INTENDED
APPOINTMENTS
RAY PORATTO
CONTENTS
Wednesday 11 March 1998
Subcommittee reports
Intended appointments
Mr Ray Poratto
Mr Vaughan Minor
Mr Joe Mavrinac
STANDING COMMITTEE ON GOVERNMENT AGENCIES
Chair / Président
Vacant / À remplir
Vice-Chair / Vice-Président
Mr Tony Silipo (Dovercourt ND)
Mr Alex Cullen (Ottawa West / -Ouest L)
Mr Michael Gravelle (Port Arthur L)
Mr Bill Grimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)
Mr Bert Johnson (Perth PC)
Mr Dan Newman (Scarborough Centre / -Centre PC)
Mr Tony Silipo (Dovercourt ND)
Mr Joseph Spina (Brampton North / -Nord PC)
Mr R. Gary Stewart (Peterborough PC)
Substitutions / Membres remplaçants
Mr Bob Wood (London South / -Sud PC)
Clerk / Greffier
Mr Douglas Arnott
Staff / Personnel
Mr David Pond, research officer, Legislative Research Service
The committee met at 1010 in committee room 1.
SUBCOMMITTEE REPORTS
The Vice-Chair (Mr Tony Silipo): I call this meeting of the standing committee on government agencies to order. We have three intended appointees to review today, but before we do that, we should deal with the subcommittee reports. First on our agenda would be the report of the subcommittee dated February 5, 1998. Could I have a motion dealing with that.
Mr R. Gary Stewart (Peterborough): So moved.
The Vice-Chair: Mr Stewart has moved that. Any discussion? All those in favour? Opposed? Carried.
Next would be the subcommittee report dated February 9. Could I have a motion on that.
Mr Stewart: So moved.
The Vice-Chair: Any discussion? All those in favour? Opposed? Carried.
Mr Bert Johnson (Perth): Mr Chairman, that was the 19th?
The Vice-Chair: That was the 19th, the second one.
Mr Bert Johnson: I thought I heard the 9th instead of the 19th.
The Vice-Chair: You may have. I may have said the 9th; it was the 19th.
The third report from the subcommittee is the one dated February 26. Again, a motion.
Mr Stewart: So moved.
The Vice-Chair: Any discussion? All those in favour? Opposed? Carried.
INTENDED APPOINTMENTS
RAY PORATTO
Review of intended appointment, selected by official opposition party: Ray Poratto, intended appointee as member, Algoma, Cochrane, Manitoulin and Sudbury district health council.
The Vice-Chair: We move then to the first intended appointee, who is Ray Poratto, as member of the Algoma, Cochrane, Manitoulin and Sudbury District Health Council. The process basically, as I'm sure it has been explained to you, is that we will have up to half an hour that we'll spend with you. We begin with giving you an opportunity to make any opening comments you might have and then we'll go around with questions from the committee members.
Mr Ray Poratto: Good morning, ladies and gentlemen. My name is Ray Poratto. I'm from Sudbury. My status is a semiretired, private sector small business person; a northern Ontarian, three generations on one side and four on the other.
I was a member of the Manitoulin-Sudbury District Health Council for a little over a year, as a consumer rep. I was attracted to the council from a number of viewpoints: a couple of doctor friends, as well as the fact that I have had a good deal of contact with the health care system over the past 60-some-odd years, having had seven children and nine grandchildren, having cared for aging parents and having been married for 43 years, so certainly I have had some consumer contact with the health care system.
My activities in the community span a great deal of time with service clubs and the chamber of commerce and, at the present time, the seniors' advisory council and a number of others. I hold no office at the present time in any organization in that I'm semiretired.
I enjoyed learning the health care system more intimately in the past year and became aware of the tremendous challenges and was excited by the plans and the opportunities the health care system was leading towards. I also appreciated some of its failings, but most of all, I guess, the excitement of all the changes that are taking place. Coming from small business and the private sector, I watched changes frequently in my affairs, dramatic changes, and it was with a great deal of interest that I watched the changes that are taking place in the hospital restructuring in Sudbury, the goal of better service at a more sustainable cost, so I have had an exciting year and that's the reason I indicated I would be happy to continue.
I'm very familiar and happy with administering change. I guess the only people in town who are enjoying as much excitement are in the education system. I can't play a part in that because I'm pretty busy elsewhere, but I wish I could because they are in the throes of that exciting activity.
I have an indulgence to beg of you. I have a new ear plug on order, so if your questions would come across slowly and well enunciated, I would appreciate it very much. The one that I had was not satisfactory; I fed it to the dog. My wife said I'm not only a little bit hard of hearing, I have a double disability. I challenged her to name what that other disability might be, knowing full well that I don't have any other, and she said, "You are often a poor listener in addition to being slightly hard of hearing." I could take that. Thank you for inviting me.
The Vice-Chair: Thank you, Mr Poratto. We'll try and go through with the questions in the way you've suggested. We'll start with Mr Cullen.
