Assemblée législative de l'Ontario

CHUA DI-DA (AMIDATEMPLE) OF TORONTO ACT, 1993

ROSALIND BLAUER CENTRE FOR CHILD CARE ACT, 1993

CITY OF GLOUCESTER ACT, 1993

CAMBRIDGE-GUELPH RAILWAY COMPANY LIMITED ACT, 1993, AND ASSOCIATED LEGISLATION

TOWNSHIP OF ATIKOKAN ACT, 1993

HUMANE SOCIETY OF OTTAWA-CARLETON ACT, 1993

CONTENTS

Wednesday 23 June 1993

Chua Di-Da (Amidatemple) of Toronto Act, 1993, Bill Pr11

Tony Ruprecht, MPP

Noi Nguyen, vice-president, Chua Di-Da (Amidatemple) of Toronto

Rosalind Blauer Centre for Child Care Act, 1993, Bill Pr34

Christel Haeck, MPP

Tracey Haapamaki, president, Rosalind Blauer Centre for Child Care

City of Gloucester Act, 1993, Bill Pr18

Gilles E. Morin, MPP

Michael Minkowski, legal counsel, City of Gloucester

Cambridge-Guelph Railway Company Limited Act, 1993, Bill Pr26 and associated legislation (Bills Pr27,

Pr29, Bill Pr30, Bill Pr31, and Bill Pr32)

Ted Arnott, MPP

Jim Wilson, MPP

Paul R. Johnson, MPP

Murray J. Elston, MPP

Daniel Waters, MPP

Carol Pennycook, legal counsel, Scotia McLeod Inc.

Peter Wilson, representative, Central Ontario Historical Railway Association and chair, Central Ontario

Railway

Robert Smit, business planning officer, Canadian National Railway

Township of Atikokan Act, 1993, Bill Pr38

Len Wood, MPP

David Boileau, director and business coordinator, Valerie Falls Power Inc

Robert Davidson, reeve, Township of Atikokan

Humane Society of Ottawa-Carleton Act, 1993, Bill Pr82

Ron Eddy, MPP

John Hamilton, executive director, Humane Society of Ottawa-Carleton

Continued overleaf

Continued from overleaf

STANDING COMMITTEE ON REGULATIONS AND PRIVATE BILLS

*Chair / Présidente: Haeck, Christel (St Catharines-Brock ND)

*Vice-Chair / Vice-Présidente: MacKinnon, Ellen (Lambton ND)

*Eddy, Ron (Brant-Haldimand L)

*Fletcher, Derek (Guelph ND)

*Hansen, Ron (Lincoln ND)

*Hayes, Pat (Essex-Kent ND)

*Johnson, David (Don Mills PC)

Jordan, Leo (Lanark-Renfrew PC)

*Mills, Gordon (Durham East/-Est ND)

*O'Neil, Hugh P. (Quinte L)

*Perruzza, Anthony (Downsview ND)

*Ruprecht, Tony (Parkdale L)

*In attendance / présents

Also taking part / Autres participants et participantes:

Hayes, Pat, parliamentary assistant to the Minister of Municipal Affairs

Melville, Tom, legal counsel, Ministry of Municipal Affairs

Reilly, Michael, legal counsel, Ministry of Education and Training

Robson, Bill, senior policy adviser, Ministry of Municipal Affairs

Wood, Margaret, policy adviser, Ministry of Municipal Affairs

Clerk / Greffière: Pajeska, Donna

Staff / Personnel: Klein, Susan, legislative counsel

The committee met at 0936 in committee room 1.

CHUA DI-DA (AMIDATEMPLE) OF TORONTO ACT, 1993

Consideration of Bill Pr11, An Act to revive Chua Di-Da (Amidatemple) of Toronto.

The Chair (Ms Christel Haeck): Mr Ruprecht, you're right on the mark here ready to begin with the applicant. Please begin with your remarks.

Mr Tony Ruprecht (Parkdale): I'm very happy this morning, members of the committee, to introduce to you Mr Noi Nguyen, who is the vice-president of the Chua Di-Da (Amidatemple) Toronto and who is going to explain to us very briefly why the default notice at that point hadn't been received.

Mr Noi Nguyen: I don't know the parliamentary procedure, so I would like to proceed.

The Chair: Mr Nguyen, if you would continue and then possibly the members might ask you some questions. But it's very informal. Be as comfortable as you can be.

Mr Nguyen: Chua Di-Da failed to send back the notice of our address change after it moved to another location shortly after incorporation and Chua Di-Da did not receive the notice of default because it moved to another location and those members returned to their old address occasionally to look for mail.

Chua Di-Da did not realize that it was dissolved after five years until later when I found out when I contacted the office of public trustee. Chua Di-Da still continued its activities even after it was dissolved without knowing that it was dissolved.

The Chair: Very good. Are there any objections from the Ministry of Municipal Affairs?

Mr Pat Hayes (Essex-Kent): No.

The Chair: I'll open it to questions.

Mr Ron Hansen (Lincoln): If Mr Ruprecht is here representing the interested party, I have no problem in supporting this particular bill.

The Chair: Shall sections 1 through 3 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Mr Derek Fletcher (Guelph): I move that the committee recommend that the fees and the actual costs of printing at all stages and in the annual statutes be remitted on Bill Pr11, An Act to revive Chua Di-Da (Amidatemple) of Toronto.

The Chair: All in favour? Carried.

Mr Ruprecht: Madam Chair, I want to thank the committee and Donna Pajeska for her understanding in putting it on for today.

The Chair: Thank you very much, Mr Nguyen. That was very quick and I hope satisfactory to you.

ROSALIND BLAUER CENTRE FOR CHILD CARE ACT, 1993

Consideration of Bill Pr34, An Act to revive Rosalind Blauer Centre for Child Care.

The Chair: Mrs MacKinnon, if you'd like to take the chair while I join my applicant.

The Vice-Chair (Mrs Ellen MacKinnon): Ms Haeck, if you'd please make your comments regarding Bill Pr34, An Act to revive Rosalind Blauer Centre for Child Care.

Ms Christel Haeck (St Catharines-Brock): Ms Tracey Haapamaki is here on behalf of the child care centre, and I had a chance to meet with her several months ago when she and other members of the staff realized that the centre was no longer incorporated. So I'm pleased to see that she's here and that obviously all of the work done to prepare this bill has met with the committee's satisfaction to this point and I'd like to introduce Ms Haapamaki to make any comments on behalf of the centre.

Ms Tracey Haapamaki: Basically what happened was the board is made up of parents and it tends to be highly fluid and sometimes lags in continuity, so we just discovered this in the last year and we've just taken the steps to revive the status, unaware that this had actually happened in 1987.

The Vice-Chair: Thank you very much. Are there any interested parties who wish to speak to this particular bill? Parliamentary assistant, have you some remarks?

Mr Hayes: Madam Chair, the Ministry of Municipal Affairs has no objections to this application.

The Vice-Chair: Questions from the committee?

Mr Ruprecht: Just a short statement, Madam Chair, that Ms Haeck has examined this with great detail and I would trust in her judgement totally and that's why I will support this.

Ms Haeck: I'll refrain from making any comments.

The Vice-Chair: Are the members ready to vote?

Shall sections 1 through 3 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall we report the bill to the House? Agreed.

Mr Gordon Mills (Durham East): Madam Chair, I would like to move that the committee recommend that the fees and the actual cost of printing at all stages and in the annual statutes be remitted on Bill Pr34, An Act to revive Rosalind Blauer Centre for Child Care. In other words, that it doesn't cost them anything.

The Vice-Chair: Any discussion? All agreed? Thank you all very much; thank you for coming. It was rather painless in the end.

Ms Haeck: I'd like to thank the committee on behalf of the centre and I know Ms Haapamaki and the centre are pleased with the quick response to this bill.

CITY OF GLOUCESTER ACT, 1993

Consideration of Bill Pr18, An Act respecting the City of Gloucester.

The Chair: Mr Morin, how nice to see you. You have -- let me check my agenda here -- Pr18, An Act respecting the City of Gloucester. If you would please introduce your applicant, as well.

Mr Gilles E. Morin (Carleton East): Yes, I'd like you to meet Mr Minkowski, who is the legal counsel for the city of Gloucester.

The city of Gloucester has now reached a population of 104,000. It's one of the fastest-growing communities in Ontario. The responsibilities have also changed and this is the reason Pr18 was introduced.

Mr Michael Minkowski: Thank you for the opportunity of presenting some submissions. I'll try to keep them brief. The principal points have been set out in the written compendium, which I understand has been circulated.

The purpose of this legislation is twofold: first to permit city council to reacquire licensing powers which have technically devolved on the City of Gloucester Police Services Board because of the provisions of the Municipal Act; and second, to allow the city to charge licence fees which reflect the true administrative costs as opposed to the fixed costs of between $10 and $50 set by the Municipal Act.

By way of background information, as you may be aware, under the Municipal Act, when a municipality exceeds a population of 100,000, technically the power and authority to license, regulate and govern devolves on the police services board. Examples of some of these types of businesses and trades that would be affected by these licensing powers include sale of refreshments, restaurants and food shops, sale of meat, barbershops, driving schools, bowling alleys and so forth.

It is the position of the city that these types of matters properly belong under the jurisdiction of the city of Gloucester. The city has now a population, as Mr Morin has mentioned, of 104,000, and the reasons why we'd like to submit that the city should retain these licensing powers are fourfold. First, the city has the technical expertise, based upon the fact that until it changed in population, it historically had always carried on these functions. Second, it has had and continues to have the administrative and enforcement infrastructure. Third, it is our submission that the licensing function is a legislative act which should be performed by a publicly elected body that's accountable, namely municipal council. Fourth, the city of Gloucester police services has no objection and in fact it has no interest in acquiring or having any of these functions.

With respect to the licence fees, the objective is to have a cost recovery system that the proposed bill puts a cap on, that the fees cannot exceed the reasonable administrative costs, so that there is some control there and so that council acts in a responsible manner.

This is motivated by the fact that there are several sections in the Municipal Act which set, pre-fixed, the maximum licence fee that can be charged. These fees were set, in many cases, going back to the early part of the century. For instance, the ability to set a licence fee for auto service stations under section 210, paragraph 154, was established in 1933 at a licence fee of $10, and that's remained unchanged. I can go through a number of items where these fees have been set, from 1914, 1922, and the maximum is, as I said, in many cases $50 and in some cases $20. The written submissions indicate that the administrative costs are somewhat higher -- not too much higher, but overall.

In conclusion, the city has received no opposition as a result of advertisements of its notice. It has advertised in both the local French and English newspapers. It has received no notice of any opposition or objection from any resident, group or association within the city or elsewhere.

The Ministry of Municipal Affairs is on side with this legislation. We've received the kind assistance of the legislative counsel in some of the drafting issues.

The bill will be identical to the legislation, the powers that have been granted to Gloucester's neighbours, the city of Ottawa in 1980, and the city of Nepean in 1984 and 1991. We're really not doing anything different from what's already been approved previously and what's been granted. We're creating some consistency and uniformity on the municipal level within the Ottawa-Carleton region.

There's one minor technical amendment that has to be performed. I'm prepared to answer any questions.

The Chair: Let me just do one quick procedural check to make sure there are no other interested parties here in the audience who wish to come forward and make any comments on this bill. Seeing none, I will turn to the members.

Mr David Johnson (Don Mills): To the representative, looking at the processing costs outlined on page 11, some of them seem somewhat low, and I guess you've explained the history. Have you tried to address these costs in the past?

Mr Minkowski: Address them in what way?

Mr David Johnson: Legislation would be required, apparently. Have you attempted to have these changed in the past to be more realistic?

Mr Minkowski: No, we haven't.

Mr David Johnson: Okay. In terms of the authority, the authority at present, as we sit here today, rests with the city or the police services board?

Mr Minkowski: As we sit here today, the authority, with respect to the business and trades and callings, in most cases, now rests with the police services board, technically speaking.

Mr David Johnson: Technically, but the city is actually still performing that function today, is it?

Mr Minkowski: That's right.

Mr David Johnson: What triggered the change? Was it the fact that you went over 100,000 people?

Mr Minkowski: The city wanted to amend one aspect of its licensing bylaw last year and sought a legal opinion on a related but different issue. At that time we became aware of the fact that because of the population, there's a technical problem.

Mr David Johnson: Technically, at that point, you were actually in violation. I guess you probably have been for some time.

Mr Minkowski: The 1991 census indicated a population of 101,000, so it's been since 1991.

Mr David Johnson: How does the city run the operation? Is it part of the city council itself, or is it run out of a committee appointed by the council?

Mr Minkowski: In terms of the actual administration? The planning and development department has a bylaw enforcement branch. That branch has designated licensing officers and property standards officers and enforcement officers, and they actually administer the whole scheme. The manager of that branch reports through the commissioner of planning and development to council as a whole and is responsible and accountable in that way.

Mr Jim Wilson (Simcoe West): Madam Chair, I just wanted to ask, through you perhaps to the parliamentary assistant: Given that the witness has indicated there is precedent both in Ottawa and Nepean, I'm wondering how frequently the Legislature has been asked to pass a private bill like this with respect to the transferring of these licensing powers, and whether the ministry has perhaps looked at making adjustments to the Municipal Act so that the cost and time involved in this process wouldn't have to be repeated, if the government has no objection to devolving these powers from the police services board to the municipalities themselves.

