair amount of time in this committee discussing it, so I thought it should be included in our recommendations. But in actual fact, since it's already included in another committee, the specific issue doesn't even have to be here. It's already being covered in another committee. It doesn't have to be covered by this committee as well. It's duplication of effort, I think, on everybody's part.

The Chair: The decision to review the WCB was a decision made by this committee after the public accounts committee had dealt with that motion, so if this committee chose to do the review, the review is open to any aspect of the WCB.

Ms Murdock: Yes, I know.

Mr Bradley: I just consider it almost pointless to go through this process after the building is built and so on. I mean, it's done. The best you're going to be able to do is wag your head at the end of it and say, "Isn't this awful?" But this all should have been done before the building was constructed. This is hopeless. I don't know if the auditor's time might be spent doing something else, once the building's built. That's the problem; you have to get these before they happen. Once it's up there, it's up there.

Ms Murdock: So are you recommending that he not?

Mr Bradley: If you people want to do it, that's all well and good.

Ms Murdock: That's fine. We can eliminate that whole section.

Mr Bradley: I'm prepared to go along with it, but I'm saying it isn't worth a damn.

The Chair: The point is, if I may say this as the Chair, we can only give direction on this committee as part of your report. The decisions of another committee are not before this committee. The decisions of the public accounts committee have been made and they involve this review, so it's a matter you're free to comment on however you wish, but you can't control what another committee has decided to do, and that is, take this direction.

Ms Murdock: Obviously, we had no concerns about it being looked at by another committee; otherwise it would not have been included as one of our recommendations.

Mr Yeager: I'm a little unsure what my direction is on this. Shall I complete a discussion of Simcoe Place in the report or delete it? Would you like this discussion, perhaps the very discussion we've had today, put in as a section?

Mr McLean: I think we should have a complete audit on the whole building after they've moved in and find out really what the cost was of the furniture, what the cost was of all this stuff. I think that's a good recommendation, to have that.

Ms Murdock: So do we.

Mr McLean: Whether they do it or not, who knows, but at least it's some direction.

The Chair: Are you saying that you simply want a copy of the report that goes to the standing committee on public accounts?

Mr McLean: No. What they're doing is making a recommendation that the auditor directed the WCB to assess long-term staffing projections, utilization, cost reductions, downsizing and automation, which is something they should be doing anyway.

Ms Murdock: Yes, and that is what is being done. It has already been recommended by public accounts, because I too sat on that committee. The Provincial Auditor intends to have that done as well. What we could possibly do is re-emphasize or confirm that this committee is also concerned with that and that the result of the audit in 1996 is going to be of great interest to this committee. It would re-emphasize the fact that more than one committee is interested in what Simcoe Place is going to cost and so on. I suppose we could do that.

Anyway, it wouldn't matter. If public accounts tells them to do an audit and this committee tells them to do an audit and resources development tells them to do an audit, the result is that the auditor is going to do an audit and all three of us will get the same report.

Ms Margaret H. Harrington (Niagara Falls): Is that clear enough?

Mr Yeager: Yes, fine.

The Chair: Item 9, funding strategy.

Ms Murdock: The growing unfunded liability is of great concern.

"Although the WCB has significantly reduced administration costs, the target rate for employer assessments has been kept as low as possible to avoid inflicting hardship on employers who are already suffering the effects of the ongoing recession. The WCB must develop a new funding strategy which addresses the viability of the system into the future."

Our recommendation is that they "should conduct consultations with the workplace parties and provide a report to the minister."

I should say that in December 1993, the bipartite board, again in a unanimous decision, because of the questions in the House on the increased rates and the experience rating to some of the employers, where the average increase was 3% but there were some companies that were getting 25%, some that were getting more than that and some that were getting less, because of all that, the board capped the rates at no increase higher than 33%. Both the employers and the labour side at the board agreed to that. In the meantime, it is frozen. It hasn't been increased. It has been frozen at the 33% maximum. But it can't sit like that for ever because the board obviously, with the declining revenues, needs to get its assessment experience rating done and figured out.

I should add too that the assessment rating was a three-year project which all the employers had demanded and asked for. There were many companies that had a high experience assessment rating and were being charged a high rate, yet they had a low accident rate. It was the employers themselves who got that whole exercise started. As a consequence of that, many employers were moved out of one section into another section, depending on their accident rate.

It makes sense to me and I presume to everyone else that you should be paying on the basis of how many accidents you have in your company. If you have a low rate of accidents, then your assessment rate would be lower, and if you have a high rate of accidents, your assessment rate would be higher. That just makes sense. But that has to be more defined and delineated, and those consultations in my view should start. They actually are under way, but they should really be working hard towards getting an assessment rating system that the employers can live with.

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The Chair: You are saying there is a cap of 33% at present. So all the controversy we heard about 75% rate increases was not factual?

Ms Murdock: As of December 15, 1993, the board capped it; a unanimous decision, I might add.

The Chair: That's interesting.

Mr McLean: So those 4,000 companies that were increased 75% over the 1993 rate is not an actual fact.

Ms Murdock: They will not be increased more than 33%. They capped the increase at 33%. Don can explain it in more detail. He attends those meetings.

Mr Eady: The board sets assessment rates usually every October. Before that, in the summer, the board goes out and consults with labour and employers on what the new assessment rate should be. You may remember hearing some talk about an average rate being $3.04 and a target rate being $3.20, and that the difference between the target rate and the actual rate is essentially the unfunded liability. You may recall that from, I think, September.

In October, at the board of directors' meeting, they voted to increase assessment rates on average 3%, but that had the effect that some people were going down dramatically, like hospitals, for example, because, as Ms Murdock said, they had a better accident rate and therefore their rates were declining. Most of the members probably got letters from their local nursing homes or people who were facing quite dramatic increases. The board's initial decision in October said that the average assessment rate would be roughly $3.04 or $3.03.

Ms Murdock: Per $100 of payroll.

Mr Eady: Per $100, which was an increase of about 3% over the 1993 rates. But that had the effect, and most of the members heard this in their constituencies, of some firms having quite dramatic increases: 30%, 40%, 50%.

The board listened to the employers and to questions in the House and revisited the issue in its December board meeting and decided to cap any rate increase so nobody's rate would go over 33%. So if somebody's rate was projected to go up 66%, it would only go up 33%. That has the effect of an average rate now of $3.01 and an average increase overall across the board of 2% instead of 3%. That's what the board decided unanimously in December. That's what the 1994 rates will be. You wouldn't have heard that in September because the board hadn't made the decision on its 1994 rates when the hearings of this committee were held.

Mr McLean: But when you consulted with the employers in October, they recommended and agreed to have a rate increase?

Mr Eady: There are, I believe, four employer members and four injured workers/labour members of the board. They've all voted unanimously to change their decision that they made in October; in other words, to cap the rates at 33%.

Mr McLean: Was there unanimity in October?

Mr Eady: No, I believe it was a split vote.

Mr Bradley: We raised it in the Legislature.

Ms Murdock: The House wasn't sitting --

Mr Bradley: No, we raised it in the fall and they woke up in December; they didn't have their meeting till then. So don't say the House wasn't sitting. The only reason we got this is because the House was sitting and we raised it and the opposition made noise about it. Then the WCB did something about it. It's the only time they did something about it.

Ms Murdock: I find that somewhat difficult to believe. I'm sure that the four employer representatives on the board of directors are not little wusses who have no ability to speak for themselves or argue against the labour side. It's just incredible to me that they would not represent their constituent group efficiently.

The Chair: How do you spell "wusses"?

Ms Murdock: I have no idea. Wimps. Use the word "wimps" instead.

Mr Bradley: Just a general question, since highways are difficult on those of us driving in these days. Who produced this particular document?

Mr Curling: The wonderful government of Ontario.

Mr Bradley: I would have guessed that.

Ms Murdock: I was asked to hand it out to the membership, and I did.

Mr Bradley: Fine.

The Chair: In fairness, this was strictly a reference note sheet for the government members, and because Ms Murdock was reading from it, she agreed to kindly share it because Hansard and Mr Yeager needed it rather than to try to write as she was reading, and then Ms Murdock decided she should share it with all the committee. So it's just their own government members' notes.

Ms Murdock: Our recommendations.

The Chair: The reason we started this way, Mr Bradley, was that it was agreed we would go through what the government recommendations were, discuss them and then the two opposition parties can make their recommendations and then we'll all discuss those too.

