STANDING COMMITTEE ON GOVERNMENT AGENCIES
COMITÉ PERMANENT DES ORGANISMES GOUVERNEMENTAUX
Wednesday 19 June 2002 Mercredi 19 juin 2002
INTENDED
APPOINTMENTS
JOHN SNOBELEN
Wednesday 19 June 2002 Mercredi 19 juin 2002
The committee met at 1006 in room 151.
SUBCOMMITTEE REPORTS
The Chair (Mr James J. Bradley): I'm going to call the meeting to order. We have all members of the committee who are here today and all staff.
There are a couple of things we have to do first. One is the report of the subcommittee on committee business dated Thursday, May 23, 2002.
Mr Bob Wood (London West): I move its adoption.
The Chair: Mr Wood has moved its adoption. Any discussion? If not, all in favour? Opposed? The motion is carried.
Next is the report of the subcommittee on committee business dated Thursday, June 6, 2002.
Mr Wood: I move its adoption.
The Chair: Mr Wood has moved its adoption. Any discussion? If not, we'll have a vote. All in favour? Opposed? Motion carried.
Next is the report of the subcommittee on committee business dated Thursday, June 13, 2002.
Mr Wood: I move its adoption.
The Chair: Mr Wood has moved its adoption. Any discussion? If not, we will vote on it. All in favour? Opposed? The motion is carried.
INTENDED APPOINTMENTS
JOHN SNOBELEN
Review of intended appointment, selected by official opposition party: John Snobelen, intended appointee as vice-chair, Ontario Exports Inc board of directors.
The Chair: We will get into appointments review now. Our first individual to be interviewed today is Mr John C. Snobelen, intended appointee as vice-chair, Ontario Exports Inc board of directors.
Mr Snobelen, you may come forward to the desk before us.
Mr John Snobelen: Thank you, Chair.
The Chair: As you know, you will have an opportunity to make an initial statement, should you see fit. We subtract the time that you take for that purpose from the government members' questioning.
Mr Snobelen: Would it be appropriate, Chair, to get a large glass of water, then?
The Chair: I am totally neutral as the Chair, of course, impartial and neutral. But were I sitting in that chair, the first question I always ask is, "Are you now or have you ever been a member of the Progressive Conservative Party?"
Mr Snobelen: Mr Bradley -- I'm sorry, the member from St Catharines -- as has been said in the past, I am not now, nor have I ever been, part of any organized political party.
The Chair: Thank you very much, Mr Snobelen, for being with us this morning. That could be said of many different parties over the years.
We will, as I say, commence with Mr Snobelen's initial statement. The questioning, I am told, in the rotation is now due to the official opposition first, then the third party, then the government party.
Welcome, Mr Snobelen, and you may proceed.
Mr Snobelen: Thank you, Chair. I beg your indulgence just to note that I was not in the Legislature last week when your milestone was noted. I add to the voices in that chamber my congratulations and astonishment at that long track record.
The Chair: Thank you.
Mr Snobelen: And also that you've maintained a youthful outlook, especially when compared to the other one of my colleagues who has reached that milestone.
Mr Michael Gravelle (Thunder Bay-Superior North): The Chair can't vote, John.
Mr Snobelen: He's obviously of some great influence, though, and so I was trying as hard as I could. I don't know what you call that in your caucus, but it has a term in our caucus.
I won't have a very long opening statement. When this appointment was first put forward, I looked at it with some delight, given that I've had experience in the private sector with exports, and not all of that good experience. So I know how difficult it is for a small business person to get involved in the export business. I'm very happy that Ontario Exports is there now, as it was not when I was in that business, to help people across some difficult borders.
I've also had some experience, particularly in the Ministry of Natural Resources, with the kind of help that government can be. I know many people at this table have more experience with that, helping to expand the export opportunities for some of our companies in Ontario.
Beyond that, we've had an opportunity at the Ministry of Natural Resources, and I can't help but wonder where we could expand that, in using some of the expertise in our government services and in exporting that expertise.
I think now particularly of the rabies baiting program we participate in in Texas and now in seven other states. There are a great many areas of expertise we have within the public service that could be exported, particularly to the United States but to other jurisdictions -- firefighting in southern climes and that sort of thing -- where I think we would be able to expand the expertise that we've developed.
I look forward to this. I look forward to your questions and I thank you for your indulgence this morning.
The Chair: We will commence with the official opposition.
Mrs Leona Dombrowsky (Hastings-Frontenac-Lennox and Addington): Good morning, Mr Snobelen. You indicated in your remarks that when you were in business you came to understand first-hand some of the challenges to a small business in Ontario attempting to export. Can you expand at all on that, please? One of your businesses was garbage.
Mr Snobelen: That's right. We exported waste from the greater Toronto area to Buffalo and Detroit, and, I think, therefore beautified all three cities. But that would just be my opinion.
We had difficulties in part of the export-permitting process. We had difficulties, for instance, in the initial export which we were involved with from a transportation point of view with the USDA and other certifying bodies. It would have been very handy to have the help and guidance of people in the field to help us with the regulatory process. We had to invent it at that time.
Mrs Dombrowsky: I would suspect that the product you were exporting increased the challenge in terms of getting across the border.
Mr Snobelen: Yes, perhaps not just the product but the uniqueness. It was the first time, 1985, the region of Halton exported solid waste. It was the first time residential solid waste had been exported to the state of New York. Being the first is always difficult in a regulatory process. I'm sure people have that with all kinds of things they're exporting.
Mrs Dombrowsky: Did you look for this appointment?
Mr Snobelen: No, ma'am, I didn't.
Mrs Dombrowsky: Someone approached you and suggested that you might consider it?
Mr Snobelen: That's correct.
Mrs Dombrowsky: I have to say that I'm somewhat curious, and I was surprised when I saw your name put forward. Mr Snobelen, your record of attendance in the Legislative Assembly has not been stellar, and that's a role for which you are paid. We have an appointment here where you're going to get a dollar a day, so I have some real question, given your record of attendance and what I can only assume might be a record of lack of commitment, how it is you come here today and ask us to support your appointment to this role.
Mr Snobelen: I think you might want to look at my record of attendance over the last seven years in this assembly, and you might want to look at my level of commitment to this province over the last seven years, in fact over the last 47 years. I think you would come to the conclusion that my candidacy for this appointment would merit your support.