The Chair: Procedurally, that's the next part of what we'll do, but I have one more questioner before I'm in the position of giving it to Mr Hayes.

Mr Jim Wilson: Normally, we don't get such an extensive answer which would be required to my question. Usually, we just get a yes, no, or no objection from the parliamentary assistant. So when he does have the opportunity, I'd like to know what the precedent is.

The Chair: Sure. Mr Hayes is quite prepared to answer your question.

Mr Hayes: Mr Wilson has raised a very good point, and I think it's worthwhile that the ministry does look at that, because there are other bills where we have the same concern, that possibly it would be a good idea to look at a bill, period, instead of individual private bills. We have discussed this on other bills too; yes, we're going to look at it.

Mr Ron Eddy (Brant-Haldimand): My comments were along the same lines. The Municipal Act, as we know, is archaic and outdated in many areas; one is the 100,000 population line, and secondly, wherever there are set fees stated in an act they become outdated in one way or another. Indeed there are some other things that should be amended in the Municipal Act, and I hope a list is being kept of them, because it's past time the act was updated in many ways.

But it should be stated in any case that instead of a set fee or amount, it is an amount to be determined by the body providing this service with a cost recovery in mind, because the mode of business any more is cost recovery. I'm pleased to support the bill and add those comments.

The Chair: Any additional comments, Mr Hayes?

Mr Hayes: I apologize to Mr Wilson. I think you asked how many others had come before the committee. There were actually the three over the last 10 years, Ottawa, Nepean and the city of Windsor. I'm sure there are a lot of others.

However, the Ministry of Municipal Affairs does not have any objections to this application.

Mr David Johnson: Perhaps to the staff who are here, in Metropolitan Toronto there is a licensing commission which is appointed by the regional government, and as I understand what's happening here, the licensing commission would do the same sort of thing. It doesn't come from the police services board; it comes through the regional council. I thought that was rather a standard procedure. What they're saying seems to make a great deal of sense, that this should be at the municipal level as opposed to the police services board level. Is Metro unique in that regard?

Ms Margaret Wood: I'm Margaret Wood, staff at the Ministry of Municipal Affairs. Yes, Metro is unique in that it does have a licensing commission performing its licensing function. Metro is not unique, however, in retaining licensing authority with the corporation itself rather than the police services board, as we've indicated earlier.

Something that you may be interested in: The ministry has probably at least several times over the last decade considered making a major update of the licensing provisions in the Municipal Act. The last attempt did not go forward because of objections from the business community. I think it's well recognized in the ministry that there is a need to update the licensing provisions in the Municipal Act, and certainly this 100,000 population item is a good case in point. We do realize that this is something that could be changed, and it has been considered in the past, but we haven't had any success.

Mr David Johnson: Is the ministry then looking at the possibility of redirecting this responsibility to the smaller municipalities even below 100,000? Is that what you're saying?

Ms Wood: No. Municipalities below 100,000 population have the responsibility for the licensing.

Mr David Johnson: So what I should have said was the reverse: Is the ministry looking at directing this responsibility to municipalities over 100,000?

Ms Wood: We're not looking at it at this immediate moment, but certainly we have considered amendments like this in the past. As I indicated earlier, our last attempt to revamp the licensing legislation was opposed by the business community. We realize that there is a need to update the provisions, but we haven't had any luck in introducing them.

Mr Eddy: Just a comment and a question perhaps. Because the matter of licensing in municipalities has been opened to the extent it has, with proposed amendments, I would hope that when any further amendments come forward it's a much simpler system. I feel very strongly that elected councils should have the right and the responsibility to establish licences and the fees therefor, realizing that they're held accountable by their electors in the particular municipalities. It's a better system, and if you're looking at licensing capabilities at the upper-tier level, restructured county or county, I think it has to be with the agreement of the local municipalities. Metro is unique in its Metro-wide licensing, and possibly that's appropriate. I haven't heard a lot of criticism of that.

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The Chair: Are the members prepared to vote on Bill Pr18?

Shall sections 1 and 2 carry? Carried.

I believe we have an amendment to section 3.

Mr Fletcher: I move that paragraph 5 of subsection 3(1) of the bill be amended by striking out "10" and substituting "15."

The Chair: All in favour of the amendment? Carried. All in favour of the section, as amended? Carried.

Shall sections 4 and 5 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Thank you for coming forward, Mr Morin, and your capable presentation of the bill. We try to make it painless.

Mr Morin: Can I do the same thing with Bill 154?

The Chair: No comment.

CAMBRIDGE-GUELPH RAILWAY COMPANY LIMITED ACT, 1993, AND ASSOCIATED LEGISLATION

Consideration of Bill Pr26, An Act respecting Cambridge-Guelph Railway Company Limited; Bill Pr27, An Act respecting Georgian-Simcoe Railway Company Limited; Bill Pr29, An Act respecting Picton-Trenton Railway Company Limited; Bill Pr30, An Act respecting Stratford, Huron and Bruce Railway Company Limited; Bill Pr31, An Act respecting Waterloo-St Jacobs Railway Company Limited; and Bill Pr32, An Act respecting Waubaushene Railway Company Limited.

The Chair: Ladies and gentlemen, we have a number of railway bills, shall we call them, coming forward to us. I would like the applicants to come to the table here, and we have a series of sponsors: Mr Arnott, Mr Wilson, Mr Johnson. Mr Waters, could you please join us here near the microphones? Mr Johnson, I understand you are acting on behalf of Mrs Witmer. Is there a member of the Liberal caucus prepared to act on behalf of Mr Elston? Oh, there's Mr Elston. Good. Your timing is excellent, Murray. If you want to move forward to one of the mikes so we can pick up any comments you might --

Interjection: I don't think we need them.

The Chair: Well, we can usually hear them, but I think Hansard might like to have him on record.

The Chair: Just for the record, we're dealing with Bills Pr26, Pr27, Pr29, Pr30, Pr31 and Pr32. Mr Arnott, the act respecting the Cambridge-Guelph Railway Co is first, so if you could make a few opening comments, and I'll turn to the other members and then turn to the applicant for comments.

Mr Ted Arnott (Wellington): Good morning, committee members. I'm privileged to be here this morning to recommend approval of An Act respecting Cambridge-Guelph Railway Company Limited. I have Carol Pennycook here from the firm of Davies, Ward and Beck, who will give some comments on this bill with this special legislation respecting the operation of a railway. The applicant represents that it is making preparations to operate railway services in Ontario.

Mr Jim Wilson: I am pleased to recommend to the committee and recommend to the House the passage of Bill Pr27, An Act respecting Georgian-Simcoe Railway Company Limited.

Very briefly, the importance of this to my riding and to Mr Murdoch's riding, to both the counties of Simcoe and Grey, is that, as members will know, with all of these bills, I would think, CN has been in the process over the years of abandoning these short lines, these spur lines. The purpose of the bill is to eventually have a purchaser of these lines and to be able to operate short-line railway companies.

It's of great benefit to the town of Collingwood because of two of our major industries, Nacan starch products and Canadian Mist, which is the second-largest Canadian whisky in terms of volume of sales in the United States; over 80% of its product is exported to the United States via rail. We want to ensure that the Meaford spur, in the case of Pr27, continues to operate and that these companies stay in operation.

I ask the committee's support for that bill.

Mr Paul R. Johnson (Prince Edward-Lennox-South Hastings): I too am in favour certainly of this bill, Pr29, and indeed that's why I'm here today as sponsor. You may not know, but the line is almost wholly situated within Prince Edward county, which is in my riding of Prince Edward-Lennox-South Hastings. I think that it certainly plays an important role in that community and I know there's considerable interest for the line within that community. The passing of this bill is certainly a formality in allowing that line to continue operating.

You didn't mention it, Chair, so I just thought I'd mention it now, that we do have an interested party here in regard to Bill Pr29, and that's Peter Wilson, who's the chair of the Central Ontario Railway. I wasn't sure whether you were going to allow him to speak to this.

The Chair: I just wanted to get the sponsors all out of the way at once and then turn it over to Ms Pennycook so that we could deal with these, since she's the sponsor for all of the bills, and then move into interested parties. I was just trying, since there are six bills that are all similar, to logistically try to deal with them all at once. Mr Elston, regarding the Stratford, Huron and Bruce Railway Co.

Mr Murray J. Elston (Bruce): This likewise is a bill that will provide some economic development opportunities for our area. We have interested parties. We have already completed initial discussions about rerailing the line that was derailed by CN. The discussions and the passage of this bill as a result are, in my view, critical to the ongoing possibilities of expanded economic activity.

It will serve some existing industries that are already on site in Bruce county and as a result probably will be able to pick up some business as well along the line, because the bulk of the business will operate from Bruce county. That will provide other businesses, in my view anyway, with the opportunity of joining in an economically feasible mode of transportation as a result of the end user.

We would really like to get this bill passed. It's taken a little bit longer than we had hoped. There have been some delays already, so if we could get the committee's approval to go forward, that would be extremely helpful to my area and to the people who are looking for an expansion of economic activity there.

The Chair: Mr Johnson, on behalf of the Waterloo-St Jacobs Railway Co.

Mr David Johnson: I'm not quite as familiar, I guess, Madam Chairman, having been just designated the sponsor about 15 minutes ago, but I understand that this will also support economic development opportunities of a Waterloo spur extending from Kitchener to Elmira, which is about 12 miles, I guess, of track and about 101 acres of land involved. It will facilitate a feeder line to the property involved. I'm supportive as well of the application.

The Chair: Mr Waters, on behalf of the Waubaushene Railway Co.

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Mr Daniel Waters (Muskoka-Georgian Bay): I too am asking for the support of the committee in respect of the Waubaushene Railway Co. Over a year ago we went to the National Transportation Agency, a federal commission, to save our rail line, as CN, I believe, is not living up to what the intent of it was.

Historically, they were given this land to supply transportation throughout the province and they refuse to live up to that, so I see this as the best alternative. We ended up within 18 months and then we will have to go back again to the commission, and obviously CN has more money to fight this than the town of Midland.

We have a number of industries that at this time use the rail system, we have a number more that want to use it and CN makes it impossible for them to connect up and use it. So I see this as the best alternative to it, if we can get a private short-line railway company in there. We know we have a viable line, we need the transportation, and therefore I will be supporting this.

The Chair: Thank you, Mr Waters. What I would ask the members to do is possibly sit at the mikes that are available around the room here and I would ask Ms Pennycook, is there a Mr Smit available? Is he going to be making any comments, or Mr Taylor, Mr Douglas Fletcher or Mr Peter Wilson?

Ms Carol Pennycook: I'm Carol Pennycook and I will be speaking on behalf of the applicant. Mr Fletcher and Mr Smit are available in the room today to respond to any questions, should there be any, but they do not propose to make any separate submission.

The Chair: If they could move forward, because it could happen that they will be asked questions by members -- just that they are available. If you would like to continue with your remarks, Ms Pennycook.

Ms Pennycook: Our firm acts as counsel to the applicant, ScotiaMcLeod Inc, which has been retained as financial adviser to Canadian National Railway Co in connection with proposed sales by CN of various feeder lines and short-line railways. As many of the sponsors have indicated, the sale of feeder lines is consistent with CN's policy of rationalizing its assets in accordance with approvals of the National Transportation Agency.

This, as the sponsors have indicated, provides a business opportunity for operators of these feeder lines or short lines and allows the maintenance of rail service to customers in Ontario and, in some instances, provides CN with an alternative to submitting applications for abandonment of lines.

The sale itself will be conducted by a bid process and any sale or operations and approval of a purchaser of a line is subject to a number of regulatory approvals, not only at the federal level with the National Transportation Agency but also approvals in compliance with subdivision requirements under the Planning Act in Ontario, approvals of the Ontario Municipal Board, which governs the safety and other regulations regarding operations of railways in the province, and of course approval is required through the Ministry of Transportation in Ontario with respect to safe operations of equipment, track and operating procedures.

As counsel to the applicant, we have incorporated six Ontario corporations which were referred to by the sponsors and we are applying for this private bill as a formality under the Railways Act to deem each one of these individual corporations to be incorporated by a special act.

The Railways Act is a 1950s statute of the province. The last time it was amended was in 1952. As I'm sure all of you are familiar, in the 1950s the province did not have modern corporate legislation, so the only way to incorporate a company was by a special act of the Legislature, unlike today where you incorporate under the Business Corporations Act.

It's our understanding from the Ministry of Transportation that there have been a number of these bills that have come forward in the last several years. Indeed, we have sponsored one before and there are a number of companies around. We have discussed with them the possibility of amendments to the Railways Act to alleviate this formality of requiring a Business Corporations Act company to be incorporated by a special act. Although the ministry agrees with us, the Railways Act is very complicated and they are looking at revamping the entire act and did not want to go about it piecemeal. I don't have any idea what their timetable is for that, but they are aware of the technical problem the statute creates on its present terms.

I would like to also mention that this private bill simply qualifies these companies to apply to operate a railway. It does not in any event eliminate the need for the usual regulatory procedures, not only on a federal basis but in particular approvals of the Ontario Municipal Board. No company, including any of these, if these bills are approved, would be entitled to operate a railway in the province of Ontario without an order of the Ontario Municipal Board.