Mr Alex Cullen (Ottawa West): Welcome, Mr Poratto. I'm glad you're here. As I read the Hansard from the previous session when you appeared before this committee, you entered the district health council in some controversial time. Now you've had more than a year's experience there and I'm just wondering if the controversy has abated any.
Mr Poratto: My experiences with the district health council have been varied. I reviewed and attended a number of the committees that the district health council had, all the way from home care to community access to long-term-care planning, mental health, emergency health services. While I have not studied or reviewed in a great deal of detail any of the committee work, we oversee in a broad policy manner the functioning of the district health council.
I'm pleased to see the amalgamation of the health councils in northern Ontario because I think we have a great deal in common. We'll have more clout with the ministry and we'll probably save some dollars because we will reduce a lot of the duplication and we'll be able to share some of the excellent expertise that is out there.
I was excited when the report was made about the streamlining. I see it as similar to the education business, if you will. So I'm excited to play a part in that and I guess the part that I play is that I bring the lack of fear for change.
Mr Cullen: Just to follow up on your lack of fear for change, there were some significant changes happening in Sudbury with the issue of the lab services, the issue of northern services and as well some of the community proposals for the Sudbury Memorial Hospital. This has caused some division in the health council. How has that sorted itself out? Are the decisions of the Health Services Restructuring Commission going to be able to be met within the original time lines, for example, that they set out? That's not our experience in Ottawa-Carleton. Is that your experience in Sudbury? What does the health council say to that?
Mr Poratto: At the beginning, when I joined the district health council last year, I had a different opinion than the one that was eventually handed down by the commission, to be quite frank with you. As I studied the report and the analysis and laid that against some of the experiences I've had in amalgamations, I came to accept that it was the right way to go.
It is now being illustrated clearly that the large regional hospital in Sudbury to serve the entire catchment area is going to do an excellent job in comparison to the three bricks-and-mortar piles that we had duplicating and creating a lot of confusion and a lot of costs. So while it shocked quite a few people in Sudbury, and quite frankly some of us in the district health council, we've come to realize that it will provide benefits for patients, cost benefits, and the doctors are happier. It's going to be quite a transition and we're up to it.
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Mr Cullen: I'm glad to hear that you're up to it. I guess the concern we're finding across Ontario is that the health restructuring commission's time line is extremely aggressive and requires both ministry initiative and community initiative to make it happen. They can close, but they can't open. They can shut down a facility, but they don't have the ability to put in the replacement facilities that are needed. It's very clear that the Health Services Restructuring Commission intends that the replacement services be in place so that there is a seamless transition. In Ottawa-Carleton we're finding that all the hospital closure deadlines have been postponed, that indeed the community has to find $47 million to come up with its share of the new facilities as a result of two and a half hospitals being shut down.
I'm interested in understanding, from your perspective, will the health restructuring commission's objectives be met within its current time lines? What is the burden that's going to be placed on the community in Sudbury to pony up their share -- at least 30% -- of the cost of something they didn't ask for?
Mr Poratto: On the question of replacement services, we are very diligently working on home care and community care committees and alternative service to patients. I just read yesterday where Mr Rock, the national --
Mr Cullen: I was asking about how your health council was coping with the time lines that the health restructuring commission has brought down, the ability to provide the seamless transition in service, because I understand these time lines were very aggressive and require that replacement services be in place by the time the facility closed. My understanding is that there is not the ability to provide this service in time and therefore the closures are being pushed back and the new money that's supposed to go into home care, long-term care, is not being made available because the community has to come up with its share of the funding. Is this a problem that the health council has been talking about?
Mr Poratto: As far as the Sudbury district health council is concerned, we're certainly not going to see people put out of the hospital on to the sidewalk. We have committees working diligently and we have a series of reports to find replacement organizations and home care services that will take the place of those people who are in long-term-care settings in the hospital who don't need what some person referred to as a $700-a-night bed.
We in Sudbury don't have a great fear that replacement beds will not be available or replacement services will not be available. They're being produced at the same speed that the hospital restructuring shutdown is taking place.
Mr Cullen: When is Sudbury Memorial to close?
Mr Poratto: Within the next year and a half, I understand.
Mr Cullen: That's the original time line that was suggested by the health restructuring commission? The closure of Sudbury Memorial, is that supposed to happen in 1999?
Mr Poratto: Yes.
Mr Cullen: You had mentioned the committees that are working on home care and community care. This is an issue that's also important in my community and elsewhere in the province. Are there waiting lists now for home care in Sudbury?
Mr Poratto: Yes, there's a good deal of home care organization taking place.
Mr Cullen: Are there waiting lists?
Mr Poratto: I can't tell you offhand if there is a specific number. We don't foresee a problem. We don't have a problem with a waiting list. There's no crisis on this question. There's no crisis on emergency health services. There's no crisis on people being phased out of the Memorial Hospital. The doctors and the chief of staff have specifically said that. We had that announcement made just the day before yesterday. The new regional chief of staff indicated that there was no crisis in either of those areas.