Actually, that completes the government discussion on funding strategy, so we would then move to the official opposition.

Mr Bradley: Looking at this particular report, it's full of self-congratulatory language which I think does nothing to enhance the position of this committee in trying to effect substantial changes at the WCB. When I read the words "unprecedented consultation process with stakeholders," that's built-in government propaganda.

"By its very nature, consensus building does not attract headlines." That's saying that the news media, because this is good news, aren't going to cover it. "The committee urges the WCB to continue its excellent efforts to prevent and detect internal and external fraud." That's only an opinion of the government members, "excellent efforts."

Ms Murdock: No one's disputing that. That's exactly what this is.

Mr Bradley: I just go through and look at all the loaded words that are used in there to be self-congratulatory which may make government members feel good. I don't know if it's going to make the kind of changes we need at the WCB because, at some point in time somebody, whoever it is, is going to have to pick up the pieces of what's happening right now, and woe betide the government in power in 1996 with some of the stuff that's going to have to be rectified.

I think by putting in the congratulatory words and the government propaganda, it does not help to improve the circumstances that exist at WCB for whatever government has to take charge at that time.

Mr John C. Cleary (Cornwall): My colleague talked a little bit about number 3. Where are those positions that you filled, and I think you said 35, located? Are they located throughout Ontario?

Ms Murdock: No.

Mr Cleary: All are right in Toronto?

Ms Murdock: Right.

Mr Cleary: They will all be in the new building?

Ms Murdock: M-hm.

The Chair: Could you say that audibly?

Ms Murdock: Sorry. Yes. I mean they're looking at fraud throughout the whole system, but they're doing that from a central location and they will be part of the new building. They are part of the old building.

Mr Curling: My only concern too -- I just wanted to re-emphasize what Mr Bradley said -- is that I think the purpose of all this is to maybe make a better Workers' Compensation Board and make it more effective.

Let me then say to you that presenting this helps us maybe to focus -- and again you're subject to the criticism. But really, having read these, which are your notes, I don't think after the day is over, workers' compensation will be improved in any respect. I don't think the message is sent.

There's a clear message that must be sent in the restructuring, reformation, renewal or the renaissance of the Workers' Compensation Board: that the people it is serving feel that they are served and we get a better service from this institution. I'm not quite sure that the message here was sent forcefully.

We've got to make sure that the report we rewrite sends that message to the Workers' Compensation Board. That's why I focus on the fact about what the auditors and what the committee said, "Oh yes, you have been a naughty, naughty person. You went out and bought this wonderful place, this very expensive place. People were against it," but saying to them afterwards, "Let us reassess it later on" -- we know if it is expensive or not or whether people want it. I don't think they'll ever buy the fact that a move like that should have come now, but that's after the fact. It's done. I don't even think it should be mentioned in the report because the auditor's report will be watching that one very closely.

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I think, too, that in the case of the fraud and the things that happened there, a stronger message must be sent through our report, that some forensic audits should be done and things like that should be done in there, so it does not repeat in the workers' compensation how we deal with the client group and how the compensations are paid. Those are my comments.

The Chair: Mr Curling, I think we'd better be very clear for Mr Yeager's sake, because you're saying you don't think that should be mentioned in the report and yet this committee and the two opposition caucuses certainly spent a great deal of the hearing time on Simcoe Place itself. If you're now saying at the drafting stage of the report that that shouldn't be in there, personally, as the chairperson, I don't think that would then be representative of how the review of the WCB actually took place. Whatever recommendations the committee wants to make, that's your choice, but I think there has to be an acknowledgement of the fact that days of discussion of Simcoe Place during the review by this committee did take place. I don't think you can selectively now write a report and not include it.

Now that we've dealt with the government's position on the review of WCB, we need to know what the official opposition's position is on the review of the WCB and what direction you want to give to Mr Yeager in drafting the report of the WCB.

Mr Curling: I hear what you're saying, but let me just emphasize I didn't say to not mention anything about Simcoe Place. I was just saying that it seems to me some recommendations that are being said here about checking about rates and annual costs and all that -- of course we must mention Simcoe Place. I didn't say that.

Ms Harrington: That's what it sounded like to me.

Mr Curling: Well, if it sounded like that, I'm wrong and maybe you got the message. I'm just saying that on some of the recommendations about assessing what's the annual cost and what's the leasehold and the furniture costs, my feeling is that, as Mr Bradley put it, the horse has gone through the gate already -- but of course, to emphasize in our report that we express great concern of that decision of buying Simcoe Place.

The Chair: Mr Mahoney was the one who talked about the carpeting at length.

Mr Curling: Oh yes, because at that time the expenses were being done. Now, I mean, it's bought.

The Chair: Okay. I'm just trying to report accurately about what took place.

Mr Curling: Yes, and I'm just trying to make sure that it is not reflecting that I said, "Don't mention Simcoe Place." I'm saying that we should. If it came out that way, I'm sorry, but we are being corrected.

The Chair: That's fine, we've clarified that.

Mr Curling: The other part there, too, is I think that we had some suggestions. We have nothing written and we're not ready today to do it, and I know you're going to write the report between --

The Chair: You're not ready today with any information on drafting this report?

Mr Curling: Yes, that's right. I should say two things. You see, Mr Mahoney, who is on a task force right now in Hamilton, would have been here but he can't be two places at once. I know that when we had changed to have the report done right away, we were trying to contact him to be here to make a contribution, because he was the leader --

The Chair: But we've known for three weeks, since January 6, that we were going to be drafting this report today on WCB.

I'm only saying that in fairness, because it isn't a last-minute decision of this committee to draft this report today. When we set up what the program for this committee was in the sitting days that were assigned to us by the Legislature, we agreed to complete the reviews of the Ontario Food Terminal Board and we have other work scheduled for next week, and the initial direction for the drafting of this report was assigned as the work for today. I'm simply saying what the committee agreed to.

Mr Bradley: One of the problems I see as well is, as you look into the future, the fear of what the board may expand to in terms of its coverage. Employers and many employees are very concerned, and the general public, that the board is going to continue to expand its coverage to areas where there is a lot of controversy and will do it at great cost to the system. We're going to end up in this province with no businesses when we're finished. I hold no brief for unsafe businesses but I don't know what's going to happen in this province if we keep loading more and more and more on to the plate. One of the things that the committee has to probably make some reference to is an impartial evaluation of what services are provided and what things might be covered in the future.

We are now talking about workplace stress, for instance. On that basis most of us in the Legislature would qualify for workplace stress, I think all parties, knowing the amount of work that each member has within his or her constituency and so on.

I look at some of the new areas which the board or the Chair of the board is looking at, and that can only be reflected in terms of higher costs. Maybe we're prepared to pay it in this province, but it seems to me that there's great resistance to that out there.

The other thing that I think all of us look at, and the government paper makes some reference to this, which I think is positive, is dealing with the fraud. I think the goal of all of us is to service those who are genuinely injured as well as possible.

My concern, as I'm sure it is of all members and our constituency offices, is that we have people who aren't being served as they should be who are injured workers and we have others who simply know the system very well. In one's own mind one might say, "By gosh, if I had the choice of the two, here's one person who I know is genuinely injured and is not getting the service needed and here's another who's doing very well, thank you," and one has to wonder whether that person should not be subject to some of the investigation you've suggested.

It's a goal. I'm not saying there's an easy solution. I'm not saying that. Mr Marchese would know, for instance, that the real dilemma for the WCB is to serve those who genuinely need it. I see many people who I feel are left behind. They phone our offices in desperation, they have a good case and they can't advance it. I see others who are very slick and know how to advance their cases very well and may not need it as much. I don't know whether Rosario has any comment on that. He's had some experience with the board which is helpful to this committee.

Mr McLean: I want to put some recommendations that we have on the record if the official opposition --

The Chair: You're prepared to give some direction.

Mr McLean: I'm prepared to make recommendations.

The Chair: Before you do that, Mr Marchese and Mr Curling wanted to respond to Mr Bradley's comments.

Mr Marchese: Mr Bradley raises good points. The point is, how do you get to that? Quite clearly, an injured worker has to prove that he has the problem and has to get medical approval for that injury; the doctor says, "Yes, there is evidence of this problem," and if it's of long duration you go to a specialist to get other opinions from the specialist. Based on medical evidence, however that is determined, then you have a case.