I believe that's important for the members to understand because a number of inquiries in response to our advertisements of this bill raised concerns from citizens in various communities regarding safety standards and operational standards, access to properties where lines are currently located. Typically, the Ontario Municipal Board orders deal with these types of things in detail, providing an approval or a licence, if you will, for a company to operate a railway only subject to its complying with these types of things.

The Ontario Municipal Board continues to be in touch with railways on an ongoing basis as a regulator and as the watchdog to ensure on an ongoing basis that appropriate operational standards, safety standards and community standards are met by these railways, so the bill of course does not deal with any of those requirements. The bill simply deals with the qualification of these companies as special act companies so that they may in fact apply both as a purchaser of lines and then to receive operational procedures.

In closing, I would mention that we have met with both senior staff and legal counsel at the Ministry of Transportation and at the Ontario Municipal Board in preparation of the draft bill, as well as with the sponsors, and have had the benefit of their input into the wording of these acts.

The Chair: Mr Wilson, at this point you're the only person or organization who is listed on my agenda as an interested party. I will ask you first to make some comments as an interested party, and then we'll see if there are any others in the room at this time.

Mr Peter Wilson: My name is Peter Wilson and I represent a non-profit group called the Central Ontario Historical Railway Association. We started working on obtaining the rail line between Trenton and Picton in 1989, when the first abandonment was announced, so this seems to be a part of the natural process, four years later, which is coming our way.

We think the rail line between Trenton and Picton is very valuable to the community. We have an expanded use for it. We'd like to use it as the economic and practical base for a community-based college for the skilled trades. To that end, we have organized 14 high school shop classes to come with us and operate the rail line for both freight and passenger.

It's quite a detailed plan, and I'll leave with you a copy of our business plan. That's why I would urge that you approve this bill as quickly as possible so we can get to work. If we become the successful bidder, we should be in business in September 1993. We believe that over the first five years we can create 50 to 60 permanent, full-time jobs, using the railway for tourism and freight. We're very anxious to get on with that job because we come from a neighbourhood that has tremendous unemployment, and we really need the break. That's my appeal to have this bill passed through as quickly as possible.

The Chair: Let me just ask, are there any other interested parties who are here in the audience who would wish to speak on any of the railway bills that have come before us? Seeing none, I will open it up to the members. We have two members who wish to ask some questions, and that's Mr O'Neil and then Mr Ruprecht.

Mr Hugh O'Neil (Quinte): I should mention that part of the riding of Quinte is touched by this railway line because it starts from Trenton. Trenton is within my riding. I'd also like to thank Peter for appearing here today. I know that Peter Wilson has done a lot of work and studies on trying to find a use for this line which would benefit the whole community, not only my riding but also Mr Johnson's. I know that he's done several studies and talks about a use for it to generate some tourism, to generate some jobs. In talking with Peter, I've told him that he certainly has my support in this project as long as it can be proven that it is financially feasible.

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I guess that would raise some concerns. I sort of hate throwing something in here that would appear maybe to be anti-approval of these bills, but that is not the case. I believe that it's likely in each of these cases, but in particular I want to talk about this particular line which runs from Trenton to Picton and which the CNR is trying to, as I say, set up these corporations or companies whereby it can sell these particular lines off.

As I have expressed to Peter and other people within our area, although it is an excellent idea, I think that what we have to be concerned with is some of the same problems that were raised -- this particular line also goes from Trenton to Marmora -- of once it is sold, who is going to be responsible for a lot of the costs that could be incurred by the new purchasers, which is now having to be incurred by Canadian National Railways, and that is, who's going to look after the fencing, who's going to look after the maintenance of the crossings, who's going to look after the safety features of it, the cost of taxes, whatever those may be?

I know that in the case of Peter's application he has received grant moneys in the past to do the studies that he's done. I think also in our particular case, to make this feasible as a tourist attraction, training for students or a train for tourists, it may be that provincially or federally whether it can sustain itself without grants that will be asked for by both the provincial and the federal governments.

I just raise some of these concerns, that once CN loses the responsibility of these through the setting up of a private company and a selling off of these companies, I think we have to know that the companies, the people who buy it, are very familiar with some of the costs that may have to be borne by that particular company or group.

I express these concerns, although as I say I think the purpose of the bills is good, but I raise these precautions.

Mr Ruprecht: I had similar concerns and I was just wondering whether Ms Pennycook is able to respond to some of the concerns by Mr O'Neil, especially in terms of maintenance, crossings, fencing, access, property rights and so on.

Ms Pennycook: Yes.

Mr Ruprecht: Then I have a second question, if that's possible, please.

Ms Pennycook: In response to Mr O'Neil's comments, certainly the applicant would agree, and it's my understanding, that their client, Canadian National, would agree.

In respect of the items that you raised as far as fencing, safety standards and so forth, those are matters that are dealt with very, very specifically by the Ontario Municipal Board and there is a series of regulations already in effect in the province that all railways are subject to that deal with safety regulations.

However, the Ontario Municipal Board orders go beyond those regulations, and properly so, because they look at particular communities where the particular rail line is and special requirements.

For example, in 1992 the Ontario Municipal Board looked at Goderich-Exeter Railway Co Ltd, which operates a short line which it acquired from CN, again through a bid process much like we're going on today, and because of concerns in the community part of the order for operations dealt with certain requirements with respect to dealing with noise levels, concerns due to the nature of the actual location of the rail line and citizens' concerns. The board went beyond the usual safety regulations that are applicable to all railways and looked at particular needs of the communities.

The municipal board, I think, deals with the requirements in that regard in a great deal of detail because it does have the benefit of requiring studies and detailed submissions on a much more specific basis than a governing body would normally deal with because it is the ongoing watchdog, if you will, for these types of things.

We believe that financial capacity is an important aspect of the selection of a purchaser, and that is certainly considered in the bid process. The bid process doesn't merely consider what a purchaser is prepared to pay but also their ability to carry out their business plan, and this is something that is reviewed in great detail, not just by the vendor, Canadian National, but by the regulatory bodies. Again, the financial circumstances are considered in light of where the rail line has okayed it, what its intention is, what the requirements are for safety and other operational requirements.

One of the reasons that we are seeking these bills today for ScotiaMcLeod as opposed to for particular purchasers is because we see the two processes as being quite separate. This is really to facilitate a technical requirement of having a company that is incorporated under the Business Corporations Act deemed to be a "special act" company.

We have done this separate from the purchasers because the bid process itself is fairly lengthy and the process of obtaining a private bill, although the committee deals with it very expeditiously, we actually started last fall. When you go through the process of the various announcements and so forth, once a particular purchaser has been approved and gone through the regulatory process with the Ministry of Transportation and the Ontario Municipal Board, and of course CN must also deal federally with the National Transportation Agency of Canada, we felt that it was in no one's interest to add several months before operations could commence simply to facilitate the technical requirement of having the actual purchaser be deemed to be a "special act" company.

So, for example, if Mr Wilson's group was the successful purchaser, once all of those approvals had happened, rather than Mr Wilson having to create a company and go through the process of having a "special act" designation for that company, we would have taken that one step to facilitate implementation of his business plan as soon as the rest of the process was completed.

Mr Ruprecht: Ms Pennycook, I wanted you to know I've been on this committee for a number of years. Normally I wouldn't even ask any questions, since I've never seen as many heavy hitters here -- there are six of them -- and more support for this project. But if you don't mind, let me ask you one other question briefly, and that is: As you described, CN is trying -- and for some reason it wants to get rid of this -- to rationalize assets, whatever that means, and yet everyone else believes this is a great economic opportunity for some local development.

My first point would be: In this process of bidding, no company has yet been designated or determined as a purchaser. Is that correct? That's in the process now.

The Chair: Please introduce yourself and speak into the microphone.

Mr Robert Smit: Yes, it's Bob Smit and I'm here representing CN. At this point we have only one party that has so far been selected to represent a line, and that's Canadian Agra Corp through Bruce Energy Centre. They and the sponsoring member, Murray Elston, have worked together in trying to establish that as a possibility. Their line is the one that he referred to earlier as being re-created.

Other than that, there are no members identified as yet. The intent is that whenever somebody is identified, they would go through all the necessary scrutiny. We started this process in anticipation that we would have, but once arrangements have been struck, then they could apply through the normal course of approvals, but they could not do so until these bills were available.

Mr Ruprecht: So it would be fairly impossible for a party that's been designated to come to this committee and ask for it to be subdivided further into smaller segments of rail tracks. That would not be possible?

Mr Smit: No.

Mr Ruprecht: Good. Thank you, Madam Chair.

Mr Eddy: Although I come from a riding that has suffered the abandonment of several railway lines -- some of which were certainly needed by industries located there, and that's causing a hardship, and some of which were indeed making money, although there are ways of course of changing balance sheets, financial statements -- I'll save my sharp criticism of CN for another forum. It's certainly more than rationalization of railway lines. It's abandonment of responsibility as well, but that's another argument for another day.

I do have three questions, two to Ms Pennycook, if I may: (1) the Railway Act, amended in 1952, if it's so complicated, restrictive and indeed archaic, perhaps it's not needed and should simply be repealed and let businesses organize and be established in the normal way. I'd like you to comment on that, if you wouldn't mind.

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Secondly, I had a concern when you mentioned the Planning Act. Did you mean that a new railway company established to operate a railway on one of these lines or all of these lines would be subject to the Planning Act as a new facility and be subject to more restrictions than perhaps CN is at the present time, as the present operator? Is that a complication and a problem? If it is, I suspect and hope that the OMB would have the power then to allow it to operate as CN did in those instances. I'm particularly thinking of residential subdivisions.

Ms Pennycook: In responding to your second question first, these companies would be subject to the Planning Act, but not on a new basis. Should a purchaser acquire a short line and want to do any expansions or spurs off of that, of course, anything new would be subject to the normal approval process, but the mere acquisition of an existing line would not require a reapproval under that process. So we wouldn't see any particular kinds of complications in that regard.

The Ontario Municipal Board, of course, as I said, has a great deal of power and jurisdiction to impose whatever it feels are appropriate safety standards, fencing standards, noise requirements, that type of thing. For example, they require annual certifications by qualified engineers with respect to their review of trackage and facilities.

With respect to your first question, regarding the Railway Act, it's certainly my view, from my discussions with staff at the Ministry of Transportation, that the section of the Railway Act that requires any company operating a railway in Ontario to be deemed to be incorporated by special act of the Legislature should be repealed. But much of the balance of the act, of course, deals with operational matters relating to railways that I would expect are appropriate in that type of statute.

Mr Eddy: Thank you for your answer. Then I would submit that that section should be repealed, and that's a fairly simple matter. Perhaps it should be proceeded with as soon as possible.

My final question is addressed to the CN representative. I'm wondering if CN, for some reason, would oppose the establishment of an operative railway on any of these lines or will, on the other hand, be cooperative and hopefully facilitate the transfer to another company so indeed businesses that need these rail line facilities will be able to have them as soon as possible, and with a view that I would hope there wouldn't be very much, if any, disruption in service to those industries that need it. Would you mind commenting on that?

Mr Smit: No, I don't mind at all. That's precisely how this all started. We've initiated a program to try and replace the process of abandonment with one of establishing feeder railways that in essence in the longer term would become partners with CN in serving the communities on lines where the economics are to CN very marginal. That's the whole intent of the process, so we very much encourage the establishment of a viable partnership with a potential operator.

Mr Eddy: Thank you for that response. I commend you for it. I'm in favour of the bills and I certainly commend the applicants for having the foresight to come forward with these applications.

Mr Jim Wilson: I too want to commend CN for the development of these bills and would continue to urge the passage of them by members of the House.

I have a number of concerns. I worked for the Honourable Perrin Beatty when we formed the coalition to, in essence, fight the abandonment by CN of the Meaford subdivision, which is a line that members should know runs between Barrie and Collingwood. However, I see these bills as a responsible action on behalf of CN to try to bring a final resolution to this matter.

I want to ask about another application before the NTA, with respect to abandonment of the Meaford subdivision -- my recollection is that a couple of years ago we got a stay of execution by the NTA. The profitability of the line is in question. I really would like, for the record, a status report of CN's intentions at the NTA with respect to the Meaford subdivision, and second, any effect Bill Pr27 might have with respect to that application for abandonment.

Mr Smit: To answer your question, CN has been working with the representatives of the town of Collingwood; in fact, the rail retention committee itself. They have a very distinct interest in retaining the rail service, and so do we, if we can find an economic way of doing so. We have indicated this to the NTA, that we're going through this process to see if we can establish whether there's a viable operator who can keep the line in operation. If we, in the longer term, fail and are unable to establish a viable operator on the line, then I guess we'll have to take matters and pursue whatever action is appropriate at the time. But until such time, we have requested that no action be taken by the NTA, so we're holding the whole process open for the possibility of this to happen.

Mr Jim Wilson: I appreciate that. Thank you for your response.

Mr Hansen: I guess I'm actually going to be addressing Mr Wilson. Maybe Mr Eddy hasn't been too involved with this, but about two years ago a small short line wanted to develop between Smithville and Port Maitland for tourism; in that particular area everybody goes to Niagara Falls but they never stop off at Smithville or Dunnville, so we thought that would be one way of keeping people in the Niagara Peninsula. It seems you have the same idea.

