Chair /
Président
Mr James J. Bradley (St Catharines L)
Vice-Chair / Vice-Président
Mr Bruce Crozier (Essex L)
Mr James J. Bradley (St Catharines L)
Mr Bruce Crozier (Essex L)
Mrs Leona Dombrowsky (Hastings-Frontenac-Lennox and Addington
L)
Mr Bert Johnson (Perth-Middlesex PC)
Mr Morley Kells (Etobicoke-Lakeshore PC)
Mr Tony Martin (Sault Ste Marie ND)
Mr Joseph Spina (Brampton Centre / -Centre PC)
Mr Bob Wood (London West / -Ouest PC)
Staff / Personnel
Mr David Pond, research officer, Research and Information
Services
The committee met at 1505
in room 228.
SUBCOMMITTEE REPORTS
The Chair (Mr James J.
Bradley): Our first item of business on the agenda is
the report of the subcommittee on business. There are six
reports. I will look for a motion to approve the six subcommittee
reports that are before us.
Mr Bob Wood (London
West): I move that the reports of the subcommittees of
December 16, 1999; December 23, 1999; January 5, 2000; February
3, 2000; February 10, 2000; and February 17, 2000, be
adopted.
The Chair:
Any discussion? If not, all in favour? Opposed, if any? The
motion is carried.
INTENDED APPOINTMENTS
HAROLD GOULD
Review of intended
appointment, selected by third party: Harold Gould, intended
appointee as member, Ontario Realty Corp board of directors.
The Chair:
Our next item of business is item 7, appointments review. This is
a half-hour review of an intended appointment as follows: from
the certificate received on February 10, 2000. This was a
selection of the third party: Mr Harold Gould, intended appointee
as member, Ontario Realty Corp board of directors.
First of all, is there a
statement that the intended appointee has?
Mr Harold
Gould: I was born in London, brought up in Brantford, I
live in Toronto and run a business out of London, Ontario. I
think you all have a copy of my resumé. I have a fairly
diverse background in business and I currently run a real estate
company that owns and manages a variety of different real estate
types from residential to commercial, retail and industrial. I've
been asked to join the board of the ORC and I'm excited to do
that, assuming I can get past today.
The Chair:
Thank you very much, sir.
This was an appointment
requested for review by the third party, so I'll start with Mr
Marchese.
Mr Rosario Marchese
(Trinity-Spadina): Mr Gould, welcome. Just a simple
question: Why do you want this job?
Mr Gould: I
was asked to do it. I'm in the real estate business. It looks
like a fairly daunting task, but something I have some expertise
in and I think I can contribute to.
Mr Marchese:
My sense is that you are familiar with what the Ontario Realty
Corp does, possibly its mandate, more or less.
Mr Gould:
More or less.
Mr Marchese:
A number of people are very concerned-I wouldn't say a whole lot
of Ontarians; some of the people who read the Globe and Mail-that
the decisions that have been made in a number of instances by the
ORC are biased in favour of those with Tory party connections.
I'll tell you, I'm not one who normally asks these questions, but
the Tories, when we in government, and the Liberals too, to be
fair to them, used to ask every-body who appeared who even
smelled of social democrat, "Are you a party member?" I feel
compelled to do the same every now and then, not always. Are you
a member of the Conservative Party?
Mr Gould:
Yes, I am.
Mr Marchese:
Not to be ashamed of it; many are. In fact, they appoint Tories
on a regular basis, and we have no qualms about that although,
when they were in opposition, they used to decry all the
appointments we would make that were New Democratic
Party-connected. We only used to pull together a number of New
Democrats or appoint them. Everybody else was a Tory or Liberal,
but these guys are good. They don't mess around with Liberals or
New Democrats, by and large.
I've got a little problem and
I want to share this with you. In terms of public interest, I'm
worried about how institutions perform. In my view they should be
unbiased, or at least appear to be unbiased. If I found it to be
a problem, I would have to do something. I couldn't in all
conscience stay in some committee and say: "The chairman has
decided this and there's nothing I can do. I'd better not deal
with this. It's not really my problem." But I would have a
difficult time. If you found a problem of a perceived nature of
bias, what would you do? How would you deal with it?
Mr Gould: I
would either make that bias known or I would remove myself from
the situation. You mean where I found myself in a conflict?