It is true that sometimes some individuals will take a long time to get through the system and others who know the system better will get through it faster. But I'm not quite sure how you make that whole process easier. Mr Bradley, while recognizing what you're saying, I'm not sure how much more efficiently we can do that.

Mr Bradley: Just in response, part of it was that you mentioned the investigation of fraud that would take place. I saw the words "excellent efforts," which immediately sends a red flag up for me, but efforts nevertheless have to be enhanced in that regard, it seems to me, in trying to determine that. Because there's only so much money out there, I want to see that money and those resources get to the people who are genuinely in need. Unless we tackle the issue of fraud, as I think there are at least some initial efforts in there to do, then that's going to mean that the people who are genuinely in need are not going to be getting as much as they should in terms of service from the WCB.

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We've all gone through cases with people who are really deserving and just have run up against a wall every time and then we've run into other cases where some of us may suspect the person is not as injured as perhaps is suggested. I think certainly the efforts on fraud have to take place. It's not a witchhunt you want out there. It's simply trying to designate the people genuinely in need and get the resources there. I have a fear that the system will collapse if we don't get hold of the financial end of it, and nobody benefits from that. That's my concern.

The other thing I mentioned -- I don't know if you heard it, Rosario -- was the concern about the expansion of coverage to new areas, that I don't see mentioned in here, that at least has to have a very careful assessment before we move forward.

I'm not saying a consensus may not develop among employers and employees and the general public, that there may be an expansion. I'm just saying that they're extremely controversial now, and we know every time we expand that there is a dollar sign that must go with that. Your government has found and every government finds that once you get in power, all the other things you'd like to do, financial circumstances just don't allow you to do.

I'm trying to get the best bang for the buck out of the WCB. I don't want to put it crassly in financial terms but that's the only way you're going to get service to those who genuinely need it.

Mr Curling: I want to add to the four recommendations that Mr Bradley put forward. I hear him saying, and we fully agree and that's how the Liberal Party stands on the recommendation, one of the things he just mentioned about no expansion of coverage, and we feel we don't need any more expansion within the workers' compensation.

Earlier on, he mentioned also about no compensation for stress, which we are quite concerned about.

Mr Bradley: Without consultation. I think there has to be consultation. The point I'm making is very careful consultation and consensus developed before we move into new areas. I don't know whether we can totally close the door to new areas but we certainly have to have a consensus out there before we move forward.

Mr Curling: The third one that he mentioned which is of great importance is value for money. We have to get value for money for what we do.

The fourth one, fraud, I mentioned earlier on about having better controls. Maybe a forensic audit should be done to make sure that the system is not abused.

There are four other areas which I would like to mention and put on the record. We want more accountability by the board of directors. We feel that could be of assistance in improving the place. Better governance is another one and then better control.

At one stage I think I heard, and I'm re-emphasizing, no new claims, and again we're going to go into an area of getting other claims thrown into workers' compensation. Right now I think it's overburdened. We must make sure that if there are any new claims they will be well researched and well done, because there are a lot of new claims that are coming in which cause a swelling of the payments and sometimes more abuse anyhow.

We're not looking forward to seeing any rate increases because everyone is completely concerned now that increasing rates to the employer is another cost to actually running business, and another straw that could break the camel's back is an increase. As far as the employers are concerned, they don't need that. What we need is what we haven't got: value for money and that the place is run efficiently.

Those are the recommendations we would put forward. The report will reflect them and we hope the Workers' Compensation Board and the government act upon those.

Mr Marchese: You said no new claims, and if there are going to be that they're well researched. Am I understanding you correctly? Claims happen, injured workers declare an injury and the claim is established and then you follow the usual procedures where you have a doctor's report and, based on that, the WCB adjudicators make a judgment on the case. What are you suggesting?

Mr Curling: Maybe I should say no new types of claims. In other words, I'm not saying that no other claims should be done -- venturing into new areas of claims for compensation, whatever the term.

Mr Bradley: I guess because one would logically say there would be new claims coming in every day. It's expanding into new areas without a lot of consultation and consensus, which is needed.

Ms Murdock: When I raised my hand to be recognized, it was because Mr Curling had said that there would be no new claims. I thought, we can't preclude the board from making those decisions; that's what they have a board of directors to do. But I agree with Mr Bradley. Actually, we probably couched it in language that he doesn't like, but it's not saying much different than 2(i) on our recommendation, that any policies or any development of any program of any coverage area should be subject to rigorous scrutiny, and that would include with all the stakeholders. We agree on that.

Mr Curling: If I can just make it clear, I agree with Mr Bradley too. I'm saying no new types of claims.

Ms Murdock: You're correct; you clarified yourself.

Mr Robert Frankford (Scarborough East): I don't know if I really want to spend the committee's time, but I felt compelled to respond to some of the remarks over there. Am I not correct that getting into new claimable disorders, if you like, is not purely an administrative or political decision? Isn't there some committee or board which discusses that? Is there not something that makes it objective?

I know there are going to be soft areas around the edges, but supposing some new hazard of work appeared, something that has not be covered in the past, I'm sure that would have to be automatically covered. We cannot decide now that ultimately the types of injuries that exist right now are what can exist for the future. I mean, we have to allow for changes that we cannot predict. I'm not saying that the areas around stress and mental disorders, say, should be automatically included or excluded, but I think that the process is more objective than I get the impression you're saying.

If you want to move into broader areas, and I think the committee presumably could, one of the questions about coverage is whether one brings in work situations which are not covered at the present time. I believe the banks are one of the big areas which are excluded. If we want to discuss that, no doubt we could, but I think that is being discussed elsewhere. If the committee wants to deliberate finally, I don't think we have enough background from what we've done in our hearings to make any great decisions on that.

Just while I'm discussing that, if one really wants to go broad, what about the possible implications of a significantly shorter work week, which is being looked at? I'd be interested to hear from the advocates of that approach what they would see in relation to the WCB claims. I think one might even see ways in which that could reduce compensable injuries. Maybe it wouldn't, but I think it's an interesting topic that will be discussed.

Mr Curling: If you let us respond to him, although not going into debate now, the understanding of what the purpose of the Worker's Compensation Board is all about is that it is an insurance agency. You pay for it and there is certain coverage which is properly defined. What type they are covered for they will pay for. The fact is that there are many, many things, I'm sure, that people will suffer from in the workplace. I presume that they look for the most common and then compensate people when they're injured in the workplace or whatever, "injured" meaning from whatever degree -- mental, physical etc.

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Therefore, if we're going to start looking at wider areas, there's no free lunch in this world. If you're going to pay any more money out, you've got to get the money from somewhere. So that has an impact somewhere else. You either have to increase the fees or -- just like your dental plan that you have with the Legislature -- there are certain times you go there and they'll tell you they only pay a certain amount, that they're not covering all of that.

If we say we're going to expand more into that area, they then have to pay more. We have to be very careful. I don't want to get into a debate about that, but it is best we make sure that when we go into new areas we must be prepared to pay more.

The Chair: At this point we are finding out what the Liberal caucus recommendations were in the drafting of this report. That's where we are in this meeting.

Mr Cleary: It's been mentioned here several times by the government that it was a board decision, you know, some of this. What I want to know is the present makeup of the board. Are all the positions filled at the moment?

Ms Murdock: Yes.

Mr Cleary: And the present makeup?

Ms Murdock: Four labour, four management and the chair.

Mr Cleary: That's it, and they're all full?

Ms Murdock: Yes.

The Chair: Thank you.

Ms Murdock: No, just a minute, because I would hate to have this come back to me saying that I lied when it would certainly be unintentional if I did. There is, I believe, one position that is coming up for reappointment.

Mr Eady: Section 56 of the Workers' Compensation Act provides for two positions, the chair and the vice-chair, Odoardo Di Santo and Brian King, and then it provides for a minimum of five and a maximum of nine directors. I believe there are only eight directors. There technically would be another position open. There could be six; there could be nine. It would be correct to say that theoretically we could put another person on that board. But the idea is that there would be four from the labour and injured workers' community and four from the employer community. Those positions are all filled now.

Mr Bradley: One can understand how you want four from each so-called side or position on the board. When they vote, each board may have a different way of doing it. If there is a tie at 4 to 4, is the chairman a voting chairman and is the vice-chairman a voting vice-chair?

