STANDING COMMITTEE ON PUBLIC ACCOUNTS

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The House resumed at 8 p.m.

STANDING COMMITTEE ON PUBLIC ACCOUNTS

Consideration of the final report, December 1980, of the standing committee on public accounts.

Mr. T. P. Reid: Mr. Speaker, it is always a pleasure to speak to such a crowded House. Obviously, the government is having problems counting again. They cannot seem to get enough members in to get a quorum.

Hon. Mr. Ashe: What are you talking about? You have a grand total of three people there.

Mr. T. P. Reid: Three of us can take on all of you.

Mr. Speaker, we are here to discuss, at a somewhat later date than I had hoped, the December 1980 report of the Ontario standing committee on public accounts. I take a certain amount of pride in this report, because I have been told by those who follow these matters that this is probably one of the best reports on public accounts that has been produced anywhere in Canada. I do not say that personally, of course. I am just passing on what others have said.

Hon. Mr. Ashe: You must have had a good staff.

Mr. T. P. Reid: That is true, as a matter of fact.

I would like to spend a few minutes just describing the public accounts committee for the record, and perhaps for members who may not be as aware of the committee as they should be.

The public accounts committee is the end of the cycle of financial accountability and spending of the government. That financial cycle begins with the preparation of the budget, the presentation of the budget in the Legislature by the Treasurer of the province and the subsequent tabling of the estimates of the various ministries.

During the fiscal year, from April 1 to the following April, the various ministries of the government spend the funds allocated to them and approved by the Legislature. What happens, in effect, is that the Provincial Auditor and his staff audit the performance and the books of the various ministries. The auditor then makes a report to the Legislature which is usually tabled in late December, and in the new year the public accounts committee begins its deliberations of the matters raised in the auditor's report and any other items it feels should be brought forward in regard to the financial administration of the province.

The public accounts committee then, going full cycle, makes a report to the Legislature on what it considers to be the major problems in the financial administration of the province, and the government deals with it as it wills. Of course, one of the final acts in this cycle of financial administration and accountability is the debate on the report in this chamber.

It should be pointed out from the outset that the public accounts committee in itself has no power to effect changes that will provide better administration or better financial accountability within the civil service. It is the prerogative of the government to act or not to act. This used to be a very important consideration. The taxpayers were concerned about what happened to their tax dollars and whether they were being prudently spent. Unfortunately, this whole process of financial accountability has got lost and has been somewhat downplayed in the last number of years.

For us as legislators still to have control over the public purse and to bring the executive of the government to account for their actions is very difficult. One of the problems is the estimates procedures that we have, and I will not recount that. But obviously one of the largest problems we have is that we do not have the information necessary to make the right choices, ask the right questions and ensure that the taxpayers' money is being effectively, efficiently and economically spent.

The attendance here this evening is probably symptomatic of the fact that this once very important function of all legislatures has lost that importance and that very few people are concerned with the process any more.

It is interesting that when I first became chairman of the public accounts committee in 1974 I went to the literature in the library, the learned journals and the academics to see what the public accounts committee did. I can tell the House that there was very little, if anything, in the literature other than a series of reports that did not outline the procedures, did not outline what the mandate of the committee was and certainly did not provide any guidelines as to how the committee was supposed to carry out its responsibilities. In fact, hardly anywhere were those responsibilities written down.

Mr. Breithaupt: If it had not been for the previous chairman, the member would not have known what to do.

Mr. T. P. Reid: The previous chairman, the only other one now extant in the House, somewhat like a dinosaur, tells me that if it had not been for him we would not have known what to do at all. I use that as an excuse for the rather poor job we did in the first number of years until I decided to disregard the advice of the former chairman.

However, it is interesting that, at least in academic circles and some others, there has been greater concern recently about how the day-to-day finances and financial administration of governments operate and whether the executives at the provincial, federal and even municipal levels are conducting the financial affairs of the people on whose tax dollars they live in a prudent and economical way.

The present chairman of the committee was moved to write an article in the Parliamentarian in October 1980 in an effort to describe and put down in black and white how our committee in Ontario operated.

Partly as a result of this greater concern, the Canadian Comprehensive Auditing Foundation, which is a made-in-Canada operation that is spreading worldwide with new concepts, particularly in government accounting, or value-for-money accounting as it is often called, commissioned a study dealing with public accounts committees and legislative auditors.

The title of the report is Improving Accountability: Canadian Public Accounts Committees and Legislative Auditors. It was just released in September. It delineates fairly well, I think, the whole process involving public accounts and legislative auditors. I was fortunate enough to be a member of the advisory committee to this report. I believe this report will serve as a model for all public accounts committees across Canada.

8:10 p.m.

I might also tell the House that the legislative auditors across Canada have been meeting for almost 12 years now. Three years ago, on my initiative, chairmen of public accounts committees from across Canada began meeting at the same time as the legislative auditors to exchange information, to educate themselves, to exchange ideas and to try to bring about a closer working relationship between legislative auditors and public accounts committees.

At the recent meeting in St. Andrews-by-the-Sea in July, I, as Ontario chairman, was elected as president of this august organization, and we will be meeting again in British Columbia next summer.

Mr. Breithaupt: He couldn't get to Australia.

Mr. Stokes: You want to go to Paris.

Mr. T. P. Reid: I would prefer that.

Mr. Breithaupt: Or even to Brantford.

Mr. T. P. Reid: Mr. Speaker, we are dealing with one of the most fundamental and basic traditions at the very root of the parliamentary system; that is, accountability to the Legislature and to the people for the financial administration by the executive.

Unfortunately -- and I say this with respect -- none of us is doing quite the job we should. That is partly because, to some extent, the public has become so cynical about the fact that government expenditures are out of control that nobody seems to care.

The present Ontario government, for instance, which is running a deficit of more than $1 billion, sees fit to set its priorities on such things as a $10-million jet aircraft and buying a $650-million interest in an oil company which will not add one job to the province. There is a lot of cynicism out there, and I think we have to convince people that what we are trying to do here is important and that we are trying to get things under control.

In 1976, the then federal auditor, Mr. Macdonell, in his report to the federal Parliament -- and one has to appreciate that, like lawyers, accountants are very careful in what they say -- said that Parliament was close to losing control over parliamentary expenditure. I think he was being very conservative, if I may use that opprobrious term, in putting it that mildly. By the way, if anybody wants a copy of the report, I have some extra ones here. The autographed ones will be extra. The big print is in that one there.

The point is that we are trying to bring accountability to the system. We have laboured in the mythology of the political science theory that we operate in this province and elsewhere, under something called ministerial responsibility, that the ministers sitting opposite are responsible for each and every action taken within their ministries. I say to you, Mr. Speaker, that this is outmoded.

It is impossible for a cabinet minister dealing with a multimillion-dollar budget, and sometimes a $1-billion budget, perhaps with thousands of civil servants, to be aware of each and every action taken by those same civil servants. The Lambert commission makes reference to this and says cabinet ministers spend more time dealing with policy matters than with financial administration. I would like to quote from the report of the Lambert commission:

"Accountability is the working principle of our parliamentary system in a process whose effective functioning is essential to our democratic government. The committee shares the view of the commission" -- this is the Ontario committee -- "that, while the doctrine of the collective responsibility of cabinet and ministerial responsibility of individual ministers to the House for all actions of government done in their name is the underpinning of our parliamentary system, this valuable tool for achieving accountable government must not become an obstacle to holding to account those who carry out tasks on the basis of delegated authority, the officials of departments and agencies."

That is from the Lambert report, page 371.

I entirely agree with what Lambert goes on to say:

"The civil servants, today more than ever before in the history of our parliamentary tradition, are the people who are responsible and who are dealing with the day-to-day financial administration of government."