Mr Cullen: My very last question deals with the new health council structure and the large territory that it covers and the availability or accessibility of this health council to talk to the residents in the outlying communities, their ability to come to health council and to speak to the needs in their community. Has there been a concern expressed about this larger geographical area and how difficult it is for people to come hundreds of miles to one of your meetings?
Mr Poratto: First of all, when I read the report, or parts of the report, on the streamlining of the councils from 33 to 16, I liked it. I automatically liked it. It sounded good. It sounded like it made a lot of sense. It sounded like it would improve efficiency in that we would have a large district health council that would be reviewing and servicing people from northeastern Ontario who have a lot in common. We have a lot of geography in common and we have a lot of natural resource problems and health problems in common, so I was pleased with it.
I saw the opportunity to perhaps save money from the three administrative organizations, district health councils, so that we could have one better tuned and have some money left over that could be expended elsewhere in other programs and in other expertise that we could bring to northeastern Ontario. I didn't have any problem. I also see the opportunity in a larger health council of having a lot more clout with the minister.
Mr Cullen: No, I'm asking about --
The Vice-Chair: I'm sorry, Mr Cullen, we're going to have to leave it at that. We're just slightly beyond the 10 minutes. We move to the Conservative caucus.
Mr Stewart: Thank you, Mr Poratto, for your presentation. It was interesting to hear that you are not a believer in the status quo and that you welcome change. I think that's what we're talking about in this province today.
But following up on the question you were asked, many of the district health councils in the province wanted to amalgamate and wanted to get together with an additional one, again to try to achieve those savings that they can put back into the system and indeed to the patient. Did your councils, the councils we're talking about, the new ones, want to get together?
Mr Poratto: Did they want to get together with the other councils, do you mean, in Algoma and Cochrane?
Mr Stewart: Yes.
Mr Poratto: I think it's a difficult thing for individual, smaller councils to reach out. They have their own parochial interests, if you will. It's a difficult question to ask them to take the initiative and reach out. It seems to me it's a lot more logical to have someone from an overall view who says, "This would be beneficial. Here is a model that would produce a number of benefits."
I'm not disappointed, in other words, Mr Stewart, that the councils don't individually take that initiative and go to their neighbour and say, "Why don't we get together and share?" I'm not disappointed because I understand that's not uncommon. They're embroiled and occupied in their own activity for their own neighbourhood or their own region. It's a suggestion that has to come from outside.
That's the reason I enjoy playing a part on the district health council, because I can bring that balance of outlook from the small business sector where we reach out all day every day to everyone in order to survive. You know what the mortality rate is, so we are constantly reaching out, looking for more expertise, looking for a sharing of those things. I think it's a good thing.
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Mr Stewart: The comments that were made this morning regarding time lines were interesting. Certainly the original mandate of district health councils was to plan. Unfortunately there was a time when district health councils didn't plan; they were to pass or spread the biases of the particular government of the day. It appears to me that they're now back into what they were originally mandated for, the planning part of it.
We've heard much this morning about time lines. If you've been in business, which I assume you have from what you're saying, time lines are of the essence. If, as some governments and people in the past have done, they study things to death and they don't put time lines on, nothing ever gets done. Do you feel that the progress in the amalgamation of these boards and the expertise you bring can more than offset the supposed short time lines we hear of this morning?
Mr Poratto: I'm the first to be impatient on that whole question.
Mr Stewart: Great. I'm glad to hear that, sir.
Mr Poratto: Because of my background, decisions are made and implemented almost immediately. Two of my doctor friends who are on the council said, "It's good to have you there, Poratto, because you're constantly bringing that balance into the equation: `Let's set some time limit on this; let's set some targets; let's get it done.'"
I don't mean to be critical, but while people from some of the other sectors are perhaps more inclined to study something to death, we're risk-takers in the private sector. We can't take four years to decide to make a decision; we're dead. We have to move forward. I hope to bring that balance that I have.
Mr Stewart: I appreciate that. I'm a great believer in continuity of service. I'm also a great believer in consistency of representation. I appreciate your coming, sir. Thank you.
The Vice-Chair: Any other questions from the government caucus? Okay. Mr Poratto, that concludes the questions for you this morning. We'll deal with your appointment after we finish hearing the other presenters this morning. Thank you.
VAUGHAN MINOR
Review of intended appointment, selected by third party: Vaughan Minor, intended appointee as member, Alcohol and Gaming Commission of Ontario.
The Vice-Chair: We now call on Mr Vaughan Minor to come forward. Welcome. As with Mr Poratto, we'll give you an opportunity to make any opening comments you wish, then we'll go around and allow committee members to have an opportunity to ask you questions.
Mr Vaughan Minor: Thank you, Mr Chairman and members of the committee. I'm pleased to be here today and I'm honoured that I'm being considered for this appointment. I believe my past experience and my professional training will be most helpful for the very important work the Alcohol and Gaming Commission of Ontario will undertake in the next few years in our province and in our communities.