Mr Eady: I believe that's not necessarily specified in the statute, but it's specified in the rules they govern themselves by. The chair would break a tie and in the absence of the chair the vice-chair, Brian King, would break the tie. I think they have a procedure whereby the vice-chair and the chair don't vote to make ties. Let's say you had 5 to 3; you wouldn't have Mr King and Mr Di Santo voting to deadlock. I think that's generally the way they operate. They try, I think, to work on a consensus basis as much as possible.

Ms Murdock: Just as further explanation too, for Mr Cleary's sake, on the legislation on the composition of the board, the nine, it just says that there's to be equal representation from labour, management and one professional member of the community. It can be either a member of the community or a professional person. But usually what they've done in the past is they've had that person wear both hats, and there have been nine present, but it's down to eight now.

Mr Eady: The statute says that the board may be composed -- it's not mandatory -- of representatives of workers, employers, professionals and the public, I believe is the way the statute is worded. So when all governments have been trying to appoint people, sometimes they may have a rehabilitation specialist who would be sort of filling a medical role on the board, or they may have a lawyer on the board, or somebody who doesn't have any direct affiliation with either employers or injured workers' groups or labour unions or workers' organizations. That's generally the way that works.

Mr McLean: I'll take about 10 minutes and I will put on the table some recommendations, some observations and some comments, having the opportunity to sit through the hearings on the WCB and the discussion that took place with regard to many of the issues surrounding the WCB.

Somebody recently described the workers' compensation system as a zoo of good intentions run amok. By all accounts, whether it's from the viewpoint of employers, workers or government, workers' compensation is in serious trouble. It's got an $11.5-billion unfunded liability that is growing at an astonishing rate. Skyrocketing premiums are delivering death blows to many of our existing businesses and making Ontario less attractive for new business, investment and jobs. Meanwhile, the system is seriously failing to address the legitimate needs of those whom it is supposed to help, and those are the injured workers.

So when we look at the facts, this year over 4,000 businesses will face rate increases of over 33% over their 1993 rates, over 27,000 employers will face increases of more than 25%, and we've got 90,000 companies that will be forced to increase their WCB premiums by 10%. This is not fair, and jobs will be lost.

Last February, the Minister of Economic Development and Trade released a study which said that even a minimal increase in WCB rates would lead to job losses and in some cases put companies out of business. That's what the Minister of Economic Development and Trade said. So here we have a board that is increasing the rates substantially.

WCB rate increases continue to skyrocket. Benefit expenditures have increased by over 50% since 1988, despite the fact that the number of accidents has decreased by 37% and the rate of injury has declined by 30%. In addition, the WCB itself has estimated that it is defrauded of more than $150 million annually. We heard all these facts when we were dealing with the chairman of the board and the vice-chairman.

We attribute the debt, the cost and the failure of workers' compensation to the fact that it has become increasingly regarded as an employer-funded social safety net, rather than remaining true to its original concept as a workplace accident insurance plan. It has become a universal system to compensate everyone for pretty well anything, and that is that problem, it's not the solution.

So instead of expanding the mandate and scope of workers' compensation, as some in the current government have proposed, I believe that solutions lie elsewhere, and I will give you some of those solutions.

We should declare a moratorium on all new entitlements, such as stress compensation, pending a long-term plan to manage the WCB's spiralling unfunded liability. I believe that is the first step in trying to get some control.

We should end the political appointments of senior positions, hire a qualified insurance executive as a chair and supplement the executive with an entirely new turnaround management team, also recruited from the private sector.

Following Manitoba and New Brunswick's lead, we should change the 90% of net benefit level to ensure workers don't receive more in compensation than they would if they were on the job.

We should implement a package of administrative reform measures including value-for-money auditing and internal spending controls, which the government's number 9 recommendation aims at.

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We also should investigate some form of copayment to enhance accountability. There's a clear message: The WCB's unfunded liability is out of control. We've got to get it back in control. I would suggest that some of those recommendations I stress there would be a step in the right direction.

So with that, I would say that the six recommendations I'm making, I would like to see them part of the recommendations that Mr Yeager will be recommending or reworking so that we can have some input with regard to that unfunded liability problem that we have.

The Chair: Comment? Ms Murdock.

Ms Murdock: I almost hate to because I thought we'd finish this sooner. Just on Mr McLean's last point, in terms of being so specific about examples of what the board should be doing, it sort of goes along with what I said speaking the last time, that I have some concerns about being that specific; in other words, directing the board that's what it has to do.

I would rather have it fall under language similar to -- not absolute, of course -- "policy and program delivery and development must undergo serious scrutiny" and that kind of thing, and that such policies could include examples of Mr McLean but that are not exclusive to. Do you know what I mean?

Mr Yeager: Yes. Perhaps at this stage we could include the recommendations pretty much as given and then when we have a written document, we can all look at them and see how they balance out and how much everybody is willing to support them as is, or perhaps there could be some flexibility on all the recommendations.

Ms Murdock: Okay, that sounds fine.

Mr Yeager: But that might be the time to --

Ms Murdock: To discuss it in detail, okay. And the other thing is, just for the record, at the beginning of Mr McLean's comments he talked about the numbers of companies that had increases. I would also point out that there were 50,000 companies in the province that had WCB rate decreases. Also, I think Mr McLean was here for the 33% cap that was explained earlier on the record. That's all.

Oh, and I want him to explain, by copayments, do you mean that the injured worker pay a portion? Is that what you mean by copayment?

Mr McLean: We want it looked at. That may be a possibility, getting back into the insurance part of it. You see, the WCB's the same size as about eight of our largest insurance companies in the province. A lot of those people who are involved with those insurance companies have copayments that they make as part of a deduction. It's worth looking at.

Mr Bradley: In regard to the appointment to the position of chair, the reason that I made the inquiries about how the voting goes on on the board is that obviously what this emphasizes now is the importance of the chair and vice-chair, if they are indeed the people who break the ties, because that appointment -- and governments are certainly permitted to do this -- will determine to a very large extent the direction in which the board is going to go.

Mr McLean has suggested that they not be political appointments. I think he meant by that that they not be partisan people. We've had over the years a number of people with a partisan background. Dr Elgie was appointed to head the WCB. I think Michael Starr was at one time. Mr Starr was a former Conservative cabinet minister in Ottawa. Mr Lincoln Alexander was a former Conservative member in Ottawa. Dr Elgie, who was appointed by the Liberal government, was a former Conservative cabinet minister. And Mr Di Santo at the present time.

We've seen people who have had some political background and I don't know whether you can ever prevent that from happening; in other words, that you want to eliminate that person simply because that person has some political background. But I think there seems to be a bit of a consensus out there that at least, if the board is moving towards more financial accountability, it has to look at whether we want a political person in that position regardless who that person might be.

It's a hard question to answer because some of the people bring a lot to the board, have brought some experience to that board over the years and some concerns about workers' compensation. So it's difficult to say that's going to solve the problem. But I think what we can all observe is that whoever you put in those positions of chair and vice-chair, those people are going to go a long way to determining the direction in which the board is going. It's also nice to have those people come in to committee so that they can hear what members are saying, trying to reflect what their constituents are saying or perhaps what the members themselves believe about it.

So, it's a very difficult question, to totally eliminate anybody who's ever served in public office from that position. But I think it is worthy of noting how important a position that is.

The Chair: I think we've completed the direction to Mr Yeager for the report in draft form on the WCB. We just have to decide when you would like this draft report to come back to the committee. We have an option of doing it the first or second week that the House is sitting after we come back. We come back Monday, March 21. Would you like the draft report to be ready that week or the next week?

Ms Murdock: We are going to have time to read it before we get into discussing it, right?

Clerk of the Committee (Ms Lynn Mellor): We could do it that first week, and Lewis would get it to me in time for me to distribute it a few days ahead of time.

Ms Murdock: Yes, so we have a chance to read it.

The Chair: Is two days ahead of time long enough for you to review it before you're prepared to come back in and discuss it?

Ms Murdock: It is for me.

Clerk of the Committee: Lewis normally would get it to me on Friday at noon the week before and I would produce it and get it out to you that day, so you'd have it on the Monday. At the latest, you'd get it Monday morning in your offices.

Ms Murdock: The committee doesn't usually sit till the second week anyway.