Mrs Dombrowsky: I have only been elected since 1999, and it's only that record that I am aware of. I'm going from that first-hand experience. I thank you for your time this morning.
The Chair: Any further questions?
Mr Gravelle: Good morning, Mr Snobelen. Can you tell us in reasonably precise terms what you see your role being in terms of what you can contribute to this? We also have a former member of the House, Mr Saunderson, who is the chair.
We would all be curious as to what you think you can bring to this and what you think some of the issues are that need to be dealt with in terms of improving the situation we have in competitiveness.
Mr Snobelen: Mr Gravelle, I have met with the chair, but I didn't want to presuppose the determination of this committee, so I haven't met with the president of the organization, who is at the assistant deputy minister level at this time.
I have read some information on what Ontario Exports is doing. I believe, as I said in the opening statement, some of my background will help in terms of relationships, particularly with small business. More particularly, though, I think my experience with our rabies baiting program and other exports of government services might be unique in the structure we currently have there, and I think that would be an additional set of expertise to what is already present in the corporation.
Mr Gravelle: I'm a little surprised you haven't got more precise thoughts in terms of what you think the role you'll play will be, because I understand you'll be vice-chair. Is that correct?
Mr Snobelen: That's correct.
Mr Gravelle: Obviously that's a very significant role to play in this. What are your concerns in terms of the realities we are facing in our province, certainly in terms of the auto sector? We've got some real concerns about the situation there -- it has been a backbone of our economy for many years. Could you give us your thoughts on what role the board can play in terms of those issues? We have seen plant closures; we're seeing the movement of plants to other jurisdictions. Can you give us your thoughts on that?
Mr Snobelen: The board has had a role in that area. As you know, a great deal of the discussion surrounding the auto sector has a federal connotation to it too. Minister Pettigrew is aware of the concerns of the auto sector. I have talked to him about that in person.
I think Ontario Exports has looked to diversify and expand in many ways the kinds of export opportunities we have in Ontario, particularly to the United States, with whom, as you know, we conduct something over 90% of our trade. We're looking for additional commodities and expertise to export.
I've been involved in the discussions on softwood lumber for the last four years, so I know first-hand the kinds of difficulties that can come into the trade relationship with the United States. We have not resolved that issue. I think in the auto sector and other sectors the concern is protectionism and currency values. My guess is that those have always been with us and always will be, and we need to have expertise and sophistication in how we deal with those difficulties.
Mr Gravelle: Let me follow that up a bit, because obviously the issue of softwood lumber is important all across the province. As a member from northwestern Ontario, it's a great concern. We've seen what has happened in British Columbia, and I think we have great fears of that happening here. You were very directly involved as minister, and I think it's fair to say the government was very supportive of the industry and working with the federal government in terms of doing this. Do you believe we need to take a more aggressive approach in terms of the United States? Certainly there are great frustrations and concerns that we're going to lose many thousands of jobs in this province, which would be devastating for the economy of the province, but particularly in the north. I'm curious as to what your thoughts are. Now that you're no longer minister, it might be easier for you to be a little more forthcoming on that.
Mr Snobelen: Many things are easier now that I'm not a minister.
Mr Gravelle: Precisely.
Mr Snobelen: I think one of the things we did in the last six or seven months that will be useful -- I hope governments of whatever cloak or stripe continue to do this, and maybe Ontario Exports is a way of doing it -- was to pay a visit to some of the consumer groups in the United States. I paid a visit to Home Depot's headquarters five or six months ago. I was scheduled to go and do a tour of some of the consumer groups this summer. I hope that tour goes off, if not this summer, then sometime in the near future, because I think we need to make our case for our forest products directly to those consumer groups, both publishing companies and the major retail operations. We have to go beyond the normal place at the table in terms of government-to-government discussions and go back to the consumer level and help our industry.
By the way, the industry was enormously supportive of those sorts of initiatives. We were able to go to Europe and have a look at some of the opportunities we might have there to expand our exports. We also looked at the marketplace in Australia and some of our competitors in New Zealand. It takes a while to acquire any depth of knowledge in that industry. I know you've done that. But I think our direct help as a government can be in going to the end consumer and making the case for our industry. Home Depot, for instance, was very receptive to that.
Mr Gravelle: I take it from that, then, you wouldn't be supportive of a more aggressive stance being taken politically, perhaps in terms of other issues that obviously would be of great interest to the United States.
Mr Snobelen: I believe Minister Pettigrew has had wise counsel on this and has been wise to keep the issue of softwood lumber focused on softwood lumber and the producers and consumers in the United States. I think he's done a good job on that file. I think there's been some urge to expand this to larger trade issues. I don't believe that would be either successful or useful.
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Mr Gravelle: Do I have a little more time left?
The Chair: You have until 10:23.
Mr Gravelle: I wanted to ask you, if I may, about an issue related more specifically to the position on the export board. Last October, former Premier Harris announced the appointment of a Task Force on Competitiveness, Productivity and Economic Progress. Their research arm, which is the Institute for Competitiveness and Prosperity, released its first study, which was pretty interesting in terms of what it said. It was called A View of Ontario: Ontario's Clusters of Innovation.
They said that while Ontario was well positioned within Canada, it is not an economic leader within North America, and it estimates that Ontario's labour productivity or effectiveness is ranked 32nd out of 60 jurisdictions in North America.
One, do you accept that, and two, that being the case, what do you think needs to happen in order for us to do that? I think that will come as a great surprise to a number of people.
Mr Snobelen: It's number two in Canada, behind Alberta, in terms of productivity, if I recall the study right. I'm not a practitioner of the dismal science of economics, but it seems to me that various experts have said that the status of the Canadian dollar has much to do with the relative productivity here versus the countries we export to and import from.
What can be done about it? There is an ongoing review of not just where we are in terms of productivity but where we might get to be. I think all of us are concerned about being productive. Productivity is not just a measure of outputs; it's a measure of value of output. So there's much work to be done on that file. I think that most of us would be concerned with the direction that we are going versus other jurisdictions.
Mr Gravelle: Our economy is so incredibly dependent on our trade relations with the United States. I mean, 93% of our exports go to the United States. Certainly when the economy was booming in Ontario, you acknowledged it was very much a result of the booming economy in the United States.
Mr Snobelen: No question about the fact that the economies are tied together. No question about it.
Mr Gravelle: So it wasn't tax cuts. If it wasn't tax cuts, it was the economy of the United States.