Being unfamiliar with Picton, only having been there last Friday -- I drove through; I took the southern route rather than the 401. A lot of people who go into the area, a very beautiful area, would have reasons to stay for another night or another day in that particular area.

I have been on some short rails in the United States. This is an ongoing, increasing business in the States; I talked to the president of the Santa Fe railroad, which is very interested in the short rail. This isn't something new. It's been going on in the States for a long time, and I think we should take a look at it here in Ontario and support this. I have no problem supporting this.

The one thing I'm very scared of is that if the potential buyers are a little short on cash and the company folds and the rail is left to rot and the rails are taken up and sold as scrap, I hope we never lose the rights of way; that subdivisions go in or whatever, that the lots are sold off. As we take a look at the building up even of Toronto and some of the other urban areas, we've lost these rights of way in the corridors. It's very important that we retain them, because I think we are coming back more to public transportation rather than individual cars. I think we really have to take a look and do anything we can to protect the small railroads.

Do you have any comments on that? I know I supported another bill Paul Klopp brought in here; I think it was Huron railroad. I can't remember the name of it, but it was for the salt mines, I believe, to haul salt out. So there has been support by the government and by this committee before.

Mr Peter Wilson: I'm happy you asked about this, because unlike other lines, this line has just under $1 million worth of freight business a year on it. It's a break-even proposition and it's been a profit-making railroad for about 114 years.

We intend to continue the profitable freight service and add to that a tourism and education business, as well as some skilled trades training. We can lower our costs a lot by using the already existing infrastructures of high schools. It's far from being a hobby railroad. It's a real professional railroad that happens to be non-profit.

As long as that cement plant at Picton is turning out cement, it will remain profitable, and we just want to build on to that profit. As you build on to the profit, it begins to stimulate other sectors of the economy. It could work away there for another 100 years, just breaking even. We'd like to take that break-even and advance it into a profit for the entire community.

Mr Hansen: One question: This isn't actually anything to do with the bill, but just for interest, what about the rolling stock? Do you have the option of purchasing the rolling stock or do you just take what comes with the line? That is important also; I know you have a business plan.

Mr Peter Wilson: Yes. I understand that the cement stock will be CN stock because it will be going other places. We're looking right now at a lot of surplus VIA stock from the 1950s. There's a lot of very good stuff sitting in Montreal, already purchased by the people of Canada. We'd like to see it go back to work between Trenton and Picton.

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Mr Elston: Actually, I just wanted to say to Mr Eddy when he asked his question that one good example of operating a short line was the one that goes into Goderich that Mr Klopp sponsored, and it in fact has indicated that short lines can work in Canada. They have been in existence for quite some time in other parts of North America, but I think it's fairly clear that the successful operation of the Goderich line is really what has spawned these next series of bills and the fact that CN has, I think, probably found a more politically palatable way of rationalizing its business. It actually is finding ways of keeping these feeder lines in existence, and I think that's particularly helpful.

In relation to the operation of the OMB, if I'm not mistaken, in relation to these things it really comes in under the old Railways Act to set conditions and terms rather than the Planning Act. Is that right or not?

Ms Pennycook: Yes, that's correct.

Mr Elston: I didn't want it left to be confused by the nature of Mr Eddy's question that the Planning Act was actually what was guiding the OMB to deal with this particular operation. It's really that the Railways Act has designated the OMB to set conditions because we don't have a provincial institution separate from the OMB to look at the public interest in the operation.

They have done so with respect to the Goderich line, and you could probably take a good look at what has happened there as the prototype for the conditions and terms that operate. From my knowledge of the area, I think people are extremely pleased that it's operating well, that it's carrying the freight and in fact making a go of it, maybe even a little bit better than was initially anticipated.

That's certainly why CN's position now is a much better one for both itself and the communities, because before, I think there was no option. Unfortunately, one of my first jobs in 1981 when I came here was actually to appear in front of Bud Orange and the CTC on the abandonment of the spur of the short line between Wingham and Kincardine, so it's kind of nice to be here now seeing that this is coming back. I think this committee is probably in a position where historically it can be seen as creating a new industry in Ontario out of one that appeared before to be dying, and I'm happy about that.

The Chair: As the witnesses will probably notice, there's a lot of interest in discussing transportation. I'd love to ask a few questions myself, but I know there are other people who are interested, and I'm going to first turn to Mr Waters and then Mr O'Neil has another question.

Mr Waters: I'd like to follow up on Mr Wilson's question because I think we're both under the same gun with CN, that is, in our case we went before the committee and we had an 18-month stay of execution, and that time is rapidly running out; we're probably down to the last few months of that. Can you give us any indication from CN how long it's going to continue to operate these lines while it's looking for someone to purchase them, or is it going to abandon them and then the person or the new company would end up having to start them up again and try to get these customers back?

Mr Smit: To answer, there's two parts to that. The second part is, would we abandon it first and then hope that somebody would come after? The answer is no. That's not to say that if we had an abandoned line and somebody wanted to buy, we're willing to talk. But as a practical matter, if a line's abandoned, that means the service has been broken to the customers on the line, and that really would serve nobody well. You can't expect a customer to sit and want to ship by rail after not having had shipments for a year, say.

The other, I'd like to say, will be consistent with our approach on the Meaford subdivision, with your subdivision as well. We will continue to forestall any unintentional abandonment until such time as we have considered that it's not possible to find a viable operator. As long as we're convinced there's still hope to identify and work out an arrangement with a potential operator, we will not allow it to inadvertently be abandoned. That's the reason we started out on this, so that we wouldn't have to.

Mr Waters: In our case as well as in Mr Wilson's case we have elevators and a lot of elevator land. I believe it is part of what you're willing to negotiate on short line.

Mr Smit: Yes.

Mr Waters: In our case we also have a major quarry system that you started right after, and that makes the line more viable at the Orillia end of the line. In negotiations, are you willing to look at the entire line rather than the last half of the line?

Mr Smit: We have been considering that internally. There are a number of problems associated with the economics of having a partner in that movement. That is certainly a customer we have not considered abandoning and a portion of the line we have not considered abandoning yet. There may be an opportunity in the future to fold that into the potential operation, but at this point the economics of splitting the operation into two-party movements has made it difficult to fold in at the start.

Mr Waters: My last question would be the condition of the line. Are you going to allow it to continue to deteriorate? As you know, you can probably walk faster than the trains can travel between Waubaushene and Midland at this point in time because of the sad condition of the line. It's deteriorated almost to the point where you can't operate on it.

Mr Smit: We'll certainly continue to do whatever maintenance is required and whatever investments are required to keep the line open and serviceable. The actual investment that would be required to upgrade it to whatever standard the potential operator may have would likely come from the operator in the future, but we'll certainly fulfil our obligation to keep the line operable and serviceable until such time as we've reached a potential deal with a partner and have been able successfully to convey it.

Mr O'Neil: Peter raised another point which you're well aware of, that we have the Lake Ontario Cement plant. Of course, in the project they're trying to put together, part of the financing would depend upon having the cement plant continue to ship. Would CN be prepared to guarantee that that hookup between where the line would terminate from Picton to Trenton -- that the feeder line which goes to the main line of CN would continue to be there for their use?

Mr Smit: Certainly, if we establish a short line relationship with the party operating the line, that's the whole intent: The intent would be to maintain an interchange at a location. That's why we're referring to them more and more as feeder lines, because that is the concept we have of their relationship with CN: that they become feeders, much as an airline has a smaller feeder network feeding the larger routes. That's the basic intent and that's our real interest, to make sure that the service can be continued and that we can continue to participate.

Mr O'Neil: My last comment: There's been a lot of work done by Mr Wilson and his group, and I think we want to make their plan as feasible as possible and help them as much as we can to cover a lot of these things. But the other thing is, where CN is actually disposing, say, of this particular line between Trenton and Picton, and you put it out for a bid or tenders or whatever, where you have a non-profit group like this that wants to create jobs, do something for tourism, how do you establish the price on that? Or do you actually give it away or give them money to take it? What do you do?

The Chair: Hansard can't record the smile.

Mr Smit: On a commercial basis, I guess it would really not be fair of us to take any one party and donate a piece of our assets. However, we would work with the party as long as we're convinced and we can be assured that through the whole rigorous regulatory approval process, the NTA and the OMB consider them viable and capable. We will try to work out some form of partnership. In terms of donation, no, I can't commit CN's assets in that way, but we would certainly be interested in working out some formal relationship.

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The Chair: I will now turn to the parliamentary assistant for the Minister of Municipal Affairs for any comments.

Mr Hayes: After all those eloquent presentations from the six MPPs representing all three parties, and due to the fact that this bill does not really affect Municipal Affairs, we do not have any objections to it.

However, I do have one concern, and that one is, does this mean now that maybe the municipalities in rural Ontario will not be charged rent for crossing over tracks, or lease?

Mr Smit: I think what you could see in the short line is that in fact the municipalities would not really see much of a difference. The provisions placed on the licence that the Ontario Municipal Board grants are essentially much the same as they now enjoy. They have the same responsibilities and benefits as they now have when CN is present.

The intent is to have the new party step into our shoes as much as possible and not disturb whatever relationships have been generated now. Whether a municipality will get a better deal from the new railway is probably subject to some negotiation.

Mr Hayes: So they're still going to take the money from the municipalities. Okay, thank you.

The Chair: All right. We're at that point where I ask if the members are prepared to vote on the bills, and I will do them in numerical order.

Are the members prepared to vote on Bill Pr26, An Act respecting Cambridge-Guelph Railway Company Limited?

Mr Eddy: Agreed.

The Chair: You're going a little faster than required, Mr Eddy. Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Bill Pr27, An Act respecting Georgian-Simcoe Railway Company Limited: Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Bill Pr29, An Act respecting Picton-Trenton Railway Company Limited: Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Bill Pr30, An Act respecting Stratford, Huron and Bruce Railway Company Limited: Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Bill Pr31, An Act respecting Waterloo-St Jacobs Railway Company Limited: Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

Bill Pr32, An Act respecting Waubaushene Railway Company Limited: Shall sections 1 through 13 carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

I'd like to thank all the participants for their time and their responses. Obviously, the members were quite interested, and as you noticed, it went through a bit more of a, shall we say, inquisition than some of the other bills that proceeded and will follow. Thank you very much for your cooperation to all, and this afternoon the bills will be reported and things will move forward quickly, I will assure you.

Ms Pennycook: We'd like to thank the committee and the sponsoring members.

TOWNSHIP OF ATIKOKAN ACT, 1993

Consideration of Bill Pr38, An Act respecting the Township of Atikokan.

The Chair: I'd now like to call the sponsor, Mr Wood, and applicants and interested parties, if you would be prepared to deal with Bill Pr38, An Act respecting the Township of Atikokan.

We're just waiting for the clerk to distribute some background information. Mr Wood, perhaps you would like to make some opening remarks and introduce your guests.

Mr Len Wood (Cochrane North): Just in opening, I would like to say that I'm proud to be here as a sponsor. This is An Act respecting the Township of Atikokan and it would enable the township of Atikokan to reduce the assessment on Valerie Falls, which is a NUG, a non-utility generating plant, that will be built to produce hydro-electric power. This is in Howard Hampton's riding and I'm pleased that he asked me to sponsor the bill and bring it forward for your consideration after first reading in the House.

Those are the comments I wanted to make. It's going to create some economic development, some jobs during the construction and the people in that area are proud of it. There's been consultation with all three parties on this and I'll ask the people to introduce themselves.

Mr David Boileau: My name is Dave Boileau. I'm a partner in the joint venture development of this project with Great Lakes Power Ltd. This project started back in 1990 through the normal regulatory approval process. It's a nine-megawatt hydro-electric project which would produce about 44 gigawatt-hours of electricity per year, which would be enough electricity to run the town of Espanola without the industrial mill. It's a fairly substantial contribution and was part of the Ministry of Energy's initiative, back in the late 1980s and early 1990s, to develop renewable resource power.

I recognize there are some difficulties within that industry now, but we started the process well before those difficulties came into effect and entered into a 50-year agreement with Ontario Hydro for the sale of our power to the grid. I believe that as time goes by that will be seen as a very economical purchase by them. I'm confident that the economy in this province will pick up and eventually all these small NUGs that came on stream will be well viewed.

In any event, the regulatory approval process obviously requires a high degree of consultation with the Ministry of Natural Resources and a very thorough review of the environmental impact of any hydro-electric development.

Our particular development was on a man-made river that was constructed in 1943 during the dredging and mining of the iron ore body under Steep Rock Lake. Being a man-made river, it was attended with a large number of environmental problems which mostly included a high level of erosion and siltation through this new river course.

Fortunately, our project was able to not only not have a negative impact on the environment, but actually had a very positive impact in that it cut off approximately 60% of the erosion that occurred in the basin of our operations.

We had very active support from the MOE inspector in the area, the Ministry of Natural Resources, fisheries and wildlife people, the Atikokan fish and wildlife group of people. We brought a lot of the local people out, including the members of council, to the site, throughout the project and generally the project was viewed as being very environmentally beneficial.