As you may know, I'm a professional chartered accountant. I received my training with a large national accounting firm and obtained my CA designation in 1975. I was honoured by the Institute of Chartered Accountants of Ontario when I received my fellowship, or FCA, in 1991. I've been in private practice in Ontario since 1977, and today I operate my own sole proprietorship in downtown London.
In addition to my business experience, I served my community as a member of London city council from 1988 until November 1997, when I decided not to seek re-election. I believe my municipal political experience will be very helpful to this board.
I've also served my profession as a member of the Institute of Chartered Accountants council for three years, from 1984 until 1987. In addition, I've served on a number of charitable boards and committees in a variety of capacities. In 1985 I was selected as one of London's Five Outstanding Young Londoners.
I believe my experience and my professional training will assist me in my role on this board. My background gives me the necessary tools to review applications, hear applications and make decisions that are in the best interests of our province and our communities. Should you decide favourably on my application, I look forward to being able to serve on this board and am prepared to answer any questions you may have.
The Vice-Chair: Thank you, Mr Minor. We start with the government caucus.
Mr Joseph Spina (Brampton North): Mr Minor, thank you for coming and applying for this position. This is an interesting and challenging commission before this province. There are a number of changes that have begun, a number of changes that will be occurring over the next few years, both from private and public sector, consumer pressure and also with the direction of the government.
Some of the challenges are not just in gaming control but also with respect to alcohol liquor licensing processes. As an example, I received a complaint from an operator of a restaurant-bar who through an overlooked situation ended up having an illegal bottle in his establishment. The inspector quite rightfully charged the operator. He had no problem with that. His complaint was that there's no grey area, there's no fine system. If you're found guilty, which he essentially admitted -- but it was an oversight as opposed to a deliberate situation, as everyone seemed to agree -- nevertheless, his licence was revoked for the period of a week. He felt that in addition to the fine he paid, that was a very severe penalty for what was admitted by everyone to be an oversight.
Would you be an advocate, shall we say, of a more graduated system, where you have an operator in the alcohol environment who generally has been a consistently good operator -- honest, fair, played by the rules -- of modifying the penalty system rather than purely you're either licensed or you're not? Would that be a fair situation that you might consider?
Mr Minor: With my business experience, consensus-building is always something I try to promote. In a situation like that, with the legislation the way it currently is, that would be something the government of the day would have to review. My understanding is that the board or the commission can make recommendations. I think situations like that should be at least reviewed and looked at. We should be rewarding the people who are complying with the rules appropriately, and not unnecessarily penalizing them. That could be a recommendation from the commission if they so desired, and the government can maybe take action.
Mr Spina: In your experience, and you have some considerable experience in finance and controls and so forth, the bulk of this really is enforcement and so on, I gather, in terms of the commission?
Mr Minor: Correct. That's my understanding.
Mr Spina: Do you feel that some of your experience contributes solidly to this role?
Mr Minor: I think it can, especially in a situation where an application is being reviewed for some improprieties from a financial point of view or a record-keeping point of view. I know the act is quite specific. The records have to be kept for a certain period of time, although I believe it's less than the time required by the Income Tax Act, so it's a little more lenient. However, I think my experience and professional training and background would assist the commission in assessing those types of situations. I believe it could.
Mr Cullen: Thank you, Mr Minor, for coming here today. The question I have deals with the larger issue. Your background is in municipal politics. You know very well that there's very significant resistance among municipalities to the introduction of, for example, VLTs and charity gaming clubs. You're going to be in the business of regulating this, but we can anticipate, as you well know, when ratepayer groups want to push something off, they will seek every venue they can get so that their politicians reflect the will of their communities. You're going to be there dealing with an application that comes from someone who qualifies under your rules, but coming into a community that does not want this activity, for a whole host of reasons. How do you see your role in this?
Mr Minor: Our role is to enforce the legislation that's in place. My understanding is that municipalities that have indicated their unwillingness to have one of these gaming clubs will not have one forced on them. There are communities in the province that have indicated a desire. One that's very close to London got approved just this week, Grand Bend, so there are communities that are rethinking it. But the board's role is to regulate and enforce, not to make policy or have any input that way.
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Mr Cullen: I come from a municipal background; you come from a municipal background. We know people -- I'll use a strip club or I'll use a triple X video store -- who come in and the community seeks to use every venue, whether a site plan, whether it's zoning, whether it meets the regulations as set out under the act and which you are charged with enforcing. When they come forward, obviously there are standards to be met before you award a licence
Mr Minor: That's correct.
Mr Cullen: You're going to have a community before you. Are you just going to throw up your hands and say, "Well, too bad, talk to your MPP," or are you going to be sensitive to their concerns about what happens when this facility comes into their community?
Mr Minor: As I said earlier, I think the commission's role is to enforce the regulations, to make sure everything is done legally and with some integrity, and I believe there has to be some social responsibility as well, but our role is not to make policy or to force --
Mr Cullen: No, I'm not suggesting that, but you know exactly what I'm talking about here.