The Chair: That's a judgment you may come to, but -- Mr Snobelen, I'll let you answer that.
Mr Snobelen: I just read something in the Toronto Star the other day about that being all over. I don't know, Chair, maybe you could fill me in on that.
The Chair: You're very helpful in your answers today, if I can note from the chair. We now go to the third party.
Mr Tony Martin (Sault Ste Marie): I just wanted to follow up on perhaps some of what previous members have asked, and pick your brain here a little bit this morning just to get a sense of what you think you can bring to this job and what it is that we should be doing as a jurisdiction to improve our trade fortunes into the future.
It was referenced that our dependency on the US -- I think you mentioned too that about 90% of our trade is with the US. Is that a problem, and do you have any ideas on what we could be doing to develop further partnerships?
Mr Snobelen: The good news about it is that the United States is both a neighbour -- so it makes it easy to export commodities there -- and also has a regulatory climate that is easier to export to than some other jurisdictions. The difficulty is it sets up a pattern for more habit than perhaps anything else. One of the reasons we went to Europe with our forest producers was to say, "What other markets are there, and can we develop markets outside of the United States for specialty products, in particular in engineered forest products?" Having a little competition is useful and healthy and would work well for our relationship with the United States. It will always, I suspect, be our largest trading partner, but it doesn't have to be our only trading partner. I think we can see that the problems in British Columbia from 10 years ago are in part because they hadn't developed other export opportunities from that part of Canada.
Mr Martin: The reason I ask you that -- and I appreciate your answer -- is that the economy that's been going for the last five or six years, which has been very positive, particularly for the larger urban centres of the province, has not really helped much in some of the more rural and northern jurisdictions, where the economy has actually shrunk significantly and we're losing population like crazy. Most of that is our young people, who represent the future -- thinking, creativity and energy.
We took a trade mission out of Sault Ste Marie. We took 11 people over to Ireland in 2000. Then we had 23 people come back from the Dundalk area north of Dublin, south of Belfast, in 2001. Then we took 84 people over just a couple of weeks ago. But we're not getting any support of any significance from either the provincial or federal governments in that. I guess we're seen to be too small or something.
Should governments be giving support to communities who take initiatives on their own? Do you think that's a smart thing to do, or is it really just a drop in the bucket that really isn't going to amount to anything?
Mr Snobelen: I don't know that it would be fair to comment on that particular mission, because I don't know the details. But I do know this: if you'd asked me a decade ago about government trade missions, I would have had a very negative view of those. Having been on a few for the forest industry, I now have a completely different view. My view is that they can be very useful. We learn a lot on those missions. We learn a lot both from export opportunities and from what we can learn in those other jurisdictions about what they're doing and how they're proceeding.
I do recognize the difficulty in northern Ontario, having spent, certainly, not the kind of time you've spent there but a little bit of time over the last four years -- the shrinking opportunities from some of the traditional activities. You'll know the forest industry now takes less employment to produce the volume of fibre. That's a dilemma. The good news is that the tourism industry has the opportunity to pick up, but you know it requires a capital investment to do that.
I think there needs to be a strategy. I think, in part, things like the Great Lakes heritage coastline and those sorts of initiatives offer us an opportunity to have government participation with the private sector to help market and design what our future should be in the market. Without doubt, there need to be more of those sorts of initiatives. They're small initiatives, but collectively they're large.
Mr Martin: You talk about learning. We certainly learned a lot, particularly those of us who didn't have much experience in economic development and trade and those kinds of things. One of the things that we discovered in Ireland -- and then I was also in Finland a couple of weeks ago with the Finnish ambassador, meeting with senior government officials on foreign and trade policy. It seems that in Europe, the eggs they're putting in their basket are in the areas of developing intellectual capacity, technological innovation, investing in education, research and development. They see that as the future for them.
It seems to me in Canada, Ontario and North America, we seem to be more interested, in terms of competitive advantage, in reducing standards, getting regulation out of the way, reducing government, decreasing taxes. That seems to be the tack or strategy we've taken.
Have you detected that? Do you have any comment on what kind of advice you might be giving government, in terms of trying to advance the opportunities for this organization you're being appointed to?
Mr Snobelen: There's obviously a collective of all those initiatives. Part of the productivity issue that was brought up earlier is that the government has a role to play, in that they set the regulatory climate. Obviously, you'd like to think the people of Ontario are as productive as any people in the world and perhaps more so, and so the regulatory climate in which they work has much to do with how much value they can add, as measured by the exports, the commodities. So government has a role to play. Also, as you know, on the research side, there's both a provincial and a federal presence.
I think we need to be vastly more strategic than we might have had to be in the past. I think we have to recognize that as a nation of 30 million people, plus or minus, we need to be very strategic about who we are, where we research, what we do and what we support publicly, so we can be world leaders in those areas where we have some advantage. I think we've demonstrated that on some small levels. Again, not to go back to this over and over, but if you look at the expertise we have in the ministry I was recently minister of, we have some expertise that is the best in the world, and we have that in a pattern across other industries and services in Ontario. We need to expand those and improve them.
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Mr Martin: One of the areas that Europe has detected will be both a challenge and an opportunity, depending on what they do in the next 10 or 15 years, is in the area of population growth. Places like Finland, which has almost maxed their capacity to grow their GNP or GDP, are indicating that the only way they will be able to go further is by getting more people to work in the industries. I guess they are going to have to look now at attracting new immigrants to the country or bringing back expatriates. I know in a lot of European countries the law is now such that if you have a parent or a grandparent who lived at one time in those countries, you can get dual citizenship, which would bring you back to either go to school or work.
In terms of Canada and the relatively small population we have for our geography, what advice would you be giving governments in terms of immigration, considering what I pick up is a concern in Europe and their need for more people in what they're doing?
Mr Snobelen: I don't have very much advice on immigration. That's not an area I know a lot about. Again, in a previous ministry I had some discussions with those in our university sector who would suggest that great graduate programs help us to attract people who will be very productive citizens of Ontario and Canada. I think there's some wisdom in having those kinds of programs to attract people from around the world who would add to the mix and add to the productivity of Ontario.
I don't know a great deal about immigration. I know that in my daily commute from Mississauga it would appear that our population continues to expand, but that's probably not the case right across the province.