It is obvious from the questions we ask the cabinet ministers that they do not know what is going on, let alone what is going on in the day-to-day operations of their ministries, nor do we expect them to in certain specifics.

The point of all of this is that there are two levels of responsibility. There is the executive and ministerial responsibility ultimately, obviously; but there is also responsibility on another level, and that is at the civil service level. Those are the people who are doing the day-to-day administration and who are responsible for the allocation of the personnel and resources that are voted to their ministries by this Legislature.

I commend you, Mr. Speaker, and others to read pages 10, 11, 12 and 13 of the 1980 report in which the then public accounts committee of Ontario dealt with accountability and responsibility, because it is very important that civil servants be held responsible for their actions. While not necessarily new with this committee, it is a different set of principles than, for instance, the academics and even some parliamentarians have been operating under for some time.

If members look at the report they will find that civil servants often are not accountable to the public accounts committee and through us to the Legislature. Members will find they have been getting away with the grossest of errors and that the cabinet and executive are allowing that to continue. We have detailed in our findings in the report -- and I will not go into it at great length -- that the administration of the civil service is poor in this province. The managerial ability on which this government prides itself is almost nonexistent in many cases. I will give members a few examples.

Within the civil service we have something called merit pay. That is something I think most members of this House have never heard of: Merit pay; what is that? That is a little fillip, sort of a fringe benefit that people in middle management and higher get for doing a good job. That was supposed to be the basis of it. What has happened, in effect, is that everybody in middle management and up has been receiving merit pay based simply on whether they show up for work. If they show up, they get it. It is not for good or better or best performance; it is simply for being there.

The strange thing to me, and I think to the committee members at the time, is that there were really no rules or regulations or performance appraisals being done at that time as to how people got the merit raise. They got it simply by showing up. If they didn't get it, they could grieve it. It was astounding to the committee that this merit pay was in place, that it ranged up to six per cent of their salaries and that there were no performance appraisals with understood guidelines being done. There was no rating of people; they simply got --

Mr. Stokes: It makes you wonder where the committee was all those years.

Mr. T. P. Reid: That is right. These things are going on and nobody knows about them. The government did not seem to be particularly concerned. Therefore, what is the incentive for anybody to perform other than adequately or moderately or just to show up?

Of all the things we turned up, it was this one that I think really concerned members of the committee the most. Even Townsend and the land banking the government did -- to the tune of $662 million, almost enough to buy Suncor -- paled in comparison to the way the executive was managing its resources and requiring from our civil servants accountability and responsibility for their functions. I sometimes fail to understand how people think.

8:20 p.m.

Mr. Speaker, I draw your attention to pages 18 through to about 25 of the public accounts committee's report. It deals with the government's land assembly. I am going to tell you a story, sir, that even you in your wildest imagination would not believe.

The province of Ontario, under the leadership -- if I may use that word -- of the Premier (Mr. Davis), embarked on a land-buying scheme to the tune of more than $600 million. They bought property in Edwardsburgh -- the member for Durham West (Mr. Ashe) knows about that, does he not? They bought Townsend and South Cayuga, and they paid two to three times the appraised value for that land.

Hon. Mr. Ashe: You forgot Pickering.

Mr. T. P. Reid: Pickering is peanuts compared to this operation. More than $600 million of taxpayers' money went into these projects.

In Edwardsburgh, a report of the government said, "We will never be able to sell this land." The government paid too much for it to begin with, and all the great things that were going to happen never materialized.

One wonders on what basis it did these things. Why did it buy both South Cayuga and Townsend, which are right next door to each other, when they were going to build one city?

I am going to tell honourable members what the then Treasurer of Ontario did. He was driving home one day in his limousine -- or was being driven home in a government limousine -- and, sitting in the back of his limousine, he had a vision. He decided he liked living in London, which had about 200,000 people, and he thought people would not want to live in a bigger city than that. So, instead of building one city of 400,000, he would buy two town sites right beside each other and would have two cities of 200,000.

There was no basis for this; there were no reports. I might add, there were only 600 people in the Ministry of Treasury and Economics and in other land planning in the government at that time. There was not one report -- there was no evidence -- to indicate the government should do this. Yet the Treasurer, on his own hook, could spend $250 million. And his response to the committee was: "I had all this money in the Treasury. I did not know what to do with it. So I said, 'Ah hell, I will go out and buy some land.'" That is the management expertise of this government.

Lest you wonder if it was just the Treasurer who was in on this little boondoggle, Mr. Speaker, let me quote from Hansard.

My colleague Mr. Hall, who is no longer with us, put the matter to the then Treasurer, Mr. White, who said this: "I simply decided as the minister responsible that it would be better to have two medium-sized cities" -- even though they were right next door to each other -- "than one large city, and I persuaded my colleagues that I was right.

"I had policy and priorities board's approval before we did any optioning, and I had cabinet approval before we did any purchasing.

"Mr. Hall: I assume that the Premier agreed with you because the policy and priorities committee accepted what you had to say.

"Mr. White: The whole cabinet -- speaking in that collegial sense, the government, the cabinet decided to buy the property.

"Mr. Chairman:" -- That was me, by the way -- "What was the activity of the Premier in all of this? Was he kept informed of this grand scheme and the cost of it, and did he give his imprimatur to this program?

"Mr. White: Well, there are not very many things that go through cabinet that the top man disagrees with."

Those are the great managers of Ontario; and I ask, where is the accountability and responsibility in respect of that $662 million?

We made more than 25 recommendations on various matters in this report. We talked about the government's habit of people -- civil servants -- quitting: working for a ministry one day and being hired as consultants the next at higher salaries and all that goes with it.

We talked about consultants who would low-ball on a tender and then come back to the government, saying, "We underbid and we need more money to complete this project," and get it. The horror stories go on and on.

We also discussed public opinion polls, strangely enough, in the committee. It was the feeling of the all-party committee -- which included some great Conservatives of the day who, unfortunately, are no longer with us -- that the government, because it was taking these public opinions polls with taxpayers' money, should make them available to the Legislature and to the public as a whole.

It is interesting that, under the threat of a Speaker's warrant, the Premier finally coughed up those public opinion polls but has been loath to follow the recommendation of the committee that they be tabled in the Legislature when they are received by the government.

There is another matter that really concerned the committee, and we are not done with it yet. That is the matter of the health service organizations and the St. Marys Clinic in St. Marys. It is interesting how this all came about, because the Provincial Auditor raised this matter in his report, partly at the instigation of letters he received from people in St. Marys.

It had to do with the St. Marys Clinic and our examination of the health service organization program. For the members' edification, the health service organization at St. Marys was being paid on a capitation basis rather than on a fee-for-service basis. That means, simply, they had a roster of something like 10,000 to 11,000 people for whom they received an amount of money every month. Whether or not all 11,000 came in to see the doctor, they got paid. This was supposed to be saving the taxpayers' money.

We found out quickly that the doctors in the St. Marys Clinic were enjoying an income substantially higher than that of the provincial average and that the Ministry of Health had never proven the roster. It did not know whether the people on the roster were alive or dead, or whether they had moved to Sault Ste. Marie, Sudbury or Atikokan.

Mr. Kerrio: Or to Calgary.

Mr. T. P. Reid: They did not know whether they were in Quebec going to another doctor or whether, as my colleague says, they had all moved to Calgary under the management of William Davis and company.

The auditor did another report for us and found that it had probably cost the taxpayers an extra $1.5 million because the Ministry of Health people did not do their job, did not follow up with their procedures and did not ensure that the people's money was being well spent.