Mr Minor: There will be public groups in a lot of municipalities. I believe there were over 70 municipalities in the last municipal election, including my own, that decided they didn't want to have them, for a variety of reasons.
Mr Cullen: Yes, including my own.
Mr Minor: My understanding from what I've read to date -- and I don't know everything about this just yet -- is that the minister has said they will not be forced on communities that have indicated they don't want them. So if a council votes against them, I don't think that will be a problem.
Mr Cullen: Hopefully not. But the lure of this money, particularly for a government that needs revenues, not only to balance the budget, but to finance an income tax cut, I think is proving a great temptation. Certainly the previous governments had come to it after having taken a position otherwise.
Your background with municipal politics: Where the community wants to come forward and challenge an application, I have to assume that there's a public hearing process, that there's due process, that there's an opportunity for the public to intervene and present its views on the issues before the commission.
Mr Minor: That would be my understanding, that there would be a public process.
Mr Cullen: There is the notion of regulation, but there is also the role of the commission in actually providing the service, if that's the right word, under the commission. There's an issue here of separation between regulation and the actual ability to provide service. These are the government casinos you are going to be responsible for. Is there not a conflict that you are both the regulator and yet the agent that's going to be authorizing a service the government itself is going to be receiving revenue from, that it has an interest in having out there because it's counting on this revenue?
Mr Minor: My understanding was there were steps taken last week to separate those two functions. There's no question that the group that's looking after the operations of a facility should not be the same group that's regulating it. It's the same as in the accounting profession. I don't know what your background is, but you don't want to have the same person who is writing the cheques doing the bank reconciliations -- standard, every single client gets the same comment in every single year in all the management letters -- because that's not a good division of duties. This is the same situation, in my view anyway. I think the regulator should regulate and adhere to all the rules, make sure it's handled properly and honestly, and let the other side, the business end, be handled by the other agency. I agree with you.
The Vice-Chair: There being no other questions, thank you, Mr Minor, for coming forward.
We move then to the third intended appointee on our schedule for today and call Mr Joseph Mavrinac, intended appointee as chair of the Ontario Realty Corp.
While he comes in, do you want to deal with concurrence in the first two? We are a couple of minutes ahead of schedule, so we'll give Mr Mavrinac a chance to come in.
Could we then go back and deal with Mr Poratto? Is there a motion?
Mr Spina: Motion to appoint Mr Poratto.
The Vice-Chair: Mr Spina is moving concurrence in the appointment of Mr Ray Poratto to the Algoma, Cochrane, Manitoulin and Sudbury District Health Council. Any discussion on that? All those in favour? Opposed? Carried.
With respect to Mr Minor, is there a motion?
Mr Spina: I move concurrence in the appointment of Mr Minor to the Alcohol and Gaming Commission of Ontario board of directors.
The Vice-Chair: Any discussion?
Mr Cullen: Just very briefly, I think that in the comments Mr Minor made, bearing in mind his background as a chartered accountant, of the separation of the role of operation and regulation, he alluded to something I'm not aware of, that there's some announcement coming down in terms of the structure of the commission and the exercise of these responsibilities. But you can't be both judge and jury and that's a very important principle. I do hope his words are being taken seriously by the government side. Coming from his background in chartered accountancy, I think that just trebly underlines the import of his words.
Mr Spina: I appreciate the comment, Mr Cullen. In fact the government did make that initiative, if you'll recall, a week ago by appointing the responsibility to Management Board Chair Hodgson, and the regulatory issue remains under corporate and consumer relations, Mr Tsubouchi.
Mr Cullen: I'm going to ask for credit for my caucus. I'm going to enjoy pursuing this with my opposite number. Jim Bradley, eat your heart out.
Mr Spina: By all means.
The Vice-Chair: It may make for a more interesting discussion in terms of question period discussions in the Liberal caucus. We'll see.
Any other comments? On the motion by Mr Spina for concurrence in the appointment of Mr Minor, all those in favour? Opposed? Carried.
JOE MAVRINAC
Review of intended appointment, selected by official opposition party: Joe Mavrinac, intended appointee as chair, Ontario Realty Corp.
The Vice-Chair: We move on to Mr Mavrinac. Welcome. I believe you've been here before and you're familiar with this process. We'll give you an opportunity to make any opening comments you may wish and then we'll ask committee members to ask you any questions they might have.
Mr Joe Mavrinac: Thank you very much, Mr Chairman. I do have a short opening statement. I would like to thank the committee for having me here today. I appeared before you a year ago and I was pleased that you at that time supported my intended appointment as director of the Ontario Realty Corp unanimously. I have served in that capacity to the best of my ability. I took my responsibility seriously, attended all meetings and found the experience to be a challenging and rewarding one.