Mr Norm Miller (Parry Sound-Muskoka): I have no questions for Mr Snobelen, just a comment that I'm sure he's going to be an excellent candidate for vice-chair of Ontario Exports Inc, which I gather used to be called the Ontario International Trade Corp. In fact, my father was chairman of it back in 1988, I believe, and had a similar background to Mr Snobelen in that he was involved with business and with government as well. He brings a unique experience. As well, Mr Snobelen's background and knowledge of the United States I'm sure will be very useful in this new role. I have a lot of confidence that he's going to be an excellent person to be the vice-chair of Ontario Exports Inc.
Mr Snobelen: Having known your father, I'm flattered by the comparison.
Mr Wood: We will waive the balance of our time.
The Chair: That completes our questioning. Thank you very much, Mr Snobelen, for being with us today. It was a pleasure having you before the committee.
Mr Snobelen: A pleasure being with you always, Chairman.
NORMAN BEAL
Review of intended appointment, selected by official opposition party: Norman Beal, intended appointee as member, Ontario Farm Products Marketing Commission.
The Chair: The next intended appointee is Norman Beal, intended appointee as member, Ontario Farm Products Marketing Commission. Welcome to the committee, Mr Beal. As you probably heard earlier, you have an opportunity at the beginning to make a statement, should you see fit, and then there will be questioning. In this case, it will begin with the third party and go in rotation. It's all yours.
Mr Norman Beal: I must admit I have no written statement, but I have prepared some point-form notes that will guide me through my past and give you some idea of my background.
I want to thank the Chairman and members of the committee for allowing me to appear before you today regarding my potential appointment to the Farm Products Marketing Commission.
My name is Norman Beal. I am 43 years old. I am married and I have one 11-year-old son. I was born in Hamilton, Ontario, and grew up in the Golden Horseshoe, including the Niagara Peninsula. I own a vineyard, a farm that is called Beal Vineyards. It's approximately 45 acres of vinifera plantings -- grapes. I also own Peninsula Ridge Estates Winery, which is a winery producing now about 20,000 cases of premium Bordeaux-style reds and Burgundy-style whites. The winery opened its doors in August 2000, and our first harvest from our vineyard was last year. We've expanded the vineyard, since 1999, from 25 acres to 45 acres. The vineyard is extremely healthy and is now supplying grapes, as I mentioned earlier, to our winery.
I also own the restaurant at Peninsula Ridge, which is a Queen Anne revival Victorian house that we have fully restored. It was recently designated under the Ontario Heritage Act as an official Ontario heritage site for its architectural and historical significance. The restaurant is geared to producing a world-class wine/culinary experience, primarily utilizing Ontario farm products.
The above companies represent a personal investment of around $7 million, and I am fully committed to the success of both the wine industry and the agriculturally based industries around the wine industry going forward.
I also own a company called Ensign Industrials, which is an oil products brokerage firm representing a company called Glencore, which is a Swiss-based commodity trading company. Their North American office is out of Stanford, Connecticut, and their head office is in Zug, Switzerland.
I also sit on the board of directors of Norcan, which is a clean products marketing distribution terminal based in Montreal, where they bring in petroleum products -- jet fuel, gasoline and distillates -- from other regions in the world and market them within the southern Quebec area.
I'm a member of the Wine Council of Ontario. I sit on their policy and executive committee, also their land preservation committee and the grape grower committee. I am also a board member of the Canadian Vintners Association. I was appointed by the former Premier in June 2001 to the binational tourism steering committee.
Moving back to just a little bit about my career, my background, I moved to Alberta from Ontario in the late 1970s, back in the oil boom days. Unfortunately in those days there wasn't a lot of employment opportunity in Ontario. I moved to Alberta and spent about 13 years there, starting originally with the start-up of the Syncrude oil sands project and then moved to Calgary and worked for Shell Canada for about 10 years.
In my capacity at Shell Canada, I originally started off in lubricants marketing and, after deregulation of the oil industry in 1985, was made the manager of international refineries, sales and product trading, and developed export markets for petroleum products from western Canada into the Far East, the US west coast and South America. In 1990, I moved to Connecticut in the US to work for Glencore, the company that I now broker for to some extent.
Glencore, just to give you a little bit of background, is probably the world's largest commodity trading company. They trade ferro-alloys, metals -- copper, lead, zinc -- and oil, of course, which I was involved in, and also grains, sugars and various other commodities, such as aluminium. I worked for Glencore until 1997, and then I went to British Petroleum, managing their international product trading division for the Americas out of Stanford, Connecticut, as well. In 1999, having had enough of the commodity trading business, I decided that I would pursue a passion, which was to become a farmer of quality grapes, and open a winery and produce wines of world-class quality.
I consider myself a passionate advocate of agricultural land preservation, including the Niagara Escarpment. I fully support the activities in the Niagara Escarpment Commission in protecting this very valuable world biosphere preserve.
My interest in the appointment is, as I think you all know, that there are some challenging times ahead for Ontario farmers in light of recent developments in the United States. We know that a recent bill passed before Congress, and now approved by the President, put forward an additional $190 billion in farm subsidies. That's going to create, I think, some competitive disadvantages for our farmers. We need to be concerned about that. There are many issues in front of the Farm Product Commission right now that are very important to our growers and our producers, and that also spills over into the grape and wine industry. The grape and wine industry has many challenges ahead, going forward. The relationship between growers and wineries probably is not in its best stead right now. I want to actually congratulate the Ontario Farm Products Marketing Commission for instituting a facilitator to deal with a great price renegotiation this year. This has been extremely helpful to date. I've sat in on those sessions with the growers and with the wineries, and I think we're making some real progress.
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I believe I offer significant and extensive knowledge in commodity trading, primarily of course in oil, but the basic principles apply across the board. I'm new to the industry; I'm back in my homeland; I've come home to the peninsula, which is an area I love. I've been very excited about raising my family there. I believe I bring some fresh blood to the commission and to some of the issues that are facing us going forward. That's my statement.
The Chair: Thank you very much, Mr Beal, for a very extensive statement.
If I could get a commercial in here at the indulgence of the committee, I have a resolution before the Legislature to be debated next Thursday which would call for an agricultural preserve for the Niagara Peninsula. It's just a little commercial that my good friends around the table allow me to do from time to time.
Mr Bert Johnson (Perth-Middlesex): What time will that be?
Mr Beal: You have our full support behind an agricultural preserve. We think it's a great idea.
The Chair: I'm very glad to hear that. With that, I'll start with the New Democratic Party in this case. It's their turn.