For a person in your position, Mr. Speaker, $1.5 million is small peanuts, and it would not take you long to come up with that money; but when you consider that the average taxpayer pays about $1,500 in provincial income taxes, that is a lot of taxpayers to make up $1.5 million.

8:30 p.m.

Worse than the money that was lost was the attitude of the deputy minister and the civil servants who appeared before the committee. I had never been more ashamed in my life than to see the performance those people put on. What annoys me to this day is that, as far as I know, those people have never been disciplined by the Ministry of Health or by this government.

It might be a little strong to say that they misled the committee. I was going to use another word and I changed it. But they misled the committee; they stonewalled the committee and they stonewalled the auditor. They would not provide the information; they went around in circles and they completely and utterly treated the committee with contempt. One can only ask oneself who is supposed to be running the store, Mr. Berry and his colleague? It was unbelievable the way they carried on.

As a matter of fact, in this report is one of the strongest statements I have ever seen printed about a civil servant anywhere. And I remind you, Mr. Speaker, that this was an all-party committee; there were Conservatives there, and they signed the report. In case members do not know, the Conservative members at that time were the member for York West (Mr. Leluk), who is now a cabinet minister; Mr. MacBeth, the then member for Humber and a gentleman well thought of by one and all; the member for Sault Ste. Marie (Mr. Ramsay), who is now a cabinet minister; the member for Simcoe Centre (Mr. G. W. Taylor); and the Speaker himself. In fact, the Speaker was then the parliamentary assistant. They put their names to this report, which says at page 30:

"The committee is also disappointed by the apparent lack of concern with the question of value for money displayed in our hearings by the officials most directly charged with responsibility for the program, Dr. Boyd Suttie and Mr. Ray Berry. In particular, the committee is disappointed with the quality of responses to requests for information and with the lateness of these responses, which served to hinder the committee and its work.

"The committee is also displeased by the lack of co-operation by the ministry with the Provincial Auditor in his comparison, at the direction of the committee, of the roster of St. Marys Clinic and the patient lists of nearby fee-for-service practices."

It is incredible to me that civil servants could come and act before a committee of the Legislature as these two gentlemen did. What is even more incredible to me is the fact that the Minister of Health (Mr. Timbrell) stood in his place and defended the actions and attitude of those people.

It makes one wonder about responsibility and accountability and what really is going on in that government. Even civil servants could not come up with some of the crazy actions that the government has lately. One wonders who is running the show.

To my knowledge, statements like this about the actions of civil servants have never been printed anywhere before. The committee did it only reluctantly, but they felt that strongly about it. Yet those people came before us again this year after this committee had met and said this last year, and they proceeded to give us the same kind of runaround as they did last year. One wonders about accountability and responsibility in those circumstances.

I promise not to speak too long, but I want to draw to the attention of the members the last two or three recommendations of the committee, because they are important.

"The committee recommends that each ministry, agency, board and commission of government establish an audit committee." We suggested this because in our review of some agencies, boards and commissions we found that the board of directors, who are often appointed by the government and usually friends of the government and who usually sit for one or two days a week every few months, are not sufficiently doing the job of ensuring the financial accountability of those enterprises.

"The committee recommends that the government require comprehensive auditing of all its agencies, boards and commissions" -- to ensure once again that we are getting value for money.

"The committee recommends that comprehensive auditing become a requirement for all bodies receiving public funds."

If we do not bring some new rules of procedure, some new guidelines, to the financial administration of this province and its various emanations, such as agencies, boards and commissions, school boards, hospitals -- all those agencies that receive transfer payments, which in Ontario amount to between 70 per cent and 80 per cent of the provincial budget -- then we have no accountability for the finances of the province at all.

I think the public accounts committee of 1980 had reached a plateau of operating, of preparing themselves for the committee, reading the material provided, having initiative in their requests for items for the committee to look at and bringing a relatively non-partisan approach to the committee. I would quote from the report I have already referred to, Improving Accountability, on page 103:

"The main factors contributing to the public accounts committee's success has long been accepted as: 1) its clearly defined role in the circle of control -- nearly all of the PAC's inquiries are audit-based; 2) the expert assistance of the controller and auditor general and his staff; and 3) the committee's non-political approach to its task."

I think we were able to come up with what I consider an excellent report because we did approach our job and the committee in a relatively non-partisan way. There was a final understanding that we were all there to ensure better accountability, better responsibility and better financial administration. That was our goal as a relatively non-partisan committee. I think if there is any partisanship it can come out in the Legislature. It can come out here in the debate on the report. It can come through question period in the estimates. I would hope that my government friends on committee also would try to adopt the relatively non-partisan approach so that we can ensure the taxpayers are getting value for their money spent.

I understand the parliamentary assistant to the Chairman of Management Board is going to be speaking on behalf of the government. I hope he would address himself to the 25 recommendations of the public accounts committee and tell us what action -- if any -- has been taken. If no action has been taken, would he tell us why not. We have had some responses to parts of the report but I would also like him to deal, if I may ask him, with the philosophical basis as laid out by the committee in the preface to the report -- about accountability and responsibility and what commitment the government has to ensure better financial control within the ministries run day-to-day by the civil service.

I would like to end in this vein. Norm Scott, who has been the provincial auditor for some seven or eight years, has, I understand, written the Premier with his resignation. I believe his term of office will end January 1 of next year.

Mr. Scott is not in the House tonight. He was not aware we would be debating the report this evening. I would like to put on the record my thanks, gratitude and personal appreciation of what I consider to be an excellent job that he has done in his function as provincial auditor. I think it is largely due to his efforts that the committee has improved as much as it has. I believe he is a civil servant in the classic mode in that he was a servant of the public, he did his job exceptionally well and in the parlance of comprehensive auditing, the taxpayers of the province got full value for their money.

The Deputy Speaker: Thank you, Mr. Reid. Might I just say when you make reference to the Speaker it is difficult for whoever is in the chair to respond since we are supposed to remain unbiased. You leave us in an embarrassing position.

8:40 p.m.

Mr. Philip: Mr. Speaker, I would like to start off my comments tonight in the manner in which our chairman, the member for Rainy River, ended his. As a new member of the committee, I am very much impressed by Norm Scott. He is approachable; he always had time for me and for other new members who had just joined this committee to answer questions and to do a considerable amount of professional development for us. I am impressed by his fairness, but most of all by his patience. The committee will suffer a grave loss not having the services of someone as dedicated, as accessible and as open as I found Mr. Scott to be over the last three months in which I have had some occasion to know him and to seek his advice.

As a new member of the public accounts committee, I take a certain pleasure in voicing my approval and satisfaction with the work that has been done by my predecessors on the committee. Some of my colleagues are still sitting on the committee; others from my party have gone to other endeavours -- at least for a little while -- and it is their hard work and the hours put in by Mr. Scott, and by other people who were of assistance to the committee and by the clerk of that committee, who made possible this excellent report that is before us. In a sense they have pioneered an awful lot of the work that I have been privileged to learn about and to become a supporter of during the last three months.

Government expenditures have risen in the past years at a rate not previously experienced in the past in western countries except in times of war. There is in the democratic societies of the world at the present time a great interest in improving public accountability. I would point to some comments made in an article titled Proposals for Expanded Scrutiny of Public Spending in the United Kingdom, which appeared in the Parliamentarian that I found quite similar to some of the things we are doing. It points out that the system of national public audit in the United Kingdom is under the first fully comprehensive review since it was established in the Gladstonian regime of the 1860s. Its modernization and development had taken place within the statutory framework established in 1866 with a partial restatement in the 1921 act.

I found that article interesting because it deals with the problems Great Britain is facing, problems that are quite similar to ours. As another democratic parliamentary system, many of the questions they are asking were the same questions we were asking in the committee and at the convention that our chairman and I and other members of this House attended with other parliamentarians from across the country.