The Chair: No. So shall we do it the second week?

Mr Marchese: Sure.

Ms Murdock: So we'll get the report the first weekend and look at it the second week.

The Chair: The second week would be March 30, so if you could advise your caucuses that it will be dealt with on Wednesday, March 30, because that's got to be finalized that day.

Mr Bradley: Sure, I appreciate that. Madam Chair, I ask this question of you and of the committee. There was a pretty interesting discussion that took place here. Some good proposals came from all sides, good recommendations. If as a result of the exchange that's taken place, any of the caucuses or any individual members of this committee have any further information or recommendations they might wish to submit, would they be permitted to submit them directly, perhaps through you, to Mr Yeager? Is that permissible?

Mr Marchese: With a copy to the members.

Mr Bradley: With a copy to all members, yes.

The Chair: Submit them to the clerk and the clerk will give them to everybody, including the researcher.

Mr Bradley: Sure, because there were some good ideas that came out of the exchange here, I think, and the precise wording is going to be important in these.

Clerk of the Committee: Could I clarify? When sending it to the members, now, Ms Murdock, are you going to be the one substituting on for the duration of this, I'm assuming, so it should go to you?

Ms Murdock: If WCB is going to be discussed.

Clerk of the Committee: So a copy should go to you. Okay.

Mr Yeager: Could I ask, could there be a cutoff date for these additional materials?

Ms Murdock: Yes.

The Chair: Yes, in fairness, that's important.

Mr Bradley: Do you want to suggest a date?

Mr Marchese: The end of February?

Mr Yeager: The end of February would be excellent.

Mr Curling: Okay.

The Chair: That's fair. All right, so any further submissions will be made to the clerk's office by the end of February.

DRAFT REPORT
ONTARIO FOOD TERMINAL BOARD

The Chair: Now, members of committee, we have another report, the Ontario Food Terminal, to give direction to our researcher, Mr Richmond. Our schedule was to sit from 10 till 12. Would you rather finish this and then not have to return this afternoon?

Mr Marchese: That would be my preference.

Interjections.

The Chair: All right. Let's move along, then, and we'll get into the Ontario Food Terminal.

Mr Curling: That was democratic, eh?

The Chair: Well, I heard a consensus.

Mr Curling: I don't have difficulty with that actually.

The Chair: Also, there is still a subcommittee meeting today for the subcommittee members.

Mr Curling: Let's just shelve the report now.

The Chair: Oh, sure, it's up to the committee.

Everyone received a copy from the Ontario Food Terminal this morning, so I'm open for discussion. Mr Richmond has a draft.

Mr Jerry Richmond: Just some points.

The Chair: He has some briefing notes here which are now being handed out to you, so maybe what we should do is just quickly get into Mr Richmond highlighting this. You don't have to read all this to us, but perhaps you can highlight some of the areas you might want the committee to give you direction on.

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Mr Richmond: Madam Chairman, I didn't realize I was on. Could I just run to my office? I didn't bring my material here. I thought you were going to be adjourning.

The Chair: Oh, heck.

Mr Richmond: It will take me two minutes. Do you want me to speak to this and then run out?

The Chair: Yes, why don't you do that, because then they can start speaking.

Mr Richmond: The notes that I prepared I finished this morning. They're probably self-explanatory but I'll just highlight them. What I attempted to do is to provide you with some suggestions, guidance, to assist you in considering recommendations, although we all know any other issues any member wants to bring on the floor, that's up to the committee to consider. I'll just highlight some of the headings here.

It seems that one of the main issues at this round in looking at the food terminal, in contrast to previous committees that focused in on the perpetual leases, was the possibility of reviewing updating the enabling legislation and the various regulations that govern the operation of the food terminal.

What I've done there in the first section is I've just put down some notes. They're really options and strategies. The general options, the first bullet point there, just puts down some of the options that you may want to consider and weighs some of the pros and cons.

I guess at one extreme there's the option of trying to come forward with an entirely new statute and supporting regulations. That may have certain strengths or weaknesses.

Below that you have what I've termed the possibility of housekeeping amendments, the possibility of looking at the regulation-making power, and the last one, the thrust of the recommendations, is just providing general direction to the food terminal or OMAF in approaching the issues that have come to our attention.

I guess we've all had many years' experience around this place. If the government or the committee were to consider an entirely new statute, I just set forward there some of the usual things that happen when statutes appear before the House at this place. It's not a simple task. I'm sure we're all familiar with this.

Usually, the government initiates a consultation process with the so-called stakeholders. They may then come up with a draft report, a draft piece of legislation, and then that might be discussed at the ministry level. It may eventually result in a bill that's given first reading, and then it would go through the normal process, referral to committee. I think we all know that can be a quite complex and time-consuming task.

The only reason I put that forward, if you went to consider an entire review of the statute, is there are other stakeholders besides the food terminal itself. There's the whole broader agricultural community: farmers, growers, processors, the people who use the -- yes?

Ms Jenny Carter (Peterborough): I'll wait.

Mr Richmond: I just put that forward for you to consider. That relates back to the first point of the strategic options the committee may want to go into.

Then this possibility was suggested, the third point, of one possible way of getting around this. The committee could recommend the thrust of some interim or housekeeping amendments to the statute pending a more detailed review, and may also address some of the matters which cabinet might see worthwhile putting forward in the form of regulations.

Those are really strategies and I think they're very germane to what we discussed over the two or three days, just to put it into some context. Of course, it's entirely up to you to decide which route you want to take.

The second point: When I prepared this, I obviously hadn't seen the detailed submission we received on the food terminal's suggested amendments to the statute, and I must admit I haven't analysed this. I will do that over the break. But based upon our deliberation over two or three days and the initial discussions, I've identified there, from my notes yesterday, what some of the major issues are relating to this matter of the possibility of reviewing the act. They're just set out there. I think they paraphrase some of the debate, some of the points put forward by Mr Carsley and his officials and the members of the board.

I tried to be as inclusive as I could, but if someone else has something else, we're certainly open to addition. I just quickly last night and this morning thought I'd put these into some context. So you can glance at those.

The fourth bullet point may be of interest to you. I attached some material on conflict of interest and spoke to the Conflict of Interest Commissioner's office this morning. You'll see the results of that.

The general impression that I got from them and looking at the various materials, and this we can certainly discuss, is that if an agency like the food terminal, of its own accord and possibly with consultation with the Ministry of Agriculture and Food, sought, as a board, to prepare conflict-of-interest guidelines for its board members, the indication that I got, and this is from the Conflict of Interest Commissioner's office, and I'm sure each of you have probably met privately with Mr Evans --

The Chair: Oh, yes. We have to.

Mr Richmond: I know we met him and he seems like a pretty respectable fellow. He has a lot of experience. Anyway, the impression I got from his executive assistant was that if the food terminal board sought, as a body, to prepare internal guidelines on conflict of interest, they felt they could do that. They also felt it would be unlikely, if they had these internal guidelines, that someone would challenge that. I thought I'd just pursue that a bit.

Mr Bradley: In that regard, that is an increasingly important component of any board any more, this conflict of interest. We have seen it in government, but in a lot of appointed agencies or even somewhat voluntary agencies it becomes increasingly important, because there is always someone outside looking in and saying, "The reason that decision was made was because this person has a vested interest." So I think that recommendation that it be developed, even internally, is a very valuable one today so that we don't have people feeling that they're being discriminated against because somebody else has a vested interest in something that's going on at the Ontario Food Terminal.

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Mr Richmond: The other document that I attached, in cooperation with my colleague Ray McLellan, who I'm sure a number of you know from other committees he's worked on, mainly public accounts, over the last number of years -- Ray assisted me this morning and I've attached the Management Board of Cabinet guidelines. I've put a star next to their statement there on conflict of interest with regard to appointees to ABCs.

I think all this stuff seems to point in a general direction that the public interest, if I could put it broadly, is served. There seems to be a mood for public agencies to get into this, at least to clarify the situation and maybe set some guidelines or ground rules. So that's before you for consideration.

Beyond that, on the conflict of interest, I also made reference to the fact that one of the board officials, the assistant general manager, made reference to the fact that in years past, on occasion, some members of the food terminal board at their meetings had in fact declared a conflict of interest. So there's mention of that.

The other points, I think, reflect the matters Mr Carsley and the board members put forward.