Mr Marchese:
Yourself possibly, or the chairman or woman, or the way the board
might have conducted itself. You're part of it and then you're
forced to make a decision. Do you simply go along or do you
publicly say, "I have a problem with this"? Or would you?
Mr Gould: Up until the point that I
knew I had to come here today, I had no idea really that it was a
political appointment. My assumption was that this was an agency
of the government whose mandate was to help in all areas of real
estate in the province. I can't imagine finding myself in a
situation where politics would rule the way I would approach the
situation.
Mr Marchese:
Glad to hear that.
Mr Gould:
Thank you.
Mr Marchese:
Obviously, this agency sells land and does much with our land.
I'm assuming you would have an interest in some of the
disposition of these lands. You might even be interested in
purchasing such lands. Would you think that might be a conflict
for you, possibly?
Mr Gould:
I'm not aware of any such instances. I'm not aware of the
portfolio, other than that I know it's large and expansive. It's
possible that somewhere along the line I might have an interest,
in which case I'd have to seek the guidance of the chair of the
committee or remove myself from the situation if I wanted it that
badly.
Mr Marchese:
Good to hear that as well.
There was an instance here
that was reported in the Globe and Mail. That's a business paper,
by and large, a conservative business paper, and when they report
some-thing of this sort, it worries me. It has to do with the
selling of a 2.3-acre site near the corner of Jarvis and
Wellesley. Two corporations were obviously interested in
purchasing the site, and there was some problem that developed
with these two people. The corporation decided what they would do
was to simply say to these two corporations: "We've got a problem
here. We've got somebody there that owns some property and we've
got to deal with them. You go off and negotiate something with
them, and whoever these two corporations negotiates a good lease
arrangement with, that person gets to be the successful
bidder."
These two companies had
already made bids. One was slightly higher, one was slightly
lower, but they had this particular problem they had to resolve.
So the agency, and the realty agent that was hired to do this,
agreed that the best way to deal with it was to say to these two
people: "Go out and resolve it. Whichever of the two of you
solves it gets the contract." The problem was that the bidder who
bid less than the higher bidder went and talked to this
particular person and they seemed to strike an arrangement, and
the successful bidder, Mr Sexsmith of Renoir, complained and
said, "No, we have made a successful bid before and now we don't
agree with what you have done."
What they did, hiring a Mr
Lyons-you're probably familiar with him, another Tory lawyer,
close to the mayor of Toronto and many others. Through his
involvement and interventions, he talked to the realty person who
had negotiated such an arrangement. Mr Miele, the president and
CEO, got involved in this discussion, at the end of which, lo and
behold, the agreement they had made with the second bidder, the
lower bidder, to give him the deal was turned down and they gave
it to Mr Sexsmith again, as a result of which they're in the
courts.
Do you see the perceived
problem here? It was covered in the Globe. There's a perceived
problem of bias here with this agency. What do we do? How do we
deal with that? What do you propose we do to put back a better
image of this realty corporation? Otherwise, it seems to me, this
government has a problem, and you would be part of that
problem.
Mr Gould:
Well, I don't know all the circumstances of that particular
instance, but I know, just reading through the material and
understanding the mandate of the corporation, that it does every
once in a while run into its own little roadblocks because it is
a government agency. But other than that, I don't see why there
should be conflict. The agency shouldn't be showing favouritism
to anybody. Its mandate is to go out and either dispose of real
estate in an orderly fashion, in the best way possible under
normal market conditions, or fix up leases or do the things that
are involved with its mandate. Anything else I certainly wouldn't
be in favour of.
Mr Marchese:
Yes. I agree with what you're saying and that's why I raised that
example. There are a few other examples, but I wanted to
highlight one that was in the Globe and Mail. It's in the courts
now. I'm assuming the Tories say we can't talk about it because
it's in the courts. But it brings a great deal of disquiet, in my
mind, and apprehension in the public's mind about how this agency
is conducting itself, and I am worried about all these Tory
connections and these potential political influences.
Can one individual or others
come to a CEO who is clearly a Conservative member-and so many
other board appointees are very Conservative-can a few of these
individuals come together and say, "We can fix this based on
political influence"? I've got to tell you, I'm concerned. I want
assurances from you, in terms of whatever is in your background
that you bring, that this won't happen while you are there.