The Ontario Realty Corp has a straightforward mandate. It is the province's accommodation and real estate service agency for ministries. It sells surplus government lands publicly at market value and it balances ministries' real estate needs against the government's overall objectives.
Tremendous change has taken place within the governance of the ORC. The government recognized the need to involve private sector real estate experts to manage assets in a more businesslike manner. ORC was established as a separate crown agency with a private-sector-dominated board of directors, a president and CEO who is not a civil servant -- John Bell comes to ORC with impeccable credentials and reports directly to the ORC's board -- and a memorandum of understanding that clearly spells out the roles and responsibilities of the minister, the chair and the board of directors, and the CEO, as well as administrative and financial arrangements.
The corporate plan highlights the strategic issues that require attention and new performance standards, goals and targets such as reducing operating costs, increased efficiency of space use, accelerated land sales, and outsource of direct delivery of accommodation services such as facility services and technical consulting services to achieve savings of $80 million over the last six years.
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Last week, cabinet confirmed ORC's move out of the OPS, enabling ORC to become self-sufficient as a fee-based agency, and ORC to earn facility management fees, project management fees, real estate transaction fees and asset management fees. All assets are to be owned by the Management Board Secretariat and the new governance structure, including the memorandum of understanding, outlines the relationship of MBS as owner and ORC as its exclusive agent. Legislation will be introduced in the House this spring.
The position for which I am being reviewed here today offers me a great opportunity to utilize the experience I have gained delivering government services over the many years as an elected municipal official. I understand the important role that real estate and accommodation can play in good government, and above all I bring to the table a regional perspective.
The Chair: Thank you, Mr Mavrinac. We'll start with the Liberal caucus.
Mr Cullen: Thank you, Mr Mavrinac, and how do you find retirement from municipal politics? That's not the purpose of my question at all, but you had such a long career in municipal politics that it must be a bit of a transition.
Mr Mavrinac: I find it quite relaxing. It's amazing how fast the phone stops ringing. My wife doesn't miss that at all.
Mr Cullen: Perhaps that's something some of us might look forward to. I served on the city of Ottawa and regional council.
I'm interested in your perspectives. You said you served on the board of the realty corporation for a year, and obviously the government likes your performance because they're promoting you. But you said it has been a challenging time. Perhaps you could describe to us what that challenge was. Was it the challenge of dealing with the downsizing, the 30% target in reducing government leases? Perhaps you could give us some detail on this.
Mr Mavrinac: It was challenging because naturally we have to meet government objectives and the whole nature of the exercise is to reduce costs, to make the whole operation much more efficient, much more cost-effective, and producing a better product and not reducing services. That is a challenge. It was a challenge at the municipal level and it's a challenge here.
Mr Cullen: In terms of the targets, how far are you along in reaching that 30% target?
Mr Mavrinac: Some of the targets that we've outlined in the corporate plan, the accelerated sale of land -- I think in 1997-98 it was $60 million and in 1998-99 we're planning $120 million. That's why we have to have expert real estate agents out there. We have to make sure we give them the proper incentive to do these things: compensation, commissions, just like the private sector does. They have to go out there and make deals to make sure the corporation and the government get the best bang for the buck.
Mr Cullen: In terms of becoming self-sufficient as a fee-based business, this assumes the charging back of market rents towards the government agencies, the more efficient use of lands. This would have to assume therefore that in some circumstances some leases would expire and one would have to go to the market to find a more economically -- these are the kinds of skills that you're looking for, the kinds of skills that the corporation will need?
Mr Mavrinac: I think what we have to look at is BOMA's standards in relation to accommodation for the amount of space required for each of our staff, and if we reduced that to that standard, we could move a lot of people from the high-rent districts of Bay Street and Bloor Street and move them in here, at Queen's Park. Naturally, it will take work to change the whole configuration of a floor or a building, but if that was done, I'm sure it would cost millions of dollars, but in the same light at the end of the day we would save millions of dollars. We'd probably get the return on that in a matter of two or three years and there would be billions of dollars saved over the long run.
Mr Cullen: The change in the status of the Ontario Realty Corp: Does this mean you would still fall under the Provincial Auditor's purview? You know that, not the last one but the one before, the Provincial Auditor's report, there were comments made about the performance of the Ontario Realty Corp. So does the change in your status affect the ability of the Provincial Auditor to make sure that taxpayers' dollars are being properly spent?
Mr Mavrinac: I think we still have the whole structure. We come under Management Board Secretariat; the minister is the individual we report to. We have to be accountable to that minister. All of the financial statements go to that minister, and I'm quite sure that in the overall picture the auditor will have an opportunity to look at those statements and make comments.
Mr Cullen: The red tape review that a colleague of mine from the Ottawa-Carleton area is heading up lists your organization among the other agencies for review, and of course the government has an agenda towards privatization. Please don't misunderstand me, but could you tell me how long your appointment is?
Mr Mavrinac: I have no idea.
Mr Cullen: It's indefinite.