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At the beginning of the project, one of our major concerns obviously was, could we build this thing and make some money? We started to do some financial analysis of it and the main concern we had at that time was the assessment liability in terms of property taxes. We were not very clear on how it was arrived at and what impact it was going to have on the project. We originally estimated that it would probably cost about $25,000 a year for property taxes on the project and we were reluctant to go ahead with spending any more money on it till we had a handle on it.

When we made a request to Revenue, it indicated to us that our assessment would produce a tax in the range of about $380,000 to $400,000, which absolutely destroyed the economic feasibility of the project, and we couldn't understand because when we started doing some comparisons with Ontario Hydro, we found that a similar project that it would construct at the same site would yield a grant in lieu of taxes payable of about $20,000 to $30,000.

We had to make a commitment on the road back in 1990 and early 1991 and we approached township council with our concern, that we couldn't build this project under the existing assessment method and that we felt the existing assessment method was really designed for the older hydro-electric facilities that were privately owned in Ontario. These ones had been depreciated on the OR-60 table, and they also have a low installed capacity. The impact of a new hydro-electric project within municipalities was that we were being assessed at a rate something in the range of about 25 times what Ontario Hydro would have to pay.

Our rate contract with Ontario Hydro was based on Ontario Hydro's avoided cost. As an input to their avoided cost, they use assessment under the Power Corporation Act, whereas non-utility generators fall under the Assessment Act. There are some serious inequities within the Assessment Act; at least, we feel as if there were.

There were a number of avenues open to us. One was that we could build the project and appeal the assessment method and try to get a reduction in that fashion. Unfortunately, we couldn't even talk to our financiers about financing the project with that risk and lack of comfort on their part. The second method was to see if we could get Revenue to reinterpret its method of assessment and perhaps classify captive NUGs -- by captive NUG, I mean a non-utility generator that is in contract with Ontario Hydro to sell all of its power to Ontario Hydro.

We have no way of recovering any cost increases that are unusual, for instance, increases in water power rates or increases in taxes. We can't go back to the ratepayers of Ontario who pay for electricity and say, "Our costs have gone up so we'd like to raise our rates." We're in a fixed contract with Ontario Hydro.

This created a real dilemma for us. We approached town council in 1991 and explained our situation at a public council meeting. We subsequently had a number of other council meetings, and in 1991 council passed a supportive resolution indicating that it would support changes in legislation or lobby Revenue in terms of changes in the method of assessment.

At that time we felt reasonably comfortable with the risk, having township support. We really didn't know where this issue was going to go but we had to get on with the project, because as you see, in the hydro business deferrals mean delays and delays mean cancellation.

We proceeded with an investment on the road. We had to build an 18.5-kilometre road through the bush into the site, and up to that time we were not comfortable enough with it until we had some assurance that council would stay with us.

We put the file in a drawer. We were optimistic that over the next year or so Revenue might re-examine its method of assessment.

Unfortunately, Revenue was involved with an appeal by Great Lakes Power in Sault Ste Marie on some projects that had recently been built in Wawa and it understandably was quite reluctant to amend or reinterpret its method of assessment. We felt that process would mature within a year or so and that by the time we were ready to move into construction the issue would be settled. In fact, the Ontario Assessment Review Board did not render a decision on this until, I believe, November or December 1992. That decision was quite favourable to Great Lakes Power, but it was immediately appealed by Revenue, so there appears to be a situation where it could go on for several more years before any changes are made.

We were up against a situation where we had gone to tender again on our project and had received the bids and were ready to commit to an $18-million to $20-million project. Our board of directors felt that we couldn't go ahead with the project under the level of comfort that we had, so we approached various ministries, particularly Municipal Affairs, Energy, Revenue, MNR and Treasury and convened a meeting, I believe in January, put everybody together and said: "We've got a project here that should be built, shouldn't be deferred, it's of economic benefit to the township. Is there some way that we can find a method of getting this issue behind us to allow us to proceed without threatening or prejudicing the existing assessment process?" The private bill method was suggested.

We went back to council, which is a new council in the township of Atikokan, and asked if it would consider sponsoring or requesting a bill for an assessment reduction. I'll deal a little bit later with the quantity of reduction and the reasons behind it. Council was very, very supportive of us. We took a resolution that was specific back to Municipal Affairs and several other ministries and started on the private bill process and we've been working very, very hard to get this bill through before the end of this session.

At the time that we made a decision to commit to the project, which was very recently, as much as, I guess, two months ago, the board of directors of Valerie Falls Power suggested that we defer the project for a year until this issue got resolved. We were very reluctant to defer the issue, simply because every deferral means cancellation, as I mentioned. They suggested that perhaps what we should do then is put in a provision within our budget to cancel the project halfway through if it turned out that we weren't successful with the private bill, because we just couldn't get the numbers up and we wouldn't be able to finance the project.

In any event, I felt that we were quite well along the way with this process and that we were likely to meet with the success that was deserved in this particular case and a decision was made to proceed to construction. We're now in active construction on the project. Obviously, we recognize the risk of the political process, but we feel as if we've done our homework and we've done a tremendous amount of consultation with all of the parties. I think that the ministry representatives will testify to that today. We've also carried on a high level of consultation with the township in five public meetings over the last three years, with the township council and a lot of other public meetings on our project.

Maybe I'll leave that now and answer specific questions to the bill later on, but that's a general overview.

Mr Robert Davidson: Robert Davidson. I'm the reeve of Atikokan. I would like to say that the Valerie Falls people have worked for a number of years on this project and, from a municipal point of view, we were pleased to have them in our area and realized the financial restraints that they've come under and are prepared to make certain concessions on their behalf.

The project is an $18-million project they're working on that will be probably officially opened in the fall of 1994. I think they're committed to something like $11 million to taxes in the province of Ontario federally, provincially and municipally. It looks like a tremendous opportunity and the community of Atikokan is certainly behind them in their endeavours to see this private bill passed.

The Chair: Thank you, Mr Davidson. There are two interested parties who are listed: John Murphy and Bob Menard. If either of those two gentlemen are present, would they like to come forward and make their comments on this particular bill.

Are there any other interested parties who at this point would like to make any comments on the bill? If you would please introduce yourself.

Mr Michael Riley: Yes. My name is Mike Riley. I'm counsel with the Ministry of Education and Training, and I just wanted to make a couple of more or less general points about the proposed bill.

I think from the perspective of our ministry, just to remind the committee, a tax exemption does of course shift the burden somewhere and generally it'll shift the burden to other municipalities within the same school board jurisdiction and also to some extent to the province generally, because with respect to an assessment loss below the grant ceilings for education purposes, this loss will be compensated for by provincial grants.

That, I suppose, is a fact known to most members of the committee, but I think we see this piecemeal approach, nothing specific to this particular bill, but generally the approach of tax exemptions for school purposes, to be not a good one, the private bill route. We would very much like to see a more systematic approach to these tax exemptions, perhaps by way of amendment to the Assessment Act or by some other general approach to this problem, because it's a haphazard and uncontrollable sort of event from our ministry's perspective.

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I'd just also add that in small northern boards, relatively small assessment shifts can have proportionately large impacts. My information is that the impact in this instance would be on the public board only. That's neither here nor there as far as -- whether the school taxes are shared fairly or not, or how they should be shared, is another issue altogether, I admit, but just for information purposes.

Those are my comments. As I say, they're more or less of a general nature, that we see this as not a good thing.

Mr Eddy: I wanted to ask Mr Riley a follow-up question on what he has just stated.

The Chair: That's fine. You may ask your question of either the deputants or the ministry staff, and the Ministry of Municipal Affairs is also represented. Mr Hayes just had to make a phone call.

Mr Eddy: Yes, this is specifically with what was just stated.

The Chair: Very good. Mr Eddy, you have the floor, as a matter of fact.

Mr Eddy: I didn't need to argue that one.

I want, first of all, to ask Mr Riley a couple of questions in view of his stated views at the present time. I don't know what would be required to carry out this suggestion. He's saying it's a piecemeal approach, but how does he answer the point that if Ontario Hydro were to proceed to build this -- and first of all, it isn't a loss; it's going to built. So it's new assessment. Okay? That's a new assessment that's coming in. How does he answer the fact that if this facility was built by Ontario Hydro, it indeed would not produce the taxes that we're looking at? It would be a grant in lieu based on a formula, so why can't we be equal?

Secondly, if it was the township that was building this facility -- and, let's face it, there were many of these generating facilities in Ontario at one time. Unfortunately, they were bought up or taken over by Ontario Hydro and closed up, and here we are clawing our way back, so to speak, and that's another story. But if it was built by the township, it would be tax- exempt. He's saying we shouldn't approach this on a piecemeal basis, but I tend to think with hydro generating plants, we've already got a disjointed system at present; indeed that's discriminatory. I wondered if he agrees with me on any of those views.

Mr Riley: I think I can to some extent. I don't want to pretend that the existing system is entirely equitable, even given the general rules. I think those are fair comments.

I would just say, though, that I think to further complicate and differentiate by way of private legislation is something that tends to exacerbate rather than remedy the problem. But I can't deny what you're saying. We don't defend that, nor do we have control over the assessment system generally, but we are very much affected by it.

Mr Eddy: Just to follow up then, what would you suggest? Would the answer be to look at hydro generating plants as a separate entity and have a separate section in the Assessment Act -- I guess that's where it would be -- regarding them, so that all would be on an equal footing of some kind, and there might be, of course, a need to differentiate some, but to put them on a more or less equal footing? Or what do you suggest?

Mr Riley: I would think in so far as a general rule can be adopted, that would be a good thing. We don't make policy in that area, but just to have general rules that cover the broadest number of cases would be good.

Mr Eddy: Thank you.

Mr David Johnson: Just perhaps a question to the reeve. I understand that you've indicated that there is community support for this application. We have a letter before us from CUPE Local 1000. I think it is here somewhere. Is that the union that's associated with your municipality?

Mr Davidson: That's correct.

Mr David Johnson: Do they remain opposed at this point?

Mr Davidson: I would think not. I think the Valerie Falls people have met with them, as they have with other organizations, and they've done a tremendous job in smoothing over the rough spots. I think they're quite receptive to the notion that it's good for the community, including themselves, because they're part of the community at the present time.

Mr David Johnson: I couldn't quite understand the opposition. I think their concern was simply the loss of revenue, I gather, in the first instance, to the municipality. Is that essentially the concern?

Mr Davidson: I guess probably to give you a little quick view on the background, we've just recently had to put the public works department on a four-day workweek over in Atikokan to come up with a deficit situation that we had a hard time grappling with and, for those reasons, those points were probably made there. That's the only way I can figure that one out.

Mr David Johnson: In terms of your support and the community support, it's primarily from the point of view of the job creation. Is that the --

Mr Davidson: The potential for job creation there is tremendous. Not only that, I guess it's just short of $1 million worth of tax revenue that the municipality will enjoy over the next number of years when the project becomes viable and on stream.

Mr David Johnson: Sorry. So there's how much revenue? Of course, you're looking at retaining at least 25% of the taxes.

Mr Davidson: Yes. I think the figure's just over $900,000, something like that.

Mr David Johnson: So when you're talking about $900,000, you're talking about the remaining 25% or whatever it is that you retain. Is that what you're talking about?

Mr Davidson: No. I'm just talking about the tax revenue that the project will generate to the municipality by its being located on that site.

Mr David Johnson: But the application is to exempt some of that.

Mr Davidson: Yes, that's correct.

Mr David Johnson: Are you looking at the exemption of three quarters?

Mr Davidson: It's about that, yes.

Mr David Johnson: Maybe this would be more to the applicant. In the letter from CUPE, and maybe I'm taking this out of context, but it says it will employ only one or two full-time employees. You must have read this letter. What on earth do they mean by that?

Mr Boileau: Maybe I should comment on a few of things in the letter, Mr Johnson. The tax payable that is proposed under the reduction would work out to $100,000 a year. The assessed method that's currently in place would yield about $400,000, so the 75% reduction would yield $100,000 which, I guess to put it in an equivalent tax base, would amount to the same as 70 new homes being built in a town that has about 1,300 homes and contribute significantly to employment from the tax base as far as municipal employees, and certainly help council out with some of the budget deficits that they're having now, because it is a new assessment.

Secondly, there's no cost to the municipality for this project. We're 45 kilometres from the town. The road was built and will be maintained and snowplowed by Valerie Falls and we have no demand on the town for sewer or water or any type of other services, police or fire services, because it's not practical to provide it out there and it's certainly not within their mandate to provide it to us. So it is brand-new assessment.

In regard to your question about the full-time jobs, it's estimated that the entire project will create somewhere between 65 and 100 person-years of employment. We are very pleased that the contractor of this particular contract is a union contract with a civil contractor and we're very pleased that they have made a sincere effort to hire locally.

The reason they're able to do it is because it's a non-ICI job or a non-industrial-commercial-institutional job. The labourers' union, the operating engineers, the carpenters, formers and all these other fellows, there's a fair number of them who are unemployed in Atikokan or have had to work a long way out of town and they're on the books in the Thunder Bay local and almost without exception, other than some of the supervisory people from the constructor, they've all been hired from Atikokan, and it appears as if the main hirers for the carpenters and joiners, when they start pouring concrete, will be from Atikokan.

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Mr David Johnson: You're talking about the construction of the project itself?