One of the principles now being debated in Britain is the proper supervision and accessibility of publicly-owned corporations. This is a matter we have been dealing with in our committee and we deal with the same problem when members of our committee get together with members of other parliamentary committees. I remember talking at some length in Moncton to a former cabinet minister in the Barrett government who, as a member of the public accounts committee and a deep believer in the proposals of the Canadian public accounts committee, legislative auditors and of the kinds of things that are being said in the first pages of this report which is being tabled before you today, agreed that it is becoming an increasingly difficult problem as governments now set up more and more crown corporations, corporations that are not directly answerable to government. How do we make sure they are run efficiently and are accountable to the public?

In the article it is pointed out that this is one of the issues being debated in Great Britain at the present time. Should the public accounts committees have access to the books of nationalized industries, the national enterprise board and the British national oil corporations? That is one of the debates that is going on at the present time in the British Parliament and in British parliamentary circles.

On page 7 of the report -- and our committee has dealt with the same problem -- it says:

"The committee has recently embarked on calling a number of agencies, boards and commissions in order to ensure that they are following regular accounting practices and fulfilling their mandate as the legislation provides. Because approximately 80 per cent of the funds paid out from the consolidated revenue fund are in the nature of transfer payments this is an increasingly important function.

"A problem often arises, however, because some of these agencies, boards and commissions consider themselves to be autonomous from the government, and sometimes question the authority of the public accounts committee to scrutinize their financial administration."

This is a question we have raised in the report, and I think it is a question that members on all sides of the House must be interested in. As a democratic socialist I believe that in a mixed economy -- and some of my socialist friends on the opposite side of the House, who have just taken over an oil company --

Mr. Cunningham: Some? All of them.

Mr. Philip: No. I was not including the Treasurer (Mr. F. S. Miller).

They have indicated by their pinko activities of the last few days in the acquisition of an oil company that they also believe --

Interjections.

Mr. Philip: Would the members like me to stop for them, because I cannot hear their interjections. I would love to comment on their interjections, but I must hear them.

Experience has shown that crown corporations, while serving important economic functions and important social functions, can also be as efficient as or, indeed, in many cases more efficient than some of the private enterprise corporations. But in order to ensure this happens we must have an efficient auditing system, and these companies must be publicly accountable.

The following questions, therefore, are most important to the kind of committee we are talking about, questions that are found in the excellent report which is just out by the Canadian Comprehensive Auditing Foundation, questions that deal with what we should really be about in a public accounts committee:

"Do the public accounts give an accurate and appropriate detailed report of the government's financial affairs so that it can be held properly accountable?

"What are the taxes and other revenues due to the government collected and properly accounted for?

"Was the money voted by the Legislature spent for the purposes approved, and did expenditures exceed the amount authorized?"

Those are the questions that members, regardless of their political persuasion and their philosophy, must surely be concerned about, for those are the questions that deal with accountability. Have those whom we have entrusted as legislators to carry out our wishes carried them out in the direct way in which we have told them to do so? If not, why not? Was the administration frugal or extravagant in its buying and hiring practices? Were programs managed in an efficient or wasteful manner? Are programs being evaluated and results reported, wherever possible, and, if so, are the programs achieving what they set out to do, namely, to carry out the government's objectives as spelled out in legislation or in orders in council? What steps are being taken to rectify administrative weaknesses?

8:50 p.m.

Without a comprehensive auditing system it is nearly impossible to answer those kinds of questions. We as parliamentarians, in whatever committees, do not have either the time or the expertise to collect the kind of information that a proper public audit can do. That is one of the points that is also brought out in our report as to the reasons the work of this committee, and the work of those working for this committee, is so important for those of us who believe in responsible government and a representative government. Therefore, if we do not deal with those questions, or if we do not have a committee that has access to the right information to deal with those questions, we are really having our problems. Those are some of the fundamental issues we are dealing with in this committee.

I would also refer to an important part of our committee report dealing with the effectiveness of public accounts committees. This is a subject we dealt with extensively in Moncton. I find it interesting that, in all the sessions we had, the kinds of issues, the kinds of questions and, indeed, the alliances and the arguments cut across political lines. There would be a Conservative in Saskatchewan agreeing with a New Democrat in British Columbia, agreeing with a Liberal chairman of the public accounts committee here in Ontario. That is why it is appropriate that there be an opposition chairman, and that he carry out his functions in a nonpartisan manner, as he has done.

As a member of the Ombudsman's committee, I feel it is ironic that we have not seen fit with that committee -- which has an analogous function of not dealing with the partisan interests of any of us but rather of seeing that abuses that are done, not by politicians but by a system, be corrected -- to follow the tradition of the public accounts committee and appoint an opposition chairman there. I admit we have a fine chairman, from what I have seen of his manner of handling things so far. But surely in the case of the Ombudsman's committee it might well be worth the Legislature's while to consider its analogy with the public accounts committee and, in many cases, the overlapping of functions, and consider an opposition chairman for that committee.

On page nine, in dealing with the effectiveness of the committee, we pointed out that it has a problem. It is a problem that again is, in some ways, analogous to a problem of the Ombudsman's committee. It says that basically we have no authority to ensure the executive or the bureaucracy acts on the recommendations made by the committee or the auditor or both. That is a problem that I, as a member of the Ombudsman's committee, am also struggling with. It is interesting that the same problem is being dealt with in both committees.

The report goes on to say the committee must rely on the glare of publicity brought to bear by the press or on the presumed interests of the executive and the bureaucracy in good financial management. We point out that, unfortunately, the committee does not have within its powers either a stick or a carrot to ensure that our recommendations are carried out, and we have seen this in the past history of this committee. There are no incentives, no sanctions, that the committee can bring to bear on the executive and particularly on the bureaucracy.

Without incentives and sanctions for good performance, the committee is based solely on the ability to embarrass a minister to take some action or to make things so uncomfortable for a particular civil servant that he will take action. It is unfortunate that is the case. We must surely be looking towards a system where that does not have to take place. That is the very kind of thing that distorts the nonpartisan nature of the committee, that builds into it an inherent partisanship that should not be part of either the public accounts committee or the Ombudsman's committee. We have dealt with that on page 12 by suggesting that public officials remain permanently accountable for their decisions while in a particular office and that this accountability remain whether they assume a different post within the public service or leave it altogether.

It would be presumptuous of me to deal with some of the specific issues that the committee of which I was not a part has dealt with. The member for Rainy River (Mr. T. P. Reid) and other members of the committee have a deep, personal and intimate knowledge of South Cayuga, Townsend and other issues, in the same way that I have a deep and personal gut feeling and knowledge of Re-Mor and other matters that came before the justice committee, on which I have been so active for so many years in this House. Therefore, I would simply like to say that the issues I am concerned about in this report are those of accountability and of running an efficient and effective public accounts system and public auditing system. Inefficient government is also insensitive government.

It is not just dollars and cents we are talking about. To make government more efficient is also to make it more responsible and more sensitive to those whom that government is serving or servicing. I think, therefore, that those items that have been raised, both in the first 13 pages of our standing committee on public accounts' final report and in the newly published Canadian Comprehensive Auditing Foundation report on proving accountability, concerning Canadian accounts committees and legislative auditors are probably even more important -- indeed I know they are more important -- than the very specific and at times embarrassing issues raised in the rest of this report.

I will simply conclude by saying the three months in which I have been a new member of this committee have been a rewarding and educational experience, and I look forward to serving on my new committee in the years to come and to working closely with the chairman and with other members of the committee.