Mr Mavrinac: Last year when I was appointed I knew that it was a three-year term, but as chair I can truthfully say I don't know. I didn't ask.
Mr Cullen: In terms of being the public's trustee of lands and offices that taxpayers pay for, can you comment on the notion of privatization? Have you gone as far as almost being privatized? Is there still a need to have some means of public oversight to make sure that taxpayers' dollars are --
Mr Mavrinac: The whole process of outsourcing all the services, as stated in my opening comments, is going to mean a tremendous saving of I think $80 million over five years. We've done that at the municipal level. I've gone through this now for the last seven or eight years.
Mr Cullen: But why not Cadillac Fairview? Why could Cadillac Fairview not manage the portfolio instead of your organization?
Mr Mavrinac: Because at the end of the day there is going to be a tremendous saving. That's the reason for the initiative.
Mr Cullen: So you don't support the notion of giving over the whole operation of Ontario Realty Corp to a private organization like Cadillac Fairview.
Mr Mavrinac: Requests for qualifications are going out and the employees will be able to bid in a joint venture between employees and whoever is out there who wants to bid on those contracts. We're not putting up any obstacles. After we've shortlisted the request for qualifications, the request for proposals will go out. That's the process. Right now we're hung up because there is a grievance at the policy level. That was heard on February 27, and a decision will be made I think at the end of March, before we proceed. Everything right now is on hold.
Mr Spina: Welcome, Mr Mavrinac. I'm pleased to see that you survived the Kirkland Lake hospitality suite last night at the prospectors' mining convention. I saw you from the other end of the room but I didn't have a chance to say hello, so I do that now.
Just to clarify, it's my understanding that the chairmanship is a three-year appointment from the time that it takes place, for your information, so you're not going to be a senator, Mr Mavrinac, and we fully expect your attendance thereby, as opposed to others.
However, you have been a long-time passionate promoter of the north. You alluded to it briefly at the end of your comments, about bringing a regional perspective to ORC. Could you elaborate on that a little bit, please?
Mr Mavrinac: The north is an area that is very unique, and we have to make sure we improve customer service. I think what we have to do is link the ORC to the regional service delivery restructuring initiative so all of the services will be the same right across the province. That will be a big step forward.
Mr Spina: Fully two thirds of provincial assets are outside of urban areas.
Mr Mavrinac: That's right. I was just going to say that two thirds of the assets are outside of the GTA. A lot of people forget about good old northern Ontario and its uniqueness. I never have.
Mr Spina: That's great to hear.
There are a number of government buildings, as a result of restructuring over the past few years, not just the past couple of years, that are finding themselves vacant or not fully occupied. What would be your method of addressing some of the utilization occupancy rates of these buildings?
Mr Mavrinac: I think this matter was discussed. I discussed this with the president. I would feel very comfortable in the next two or three years if we could move everything owned by the province, especially in this downtown Toronto area, around Queen's Park, and get them out of third-party leases, if that accommodation becomes available and those moves are made. That way you're much more efficient and cost-effective for the government.
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Mr Spina: Thank you, Mr Mavrinac. I wish you well. I think one of my colleagues has a comment.
Mr Stewart: Just a comment, Mr Mavrinac. It's nice to hear that the business perspective is working its way into the Ontario Realty Corp. I'm a great believer in it. In the area I represent, we have a brand-new building and we're getting some fairly heavy concern by some of the private owners down there whom the province has been leasing facilities from for many years, because we're moving them into our own facilities. For the life of me, if I owned a building and a few businesses, I don't know why I would lease from somebody else when I had vacancies within my own operation. In your opinion, how do we deal with this? How do we make sure that the public is aware of what we're trying to do?
Mr Mavrinac: I think it's a matter of education. I'll give you a good example in my backyard, Timmins. We had that facility down in South Porcupine, acres of empty space, and here we were renting in downtown Timmins. Finally, we're starting to move everything in there. For the first time in about 20 years, that building is full, being utilized properly. You have all the government services under one roof and you have one-stop shopping, so to speak. Naturally, as you would imagine, it was not received favourably, but it has to be done.
I think Peterborough is another area; Sudbury is another area. We're going to have to address those, but we just have to tell the people it's their tax dollars we're spending, and at the end of the day those taxes are going to be less if we move out of those third-party leases.
Mr Stewart: I couldn't agree with you more. The other comment you made is that there is an area for outsourcing in a lot of different groups and organizations, and if we are going to create those efficiencies, I think we have to at least be prepared to look at them. There's a lot of expertise in the private sector that I believe government should take advantage of, whether it be through outsourcing or whatever.
Mr Mavrinac: Using my municipality as an example, we didn't have to wait for governments to tell us we weren't getting any more money, because once a mine or a sawmill closes, you have a situation that immediately affects your assessment, affects your overall budget. We started in Kirkland Lake and we outsourced our two sewage treatment plants to OCWA, outsourced our maintenance and janitorial services, snowplowing at the airport, landfill, garbage pickup. We've gone through this; I've lived this now for the last seven or eight years. This is like déjà vu going through this. It's just another level. I'm quite familiar with the whole process.