Mr Boileau: The construction phase, yes. I find a lot of people focus on the long-term job aspects of these projects, but the skills that are developed -- activity generates sales. At least, that's what I've always found in business. Yes, it's true. These hydro-electric projects, when completed, don't generate a whole bunch of jobs. There's not enough money in them to --

Mr David Johnson: Is that the one or two? Is that what they're talking about when they say --

Mr Boileau: There could be one or two full-time jobs and there would be some contract jobs, Mr Johnson, that would come out of it.

The other aspect of it is, and Reeve Davidson alluded to it, was the taxes payable to the province over, I guess, a 15-year period. We calculated it between the province and the federal government with capital taxes of $52,000 a year, water rental payments starting in year 10 of $391,000 a year. Provincial taxes and all these other things amount to about $13 million that we're contributing in the 15-year period, all out of private capital.

The only funding that has come from the public on this project was a $179,000 road grant. We paid $179,000 and the Ministry of Northern Development and Mines, through Shelley Martel's ministry, paid half. That was for constructing the 18-kilometre road. The reason was, we piggybacked on top of a northern Ontario regional economic development grant and we had the support of the Ministry of Natural Resources geological representative; Boise Cascade, the forestry people; and the tourism people. Everybody was quite happy to see that road built, and we turn it over to the province when we're finished.

Somewhere in this letter he makes a reference that the project will cost $18 million to build with 50% of the funding coming from Northwestern Resource Development. We haven't received anything. Other than that $179,000, this entire project has been financed by private capital.

Mr David Johnson: Essentially, I guess the exemption here today then would save you about $300,000 a year then, roughly? That's what we're talking about?

Mr Boileau: It would. In the absence of it, the project wasn't feasible.

Mr David Johnson: Can you give us just a couple of words in summary as to why we should believe that?

Mr Boileau: When we first did our financial projections -- and we have submitted some copies to various ministries -- our revenue on the project worked out to about $2.7 million a year based on 44 gigawatt-hours of production. That estimate of production was based on hydraulic records dating back to 1926 and produced by Acres International and Monenco, two of Canada's largest hydro-electrical engineering firms, so we have a lot of confidence in that number. That $2.7 million represents the total income from the project and from that we have to pay down a debt of $18 million to $20 million. We have fairly high operating costs with respect to water power rentals, site maintenance, insurance, municipal taxes and everything else.

When we ran our numbers based on a municipal tax of $50,000 a year, we ended up with an internal rate of return on 15 years of 8.1%. I'm not sure how familiar the committee is with trying to finance high-risk hydro-electric projects. Hydro-electric projects are fairly attractive for financing, as far as everybody saying they want to do it, but the risk dollars that are required usually mean that there's about 2% or 3% more charged to the development, simply because there are so many problems with construction delays on working in water.

When you're finished building this thing, you pray for rain. If you get two or three years of poor rainfall, then you have to set aside an enormous reserve account to keep the bank happy. In order to finance a project and to take it to conventional banking sources without selling our soul to try to get the darned thing built and ending up not owning anything, we require an internal rate of return of 14%. That may sound like a lot, but if you try to build some of these high-risk capital projects, it isn't.

When we ran our numbers, we needed a 30-year protection. We also required a reduction which we hoped would be a lot more than 25%. However, we've been in this thing for three years. We were anxious to get to construction. We felt as if we were going to lose another year because of the delay on this thing. We are willing to make some moves to put it behind us as quickly as we possibly can and we're also willing to make the commitment to the province of Ontario to build and create some jobs this year, not next year or anything else.

The Chair: Are there any other questions of the deputants? I would like to turn to Tom Melville from the Ministry of Municipal Affairs to report on the ministry's objections, if any.

Mr Tom Melville: We have no substantial objections to this bill. There are two motions that we would like to bring forward at the appropriate time.

Mr David Johnson: I was wondering in terms of the boundaries for various facilities seeking assessment exemptions. We see the humane society that comes up later, the seniors' facilities, community centres, private hydro facilities. Are there any boundaries in terms of who can seek an exemption?

Mr Melville: In response, anyone can apply for an exemption.

Mr David Johnson: I had this sense somehow that there were determined facilities that could be eligible. That's not true?

Mr Melville: There is Ministry of Municipal Affairs policy on qualifying applicants, as it were, for tax exemptions, which I can obtain for you in a few minutes, but basically they include certain criteria such as are they a charitable organization, do they own and operate the property and so on.

Mr David Johnson: Well, this is not a charitable organization.

Mr Melville: No.

Mr David Johnson: What sort of definition would this meet that would qualify it?

Mr Melville: Perhaps Bill could answer that.

Mr Bill Robson: My name is Bill Robson. I'm with the Ministry of Municipal Affairs as senior policy adviser.

To try to respond to that question, the first thing is, we had a number of interministry meetings with a number of ministries such as Municipal Affairs, Revenue, and Education to some extent. I think we would have not supported the exemption, but we have recognized that in the sense of assessing hydro-electric projects, there is quite a distinction. The point made earlier is quite correct. This project, as an Ontario Hydro project, the tax responsibility would be about 10% of what it is going to be as a private utility.

The reason this hasn't been quite as much of a problem up to now is because there hasn't been much in the way of private utility generating stations going into place. There are some coming forward, but the ones coming forward are generally gas systems. The capital costs on those are much lower, so with our assessment system, we don't foresee that as a problem. Under the gas system, the property tax responsibility would be about 30% of what it is for this hydraulic system, which is a water-powered system.

We are establishing an interministry task force to look at assessing hydro facilities and the gas utilities and even private ones like this. We'll probably, in the future, come up with a completely different system to assess them, but in the intermediate period, we have this problem that this particular one is going to go forward. So although we would have been normally reluctant to support this at all, we are being supportive because of the difference in the treatment of the different type of systems.

Mr David Johnson: I was just curious, because this is a private company, and I would have thought that very few private companies would qualify in general. But you're saying that because this is involved with the generation of electricity, that's a little hook that allows it to meet your approval. Normally, private businesses in other fields, for example, would not qualify for tax exemption, would they?

Mr Robson: Well, as Tom indicated earlier, we'd have to look at each situation, but I think the important thing here is that we do recognize quite an inconsistency in the net result, so we are going to work towards trying to address that. But for the short term, the view was that we should try to see if we could make this situation more comparable to the other ones, the other ones being Ontario Hydro and --

Mr David Johnson: When I was mayor, I had a whole lot of companies that came to me that were on hard times, that were not able to pay any of their bills, including their tax bills, I guess. If they thought they could be exempted, they would have been delighted. They would have joined the long lineup. But I didn't assume any of them were eligible.

Mr Melville: Again, just to respond quickly, I think the point that Bill Robson is making, in perhaps simpler terms, is that the hydro generation facility is a special case because of the existing assessment arrangements for hydro facilities of that nature. In respect of other matters, we look at them on a case-by-case basis, but we do have ministry criteria and, as you say, ordinarily a private business we wouldn't approve for a tax exemption.

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Mr Eddy: I'm certainly delighted to hear that there's an interministerial committee looking at this whole picture, because it's timely and it's needed. We need to get on with it.

This is a water-powered, generating hydro-electric commission. I'm very strongly in favour of that and I think there needs to be more of it.

I'd like to also point out that if it was a municipal endeavour, it would be tax-exempt. I think that's right and I don't know whether there are still any of those that are in operation, but I expect that would be the case, other than the other taxes, of course.

So I realize that this is a special case. I'm strongly in favour of it because of what it will do and what the operation is. I think we need, in time, a lot more of them. Oil may run out; gas may run out. That's a long way away, but the water, hopefully, will always run. It's water-powered, so this is a real plus. I think we should support it. I'm in favour of it.

Mr Hansen: I just wanted to get on. I don't think there's any disagreement here. I want to support this bill. I think we have one more applicant to deal with.

The Chair: That's true, but there's always some interesting questions and new knowledge that is obtained as a result of these questions. So as this education process continues, I would then turn to Mrs MacKinnon.

Mrs MacKinnon: I apologize. I had to be out of the room for a while on a telephone call. Are we setting any precedent here by agreeing with this?

Mr Robson: We probably are, but I'd like to think that we're not. So to try to answer that, there is a fairly large surplus of hydro power at the moment, so the likelihood of a lot more private systems coming into being should be quite limited.

At the moment, there are about 15 projects that are to move forward, but none of them is in the hydraulic water situation that this one is in. The other ones are more of a gas type. Hopefully before even those other ones come into being, we will have resolved how we are going to assess the hydro generating plants on a consistent basis and there won't be a need for this type of exemption.

It's a kind of a double answer I'm giving you, but we're hoping that this problem will be resolved long before the next project moves to completion that would be in this type of situation.

Mr Boileau: Perhaps I can comment on the precedent side of it, because there was obviously a concern -- and it's being raised here -- to the municipality and to MMA.

Any time there's an assessment reduction in private industry there should be a concern, because we don't want to see a situation developing in this province -- and even as a businessman I wouldn't want to see a situation developing -- where a business could pick up and play one municipality off against the other. But we're not able to move the river. We are a captive to the river. It happens to be on the outer boundaries of the municipality. If we didn't like dealing there, we just can't pick it up and go anywhere else.

It's a situation where, in the last 50 years since the river was diverted, there's been in excess of $100 million of water that's fallen over those falls that could have generated substantial revenues for the provincial treasury, both in terms of water-power rentals and income tax, and also for our federal treasury. We plan to capture it now and start putting that money into the economy. Certainly we expect to make some money from it so we can continue on with some other developments, but we can't move the river. We have to build it there, and the capital costs of building it are just absolutely tremendous and everything has to go in up front. I hope that answers that question as far as precedent.

Also, just one other comment: Any private business that can get through this private bill process without having a heck of a lot of good reasons behind it for getting it passed, I wish it luck, because this has been a long, tough process for us. We've had excellent cooperation from all of the various ministries and I think certainly a very sympathetic ear and understanding of the difficulties that we face with some of the methods of assessment that have been here. I'm very pleased to have been working with these people in resolving this problem and pleased also that it shows that the system does work if you stay with it.

The Chair: I think I will now ask the question that Mr Hansen may have wanted me to ask a few minutes ago, and that is, are the members ready to vote?

Shall section 1 carry? Carried.

Shall section 2 carry?

Mr Mills: I have an amendment, Madam Chair. I move that section 2 of the bill be amended by adding the following subsections:

"Maximum period

"(5) A bylaw under subsection (1) shall be in force for a period not to exceed twenty years as set out in the by-law.

"Re-enactment

"(6) Despite subsection (5), the council of the corporation may re-enact a bylaw under subsection (1)."

Madam Chair, this will technically require the municipality to reconsider bylaws in 20 years.

Mr Boileau: I recognize the reasoning behind the proposed amendment; however, I would like to object to it on the basis that we placed our cards on the table up front; we gave all the ministries as much financial information and we communicated up front with the municipality as best as we possibly could.

The 30-year term we requested was not as long as what we anticipated. We have a 50-year contract with Ontario Hydro, and our provisions for dry-year facility funds and other things could very easily push us over the 30 years. In addition to that, many of the members who were involved in this whole process were not aware that in order to finance the project, we had to ask Ontario Hydro to put some money in our rate up front and take it away from the back end; in year 20 to year 30 we lose 25% of our rate from Ontario Hydro and in year 30 it goes back to normal. So there is a very significant financial difficulty for us right up to the 30-year period. In addition to that, the last provincial budget has tripled water-power rental rates, which has again created a serious problem for us because we can't go back to the public ratepayer and say we need more money.

I would suggest that the requirement for this amendment is minimal and that this act only empowers the township to pass a bylaw. The township could even decide not to pass a bylaw, period, or it could impose any conditions upon us, whether it be a review in five years, 10 years, 20 years, or to stand with what this bill is giving us. They could also impose other conditions that may be of benefit to Valerie Falls or to the municipality. We're very prepared to work with the township in developing a bylaw that is responsible and also establishes some floor prices.

I would ask the committee to consider allowing the township to work within the bounds of this bill and allow us to go back to our financial people and say, "Yes, we have a bill that gives us the 30 years, which is what we presented to you guys for comfort." I'd please ask you to consider allowing the township to determine that through the bylaw.

Mr Eddy: I'd like to ask Reeve Davidson the wishes of the elected council of the township of Atikokan regarding the time.

Mr Davidson: That time frame was discussed and, as Mr Boileau was saying, we did talk about the 30-year plan. With the uncertainty in the economic future, as we all know today, our council isn't comfortable with that arrangement. It's the arrangement we did make in Atikokan.

Mr Eddy: So you support the 30-year term.

Mr Robson: To comment on the motion, I think the point made is correct, that the bill as it now stands does give the right to give the exemption for 30 years and subsection 2(4) does allow council to put whatever conditions it wants into the bylaw and it has the flexibility to change even the exemption rate in subsection 2(1). But the reason this motion came forward, and it's up to the committee to decide what its position is on it, is that at the interministry level there was some discussion about the fact that this project has a heavy capital cost up front, $18 million up front. We're giving the exemption because it is a very costly facility being created and the assessment as a result becomes very large because of the facility being created.

But it was also pointed out that the financing arrangement to cover this upfront cost will be amortized over a 15-year period. There was some concern that rather than the 30-year period we put in the bill, maybe we should restrict it to a 15-year period, as the full capital costs should be amortized over the 15 years, which is the best financing period they could get; in fact, they might have to even use a 10-year financing period, depending on the flexibility of the financial institutions.