Hon. Mr. McCaffrey: Mr. Speaker, I want to start off by complimenting the chairman and the members of the public accounts committee for the work they have done. I am intrigued to hear the former speaker say that, while he has only been a member for three months, he is quite encouraged by it. I have an even shorter history than that with this committee -- about two days --

Mr. T. P Reid: But a great contribution just the same.

9 p.m.

Hon. Mr. McCaffrey: That is right. In the last four years it is one of the few committees in which I never did have an opportunity to get involved. But much worse than that, over the past four years and now, like a lot of people in this assembly, I find if one is not on a particular committee, more often than not one is just not at all alert to the kinds of things it is doing. At the outset I plead guilty to finding myself in that position.

Quite candidly, I read this final report of the standing committee on public accounts, dated December 1980, for the first time only the other day. I read it cover-to-cover and I was very impressed with it, to borrow a phrase used earlier tonight by the chairman of the committee. He talked about this committee's role coming at the end of the accountability cycle, after the budget and the estimates and the accountability through this House, the role of management board and public accounts. I think it is important. I would urge those few members who are here and have never been on this committee to take the time to read at least the first 15 or 20 pages of the report. That end of the cycle analogy is spelled out very clearly there, and I think it is an important role for all members of this assembly to understand.

I was particularly impressed with the relationship, again alluded to in the report, between the public accounts committee and Management Board of Cabinet. I want to make it clear here, at the outset, that I am speaking on this report tonight in my role as vice-chairman of management board -- the Chairman of Management Board of Cabinet (Mr. McCague) is not in the province at the moment or he would be. As I understand from reading the report and in the conversations I have had with some of the management board people in the last few days, the relationship between management board and the committee is a close one. I know for a fact there is a good deal of respect held by the senior people of management board for the chairman of this committee and for the role of the public accounts committee itself.

In my conversations with them in the last couple of days, I know there is a very sincere attempt to work in a co-operative role with this committee. I do not know if this is a good analogy, but I was thinking that if the roles of Management Board of Cabinet and the public accounts committee are not parallel -- that may be stretching the point -- certainly their roles are not at all in conflict. Accountability of a financial nature is the operative word for both those groups. In my judgement, respect for that role and for the members of the public accounts committee goes well beyond the immediate people within senior levels of management board to the deputy minister and senior civil servants. There is no question that people I have talked with in the last few days share that respect and that spirit of co-operation.

If I may now turn to one specific recommendation of several I would like to touch on -- that is the first recommendation at the back of the book, at page 48: "The committee recommends that the deputy minister as chief administrative officer account for his performance of specific delegated or assigned duties before the legislative committee responsible for the scrutiny of government expenditures, the public accounts committee."

I said at the outset I think it is clear the government agrees with this principle. More to the point, the responsibility of deputy ministers to this committee and to other committees of this assembly is a well-established principle in Ontario. It is evidenced in large measure by the attendance of most deputies and their performance through the public accounts committee. I respect the fact that the chairman of the committee in his comments earlier tonight made reference to an isolated -- I hope it is isolated -- instance where there was a problem. For a variety of reasons I am not going to comment on it, principally because I am not aware of the details. The respect of the deputy minister and senior staff levels of this government for the committee, for the people on the committee and the role they play, is widely held. Certainly they know that the spirit of cooperation is expected of the deputies and their staff when they do attend at the committee.

Before I say much more about the question of deputy minister or senior staff accountability, I would like to say a word about the question of ministerial responsibility. I think it is important to make it clear that ministerial responsibility is a fundamental principle within this government and that there is no change in that basic principle. I say that because I am going to quote from page 11 of the report of the standing committee on public accounts.

At the top of page 11, the quote from the Lambert commission says: "While we have no wish to dispute the principle of ministerial responsibility, there can be little doubt that today the degree to which a minister really has the effective management and direction of his department is open to question. In the context of developments in recent decades, we are dealing with a government vastly transformed from the time when the conventional view of ministerial responsibility was formulated. The twin assumptions that Parliament has the clout as well as the information to exact a relevant accounting, and that the departments can be managed and directed by ministers, do not hold as they once did. We believe that the application of the principle must be reconsidered in the light of changed conditions."

Virtually everybody in this assembly understands the dramatic changes that people in government have been confronted with, particularly in the last decade, but there has been no change in this fundamental principle of ministerial responsibility in the view of the Ontario government.

When the Lambert commission report was done there was a feeling that was widespread, rightly or wrongly, that in Ottawa things were totally out of control and that the civil servants ran the shop. Whether that was conventional wisdom, to what extent Lambert actually reflected the reality in his report is open to debate. But that is not the view here. The question of ministerial responsibility, in spite of the changes in the last decade, has not been altered.

I would point out to the new members in particular that if they take a look at the government structure that has been in place here since 1971 -- I refer to the Management Board of Cabinet and all of those policy fields, et cetera -- the whole structure of the Ontario government is designed to reinforce this fundamental principle of ministerial responsibility.

Having said that, with reference to the comments the chairman made about the changes, Lambert reiterates the changes we have all been confronted with in the last decade. We are under no illusions that is going to abate. I suspect the rate of change is going to accelerate in the 1980s.

Management Board and other people in the government are sensitive to that. I am sure the member for Rainy River is aware of this, but I would like to quote from a speech that the Chairman, Management Board of Cabinet, made some time ago when talking about the role of managers in the 1980s; by that he means senior civil servants.

I am not going to quote this thing in isolation. I want to make reference later on to the management standards project that is in place and well under way within the government. In short order, hopefully, it will be a lot clearer to people and many of the changes that have been worked on in the last couple of years will soon be clearer to people.

The speech I refer to was made September 14, 1980, by the Chairman, Management Board of Cabinet: "One of the adjustments" -- he is talking about the future -- "I believe we will all face during this decade is to recognize that senior executives will be called upon more and more to play a dual role as policy adviser and general manager. During the past few years, a deputy minister's contribution has been heavily weighted towards the role of policy adviser. This will certainly continue, but the role will change substantially from one of advising on the creation of new programs to one of modifying existing programs and policies. In the 1980s, a general manager's role will take on as much importance as the policy adviser role.

"I predict the general manager's role will become crucial in the coming years. It will be especially important to the minister, who even now is being held ultimately responsible for the quality of management in his ministry. Media reporting of government tends to zero in on examples of bad management. During question period, opposition members search out examples of bad management of anything from policy advice and planning through to the proper handling of cash and individuals. At such moments it must seem that the minister is at the mercy of his managers, but the manager himself will be asked to shoulder some of the burden."

9:10 p.m.

While not deviating from this principle of ministerial responsibility, let me just read on a paragraph or two: "When a committee of the House concentrates on government policies, it is true that it is looking at political decisions, which you as managers" -- he was making this speech to a group of senior Ontario civil servants -- "are not expected to account for. But when the committee starts to delve into the reasons for the creation of that policy or the specific decisions made in carrying it out then you come into the line of fire.

"As the quality of management takes a front and centre position the manager is held accountable more and more for his decision-making and the quality of his advice. It is largely up to you to respond to this demand and to stimulate us as politicians to make the best choices for the taxpayers.

"If you have enjoyed the anonymity of your position as a manager I am afraid that you are going to see some changes. As many of you point out, you are going to be asked to explain and defend policy in a public forum -- in committee. More and more we are seeing civil servants being named in the House, grilled in committee and challenged at estimates discussions. Freedom of information legislation will increase." And on it goes.

Mr. T. P. Reid: He was not a very good forecaster on that one. That was before the election.

Hon. Mr. McCaffrey: That was September 1980. Well, we will come back to that. He goes on: "In the face of this pressure it would be understandable for the manager to ask where his loyalties lie. Obviously, he has direct accountability to his immediate superiors, his minister and his ministry. But he is also" -- and I like this part -- "accountable to the public at large. The successful manager in the 1980s will be one who recognizes some of these larger obligations and is not intimidated by them."