There again, at that level it's much more difficult because it's your neighbour that you're going to tell that he's going to have to fight for the job with the new service provider. You're going to have to explain to him. It's not like you people down here -- I shouldn't say that, because you have to go back home once in a while -- but at the local level it's much more difficult to implement a lot of these changes. It was done and we managed to not increase our taxes by more than 1.5% over the last five or six years, even when millions of dollars were cut back. That's how we did it.
Mr Stewart: I admire municipalities that were prepared over the last three or four years, and many of the ones that looked towards the future were certainly prepared; they could not rely on funding from the province and have prepared to do so. I compliment you on it, and certainly some of the other municipalities. The unfortunate part of it is that it has been such a way of life for so long that it has made it very difficult for municipalities to prepare or to believe that this was happening. So I compliment you on this.
The Vice-Chair: Any other questions? Thank you, Mr Mavrinac. That concludes questions from the committee.
Can we move then to the issue of concurrence?
Mr Spina: I move that Joseph Mavrinac be appointed as chair of the Ontario Realty Corp.
Mr Cullen: I would be pleased to support the nomination. There's no doubt that Mr Mavrinac brings excellent skills to this position.
I do have some comments to make about the changes that are going to be happening at the Ontario Realty Corp. We're learning today that indeed the corporation is going to change, become self-sufficient as a fee-based business and in effect contract out its operations and allow some or all of its employees to bid on this. Obviously, if they can compete with the private sector, they will be able to buy back their own jobs, but traditionally the experience we've had in my community is at a loss of salary and a loss of benefits. How that is seen as progress I'm not entirely sure. Certainly it's savings to the taxpayer on the one hand but not to the community on the other. However, that's the direction that has been given to the Ontario Realty Corp.
I am concerned as well about this whole notion of -- I asked earlier, and you heard my question, why not simply give it to Cadillac Fairview? Mr Mavrinac didn't bite on that one. He certainly wasn't in favour of that. In essence, what's going to happen is that Cadillac Fairview will be a bidder and will take over the operation of the government's holdings, say, in the megacity of Toronto. So we lose the staff, they have their people, they run around and do it, they manage all those leases, at which point the Ontario Realty Corp becomes simply a coordinator of those people who have bid on the management contract and the private sector will actually do the hands-on management.
There will come a time when we will have the Provincial Auditor's report coming back to us talking about the ability to oversee their management practices, the ability for these ministry offices or government offices dealing with all the complexity of different providers. The Ministry of Health will have a number of different providers because it's spread out across the province. We will not have one-stop shopping. We will not be able to go to the Ontario Realty Corp. We'll deal with Cadillac Fairview in Toronto, Minto in Ottawa, and I don't know who else is out there because the whole process will be complex. It's being seen as, "We'll privatize, we'll contract out the operation and let the private sector do it." Well, why not cancel the whole damn thing entirely?
The reason the Ontario Realty Corp was created in the first place was to centralize and coordinate the government's leasing accommodation concerns and have the economies of scale as a result, and to do it not as an additional cost to the taxpayer but as a reduced cost, because we're not in the business of providing profits to the private sector. They provide services, and if it's efficient for us to go out to the private sector, then we do it.
In my community we do it in garbage but we don't do it in police; we do it in road construction but we don't do it with libraries, and there's a reason for these things. I'm just cautioning this committee that the road the government is going down here in the context of providing for more efficiencies, providing a bigger bang for the buck, to get government out of the business that other business should be in, takes you around in a circle.
You have to realize that 30 or 40 years ago there wasn't an Ontario Realty Corp and it was in the hands of the private sector. Each ministry went into each community and leased directly. When you look at the accounts from the public accounts committee, when you look at estimates, when you look at the whole notion of how the Ontario Realty Corp came about, you are forgetting history and dooming yourselves to repeat it. That will be the epitaph of this government, indeed among many others. I think there's competition to write on the tombstone of this government, but that will be one of them.
Mr Spina: It ain't going to be for a long time.
Mr Cullen: It's there in terms of welfare, because you're forcing municipalities to pay more when they went bankrupt during the Depression over the cost of welfare. That's a bigger picture issue, but just on the small piece issue here, why was the Ontario Realty Corp created? It was to co-ordinate and use economies of scale to protect the public's interest in providing accommodation and provide services.
Mr Bert Johnson: I have a little different recollection of why the Ontario Realty Corp was established. I don't want to be provocative, but as I recall, it was done to unload debt from the province's books on to a different corporation. Mr Cullen and I have --
The Vice-Chair: I have to remind myself, Mr Johnson, that I'm supposed to be neutral as Chair. It's very hard, but I will do my best.
Any other comments? On the motion for concurrence, all those in favour? Opposed? Carried.
Thank you, Mr Mavrinac.
That concludes our business this morning unless there's anything else. Thank you.
The committee adjourned at 1110.