Mr Martin: I won't ask you to expand on what that means, an agricultural preserve for the Niagara Peninsula. I would ask you to maybe share with us how you think you're going to deal with the possibility of a conflict in terms of your passion for the grape and wine industry. As you know, there's a whole variety of farm products that are being produced and marketed in Ontario, Canada and North America. Do you see a difficulty there, any kind of conflict of interest that might arise in your deliberations?
Mr Beal: My understanding is that the Ontario Farm Products Marketing Commission actually oversees 20 different marketing boards, the Ontario Grape Growers' Marketing Board being one.
I am fully committed to the long-term health of the grape and wine industry. You cannot produce world-class wines without producing world-class grapes. I am fully committed to both the growing side and the producing side. I am a grower, I'm a farmer and I am a producer as well. I think I can see a balanced view on both sides of those fences.
I believe very strongly, when it comes to the relationship between grape growers and wineries, that in order for us to be successful in the long term, we have to work together. I think some of the issues before us now are created because the industry has evolved tremendously in the last five to 10 years. It's growing in a very dynamic way. Some of the thoughts around pricing and quality have not evolved and haven't evolved quickly enough. I think the Ontario Farm Products Marketing Commission has a role in facilitating the evolution in thinking, both by wineries and by growers, so I think I can be of great assistance in that way. Whether or not in specific votes that relate to the relationship between growers and wineries: I probably would have to be taken out of those equations when specific votes are taken that would affect either industry.
Mr Martin: I wasn't so much referring to the difficulty between growers and winemakers; I was referring specifically to the other products in agriculture that are being grown and marketed in Ontario. You obviously have a passion -- we can't seem to get you off it -- for the grape and winemaking industry.
What about the other farming industries? What knowledge, interest and experience do you have in terms of their challenges? How are you going to be able to, I guess in some instances, unhook yourself from the concern you have about your own particular industry and engage, and at other times disengage because you may have a conflict? Or do you see that as a problem?
Mr Beal: I don't see that as a problem. One of the things I think I would bring to the commission is my extensive knowledge in the commodity trading business and my experience in international sales and trade. I recognize how important or how significant government regulation can impact various industries, and certainly I think for our own agricultural business right now, which is a hugely important industrial sector within the Ontario economy, I can see how negatively or how adversely they can impact various agricultural commodities. I see that particularly right now with the farm subsidies that are being put in place in the United States.
I think I can bring a sense of knowledge from the commodities side of the business to the commission in helping move our various marketing boards forward in terms of exports or even how to deal with regulations and some of the protectionist policies being put forward by other governments.
Mr Martin: Setting aside the American subsidies for the moment, and certainly there are various sides to that issue, what are the biggest challenges in your experience right now to the agricultural industry community in Ontario?
Mr Beal: I certainly believe we're very competitive. I find that the Farm Products Marketing Commission is often asked to be an arbiter between the various factions or parties, particularly between the growers and the producers. I think the greatest challenge is to get both growers and producers working as a team in a co-operative way rather than in a confrontational way.
I think the long-term health of all the various commodities, whether it be pork, eggs -- I think working together is absolutely key for the agriculture-based industries to move forward. I think the role of the Farm Products Marketing Commission is really as a facilitator of that kind of dialogue, bringing together both the growers and the producers to take a long-term view of how we develop and grow the business going forward.
Mr Martin: I hear you on the growers and producers side of things. What about the producers and the distributors? I note up in my area -- I'm from the north -- where we have very small farms, a lot of them are just choosing not to be involved any more because the distribution systems have become so difficult to become part of, so very expensive, and at the end of the day not very profitable. It seems to me that when you and I go to the store to pick up our groceries on a Friday or Saturday or whatever, it is becoming ever more expensive for us to put food on the table, and yet you talk to farmers and they'll tell you that they're going bankrupt. The family farm is becoming a thing of the past, it seems.
What, in your mind, is the problem there in terms of distribution systems, and what is it that this commission you're being appointed to might be able to do to confront or challenge or bring some resolution to some of those issues?
Mr Beal: I can certainly tell you that I recognize the concerns relative to limited distribution in the wine industry. We have that very problem as well, because we do have to market through a singular government monopoly called the LCBO. Access to markets is absolutely, critically important to our farm products going forward.
To give you an idea of specific recommendations that I would put forward, I can tell you that I don't believe I have the background knowledge and the expertise today to be able to make any specific recommendations. I do recognize it is a significant concern for the small farmers going forward. Any way the Farm Products Marketing Commission can assist particularly the smaller farmers in gaining access in distribution, I think we should move forward on that.
With regard to specific recommendations, I don't feel that I'm qualified at this point in time to give you any specifics.
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Mr Martin: Do I have some time still?
The Chair: You do.
Mr Martin: You mentioned the LCBO and the monopoly that's there, and we certainly hear a lot about that. I think it's been visited and revisited and turned upside down and looked at in an attempt to figure out what to do about it.
On the other hand, you've got many other products that are distributed by what are becoming one or two major distributors, a couple of major grocery chains that, for all intents and purposes, monopolize and set the rules and dictate.
Is there anything that you believe can be done on that front? For example, the federal government has been looking at the issue of monopolies for quite some time but doesn't seem able to engender enough political will to actually come down and be tough. In Ontario, I brought forth legislation to regulate franchising because, for all intents and purposes, most of the food distribution systems are franchise operations and in those franchises there's very tight regulation and rules on how farmers get their product on to the shelves of stores and what price is charged for them.
Have you looked at any of that? Do you have any ideas as to things that might be done to improve the circumstances for the small family farm in Ontario today?
Mr Beal: I understand exactly where you're coming from. Any monopolistic organization that is created or set up or is emerging with respect to the distribution of farm products is not a good thing for this province. We need to ensure ready access for all our farm products through a broad distribution chain. I hear and agree with your concern that if we continue to monopolize the food distribution system, that is going to be unhealthy not only for our small farmers, but for our medium-sized farmers as well.
One suggestion that is being made relative to the grape-growing business and the grape growers is that co-operatives be set up through grape growers in order to process their product and have the critical mass to effectively distribute it. That's something we can look at across many of the other commodity sectors, where smaller farmers can band together to give them some marketing clout with respect to some of the larger distribution chains. That is something I think would be a positive way forward.
The Chair: We move to the government caucus.