I am not trying to go back to that excellent speech of the Chairman of Management Board in isolation from some other programs that are in place, because I think it speaks to a couple of the matters we are talking about here tonight. Ministerial accountability is paramount, but nobody, certainly not the senior civil servant, is naive enough for a moment to think that in the light of these changes, freedom of information and others, his role has not changed dramatically as well.

The reference I made earlier to the management standards project is an example of the kinds of things I have seen for the first time since I had the opportunity to become a member of Management Board, and I say quite straightforwardly that I have been extraordinarily impressed with what I have seen. Again, one could be a member of this assembly for years and not really be sensitive to the good work that public accounts is doing. One could be a member of this assembly for years and not even know that there was a Management Board, let alone what it does. I understand that, and I am often frustrated by it. There are a number of people -- and I am one of them -- who are going to try to address that situation in the future.

But today when we talk about the management standards project -- and I am quoting here from a recent memo under that heading: "Today the management process is being evaluated by individual managers, the ministry internal audit groups..." The member for Etobicoke (Mr. Philip) talked tonight about the need that we as laymen have for some clearly understood and, one would hope, uniform auditing standards in order for us to make our political judgements -- and I mean that in the best sense of the word -- before we can bring our judgements into play.

Believe me, the people of Management Board are extremely sensitive to this. They have been alert to this for some time, and certainly over the last two years they have had a number of things in place to bring this uniformity and, one would hope, simplicity to our attention as tools for all of us, and first of all as tools for senior civil servants.

"Today the management process is being evaluated by individual managers, the ministry internal audit groups, the Provincial Auditor, public accounts committee and others. A common set of standards would avoid conflicting criteria and encourage more objectivity. Also, because past reputations tend to endure and new approaches are not always recognized, an accurate portrayal of management accomplishments is needed to demonstrate both individual and organizational performance."

I guess, in a way, that goes back to a point that the member for Rainy River made with regard to merit pay increases and so forth. I do not have the time to go into that tonight, but I hope there will be an opportunity for the public accounts committee in this coming session -- I guess the committee has a million things to do -- to have the Chairman of Management Board back -- I guess he has been there in the past -- and some of the people within the staff there who have been doing some work on these internal audit and management standards programs.

The accountability and rapid changes that all of us elected and nonelected people within this establishment of government have to contend with are being addressed and I think very carefully so.

May I briefly, with regard to another recommendation in the report, quote recommendation two: "The committee recommends that public officials remain permanently accountable for their decisions while in a particular office." I can understand in the reading of the report why -- I guess frustration would be an operative word -- a recommendation like this might come forward. I am sure the chairman and members of the committee can understand why the government's reaction is not positive to that and they do not accept that recommendation.

There is no mystery to it. There is a feeling that permanent accountability should not become a formal requirement of public service positions. It is simply beyond the capability of any person to recall and recount explicitly, as they would be expected to before the public accounts committee, events which may have transpired many years ago. I do not know if at this stage of the game that particular recommendation requires any further elaboration.

I know the Chairman of Management Board has communicated with the chairman of the committee on this. Permanent accountability has a host of brutally practical problems associated with it. I see it as a little different from the accountability question. I just see some serious practical problems in being able to have the senior staff cope with something like that.

Very briefly, the last comment I would like to make tonight on the report is about a matter very close to the chairman of the public account committee's heart -- public opinion polls.

On page 49, the recommendation reads: "The committee recommends that the Premier set down a specific policy on access to polls in accord with the conclusions reached in background paper 13, entitled Freedom of Information and the Policy-Making Process, of the Commission on Freedom of Information and Individual Privacy."

For those members here tonight who are new members of the assembly, the question about polls has some history. During the four years that I have been here, I think it is fair to say that the chairman of the public accounts committee was a catalyst in keeping that question alive and hot before this assembly.

In the body of the report, on pages 34 and 35, I would like to just read this paragraph which is relevant to the question of public opinion polls: " ... the committee believes that poll data collected by government should be routinely made available to the general public. It recommends that the Premier set down a specific policy on access to polls in accordance with the..." It goes on about that background paper and then says:

"The committee supports the argument made there that because public opinion polls are based on scientific surveys they are factual information rather than opinion and thus do not involve the problems of disclosure of opinions and advice upon which the principle of confidentiality in government decision making is based. This policy would have the further benefit of dispelling concerns that the polls represent the use of public funds for partisan purposes."

For a couple of reasons, and that last sentence speaks to one of them, I for one would like to see this matter resolved and I am confident it will be resolved soon.

The situation as it stands is the following -- and the member for Rainy River could do real justice to this because it has some history: at his urging, the matter came to a head when, following the passage of a private member's resolution requesting the release of public opinion polls and the costs therein, most, if not all, of that material was tabled here in the assembly. A statement was made at that time that a government policy -- a statement by the Premier -- as requested here by the public accounts committee would be made known.

9:20 p.m.

I guess the most current information--and I share this with you, Mr. Speaker, and some of the other members -- I can bring is an answer from Dr. Stewart in the Premier's office to the chairman of the public accounts committee. I will read the letter: "The government's position, until such time as such steps are officially announced, will be to follow the pattern which has been established over the past few years -- that is to respond to specific questions about government commissioned polls in accordance with the standing orders of the House, and to leave the actual release of polling data to the ministries which are involved. I have attached for your information a copy of the answer provided by the government to Mr. Reid's Order Paper question number 92" -- which was the request for that material.

That is the situation as of this minute. I have spoken to my colleague the Minister without Portfolio, the member for Carleton-Grenville (Mr. Sterling), who has, among other responsibilities, this freedom of information matter. He has told me that on or about December 15 of this year he is going to speak to the whole question of freedom of information in the form of a draft bill. I think that is what we are going to see. He will address this question.

Mr. T. P. Reid: December 15?

Hon. Mr. McCaffrey: On or about December 15.

Mr. T. P. Reid: Of this year?

Hon. Mr. Ashe: Same year.

Mr. T. P. Reid: Of this century?

Mr. Samis: I think the minister had better backtrack a bit.

Hon. Mr. McCaffrey: Did he say this year? I am not sure he said this year. But that was my understanding anyway, that this matter would be spoken to. I am sensitive to this, let us be honest, if for no other reason than because there is a perception that we are using tax dollars to take public opinion polls that we would use for partisan purposes. I want to make it clear I do not believe that for a moment, but I recognize the perception. I will never forget as long as I live one of the first committees I got assigned to in this assembly after the 1977 election. That was the select committee on health care financing --

Mr. Martel: But you have got it made now -- power, power.

Hon. Mr. McCaffrey: You weren't even there. Listen, when it comes to influence peddling you could write the book. But that is another story.

In regard to the select committee on health care financing, the member for Renfrew North (Mr. Conway), I recall, was a member of that committee and may, in fact, have asked the question of the Minister of Health (Mr. Timbrell), the same minister at that time. He said: "We understand you have taken some polls for the Ministry of Health. Among other things, you have queried people on their views about health premiums and how the expensive health system might be best paid for." The Minister of Health, not surprisingly, said: "Yes, we did. Would you like to see them?"

We had bushels of paper and polls and charts and diagrams. The good people from the Ministry of Health were in there showing us on their overhead projectors all the information and then some, all one would ever want, which came out of those public opinion polls. So I do not think it has been the mysterious area that people in many cases have made it out to be. As I say, I am confident it is something that will be spoken to by my colleague the Minister without Portfolio on or about December 15.