Mr Gould: I
can only tell you that it won't happen as a result of my
involvement. I'll back up a little bit. I joined the Conservative
Party just before the last election. I don't consider myself a
very political person. I happen to agree with this government's
approach to things. If some time in the future your government
and I had the same kind of agreement, I would have no problem in
changing my loyalty.
The Chair:
The government caucus.
Mr Wood: We
will reserve our time.
The Chair:
Reserve your time?
Interjections.
The Chair:
The advice I have is that it would require the consent of the
entire committee for the government to reserve its time to go
last, so to speak. If someone from the government caucus is
prepared to go-
Mr Morley Kells
(Etobicoke-Lakeshore): I don't know if there's a game
plan here. I just basically wanted to ask a question.
The Chair:
Go ahead.
Mr Kells: The question was just
simply this: You stated that you've just become a recent convert
to the Conservative association, and I was wondering if you have
ever belonged to any political association prior to this
conversion.
1520
Mr Gould: I
wouldn't consider it a conversion. I think the question
originally was, do I belong to a political party? I made a
contribution to your party before the last election. That's why I
said it. I'm not a convert from any other party.
Mr Kells:
Then I retract my conversion implication. Have you ever belonged
to another political party prior to belonging to the Conservative
Party?
Mr Gould:
No, I don't think so.
Mr Kells:
Indeed, that shows an immense perspica-city. When you finally
became involved in a political party, you chose the
Conservatives. I think that's admirable.
Mr Joseph Spina
(Brampton Centre): Just a quick question, Mr Gould.
Thank you for having an interest in this position. The ORC has
some interesting things and projects that it's going to be
involved in. In looking at your resumé, it appears as if you
have an extensive track record in investments, particularly with
respect to property investment. I'm presuming, and asking perhaps
your confirmation or any other comment you wish to make, that
these would be good qualifications in evaluating any potential
deals that the ORC will become engaged in.
Mr Gould:
I'd like to think so. I've got lots of experience on both sides,
being an owner and being a tenant and now being a landlord. I
think my experience will help; I hope it will anyway, without
knowing the full breadth of exactly what I'm getting into.
Mr Spina:
Obviously a director is involved probably more with policy than
actually looking at day-to-days deals, but there's unquestionably
an opportunity for the directors to present a perspective to the
management. Thank you. I wish you well.
The Chair:
Does any other member of the government caucus wish to direct
questions to the recommended appointee? We'll go to the Liberal
Party.
Mr Jean-Marc Lalonde
(Glengarry-Prescott-Russell): Thank you, Mr Gould, for
coming in front of our committee today. I have a few questions
definitely, because this is a major task that you'll be
undertaking. Looking at your past experience in business, I was
just wondering how come you never got into Mr Gretzky's business,
since you come from Brantford. But anyway, you are in the real
estate business at the present time.
Mr Gould:
That's right.
Mr Lalonde:
Do you intend to leave that company?
Mr Gould: Do
I intend to leave it?
Mr Lalonde:
Yes.
Mr Gould:
No. I'm an owner.
Mr Lalonde:
You don't intend to sell it?
Mr Gould: I
couldn't say that; somewhere along the line, yes, I certainly
could.
Mr Lalonde:
You intend to be on this board of directors and also continue
your business with Ivest Properties Ltd?
Mr Gould:
That's right.
Mr Lalonde:
Are you aware of the Ontario government management guidelines
concerning the conflict-of-interest guidelines?
Mr Gould:
Yes, I think so.
Mr Lalonde:
You've gone over it. We know what's been happening in the last
couple of years. There have been a lot of questions on conflict
of interest. There's always some political influence at times.
You say that you joined the PC Party or you subscribed to the PC
Party just prior to the election. Were you ever approached to
become a candidate for the PC Party?
Mr Gould:
No.
Mr Lalonde:
Never did?
Mr Marchese:
They might.
Mr Lalonde:
Anyone is liable to belong to any party or contribute to any
party, I recognize that. But these days we recognize very
often-it could be federal; it could be any provincial
government-that when you do become a donor to any party, they
tend sometimes to do something in return. But in this case, as I
said, it is a very important task. Looking at all your
involvement in the previous companies where you worked, I'm
really concerned about how this would be handled. Looking at the
prediction of this government, their prediction is to sell their
gross sale of $200 million this year. We talked about the one on
the corner of Wellesley and Jarvis and what happened last year. I
still say there was political influence there. There was some
political influence in the 407 sales.