Over the page, page 3, I also have a handout. Most of you got this earlier. I did a background briefing paper when we first began this and in that document spoke to a number of issues. I think those are very relevant and most of them came up during our deliberations. I've got, back in my office, some extra copies of that report that I want to get for anyone who doesn't have it with them or may not have got it because of the substitutions.

On page 3, I've identified a number of other issues the committee may choose to address. They relate more to the deliberations of the committee and some of the background material that I walked you through the very first day. I'll just highlight those. I'm certainly prepared, if you have questions or clarifications, to speak to them.

The food terminal, as you would know and as I mentioned in my background briefing paper, has prepared a five-year corporate plan in which they speak to various, mainly capital improvements that the food terminal should undertake. Some of those things they've undertaken; some of them they've yet to embark upon.

One of the major capital improvements that's been spoken of, but I think the board has faced financial -- "difficulties" is too strong a word, I guess; they've been in a dilemma to try to find the money to finance this -- is the extension of the deck over the farmers' market. That's one of the major outstanding capital improvements that I'm aware of. So I'm really putting this forward. The committee may want to comment on the corporate plan and some of the capital improvements that you, as a committee, feel the food terminal should undertake.

The second point there I think has been flogged around. Mr McLean can probably speak to this; so can you, Mrs Marland. The question of the perpetual leases has been around for a long time. I've attempted to encapsulate there just some of the points of debate and I think this has been recognized. There are historical reasons why they exist, and then you can debate whether they're equitable or just. I think if the board did want to get out of them through the possibility of revoking them there's also the question of having to buy them out. The food terminal board might be open to legal action.

The other possibility I've put in there is when the market and the economy improve. The board did have, in the late 1980s, their C unit project that they embarked upon. They did some of the initial engineering and architectural design work and expended some money for that, but some of the leaseholders, with the change in the economy and the onset of the recession, some of the people who had signed agreements to move into the C units backed out. In the aftermath of that, and there's documentation on it that you've received, the board cancelled that project.

On those C units, my reading of some of the previous committee deliberations was that they were regarded as a possible way of opening up the food terminal somewhat to get away from the perpetual leases, because the thinking was that these C units, if they had been built, would have been leased on a short-term basis. They wouldn't have had that perpetual aspect to them, the automatic 30-year renewal.

That's one possibility the committee may choose to touch upon, that if and when the economic situation improves, you may want to give the food terminal direction that it might think of reactivating a project like that.

Mr Bradley: Just a clarification, if I may, on the term "perpetual leases": I did not recall when we were doing the tour whether anyone had mentioned to us that those leases continue if someone dies but someone else in the family takes over the farm operation or the operation. Does a lease terminate when someone dies?

Mr Richmond: I'm afraid we'd have to get clarification for that from the food terminal itself.

Ms Murdock: She's saying no. There is a representative for the Ministry of Agriculture and Food who can advise.

The Chair: Would you like to come forward and answer the question?

Ms Marianne Holder: I'm Marianne Holder from the minister's office. I believe that the leases can be passed on to children and that this is one of the reasons they were instituted as perpetual leases.

Mr Richmond: Some of the other points: In my earlier briefing paper there was some mention of the issue of privatization. What I was informed earlier, during the regime of the previous government, during the Liberal term, was there was some analysis of that. Some of the food terminal officials did travel down, I think they told me to New York state, to look at a market there that was privatized.

As to my sense of the privatization issue, unless the committee should decide otherwise, I don't think it's really in the cards. The sense I get is that the perception is that the food terminal is a long-standing public agency, 30 to 40 years, set up in legislation in the late 1940s and came into being in the early 1950s. My sense is that there appears to be a recognition that it's performing a valuable function in serving the wholesale produce market.

The Chair: I think that's going to be up to the committee to discuss. I think it's good that you have included it here. Everything is on the floor as far as the committee is concerned.

Mr Richmond: The next point there is the discussion of the food terminal having to make a voluntary or otherwise contribution over the three years of the social contract. Mr Carsley spoke to this, and also the chairman of the food terminal. I have it in my detailed files. I think it was distributed to you earlier. Mr Ireland wrote a letter to the Premier expressing his misgivings over this. That's an item on the table for the committee. I don't know whether the committee will seek to take a position on this.

We heard the board's argument. There can be debate over this, but even though they are a public entity, they feel that they do not take money from the public purse, that they've been essentially self-sustaining and they've retired their initial debt to set the place up. It can be a matter for debate.

The other point, and I didn't get a sense that this is a controversial one, but the committee may wish to comment on this, maybe give the food terminal some direction or maybe even some kudos, is the point of the impact of the recession and increased competition. That appears to be more of a matter for commentary but the committee may decide otherwise. I'm just reflecting on your discussion of this to date.

Knob Hill Farms, it was mentioned, has a wholesale outlet and there are a few others. From the documentation the food terminal officials provided to us, the food terminal so far appears to be holding its own and performing a function in the market, despite competition from elsewhere. It serves the greengrocers -- but you can certainly debate this.

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The waste reduction plan was explained to us and I think we saw all those different coloured carts at the food terminal where they appeared to be quite diligent in putting cardboard and wood waste and everything else. They seem to be making a serious effort at the 3Rs. The committee may wish to comment on this. From your debate, I didn't get a sense that this is a controversial issue. The committee may wish to recognize this and possibly even commend the food terminal for getting into recycling and the 3Rs in a big way. They did admit that part of the incentive here was the increase in the tipping costs to Metro's landfill sites, that it was an incentive to them to reduce their costs of getting rid of their garbage.

The cost centres were mentioned. The food terminal has nine of them. We asked for a detailed breakdown on the revenues from the cost centres. I don't know whether that's in this package here. The committee may wish to comment on them. Their major revenue centres are the leases and the admission fees. I think it was admitted by the board officials, and you certainly saw it on our tour, that the rail cost centre is quite underutilized. I think they said they get about 50 rail cars a year. Over the 40 years, the mode of transport for fresh produce has shifted from railway to truck.

The question the committee may wish to consider, and I had this in my initial briefing paper, is whether the food terminal should maintain the rail siding -- you saw the space and extensive covered area -- or possibly seek to also use that in the interim for trucks. They might have to make some physical modifications. The other option is that they carry on as now. When we went there, it didn't seem that covered area was being greatly used.

Then I have just put in there that there may be other miscellaneous matters that any of the members, based upon their interests, or at the constituency level, or their status as critics or having an interest in agricultural matters, may wish to bring to the table. For example, there were several questions over testing and inspection of agricultural produce for pesticide residues and irradiation and the like. Those may be very topical issues. The impression I got, though, from the board officials, was that's really beyond their mandate. They mentioned that the federal Agriculture Canada inspectors have an office and have access for their random testing that they conduct at the food terminal, but I didn't get any impression that this is a direct mandate and responsibility of the food terminal itself. So that's it.

Mr Curling: I just wanted to say, as a matter of procedure, that if we're going to really write the report, we just got this, which is very helpful, I might say, and we just got the food terminal board comments. What we're going to do now is to almost make recommendations or formulate this report. In the meantime, we're reading this.

The Chair: It's up to the committee, Mr Curling. If you wish to take Mr Richmond's notes and the submission you received from the Ontario Food Terminal this morning, and come back and give direction to Mr Richmond about the draft report, that's up to the committee. If you wish to do that, you can come back this afternoon, which may not be enough time for you. The option is that you could take this material away and we could come back to one of our meetings in the beginning of the session and give direction at that point to Mr Richmond for our draft report.

Mr Curling: The reason why I recommend that approach is that even if we talk about whether we go making new regulations or amending the present act or making a new act, it's quite a decision for us to say in the report that's the direction to go.

In all fairness to us here, I presume the recommendations from the committee are taken seriously. Therefore, we've got to take it seriously so the recommendations can be taken seriously. I'm just concerned whether or not we have that assessing time and are able to evaluate both reports here.

The Chair: Mr Richmond referred to this. I've only been here nine years, but this is the third review of the Ontario Food Terminal --

Interjection.

The Chair: Is it the fifth in nine years? It's the third since I've been here anyway. The point is that maybe it is telling this committee something, that the Ontario Food Terminal comes up for review and then it comes up for review again. Maybe this would be an opportunity for the committee to do something that was in depth and constructive, and maybe you do need to spend some time formulating the direction you want to give Mr Richmond in drafting the beginning of the report. I'm at the direction of the committee here.