I just wanted to comment on those three matters, deputy minister and senior staff accountability, the question of permanent accountability, and public opinion polls. I want to say again, in conclusion, that I think the report is first class. I would urge members to take the time to read a little bit of it. I am not naive enough to think they are going to read it all. If private members can find time to sit in on that committee from time to time, I think that would be an important step. The operative phrase was used by the chairman at the outset -- this committee's fundamental role in the process of accountability, at least of a financial nature, its relationship with the budget, management board, the whole estimate process; I think it is important to see that cycle in its entirety.

Again, I feel that the role of management board in a way does parallel the role of the public accounts committee. I say again, those two bodies are not in conflict. My compliments to the committee and I look forward to its next report.

Mr. Swart: Mr. Speaker, I want to rise and speak very briefly on this report of the public accounts committee. I have taken the opportunity to read parts of it, those in which I am particularly interested, and I would echo the words of the previous speaker that it is a thoughtful report. It deals with some very real problems that face this Legislature and all legislatures and does it in what appears to be a rather impartial manner. I would compliment the members of the committee on this report.

There are really just two items in it that I want to refer to specifically. The first is referring to the Ontario drug plan, and it is with particular reference to the senior citizens that I want to make some comments. I think all of us know that the drug plan applies to senior citizens, but partly because of the technicalities used, senior citizens do not actually get the drug card until, in normal practice, somewhere between one or two months after they become 65.

In my constituency office, and I am sure this is true of many other people, we have constituents dropping in who have just turned 65 and find out they are not covered for drugs. They may have fairly expensive monthly drug costs that may have been covered by the plan in the plant where they worked and thought they were going to get coverage at 65. Suddenly they find out they are not eligible for a drug card until some time later and that, in fact, there is no retroactivity and they have to pay out of their own pockets for the drugs during that period.

The present procedures provide that a drug card is provided for the first of the month after the month in which one receives the first old age pension cheque, and of course people do not receive that first old age pension or old age security cheque until the month after they become 65. So the person who might become 65 on September 2, like the Minister of Revenue (Mr. Ashe), would find he or she would get the old age pension cheque in the first part of October and would not get the drug card until November 1.

This is to eliminate duplication, at least theoretically. The first cheque paid by old age security from the federal government to an individual is done by computer and that computer copy is then sent to the province. On the basis of that, because it has all been screened by the time they get the first old age security cheque, they have had to ensure that their age is 65 and they are eligible for it. Once this has gone through the federal government computer, then the Ontario government will send out their drug card effective as of the first of the next month.

9:30 p.m.

There is a way one can get it more rapidly than that and some people in Ontario do. I am told there are about 6,000 citizens of this province who get a drug card each month. Of those, some 400 use a faster route and that is to make direct application to the Ontario Ministry of Health. But if one makes that application directly to the Minister of Health, one has to submit all the documentation to the ministry, including the birth certificate and all of the other requirements, the same as one has to submit to the federal government.

The majority of people don't do it: first, because they don't know about it; second, because there is a lot of red tape to it and it has to be done some months in advance. So the great majority of those who become 65 -- in fact, perhaps about 97 per cent of them in this province -- do not get their drug cards until into the second month after reaching age 65.

I asked a senior official in the Ministry of Health why they do not make this retroactive. He said: "It is a system that has been set up. It really gets to be a financial matter at the present time."

I suggest that for the amount of money involved in that, to delay a card on the average of a month and one half, and that is the average, is pretty poor administration. I want to assure the minister I have no vested interest; I won't be there for some period of time. They should work out a system -- and it wouldn't be difficult -- to make it retroactive, so that person's card would be effective as of the day he is 65 years of age. The cost would not be great, and it would be to the benefit of a lot of people.

It may be said that this is just something of a nuisance, that the costs may not be great; but the costs can be great. If a person needs a free drug card when he is 65 and two months or 65 and three months, surely he needs it the day he becomes 65 so there is continuity in his drug coverage. I would just say to the cabinet ministers who are here, any people over on that side, please take a look at that legislation and see if that cannot be changed to give that benefit to people as soon as they get to be 65.

I would also point out, just in conclusion on that subject, that the druggists themselves -- and I hope the people on the other side will talk to some of the druggists in their areas -- are finding that this is a great problem to them, because the people come in and say, "I am 65 now; I should get it for free," and they almost refuse to pay for the drugs. They think somehow or other the druggist is trying to rip them off when, of course, he is not doing that at all; it is the policy of this government which prevents them from getting it at that time when they should get it.

The other item I want to refer to in this report is that pertaining to the land assembly. This is a matter which has been discussed in this House ad infinitum over the last four, five, six, seven years, and I do not intend to go into all of the details of that purchase of land, particularly up in the South Cayuga and Townsend area where, according to this report now, the government of this province has invested pretty close to $36 million in the South Cayuga land assembly and another $31 million in the Townsend land assembly, for a total amount of about $67 million of the taxpayers' money invested there, for which they are getting very little or no return at the present time and the land is just lying there idle.

What bothers me about this report are the recommendations at the end. I must admit that the committee in its recommendations deals rather indefinitely with it. It says: "The committee recommends that the government now actively seek to minimize or end its losses on all three of these land assemblies" -- they talk about a third one, too, of course, which is Edwardsburgh -- "including an examination of the possibility of sale.

"The committee believes that the questions posed in these hearings warrant further examination of land assembly programs by the province. The committee, therefore, will look further into other land assemblies of the province in 1981."

Then there is the dissenting statement by the former member for Humber, Mr. MacBeth, which bothers me a little more, where he says: "Under the heading of 'Land Assembly,' the committee is critical of a number of land purchases. Events subsequent to the purchases have made much of the land surplus at the present time. If the economy had continued to expand, it could have been otherwise. To me, these purchases exemplify the dangers inherent in so-called land banking theory."

For myself and my party, we want to dissociate ourselves from that kind of statement about the dangers inherent in land banking. I want to say that land banking, properly used, is one of the best services and one of the best methods of cutting home costs that one can possibly have in our society. There are plenty of examples across the province, and more across the nation, to prove this point.

We know that many municipalities in this province do land banking for industrial purposes. It is quite legal for municipalities to do it for that. Unfortunately, it is not legal for municipalities to do it for housing. I suggest that there is something wrong in priorities when municipalities spend that kind of money to get land for industry and commerce and cannot do it for housing. I suggest housing in our society is just as important as industry and commerce. Municipalities do it successfully, I think most of us would agree. Whether we are talking about Niagara Falls or St. Catharines in my area or many other municipalities in this province, we find they have gone into land banking. They have subdivided this land, divided it into blocks, provided the services and are performing a useful function for industry that comes into their areas. The history of land banking across this nation, perhaps with the exception of what was done in these instances has been a real success in Ontario.

I was involved in this myself as head of my municipality some 20 years ago, when municipalities had the legal right to go into land banking or public land development -- perhaps that is better terminology -- and it was a tremendous success.

We had a co-operative group that wanted this land, and it pressed our council. We only passed it in council by one vote, although by the time it was over every member of council was laudatory about what had been done and the success of it because we could provide serviced land for people at far lower cost than the private sector.

This has been proven to be true in Saskatoon as well. But perhaps the most classic example was in Red Deer, Alberta, where all the development in that city since the last great war has been done by the city itself. There has been no private development -- not because it is outlawed but because the policy of the city was so beneficial that the private developers have not got into the game and the city has bought land out around it.

Not only has it been able to provide this land at cost and service it, but the important thing is that it has been able to keep down the cost of the land around the outside of the city because it is out of speculation. The city owns that land for development for many decades in the future.

9:40 p.m.