Mr Johnson: I have both some comments and some questions for Mr Beal. I represent the riding called Perth-Middlesex. It stretches from the city limits of London north 130 kilometres to a little place called Taviotdale. I think at one time there were about 42 commodity groups represented in the council, and I think there are 39 of those 42 in my riding. I guess two of them that aren't would be the tender fruit and the grape growers. So my background will be a little bit different from yours, and I'd like to bring that perspective, because I want to content myself that you bring a great deal of experience to this position but not the background that would influence those in my part of Ontario.
By that I mean that most of that part of central Ontario was surveyed and populated in the mid-1800s, and most of them were 100-acre farms. In some societies my family would be called peasants, but we owned our own land and we farmed it and cropped it. I think throughout history it will be demonstrated nearly exclusively that peasants who own their own land do much better for themselves than when somebody else owns the land and they are asked to farm it, either on a share-cropping basis or for wages.
I bring that up because the background of most of those 20 marketing boards that were set up in the 1950s, 1960s and 1970s was that we wanted to maintain a middle-class society on farmland in Ontario rather than a peasant class. There will always be diversity between those processors and growers, such as vintners and grape growers, and in all the other commodities as well. My question is: how do you see your background fitting into those kinds of disputes?
Mr Beal: First of all, I see myself as a grower and also as a producer. I think I recognize some of the problems the growers face going forward, right down to the weather, and I recognize and can understand some of the concerns our producers have as well. I think I can bring a balanced view from both sides of the table, so to speak.
I totally agree with you: I think the 100-acre farm is an absolutely invaluable institution within the Ontario economy, and I fully support keeping it. But I cannot support poor farm practices that don't make certain farms financially viable. I don't believe we have a role to support poor business management, but I do believe we should strongly support the entrepreneurial farmer who knows how to run his farm.
Going forward, to be totally honest with you I do not have a great depth of knowledge when it comes, for example, to the production and processing of tobacco. But I think the basic principles do apply across the various commodity sectors. Again, the most important thing to me is that the producers and the processors overcome their differences. Yes, there are some conflicting interests between producers and processors. But recognizing the long-term health of both is important, and working together is the only way you're going to surf through those issues.
It's also important that the legislation keep in step with the times. I think many of these institutions have stayed pretty well the same since the 1950s, even though the industry, for a number of different reasons -- whether they're being competitive or through regulation within Ontario or offshore -- has changed the dynamics and basic principles of running that business profitably. I think it's important that we look to make sure the regulations are in step with the realities of the business. I see the Ontario Farm Products Marketing Commission as a key institution in making sure the government is informed that maybe it's time to revise certain statutes under the act.
Mr Johnson: I would draw your attention to a point by Mr Martin; that is, that in Ontario basically there are only three buyers of farm products for supermarket shelves. It's a little different than a vertical integration of growing your own grapes and processing them to the finished product.
I'm encouraged by your background and your forthrightness in the way you've answered questions. I would like you to know that I'll be supporting your appointment to this board.
Mr Beal: Thank you.
Mr Wood: We'll waive the balance of our time.
The Chair: You'll be waiving a deficit, but that's OK. There's nothing wrong with that. I was distracted with the very good questions that were being asked, so it went on at great length. But it was very valuable to the committee.
Now we go to the official opposition.
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Mrs Dombrowsky: Good morning, Mr Beal. I'm hoping you might assist me in understanding a particular part of the agriculture industry that I'm not especially familiar with. Like the member from Perth-Middlesex, I represent a rural part of Ontario. There are very different kinds of agricultural enterprises in my part of the world in eastern Ontario, and I want to talk a little bit about that.
You are a grower of grapes and you are also a producer of wine. Do you have a quota for producing grapes?
Mr Beal: No, I don't.
Mrs Dombrowsky: Do you buy grapes from yourself?
Mr Beal: Yes, I do.
Mrs Dombrowsky: So you do participate in a managed market with your grapes.
Mr Beal: Yes, I do. I obviously produce and purchase. The winery purchases grapes from the vineyard. I also have long-term contracts with nine different growers ranging from Niagara-on-the-Lake to south Lake Ontario to the Beamsville bench as well.
Mrs Dombrowsky: Very good. It's interesting, because in other agricultural enterprises -- I'm thinking particularly of the dairy industry, for example. You explained how you returned to this area and you purchased property and established a vineyard, obviously with some significant investment. In the dairy industry, what I'm hearing from individuals who would like to get involved, just as you have become involved in the wine-making industry, is that the problem for many young people who may like the farming business but don't have a family member, either a parent or a sibling, who owns a farm -- in order to get into the dairy business you have to purchase quota, and quota is very expensive. So what seems to be happening, the trend that I've been observing and the concern I hear about from folks in my part of the world, is that the smaller family dairy farm is really becoming obsolete, that it's more and more difficult for people like yourself who might want to get into the industry to be able to afford that investment.
While I think we support the principles of the managed market system, particularly in the dairy industry it's becoming more and more of a challenge for people in rural Ontario to continue to be engaged in that business. Are you aware of that? Have you had any conversations about that reality, maybe as you were doing some research for this?
Mr Beal: I can't give you an in-depth response to that. I recognize that particularly in the milk and dairy industry there are very complicated issues facing the industry. I appreciate how difficult it probably would be for someone outside the industry to be able to access the opportunity to enter it because of the quota system. I do believe that the quota system for dairy products has served a number of farmers in the Ontario dairy industry very well over the last number of years. Maybe it's time to look at a way of creating openings in that system so that new entrants can come in. But to be honest, for me to give you a detailed analysis, I'm just not prepared or in a position to be able to do that.
Mrs Dombrowsky: I understand that and I'm really not expecting that. I guess I'm sharing it with you as an elected representative so that you understand some of the issues that I hear about from people in other agricultural areas in Ontario and what some of the challenges are.
The member for Perth-Middlesex talked about the peasant folk. I come from that kind of stock myself. I grew up on a farm. I couldn't agree with him more that when you own your own land and you are your own master you can do extremely well. My son is studying agriculture at the University of Guelph, and while his dad and I are not farmers, we would very much like to become involved in that industry. What we have come to find out is that if he were to -- really the only option that would be open to someone who isn't related or directly connected to someone in the dairy industry, for example, would be to pursue one of the options you talked about: either working for someone else or time-sharing or whatever, offering to work in lieu of gaining shares in an operation but never, ever owning it. I think that the smaller family farms have contributed significantly to a quality industry in this province, and I would hope that we might be able to continue to explore ways that that might continue as well.