Mr Marchese: I would be personally prepared to say let's postpone the discussion of this if the opposition members say, "Yes, we need more time to reflect on both what the board members have produced and what the researcher has given to us today." If that's their desire, I'm perfectly all right to go along with that.

I was prepared to say something quite different, by way of making a recommendation, but rather than getting into what I would have been prepared to recommend, if the members want to put that discussion off, then I would not get into that discussion and would say yes, let's put it off if that's what the opposition members want to do.

Mr Bradley: You've whetted our interest now.

Mr McLean: This is the third time I've been through this. The perpetual leases were always a major issue, but every legal advice we ever got said we'd be in trouble if we tried to change it. So you're either going to take the bull by the horns and make some recommendations of changing it -- my observation is that we should be dealing with an option of internal housekeeping to try and satisfy some of the concerns the board brought to us.

I would like the ministry to have a look at the changes they made to the act to try and see if it is possible to do that. I'd like to see some cooperation that it can be done and not just put off and off and off. It appears to me that the board feels it is a priority that we do something. I would like to see some minor amendments to try and do it.

The Chair: What you would like to see is a response from the ministry to this presentation from the Ontario Food Terminal that we just received this morning.

Ms Carter: I think the first thing to point out is that in fact this food terminal is doing a very good job. It's doing an excellent job and there only seems to be the one really major point at issue, which is the question of the Ontario produce only at the farmers' market. The other things are relatively minor.

What I'd like to suggest is that we don't reopen the act because I think there are downsides to that, one of which is this whole question of whether it would be perceived as a trade barrier or not under our new NAFTA agreement and so on. That would then come into the picture. I understand that the board hasn't had much in the way of discussions with the ministry on this particular issue and that there's still scope for it to do that and maybe to solve this problem through regulations. Apparently the judge actually said they could've made a regulation to control this issue. I think in any case it would be better to have it as an internal policy rather than something that is dependent on the change to the legislation, if that can be managed.

I think that is what needs to be looked into, rather than just adopting what the food terminal board themselves have said, and looking at the legislation, at this point.

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The Chair: You're asking for it to be looked into, which is the same thing really that Mr McLean is asking for, so you can find out what the boundary of the committee's scope is actually.

Mr Frankford: I was going to ask -- or I would do my own homework -- to get some indication of what the previous reports have looked at and emphasized. I hear the question about the perpetual leases. I don't know if there were any other --

Mr McLean: It's all on the record.

Mr Frankford: Okay. I will be happy to take the time to look it up myself. I'm not quite sure why it was chosen yet again, although I think it's a very interesting agency. It probably does a great deal more than we've really recognized. It seems to me it's probably a very fine balance at the moment. Things could be changed, but if one pulls something out, this would perhaps upset that balance.

The Chair: This agency was selected by the government members of this committee; that was their choice, in case you didn't know that.

Mr Frankford: It seems to me that it really has a very broad economic impact. It is the primary market for the entire province. It seems to me that it serves a valuable function for the smaller ethnic markets which are developing. It probably has a very strong economic stimulus role. It makes me think of Jane Jacobs and her contention that it's cities that produce agriculture and not the other way around.

The one question, as Mrs Carter mentioned, that the board was concerned about was this question of Ontario-only farmers' markets. I'm sure that's something we would very much like to encourage, but I am afraid there is the possibility that this would upset the whole fine balance by possibly opening up questions about international trade rules. I would certainly be very happy to receive more discussion and to know what the ministry's position is on this.

Mr Cleary: It's going to be hard not to repeat here because I agree with some of the previous speakers. I think the terminal has served its purpose well. It's done what it was set up to do. There are not many things that've been in place since 1946 that haven't been changed, and probably need changing. They mentioned the ethnic market and different things like that.

I guess what I would like to see is the downside of what Mr McLean had mentioned, and that was the bottom one on the front page, that "a possible option is to proceed with interim housekeeping." I would like to see the downside of that if there is one.

Mr Marchese: Given what Mr McLean said, perhaps I, too, would comment on that. Part of the essential question for me, from yesterday's meeting was, do we need to change the act or not? These are the questions the researcher also raises in his two points. That's what we need to answer before doing anything.

My feeling is, and I raised this question yesterday, although the lawyer didn't quite agree, that we should look at the change on the regulation-making powers as a way of getting to all of the issues that were raised. My sense is that we can do that.

We should proceed to look at all the questions that have been raised, particularly with restricting the sale of produce in the farmers' market section to the Ontario-grown only. We should move to that because I support that and I suspect all the committee members support that. I think we should look at that within the context of regulation-making powers.

All the other questions are also in here, which the researcher has identified -- conflict of interest; I believe fees were mentioned yesterday as a matter and I'm not sure whether you mention that in your research, but these are questions of regulation-making powers that were under question or doubt and it's here. All of the questions that have been raised are in here, including the whole notion of the perpetual leases. I wouldn't mind asking the ministry to look at the pros and cons of that because we haven't done any research, or to look at the whole question of what are the advantages and disadvantages of doing that in a way that would allow the members to make a wise judgement on whether or not that's good to do.

We should be studying the issue as a way of saying, "Will this affect the market or not, or in what way might it affect the market?" That would be by way of looking at disadvantages, and if there are advantages to doing that, we should also be studying that, but we need that before we can make a judgement. It's here as an issue that the ministry should be looking at, which we can then, as a committee, also address once they've done that, including privatization. We haven't done any studies that speak to this issue by way of looking at advantages or disadvantages of this. I might be interested in looking at this matter because in a way it's running as a private system right now. The only difference is it's a government agency, but it's really running as a private system at the moment.

The Chair: On government land.

Mr Marchese: The land is ours, obviously. That's the issue we would have to look at when we look at privatization or not.

But I wouldn't mind looking at some study that looks at that issue, and it's all here. All the issues are raised here, including what the role of the government should be in relation to the Ontario Food Terminal. I wouldn't mind us getting their opinion or study on that matter.

All the issues are here. Looking at the options, I say the general option the researcher has identified is the direction I want it to move in, and I think other members are moving in that direction as well, and that is looking at the housekeeping amendments, which Mr McLean spoke to, changing the regulation-making powers and/or the regulations pertaining to OFT, more specific regulation-making authority, direction to the OFT and the Minister of Agriculture and Food to change operating procedures and internal -- all of that, I think, can be accomplished and should be the option we should be looking at.

If all of that fails, once we've looked at that, then we as a committee should seriously suggest that the act should be looked at, because clearly the regulations were not working, but I see that as an option down the line. I think we should move on that option. I support what Mr McLean was saying as well and perhaps we might clearly get a direction from the Liberals on this as well.

Mr Curling: I told you the first time that we can't consider it today.

The Chair: Then shall we agree that we ask for a response?

Ms Murdock: Mr Bradley wanted to speak.

Mr Bradley: On this issue, I think there is an important direction we're aiming at now. I'm also interested, I must say, in what the Minister of Agriculture and Food has to say because very often you get a different point of view from an organization which has viewed this for a long period of time.

I think Mr Richmond has identified a number of very important issues to deal with. The one question that perhaps superimposes itself upon this whole discussion is that of whether legislation or regulation can deal with this.

I had a little bit of a period of time to stay later at the food terminal and I discussed this issue at some length with the individuals there. The impression we got as a committee was certainly that they felt legislation was going to be required. I indicated clearly to them that the fastest way and the most efficient way to deal with it, if there's a consensus in the committee, is by regulation. It also raises the fewest red flags with our friends to the south.

If this can be accomplished through regulation, even though I'm one who believes government shouldn't always move by regulation, I feel that a lot of this can be done by regulation.

The second option, of housekeeping, is the second most attractive option. I think to open the whole act up may be some problem.

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The Chair: I think there's certainly consensus on what it is you're all interested in. Do you want to do it by a formal motion to ask for the response from the ministry or do you want us just to do a letter to the ministry via the clerk's office? I think maybe we should have a motion so that we know what it is you're asking the ministry for.

Mr Curling: We could have a motion. McLean will start it off.

Mr McLean: I think what we should do is recommend to our researcher that it's item 3, or the last one -- some minor amendments would be what we would be looking at -- and that he should be in touch with the Ministry of Agriculture to try and help him draft us back a recommendation that we feel would be acceptable and would pass as an amendment.