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So there was more discussion. It was indicated that Valerie Falls would be very reluctant to have a 15-year term, so as a compromise, this proposal was put forward. As there is a lot of uncertainty about what's going to exist down the road, 15 or 20 years and so on, even though there is this flexibility for council looking at it any time, to try to give some direction is what was indicated in the bill: Should we give consideration to having a mandatory review at a 20-year period so the risks of the situation for the next 10 years could be looked at, to continue the exemption or to change the exemption? It's just a question of whether we want this type of directory reference in the legislation.

Mr David Johnson: Who drafted the bill that's before us today: the applicant or the staff?

The Chair: I believe it ends up being a joint effort.

Mr David Johnson: The reason I ask is because it obviously has the 30-year period in here. If you had involvement in drafting this in the first place, you must not have been too opposed to the 30-year period, or why would you have permitted 2025 to be in the draft? I'm looking at the draft, and it says that the act is repealed in December 2025. This apparently had the blessing of your staff, did it?

Mr Robson: We're supporting the 30-year period as the full life of the bill, but we're recognizing that circumstances could change and that exemption could be removed at any point in time.

Mr David Johnson: Then what does the 20-year period amend, in the amendment?

Mr Robson: It respects the term of the bylaw that can be issued at the beginning of the process. At the beginning of the process, the law that is initially issued to grant the exemption cannot give an exemption for longer than a 20-year period. That's what this amendment is proposing.

Mr David Johnson: All right. I'm not sure I assume that, but let me ask one final question. In view of the fact that the municipality is supportive of the longer term and in view of the fact that you're saying "on the one hand and on the other hand," are you opposed --

Mr Robson: We're supporting the longer term also. We're saying, should there be a review during that process?

Mr David Johnson: Then you're saying that in terms of this amendment that's before us today, you wouldn't be displeased if we didn't support the amendment.

Mr Robson: We're recommending the amendment.

Mr David Johnson: I'm totally confused now, because the amendment says "shall be enforced for a period not to exceed 20 years."

Mr Robson: Yes, but what does the next subsection read?

Mr David Johnson: Despite the subsection, "the council of the corporation may re-enact a bylaw under subsection (1)."

Mr Robson: That means they can go for up to 20 years and then can continue to re-enact the bylaw as long as the bill is alive.

Mr Boileau: Just to comment again, I had a conversation with Ron Young over at the Ministry of Revenue yesterday. I'm not sure where the concern on the 20 years came from, but I believe there was not active knowledge about the bite-back in our rate with Ontario Hydro, and that may have prompted this.

The amortization period for our project represents a fairly fast pay-down of the capital when you consider some of the contingencies and the risks and the reserve accounts we have to carry. The shareholders of this project, myself and Great Lakes Power, are not anticipating very equitable dividends from the project until after this period comes. At the end of 15 years, presuming it's rained on average every year and we haven't run into some problems, we may have five years of grace until we lose 25% of our rate.

The way we did our calculations -- and I'll repeat. These were the numbers required by our financial people to put this package together. If we have to go back and say we're exposing ourselves to a review after 20 years even though that's still available to the township within a bylaw -- I guess it is our job and Municipal Affairs' job to develop that bylaw and see if we can't get it passed, but if there's a review, our financiers are just going to look at this and say, "You don't have 30 years, because we have to take a worst-case scenario; you've got 20 years," and that's the way the numbers are going to come out.

It is a very serious concern to us, because I've put a lot of my own private capital into this project and I don't expect to see a lot of money come out of it, but I'm not sure how exposed we want to be on this thing in years 15 to 20 because it could be very, very serious.

Mr Eddy: Sorry to prolong the matter, but it is important, and I'm opposed to the amendment. I think it should be left at 30 years. The applicant wanted it; it has been negotiated; the municipality agrees with that; we have counsel from the ministry agreeing with that. Also, in view of the fact that the municipality can review the matter in its bylaw, I expect that the Legislative Assembly, this committee, could review the bylaw. Thirdly, there is an interministerial committee that I'm very pleased to hear is going to be working on the whole matter of assessment of water and other hydro-electric generating facilities which indeed may affect this situation, and I really would wish it speed on what it's doing. I think it's all in place, so I'm certainly in favour of the 30.

The Chair: Did you have anything else to say, Mr Hayes?

Mr Hayes: Very little, Madam Chair, but without this amendment, that means the municipality does not have to review this agreement in 20 years, is that correct? It would be of benefit to the municipality, I believe, without adversely affecting the applicant. That is one of the reasons it allows it; it says the municipality must review it. I think that's important. That's all.

Mr Eddy: I'm not clear on the point of view that's been expressed. I'm sorry, I guess I didn't quite hear. Is the parliamentary assistant supporting the amendment from 30 to 20 years, or willing to go along with the 30 years?

Mr Hayes: It is for 30 years, but at the same time it's saying that the municipality must review it in the 20-year period. That's what we're saying.

Mr Eddy: I didn't understand the amendment that way. The amendment really doesn't have that intent, it seems to me. I would have no problem with requiring the council of the township of Atikokan to review the matter every five years or every term or something; it can anyway. If it's a necessary requirement, that's separate, it seems to me, from the term that's being proposed for the possible life of the bylaw. I think they're two different things. If the ministry feels that the local elected council should review the matter on some basis every five years, as you have to in your official plan or something like that, that's no problem, because it has that right anyway. But allowing the bylaw to be in place for the 30-year period is a different matter, and I support it. Thirty years isn't very long, you know.

The Chair: I won't make any comment on that one. I will continue with the vote at this point. The motion has been duly made and we've had some discussion, so all those members who are in favour of the amendment as it was read by Mr Mills? All those against? The motion carries.

Shall section 2, as amended, carry? Carried.

Mr David Johnson: So the Chair supported that motion? I just counted, and --

The Chair: No, it was not a tie.

Mr David Johnson: I see. I was counting the hands over here.

The Chair: Shall sections 3 through 5 carry? Carried.

Shall section 6 carry?

Mr Mills: I have an amendment.

I move that section 6 of the act be amended by striking out "2025" and substituting "2024."

The Chair: Any discussion on that?

Mr Mills: Housekeeping.

The Chair: All those in favour of the amendment, please signify. All those against? The motion is carried.

All those in favour of section 6, as amended? Carried.

Shall section 7 carry? Carried.

Shall the schedule carry? Carried.

Shall the preamble carry? Carried.

Shall the bill carry? Carried.

Shall I report the bill to the House? Agreed.

I'd like to thank you for your participation and your patience. It's sometimes a longer process, and I appreciate your coming before us today.

Mr Boileau: Thank you, Madam Chairman, and thank you, committee. We'll get on with building it.

The Chair: Very good. I know the members in the north will be very pleased with that economic activity.

Mr Wood: I'm expecting 12 more projects within the next couple of years within Cochrane North.

Mr Hansen: I didn't understand when I flew over Atikokan. It is the land everybody applauded on the plane.

The Chair: Yes.

Interjections.

1150

HUMANE SOCIETY OF OTTAWA-CARLETON ACT, 1993

Consideration of Bill Pr82, An Act respecting the Humane Society of Ottawa-Carleton.

The Chair: We have Pr82, An Act respecting the Humane Society of Ottawa-Carleton coming before us. Mr Eddy will be acting as the sponsor on behalf of Mr Chiarelli, and we have Mr John Hamilton, the executive director of the Humane Society of Ottawa-Carleton, as the applicant, if he would come forward. Mr Eddy, perhaps you would like to make your opening remarks and then turn it over to Mr Hamilton.

Mr Eddy: I appreciate the opportunity to appear before this committee and say a few words at this time.

The Chair: No comment. We're counting.

Mr Eddy: On behalf of Bob Chiarelli, MPP, it's my pleasure to introduce John Hamilton, the executive director of the Humane Society of Ottawa-Carleton, who is presenting a bill which would exempt certain land and premises from taxation for municipal and school purposes. Thank you. Now I'll go back to my den.

Mr John Hamilton: I'd like to begin by stating up front that the humane society has occupied the lands and premises since 1967 and in fact was never taxed on those lands and premises up until 1991. What we're really seeking here is a return to the status quo rather than an exemption from existing taxes. We're not eroding the tax base. We are, as I mentioned, seeking a return to the status quo.

It appears as though the decision to tax in 1991 was as a result of an administrative decision that the municipality could tax us, and as a result of the province-wide reassessment brought about in some way by a 1985 Supreme Court ruling against the London Humane Society that a local affiliated humane society was not eligible for a tax exemption under the OSPCA Act. We're not seeking an exemption under that act; we are seeking an exemption as a registered charity under the Assessment Act.

Let me be very clear that we have support from the local authorities affected, whose tax base is affected. Number one, the Ottawa Board of Education supported the bill at its meeting on December 16, 1991, evidence of which you have in the compendium. You also have in the compendium evidence from the city of Ottawa supporting the act from its November 6 and 7, 1991, meetings. The region, as a matter of policy, does not consider these applications or exemptions and refers them back to the municipality, which is really the intent of what we want you to do through this bill as well.

Let me also state that the exemption meets all -- let me repeat, all -- of the Ministry of Municipal Affairs criteria, in that the humane society owns and occupies the property in question; the humane society is a registered charity under the Income Tax Act; the exemption applies to property taxes and not others, such as local improvements; the governments whose levies are affected have given their approval; and the exemption will be granted through a bylaw.

We are a registered charity under the Income Tax Act and at least as worthy as others who have received similar exemption, such as the Boys and Girls Club of Ottawa-Carleton and the civil service centre for recreation. So it is not a precedent.

The humane society also provides essential services and in fact acts as an agent of the municipalities in question by operating a pound for animals and ambulance service for animals. It provides a shelter, operates investigations and prosecutions into animal care, serves as licensing agent and picks up strays in the region. If these essential services are not provided by the society, they'll have to be provided by the city at a higher cost to the taxpayers.

The humane society also provides broad social benefits in the region by other programs such as our companion animals program, where we visit elderly and institutionalized persons, providing them companionship, fighting against loneliness and isolation. We provide a humane education program to elementary school-aged children on proper pet care. We reunite lost pets and their owners. We offer a pet-a-cat program which trains people on how to care for pets and provide veterinary services for sick and injured animals. We maintain a database of pets through a microchip identification program and we also shelter and place homeless pets.

At worst, the exemption we're seeking would be possibly revenue-neutral. If we are forced to curtail our activities, our essential services due to lack of funds, the municipalities in question will have to expend tax money to provide those replacement services, more than offsetting any tax revenues. It is most efficient and cost-effective to have one body, the society, provide these essential services.

Let me repeat that this is a return to the status quo, to empower the municipality, the city of Ottawa, to exempt us from taxation.

The Chair: I hope members take the opportunity to go through the package of information that the clerk has put together, because it appears that we have at least one objection to the application. I will do my duty here and ask if there are any interested parties who wish to come forward at this time to speak on this bill. Seeing none, I will turn to Mr Mills who had a question.

Mr Mills: It's not so much a question but a comment. You can tell by my accent where I'm from. I have long supported any society preventing cruelty to animals, not only vocally but with my money as well. I don't think there are too many people who originate from the British Isles who are not very concerned about animal welfare and the wellbeing of animals. Earlier, I said I was in a hurry to get out of here, not because I had no interest here, but believe it or not I have to go to a meeting with Barnum and Bailey about some proposed legislation about circus animals, just to let you know where I'm going.

I understand that the presenter didn't really know until a short time ago that there would be some opposition to this. It's unfortunate that the lawyer who represents you is not here. I have some empathy with the position you find yourself in, but I'm obligated to speak on behalf of the Solicitor General in that we do not support this, because at the moment it's my understanding that the sort of headquarters of the society is given some sort of tax exemption but that this tax break is not an offload towards the affiliates.

I can see and our ministry can see that this will present some considerable problem. We think, speaking on behalf of the ministry, that this really is a matter to be dealt with by the government as a whole. I'm not saying it shouldn't be dealt with, but that's really the way it should be dealt with, as opposed to this type of bill here. I have a lot of empathy with your coming here, and not knowing that until just now, I believe.

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Mr Hamilton: Can I respond to that statement, Madam Chair? We are not seeking the exemption under the OSPCA Act. Although that certainly appears to be the intent of the act, we're not going to argue that. We are seeking an exemption under the Assessment Act, section 3, paragraph 12, that provides for exemption to a registered charity, which we are. In that sense, we are not setting a precedent either. We're just asking for treatment equal to that given to other charities, such as the Boys and Girls Club of Ottawa-Carleton or, like I say, the Ottawa Civil Service Recreational Association facility.

Mr Eddy: I think the point was made by the applicant that this is a service for and on behalf of the municipality. That's very important because if they don't do it, the municipality kicks in and will have to do it. We have the taxing bodies that are affected by this decision in agreement with it, so I think we should proceed. I'm very much in favour of it, realizing again that if it's taken over by the municipality, it immediately becomes tax-exempt and the municipality will have to operate the facility and provide the service. I think it's important to let, again, the elected people in the given area make the decision on this. I'm certainly in favour of it. Let's get on with it. I'd be prepared to move, in order to save time to allow Mr Mills to get on with his other animal --

Mr Mills: Animal activities.