I was impressed with the fact that you've indicated to us you came back and you have started your own agriculture business, and want just to let you know there are other areas in agriculture where that is not as easily done. I'm not suggesting what you've done has been easy. I certainly congratulate you on your very obvious success and wish you well in this endeavour as well.
Mr Beal: If I can just comment, I hear exactly where you're coming from. One of the reasons I came back to the Niagara Peninsula was because of quality of life and lifestyle. I wanted my son to be raised in an environment where he could be involved -- I don't want to sound too silly -- with the land and grow up in a community where we're not in a big city where he's pounding the concrete every day, where he actually is close to the land.
I think it's absolutely, critically important that all Ontarians have that opportunity. I truly hear where you're coming from on that. I believe that in any business, and farming is certainly a business, you need to provide access for new entrants. That brings in new blood, new ideas. I think it's very important that we allow that opportunity to be present for people who maybe are not necessarily in the agricultural business now to have an opportunity to come in. I hear you loud and clear.
Mr Gravelle: Good morning, Mr Beal. I appreciate the sensitivity with which you've dealt with the conflict issue. You addressed it in your opening remarks and it's come up in each round of the questioning, but I wanted to pursue it a little bit further because I think it is important and important to understand.
You've described yourself as a grower and a processor, and I appreciate that. But there was difficulty in negotiations last year; it went to arbitration. The arbitration panel was brought forward and ruled in favour of the grape growers, and that made a significant difference. I understand from our researcher, which we appreciate getting, that it's made a difference of $1.5 million to the grape growers. I'm curious as to what your position is on how that decision was reached, whether or not you agreed with it and how it impacted on you, as I do think we have to be concerned about where your interests most strongly lie and what impact that might have on decisions you might make in the future.
Mr Beal: It's interesting. You talk about the large processors and the small processors. I happen to be a small processor. For the last two years we've gone to arbitration over the grape pricing process. I think there are some inherent problems with the pricing process right now that the Ontario Farm Products Marketing Commission is dealing with through a facilitator, and they're doing an excellent job. Both the growers and the processors recognize there needs to be change.
Last year in particular was interesting, because of course the processing industry said there was a requirement for only 33,000 tonnes of grapes. In the end, they purchased 41,000. From a grower's point of view I'm saying, "What gives here? When you went into negotiations, you told me there was only demand for 33. You bought 41. So was the 33 just a negotiating ploy?" That's created some distrust between the growers and the wineries, but I can tell you that the swing in the 8,000 tonnes didn't come from small processors like me. It was actually one processor and the largest winery organization in the country.
What happened there was, I think they decided to back out of buying imported juice and buy more domestic product, for which I applaud them, and given the potential for a surplus this year, I hope they are there to step up to the plate again this year. But again, there is a problem structurally with the way the price negotiation process is currently being undertaken, and there's probably not enough correct information being thrown around by both the producers and the growers. There's a misunderstanding of the realities of certain situations in terms of supply and demand on both sides of the table, and the farm products commission is instrumental and key in making sure that information is validated, is considered unbiased and is put forward to both parties so they can actually sit down and have an intelligent conversation when we go into negotiations this year.
Mr Gravelle: I take it then that one of your goals would be to actually bring that forward the way you've described it.
Mr Beal: It's absolutely key that the proper information be put forward so we can understand the overall supply-and-demand dynamic within our industry. Right now, I don't think either party does.
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The Chair: Thank you very much, Mr Beal. You may step down now, and the committee will go into its deliberations.
I think we'll deal with the intended appointments first, then talk about agency review proposals, and then we'll talk about potential future meetings.
The first intended appointee is Mr John C. Snobelen, vice-chair, Ontario Exports Inc board of directors.
Mr Wood: I move concurrence.
The Chair: Any discussion?
Mr Martin: Even though I have no real difficulty with Mr Snobelen's obvious work ethic, his knowledge of the business world, his relationship with lots of people south of the border, his understanding of the impact of that on the Canadian economy and the very difficult relationship we have with that country, given that 90% of our exports are to the US, I still have some misgivings. I've been here for almost 12 years now, and I don't remember us appointing members of the Legislature to bodies of this sort. It may have happened -- and somebody can enlighten me -- that members of the Legislature would, while still serving as members, be appointed to agencies, boards and commissions.
It seems to me that we have a different role to play. We have an overseeing role that needs to be objective and broader than what Mr Snobelen will now have. As issues of export and trade come before the Legislature and he gets to participate in debate and vote on some of these issues, he may find himself in a conflict of interest from time to time. I don't think that's healthy. Personally, I wouldn't want to be stuck in that position myself, although from time to time we all find ourselves in some degree of conflict, but I think we work it out.
No reflection on Mr Snobelen's ability, knowledge and obvious willingness to commit, but I don't think I can support this in that I think it will be a major and obvious conflict for him and for us, because we all share the same responsibility. So I won't be able to support this appointment this morning.
Mr Gravelle: I have some concerns as well about the appointment of Mr Snobelen. I share some of the concerns expressed by Mr Martin and some of the concerns that were expressed by my colleague Ms Dombrowsky as well.
What I think disappointed me the most about the presentation by Mr Snobelen was the casual manner with which he treated this position. I would have anticipated that he would be more prepared to give us some well-thought-out comments on what role he thought he could play. This is a significant board in our province, and I do think it's important that we have people who are willing to put very much a clearly thought out effort into this. I was concerned by that.
I know there is a precedent for sitting members to sit on boards. Mr Pond gave me some material on that earlier, and I appreciate that. But still, I do think there have to be some concerns about that when there are other people in the province who I would think could do that.
I must admit, it was more the fact that there was an expectation Mr Snobelen appeared to have, and perhaps he wouldn't appreciate that, that this was going to be an automatic appointment whereby he would be welcomed quickly. We obviously treat the opportunity to interview people here very seriously. I was disappointed in the fact that he had given it no thought and wasn't particularly embarrassed to state that, that he hadn't given it a great deal of thought and looked forward to it. So I won't be supporting him as well.
The Chair: Any other comments by any member of the committee? If there are no further comments, I will call for a vote.
All in favour? Opposed? The motion is carried.
The next intended appointee we deal with is Mr Norman D. Beal, member, Ontario Farm Products Marketing Commission.
Mr Wood: I move concurrence.
The Chair: Any discussion?