You're in business at the
present time as president and owner of Ivest Properties. I just
wondered, will your company be dealing with the government in
transactions? Are you going to be part of the transaction that
will be going on between the government and the private
sector?
Mr Gould: I
can't imagine how I would be. No.
Mr Lalonde:
You can't imagine how you would be. Up to now, let's say, up to
1999-2000, the government gross sales will be $801 million.
That's their prediction. They already had a little over $600
million in sales of property ever since 1995-96, so that would be
in the last four years.
In the company that you're
with, what would be your largest transaction that you have been
involved in?
Mr Gould:
About $12.5 million.
Mr Lalonde:
About $12.5 million. Looking at the government property that we
will have for up for sale, it could mean a lot of commission for
a company like yours.
Mr Gould: We
own and manage real estate. We're not in the business of
accepting commissions. We don't sell real estate on behalf of
others.
Mr Lalonde:
I could tell you that I really appreciate the answer that you
have given to my friend from the NDP here, that you said yes, and
I noticed that this was an honest answer that you gave him. You
said that you belong to a
party, you contribute to a party, and that's very honest. But you
will understand quite often in the future, in accepting this
position, you will have to be honest, as you know-I'm sure you
are-and fair to all Ontario taxpayers.
I had another one and I lost
it Mr Chair. So you will be ready at any time to declare your
conflict of interest if it does involve your company?
Mr Gould:
Absolutely.
Mr Lalonde:
I don't have any more questions, Mr Chair.
The Chair:
Thank you very much. We have had a series of questions from the
three political parties represented in the Legislature and the
committee. If you have any windup statement, Mr Gould, we'd be
happy to hear of it.
Mr Gould: I
don't, Mr Bradley.
Mr Lalonde:
Can I ask a question, Mr Chair?
The Chair:
Yes, there is still some time left, so you may do so.
Mr Lalonde:
How did you get to know that there was a seat open on the ORC
board of directors?
Mr Gould: I
was approached by one of the board members.
Mr Lalonde:
One of the board members, not a member of the Ontario Legislative
Assembly.
Mr Gould:
No. One of the board members.
Mr Lalonde:
Thank you.
Interjections.
The Chair:
As we would all know, interjections are always out of order in
committee. Thank you very much, sir. We'll allow you to
depart.
We will have the committee
consider this appointment at this time. Is there a motion?
Mr Wood: I
move concurrence that we consider the appointment of Mr
Gould.
The Chair:
Moved by Mr Wood, concurrence in the appointment. Any
discussion?
Mr
Marchese: Just a few brief comments, Mr Chair. Quite
clearly this is a very decent man who has Tory connections, but
that's neither here nor there. I've found that he's a very
sincere individual. He has indicated that if there were to be a
problem with respect to anything he would do, or his company, or
whatever number of companies he might be involved in, and if he
were to have an interest in purchasing something that the Ontario
Realty Corp wanted to sell, he would declare a conflict. I think
that is very important to know and to hear.
I was clearly interested in
his view around process perception of bias and how he would deal
with that, because I am clearly very concerned about the
intervention of Mr Miele in the case that I have spoken about. I
find that an insidious intervention, actually, as I see it and as
it has been put out by the Globe and Mail article. The fact that
it's going to court presents some problems to the Ontario Realty
Corp and therefore to government and therefore to all as
politicians. I'm concerned-I hope that the other members are
concerned as well-that the behaviour of the CEO and the behaviour
of the agent they hire has to be above reproach. From what I saw
of that case, it is indeed reproachable in terms of what has been
done. So I'm profoundly worried.
I raised this question with
Mr Gould, and he appears to say that he would not be party to
such a problem. I wanted to hear that. I'm paraphrasing now in
terms of what he said. I'm willing to believe that if something
like this came up, he would stand up for integrity and fight the
bias if it occurs. In that respect, I am prepared to support his
candidacy here today.
The Chair:
Thank you, Mr Marchese. Any comments by any other member of
committee before I call the question?
If there are no comments, I
will call the question. All in favour? Opposed? Carried.
Does any member of the
committee have any other business that he or she wishes to bring
before the committee? If not, I will entertain a motion of
adjournment.
Mr Wood:
So moved.
The Chair:
All in favour? The motion is carried.
Thank you for your
attendance today. The meeting is adjourned.