The Chair: I think it's wise not to pursue that.

Mr Eddy: -- responsibilities, to move approval of the bill.

The Chair: I think it's appropriate that we turn to the parliamentary assistant for Municipal Affairs and ask if he or his ministry has any comments to make on this proposed legislation.

Mr Hayes: We do have some concerns about this. Mr Mills has certainly touched on some of those. We feel this would be setting a precedent, especially wanting the amendment through the Assessment Act, and also it's another one of those types of requests that I think the government really should be taking a look at and deciding whether to make changes as a whole on this particular issue.

There are some concerns from the Ministry of Education and Training and I'd like, Madam Chair, if you would refer to Mike Riley.

Mr Riley: I can do little but support the comments of Mr Mills. We too are very concerned about the precedential value of the proposed bill. What we foresee is that if this is granted, other affiliates -- not the parent body -- around the province will see it as a precedent. They too will be in a position to seek exactly the same type of treatment.

This is a concern that places, I think, this matter on even a different footing from our normal concern about private legislation accomplishing tax exemptions generally. It's one thing where it's more or less a one-shot deal, a single type of entity or institution in one location in the province. But where it's a somewhat larger organization, organized as the OSPCA and its affiliates are, I think we really believe that the private bill approach is especially inappropriate for this type of relief.

Mr David Johnson: I'm just trying to get my mind around what is considered a precedent. Is it considered a precedent because this is a humane society? I'm thinking that earlier in the day we looked at a private company, albeit hydro generation. Before that, we've looked at other facilities. I think they were the sisters of something that got an exemption a week ago.

Mrs MacKinnon: No, they didn't get it.

Mr David Johnson: That's right. They didn't. But some do and some don't. In my mind, I can't figure out what is a precedent and what isn't. Can you clarify why this would be a precedent?

Mr Hayes: With my information, it would be a precedent because this would be the first humane society that we would give this type of exemption to.

The Chair: Mr Johnson, just as a point of information, Mr Melville previously had indicated that he would be trying to provide you with some criteria as to what in fact are the considerations when any of these tax exemptions are brought forward to the ministry. If I may proceed for one moment, or if Mr Melville would like to come forward to one of the mikes just to reiterate his comments, you indicated that charitable status was one of the criteria. There may be others which at this point we're all unaware of, but that was one issue that was consistent.

Mr David Johnson: I'd appreciate his guidance. I understand from the applicant that they consider themselves to be a charitable and non-profit organization, and from comments earlier.

Mr Hamilton: We are a registered charity.

Mr David Johnson: Perhaps in Mr Melville's comments, he might address the fact that the humane society considers itself to be a registered charity and a non-profit organization, and then why is that a precedent.

Mr Melville: These are separate questions. First of all, I'll give what the ministry criteria are in respect of exemptions. The first is that the organization own and occupy the property. The second is that the organization be a registered charity under the Income Tax Act, as was mentioned by the applicant.

Mr O'Neil: Could you mention, as you go along, which of these they comply with and which they don't comply with?

Mr Hamilton: In fact I have a copy of those criteria, and we do comply with all five of those criteria.

Mr Melville: I'll go through them, and then there's some additional information I'd like to give you.

Thirdly, the exemption would apply to property taxes only and not to other local charges such as local improvements. I would add that property taxes normally mean both municipal and school taxes, and I think that's important in this case.

Fourthly, the consent of the upper tier, if there is one, or the school board is to be obtained if the bill provides for the exemption of their levies. I understand that in this case the school board has given its consent. The upper tier has been --

Mr David Johnson: Silent.

Mr Melville: Silent.

Mr Eddy: Correction. I don't think that's quite correct.

Mr Hamilton: As a matter of policy, the upper tier does not consider these requests.

Mr Eddy: That's a little different. Thank you.

Mr Hamilton: It's very important to notice the distinction between refusing a request and refusing to consider the request.

Mr Eddy: It's policy in the upper tier in the face of the regional --

Mr Hamilton: They refer it back to the municipality, in which case the city of Ottawa has approved the exemption.

Mr Melville: It could be put as, "There is no resolution from the upper tier approving it."

Mr Eddy: That's becoming overtechnical. The main part of this is that the council of the regional municipality of Ottawa-Carleton has had the opportunity to refuse it or indeed approve it and it has elected to say it goes to the local municipality. The local municipality has jurisdiction, and that cannot in any way be construed as objecting to or opposing the application. It's as simple as that.

Mr David Johnson: Mr Melville was on the floor, though, and he was going through it.

The Chair: Passion sometimes takes over. What can I say? Mr Melville.

Mr Melville: Thank you very much. The final criterion: The exemption is to be granted through municipal bylaw rather than directly in the bill, and that's indeed the case with this bill.

You asked what was a precedent about this bill. I think it is relevant to know that under the Ontario Society for the Prevention of Cruelty to Animals Act, and perhaps the applicant can correct me if I'm wrong, there is a tax exemption in respect of municipal taxes but not school taxes.

Mr Hamilton: No. We have never been assessed municipal nor school taxes from the time we occupied the premises in 1967. So we're not applying for an exemption from former taxes, we're applying to keep the status quo. We're not applying for an exemption under the OSPCA Act either. We're applying for an exemption as a registered charity.

Mr Melville: Yes. I'm not speaking to your organization, I'm speaking to the legislative policy set out in the Ontario Society for the Prevention of Cruelty to Animals Act. In that act, a tax exemption is given to societies for municipal taxes and not school taxes. I'm not speaking specifically to your organization.

Mr Hamilton: Okay.

Mr Melville: As you say, you've had an exemption since 1967 in respect of both kinds of taxes, presumably under the Assessment Act. What you're asking this committee, not under the Assessment Act but through this committee process, is to determine whether that exemption should be continued, because I understand there's a court matter. Is that the case? There's some doubt as to --

Mr David Johnson: We are on your criteria, and maybe we should nail them down first. You've listed the five criteria. Those are all the criteria?

Mr Melville: Those are all the criteria.

Mr David Johnson: As I understand it, they meet each and every one of them.

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Mr Melville: They do indeed.

Mr David Johnson: You're saying that even though they meet the criteria, the government still has the right to deny or oppose the application.

Mr Melville: This committee has the right to approve or disapprove the application. I think that should be very clear.

Mr David Johnson: They meet all the criteria, but you're saying we should not approve it because they're a humane society and this is the first humane society that --

Mr Melville: I'm trying to provide information to the committee. Thank you very much.

Mr David Johnson: But you're also making a recommendation, I think, as I understand it, through the parliamentary assistant.

Mr Melville: The Ministry of the Solicitor General has indicated through its representative that it opposes the bill. That is correct, I believe.

Mr Hamilton: If I may interrupt, their opposition is through the OSPCA Act, which we're not applying to.

Mr Eddy: It was pointed out by Mr Mills and subsequently by Mr Hayes that it's being objected to or opposed on the basis that the whole thing needs to be looked at. That's great, and I agree with that, but the point is when. I think we need to get on and deal with this application.

If the other comes in, and I hope you have time to work at it -- we've got a whole list of things that need to be and that's great, but until that comes forward -- and indeed if some policy comes forward eventually, or sooner than that perhaps, then some of these may be affected by it. That's fine.

I always figure, never use the reason that it's a precedent for not taking action, because I think when elected bodies do that, they're just not prepared to face up to and deal with the application. I am and I'm approving it.

The Chair: Mr O'Neil, you're the next person on the list.

Mr O'Neil: I guess I'm trying to get some --

Interjections.

The Chair: Excuse me. Order, please. Mr Perruzza, did you want to actually get on the list of questioners? We can put you on.

Mr Anthony Perruzza (Downsview): No, I'm just --

The Chair: No, no, Mr Perruzza, you're not on the list of questioners. Mr O'Neil.

Mr Perruzza: I yield to Mr O'Neil.

Mr O'Neil: I'm not quite clear on this, and maybe I should be, but what you are saying is that there are grants that are given to the head body that in turn returns some of this money to the local unit?

Mr Hamilton: We receive no funding from the OSPCA.

Mr O'Neil: Could you clarify that?

Mr Hamilton: The former status, if you will, of OSPCA affiliates was that they would be tax-exempt. On the basis of the OSPCA Act, a Supreme Court ruling determined that the legislation does not apply to the affiliates, only to the OSPCA. We are an affiliate. We are applying for tax exemption as a charitable institution, not as a member of the OSPCA.

Mr O'Neil: If they're an affiliate not receiving any help, what happens to that money that goes to the head branch?

Mr Melville: I'm not sure I understand the question.

The Chair: Mr Hamilton, do you have any comments on Mr O'Neil's question? Mr O'Neil, would you like to reiterate your question?

Mr O'Neil: In other words, you're saying that the government gives money to the --

Mr Melville: OSPCA?

Mr O'Neil: Yes.

Mr Melville: No, no. As I understand it, is it correct that the government does not give money to the OSPCA?

Mr Hamilton: I couldn't really comment factually on that.

Mr Melville: I understand that the region of Ottawa gives a grant each year. I'm not sure how much. It's a considerable sum, approximately $300,000.

The Chair: Mr Mills may have something to add here. Mr Mills, do you have any knowledge about what's happening with the OSPCA?

Mr Mills: No. I've got it in my head what I believe to be going on, but I haven't had -- this was sprung upon me yesterday, because, I think rightly, the documents are circulated through ministries prior to time for comment. Somehow this document slipped through the Solicitor General without comment from staff. I know roughly what I perceive to be the problem, but I'm not about to elaborate on that, because I'm not sure and I don't want that to be on the record.

Mr Hamilton: I think we're getting sidetracked, if you will, from the real issue at hand. We're not asking to apply the OSPCA Act to the Humane Society of Ottawa-Carleton. What we are doing is seeking an exemption under the Assessment Act, the same as any other registered charity is eligible to seek that exemption from the local municipality.

We've applied through the local municipality. It's taken us two years to get to this stage. We've applied through the Ottawa Board of Education. We've gone through all the steps and met all of the ministry's criteria, and now we're asking for this committee to recommend the passage of the act.

The Chair: Mr Riley, you had something else to add here?

Mr Riley: Yes. My understanding is that essentially that's correct, but I believe the point that should be made is that to grant the exemption proposed will, in effect, force the hands of other municipalities and other school boards, which then will be faced with similar requests from other affiliates of the OSPCA around the province. I think that's why I feel it's so inappropriate here.

Notwithstanding that there may be a range of agreement with the local governments and agencies in the Ottawa area, I think to grant this exemption will perforce dictate the result in other areas around the province, or tend to do so, because of the way the OSPCA is organized and the relationship of affiliates, presumably in the same relationship to the parent as is the Ottawa humane society with the OSPCA.

Mr Mills: I think we could go on around the clock like this, but I can tell you unequivocally that the Solicitor General feels that this matter should be dealt with by the government in general because it's so wide-reaching, with implications of different ones coming to this council after this. I would suggest to you, Madam Chair, that you put the question.

The Chair: All those in favour of putting the question? Those against? We had the two gentlemen over there. How many were against again? Would you please show? Against putting the question? Two. It's a tie.

Mrs MacKinnon: How can it be a tie?

The Chair: Well, you didn't show again, Ellen, if you were against it, putting the question.

Mr David Johnson: I thought you said "against."

The Chair: Yes, because you two were in favour of putting the question, and I asked who was against putting the question, because I have two other people on the list here.

Mr David Johnson: I thought I was the only one who --

The Chair: Let's go through this again. Those in favour of actually having the question put, please signify. Thank you.

Mr Perruzza: And this is the same one we had earlier.

The Chair: No, I'm sorry, it wasn't, and my glasses are actually very close to my appropriate prescription. So I'd suggest actually you might be a little bit more on top of it.

Okay, the motion would carry. We'll have the question put.

Sections 1 through 5, all those in favour of having those approved? Carried.

Shall the schedule carry? Carried.

Mr Hansen: No.

Mr Mills: You didn't ask if anybody's opposed to it.

The Chair: I'm sorry. I just got all rattled with the questions that were --

Mr O'Neil: Take it easy on the Chair.

The Chair: No, no. Just hang on, Mr O'Neil. Just hang on. We'll get ourselves all together here.

Shall sections 1 through 5 carry? No. Okay, I'd like you to show your hands, please.

Mr Perruzza: Be sure and say "for the vote."

The Chair: Thank you, Mr Perruzza, for your comment. Would you please show your hands.

Mr Hansen: For what?

The Chair: For a vote. All those in favour? One, two, three, four. All those against? One, two, three, four, five.

Mr Eddy: It meets the criteria. It meets all of our criteria.

The Chair: You may have the debate outside in the hall, please. It's lost. The bill's lost. The bill will not be reported to the House.

Mr Eddy: But it meets the criteria --

The Chair: Thank you, Mr Eddy. Let's try to keep some order in the room.

Mr Eddy: They have established five criteria. It meets every one of them.

The Chair: Thank you, Mr Eddy.

Mr Eddy: The Solicitor General should get its act together over there and get these things through.

The Chair: Thank you, Mr Hamilton, for coming before us.

Mr Eddy: Throw the criteria out. Throw them out, rip them up. They aren't worth the paper they're written on. I can't take this.

The committee adjourned at 1220.