Mr Curling: You're moving that motion?

Mr McLean: I'll move that motion.

Mr Curling: I'll second it.

The Chair: You're asking for a draft amendment to the act?

Mr McLean: Which would incorporate what the board is kind of looking at, but I would want it done in cooperation with the ministry. There's no point in going through the whole process and the ministry says: "That's no good. It's out."

The Chair: But that's a little different. What you asked for earlier --

Mr Marchese: Not an amendment to the act. To the regulations.

Mr McLean: I don't care, but I want him to look into what we can do.

The Chair: I think what you need is a response from the ministry to this submission from the Ontario Food Terminal Board. It makes sense that the ministry is going to give you a response to all of this.

Mr Curling: I heard Mr McLean say a bit more: not only a response, but if we're going into the direction of regulation, for them also to say that wherever they see that regulations can be made in order to make it effective, that's the direction we want to go. But we want some comments from the ministry.

Ms Harrington: But we're not asking for an amendment to the act.

Mr Curling: Yes.

The Chair: Not at this point, I don't think.

Mr McLean: We're asking our researcher to look into the possibility of how we're going to incorporate this in some form or another in a recommendation that we would make to the ministry. That's all we can do.

The Chair: Then we agree, from the direction from the committee this morning, that Mr Richmond will deal directly with the ministry to establish what the recommendations should be in the draft report to address those areas you've all spoken about, and when the draft report comes back, then we'll find out how you can do it.

Mr Marchese: That would be fine.

The Chair: You can debate it then.

Mr Marchese: To add, though, by way of preamble, I think we can communicate to them in addition that the committee is interested in changing the regulations so as to allow them to deal with the matters that have been raised, and the critical areas that were raised have to do with restricting the sale of produce in the farmers' market to Ontario-grown only and the other matters of conflict of interest and the fees. These were the critical points they raised. As a preamble, I think we should state that we want to change the regulations to deal with those and other matters that are raised on the other page, and then simply ask for the ministry's comment on that and other matters in terms of how we proceed.

The Chair: Do you think you would like to have another meeting before you review the draft report? Would you like Mr Richmond to be able to report back to you before he actually starts to draft that report?

Mr Curling: Yes.

The Chair: Is that what you'd like?

Mr McLean: I think he's got enough to draft a report.

The Chair: I'm asking you what you'd like, Mr Richmond.

Mr Richmond: With all due respect, Madam Chair, I'm a bit confused, if I could use that word. I wonder whether the committee may want to direct the Chairman to write to the Minister of Agriculture and Food on behalf of the committee, asking for some direction on both the food terminal's draft and the issues raised in my memo. I'm just proposing this.

If the Chairman wrote to the minister or the ministry, and the minister or ministry would respond to the committee, indicating those areas -- I sense that one of the themes the committee would want primarily is to get what the opinion is technically of the ministry on these issues and then to get a sense from the ministry of which ones it feels can be best addressed through regulation.

The Chair: I think the thing that's happening here, in fairness to the committee, is that normally there would be a draft report that the ministry would respond to. What we're asking here is for the ministry to respond to the questions raised by the committee before the committee drafts its report. That is a little different.

Mr Marchese: That would be fine. I'm not sure what the other members have to say. I was saying I had an opinion about a preamble that says the committee members are very interested in changing the regulations to deal with some of the questions that have been raised, and I mentioned three. I think there was agreement around that.

Around other issues, there may not be any agreement. They're matters that are raised that will solicit further debate, not just in the ministry and in its consultation with other people, but within our own caucuses. That's another matter to be dealt with, but we would appreciate their opinion on those as well. But as a preamble, we want to say that we're interested in changing the regulation around some of these issues that affect the terminal and stating that as a matter of principle. I'm not sure if the other members agree.

The Chair: I think what Mr Richmond is saying to you is that he would prefer that direction to the minister to come from the committee rather than from him.

Mr Cleary: Madam Chairman, I guess everybody's going to jump in here, but I would move what Mr Richmond said. I think it's a good start.

Mr Richmond: One possibility: The clerk and I, with the committee's direction, would certainly work with you, Madam Chairman -- we'd have to review today's transcripts and we have this documentation too -- to compose a letter that the Chairman would send to the minister. Subject to your direction, I am certainly willing, as I'm sure Lynn is, if need be, if the ministry wants to meet with Lynn and myself to discuss that letter, to meet on the committee's behalf with officials from the Ministry of Agriculture and Food. I'm not saying I'm not willing. I'm just saying that I think the committee's probably in a stronger position if the communication comes from the committee through the Chairman.

Mr Curling: I was trying to get your attention because you had asked, "What is our direction?" The reason I raised this in the beginning is that first I heard from the Ontario Food Terminal that there are certain things it has proceeded with. They lost in court and they think that if they exercise these things, they'd have lost in court whether or not -- the judge told them, "You can't because you come here with a regulation and feel that by regulation you can change your mandate." I think I heard that from them.

Now here they are presenting a couple of things they'd like to see changed. You have put some options to us to consider, whether we go through legislation or regulation. When I made the comment to you at the beginning, it was to say I'm not quite sure that the things they're saying here can be accommodated in regulation. I'm speaking as a layperson, not a lawyer.

I'm saying that we could get some response from the minister and from the legal body on the things they're asking for here. Maybe we don't have problems accommodating them, but we're not quite sure whether we can accommodate them through regulation or through legislation. Let us not go through that cycle.

Therefore, could you comment then, understanding that some guidelines, excellent things that research has told us to look for, what direction we are going -- could you comment back so we could proceed in making a report?

The Chair: I'm going to get our clerk to tell you what she's going to include in the letter to the minister.

Mr Marchese: Before you do that, could I make a brief point?

The Chair: Go ahead.

Mr Marchese: The policy just raised something that I thought was useful as well. Is the committee interested in listening to ministry officials as well with respect to this, or the lawyer of that ministry? Perhaps that might give us a face-to-face encounter with them and we could submit this to them and then have a meeting with ministry officials and the lawyer to be able to raise this in person with them. Is the committee interested in that? We could do this simultaneously, by the way.

Mr McLean: It's not our job. Our job is to make recommendations.

Mr Marchese: Fine.

Mr McLean: Then we'll have to continue the hearings.

Mr Marchese: The point I raise is that what we would get is exactly what we would get, presumably, from having them in front of this committee; it's the same job.

Mr Curling: We're saying if they can direct such a letter. They can have these papers. They don't need to tell us; they can respond through these. We don't need to have a hearing again.

Mr Marchese: Sure, I support you.

The Chair: Let's listen to the clerk.

Clerk of the Committee: What I would include in the letter to the minister would be a copy of today's Hansard, the notes that Jerry submitted and the draft that was received from the Ontario Food Terminal, asking them for their comments -- when reviewing the Hansard, I'll get the specifics into the letter -- and to have that documentation back to us by the end of February. Then you will have the material in time to go over the draft report with Jerry when the House comes back, whenever you determine you're going to do that draft report, and you will have had time to look at it and caucus it and you'll all be able to have a position on it.

The Chair: Okay, that's very clear. Is there agreement on that?

Mr Marchese: Sure.

Mr Curling: Agreed.

Mr Richmond: I didn't realize I was going to be on. I came over here before lunch just to distribute this memo. There has been reference to a lot of background documents, corporate plans, things like that. There's a memorandum of understanding. There's my background briefing paper. As to the background briefing paper, not to flog things that I've done, I really think that if you don't have that, you should have a copy of that to take back for yourselves and your caucus. If you're going to stick around, if we do adjourn, I could run over to my office and bring some over.

The Chair: We can just send it to their offices.

Ms Murdock: To those people who are normally on the committee.

Mr Richmond: Some of you should have it.

The Chair: Those members who are dealing with the WCB, so that would be you.

Ms Murdock: Yes, but this isn't WCB.

The Chair: Oh, the Ontario Food Terminal.

Ms Murdock: I'm not normally on this committee.

The Chair: I don't think we have any more questions on the Ontario Food Terminal report drafting at this point in the meeting. Unless there are any other items of business of the whole committee this morning, we will adjourn the whole committee and have a meeting of the subcommittee. Are there any questions of general business for the whole committee? Seeing none, then we will adjourn the committee meeting for today. Thank you for your attendance. We'll have our subcommittee meeting.

The committee adjourned at 1244.