Mr Johnson: I just wanted to address two things. One was the point brought up by the member for Hastings-Frontenac-Lennox and Addington and the difficulty with getting into, for instance, the dairy industry now with the purchase of quota. That is a problem. I don't know the solution to that part of it, but I don't want there to be any difficulty in making the decision -- that is a problem, but to me it doesn't mean that we get rid of the good things with that. If we use the example of a farmer's son who can't afford to get into the dairy business because he can't afford the quota that is necessary, then we wouldn't have any auto workers, because if we did, all their sons would want to buy assembly plants, and I think the assembly plants in Oshawa are out of the realm of most people's financial capabilities.
I did want to just clear up that the farm marketing system was set up by farmers for farmers, for their industry, and that I support the marketing system and I support Mr Beal's appointment.
The Chair: Any other comments? If not, I'll call the vote.
All in favour? Opposed, if any? It's carried unanimously.
That concludes our consideration of intended appointees.
COMMITTEE BUSINESS
The Chair: The next issue I have listed is agency review proposals.
Mr Wood: I have a motion to put before the committee. I move that the committee approve in principle the review of a CCAC or CCACs and that the Chair be requested to put this matter on the agenda around September 1 or at any other time he may deem appropriate.
The Chair: Thank you very much for putting the motion. Any discussion on the motion?
Mr Gravelle: I am pleased to see that we'll moving forward with the agency review of the community care access centres and home care, particularly in light of the fact that we were so disappointed not to see more money put toward home care in this budget. I think it's even more significant that we discuss this. Certainly that was something we were expecting in the budget, and it wasn't there. I think it's all the more important that we have this review. We appreciate this, and I certainly will be supporting it.
Mr Martin: Just to add to those comments, there are some interesting things to be looked at here, including the fact that in the past year there has been a hostile takeover by the government of that whole realm of health care delivery, with a wholesale replacement of boards and executive officers in some instances, and the fact that we're finding that more and more CCACs this year didn't spend their allotted budgets because they are claiming that the regulation within which they need to operate doesn't allow them to deliver the kind of service their constituencies need, so they've had to send money back. The government now is claiming that they are giving more money to CCACs when in fact all they're doing is returning the money that wasn't spent last year.
It will be interesting to have a look at that and see exactly what the reality is and why, and what comfort we have that next year these CCACs, even if they get the money back, will be able to spend it, given the regulation that's in place and the very tight control over that by government through these newly appointed boards that answer to nobody but the government. So I look forward to this.
Mr Wood: I would add by way of explanation that it's my intention that the Chair might put this on the agenda about 30 days before the Legislature resumes sitting, so that we can plan what's going to be done when the sitting resumes. That's why I worded the motion the way I did.
The Chair: Thank you for that clarification. I think that was in the form of a motion you put forward?
Mr Wood: I've given you discretion. I was suggesting to you the way in which it was my hope you might exercise it.
The Chair: Can we translate that in the form of a motion, then?
Mr Wood: No, I'm satisfied you have on the record --
The Chair: Oh, I didn't know you'd be that satisfied.
Mr Wood: We have confidence in --
Interjection: Twenty-five years' experience.
Mr Wood: -- the 25 years' experience showing through with a very judicious determination based on the discretion we're giving you.
The Chair: This is such a -- I won't call it non-partisan -- multipartisan committee that develops consensus. Thank you very much for that vote of confidence, Mr Wood. We have that matter dealt with, then.
Mr Wood: Do we call a vote?
The Chair: Oh, yes. All in favour? Opposed? I knew that would go through unanimously. That's good stuff. Thank you very much, Mr Wood, for your help in that regard, and to members of the committee for your indulgence of that issue.
We have one intended appointee on the list so far, Yvonne Weir, to the Muskoka, Nipissing, Parry Sound and Timiskaming District Health Council, and the deadline would be July 7, 2002. May I assume -- I won't assume anything. We can do one of two things: we can have a meeting I guess, next week, and deal with that. Is it next week, Mr Clerk?
Clerk of the Committee (Mr Tom Prins): Yes.
The Chair: Or we can put her together with some others that will be coming in the summer. That would require an extension.
What is the wish of the committee?
Mr Wood: I would ask unanimous consent of the committee to extend by 30 days the time permitted for consideration of her appointment.
Mr Martin: I have no difficulty with that, but I would like to see us make every effort to maybe get this thing done next week so it's off the table and we can move forward into the summer with a clean slate. We're going to be here anyway. It will take half an hour.
Mr Wood: I'm not strong either way. I'm merely putting that forward so the option exists. I think a meeting is likely anyway in July, and if we have only one person to deal with next week, we can leave that option open. But if there's a strong desire to do it next week, I'm certainly not opposed to it.
The Chair: Any other comments? If not, I think it would be useful at least to pass the motion that has been suggested, and then if we decide we want to have a meeting, I'll consult with the members of the committee through the clerk to see if it's convenient next week or not.
If we can vote on that motion: all in favour? Opposed? The motion is carried.
Any other business to come before the committee today?
Mr Wood: I move adjournment.
The Chair: All in favour? Opposed? Carried. Thank you very much, members of the committee.
The committee adjourned at 1123.
CONTENTS
Wednesday 19 June 2002
Subcommittee reports A-1
Intended appointments A-1
Mr John Snobelen A-1
Mr Norman Beal A-5
Committee business A-11
STANDING COMMITTEE ON GOVERNMENT AGENCIES
Chair / Président
Mr James J. Bradley (St Catharines L)
Vice-Chair / Vice-Président
Mr Michael Gravelle (Thunder Bay-Superior North / -Nord L)
Mr James J. Bradley (St Catharines L)
Mrs Leona Dombrowsky (Hastings-Frontenac-Lennox and Addington L)
Mr Michael Gravelle (Thunder Bay-Superior North / -Nord L)
Mr Bert Johnson (Perth-Middlesex PC)
Mr Tony Martin (Sault Ste Marie ND)
Mr Frank Mazzilli (London-Fanshawe PC)
Mr Wayne Wettlaufer (Kitchener Centre / -Centre PC)
Mr Bob Wood (London West / -Ouest PC)
Substitutions / Membres remplaçants
Mr Wayne Wettlaufer (Kitchener Centre / -Centre PC)
Also taking part / Autres participants et participantes
Mr Peter Kormos (Niagara Centre / -Centre ND)
Clerk / Greffier
Mr Tom Prins
Staff / Personnel
Mr David Pond, research officer,
Research and Information Services