If there is one fault with most of the municipal governments that are permitted to do this sort of thing, it is that they have not kept up the land banks. The benefits have all been there; they are in Saskatoon, in Edmonton and in Red Deer. In Winnipeg, a lot of land banking and public land development is done there. In every instance it has been proven beneficial, but they have not had people there who took the initiative to buy additional land when the land was being used up and, therefore, the land banking is not at the same level across this nation as it was 15 or 20 years ago.

The reason this was not successful in those three areas, particularly the two areas, was simply the extravagant estimates by the government and others concerned of the growth that was going to take place in this province and elsewhere. Those of us who have been on municipal councils have all been through this before. Municipalities want to think they are going to grow and, when they hire consultants to bring in estimates, they bring in estimates way beyond the growth that is actually going to take place.

For instance, on the regional planning committee of the Niagara region, the estimate that was brought in eight years ago was that they were going to have a growth of 155,000 in the next 20 years. The growth down there to date has been less than 20,000. That is true across this whole province. In every area, we have this growth orientation. I am not opposed to growth, but we are unrealistic about it; so we find all kinds of land across this province designated for urban development that should still be left as rural areas for farming. That is what has happened here. It was terribly bad estimates by the government.

There is nothing whatsoever inherently wrong with land banking; I repeat, there is nothing that will provide more benefits to home purchasers in this province. Municipalities and governments should go out and seriously do land banking on a reasonable and planned basis and not on the basis of some proposal by people who do not really believe in land banking. Perhaps that is the problem, that people who do not really believe in land banking make unrealistic proposals and blacken the concept of land banking, which is something we should be promoting in our society if we are really concerned about future citizens.

Anybody who is familiar with areas where there is massive growth must know the speculation that takes place in the land when the costs of the land are driven up. In my area, in a period of five years, the cost of the land was driven up 20 times by speculation. Many people were deprived of the right to own their own home simply because the land costs were too high, getting up to 30, 40 or even 50 per cent of the total cost of the home.

I urge all members of this Legislative Assembly, and particularly the members of the government party, not to abandon land banking, not to discredit land banking because it was not done properly, but to use it in a reasonable manner from now on so that the people of this province can benefit by having cheaper homes and by having homes available that they could not otherwise afford.

Mr. Williams: Mr. Speaker, I appreciate the opportunity to rise and speak to the report that we have before us this evening. I have listened with interest to some of the particular concerns that have been expressed by some of the members of the Legislature with regard to specific aspects of the report.

In the few moments available to me this evening, I would like to address my concerns to a specific area of the report. The area in particular that I have some concern with relates to the recommendations dealing with the Ministry of the Attorney General.

I refer to page 49, which synopsizes the recommendations contained in the report, and the one relating to the Ministry of the Attorney General. That particular recommendation provides and recommends "that formal criteria for eligibility for assistance from clinics be established by the law society, that the scope of audits of clinics be broadened, that purchasing procedures and records needed to safeguard fixed assets be developed, and that the frequency of visits by fund administrators to clinics for evaluative purposes be increased."

The recommendation is actually referring to what has been a very successful program in Ontario dealing with the community clinics established by the legal aid plan and monitored by the Law Society of Upper Canada.

The report deals with three specific matters. The one it seems to give the greatest attention, in addressing matters under the jurisdiction of the Ministry of the Attorney General, is that of legal aid community clinics: whether these clinics are performing within the spirit and intent of the legislation and whether the law society is properly monitoring their operations, particularly from a funding point of view.

In making this recommendation, the report in turn refers back to the report of the provincial auditor, particularly section 89 thereof. To really home in on the area of concern, one has to look at some of the key facts raised within that section. I know it is a matter that has given some concern to the minister, because he above all wants to be assured that the program is working well, within the spirit of the legislation and within the original intent of what the legal aid clinics were set up and established to do.

The success of the program is reflected by its remarkable expansion since its inception in 1975-76. In that year, funding was provided for 13 clinics. In the space of three short years, the number of clinics grew from 13 to 31. I understand that five more clinics were established since that report, in 1980. So there has been remarkable growth, and not without substantial involvement from a financial point of view. The report of the provincial auditor points out that approximately $5 million had been distributed to the various clinics during that 36-month period.

The report before us this evening draws attention to a concern, previously expressed by the provincial auditor, with regard to some apparent laxity in the way in which the funding of these clinics was being monitored and assessed. That, since the inception of the program, only three of the now 35 clinics has had any assessment whatsoever, heightens one's concern as to the allegation of laxity that has been laid with regard to the proper financial evaluation of the operations of these clinics.

I think it was proper and right that the provincial auditor has drawn attention to this matter and that the committee itself has addressed these concerns. There is concern not only with regard to the actual funding but also about whether the legal aid clinics that have been established have been operating in all cases within what was deemed to be their proper terms of reference.

9:50 p.m.

Again, it would appear there has been some laxity this time in the nature of the existing legislation, and a lack of clear definition seems to have created an uncertainty and an ambiguity that has brought about some criticism, fair or otherwise, with regard to the operation of some of the clinics because it has been suggested that in some areas the clinics seem to be operating beyond their terms of reference.

The terms legal and paralegal services, two independent community-based operations, have been given a broad definition. A great deal of latitude has been given with regard to what that definition should be. When the matter was studied, in 1978 I believe, by the Grange report on legal aid funding, certainly there was latitude given with regard to definition. Nevertheless, concern was expressed in that study which suggested there was some validity to criticism raised in some quarters that the legal aid clinics were providing something more than legal services.

This is cited specifically in section 89 of the provincial auditor's report where he points out -- it is in the report before us this evening -- that these clinics seem to be involved in social action and legal reform activities which seem to extend beyond the realm of providing specific legal services.

Under the regulations established to try to give some clarification of definition, to give more precise guidelines to these legal aid clinics so they will not continue inadvertently to stray beyond their terms of reference, it would appear the regulatory process has been used in what I suggest is a somewhat inappropriate fashion.

As one who has been involved in studying the regulations process as chairman of the standing committee on regulations and other statutory instruments for several years, it was one of the fundamental principles established by the committee that the regulatory process should not be used to establish policy, but rather that policy is reserved and is the sole prerogative of the primary legislation, that is the statute itself.

Yet when one examines the regulation that was enacted in 1979 to try to assist the legal aid clinics in giving a clear definition as to what rights they had and what their operating terms were, we find in examining Part X entitled Clinic Funding, if one were to look at the top of the page one would realize it was a regulation, although one would think it was part of the statute itself because it not only includes definitions but also tries to establish guidelines that I think are the sole preserve of the statute rather than the regulations. The regulations, as we know, are set up specifically for the purpose of the administrative process and not for that of setting policy. Yet I would suggest that Part X, regulation 391, 1979, has more of a statutory flavour than a regulatory posture. While it has been used for the purpose of trying to resolve the dilemma, that regulation, in itself, is put in question for the reasons I have stated.

Since these criticisms were launched both in the Grange study and in the auditor's report, it is apparent that the Law Society of Upper Canada has endeavoured to address these criticisms. In their 1980 annual report which was tabled in this Legislature during the spring session, it is apparent from comments made in the report dealing with independent community legal clinics that efforts will be made to tighten up on the clinics as far as the monitoring of their activities is concerned, both with regard to their financial accountability and with regard to their activities at large within the community under their terms of reference.

One could perhaps point to recent activities that might well illustrate the concern that exists today. I do not think this matter has been finally settled even at this point, although it is a matter that I understand the Ministry of the Attorney General is actively reviewing in light of the report from the Law Society of Upper Canada, and in light of reports from other directions.

One of the concerns that has yet to be resolved is that there are provisions within the regulations I was speaking about a few moments ago which preclude the committee from going in and monitoring all aspects of the operations of a legal aid clinic -- where the people operating a clinic allege that certain information is of a fiduciary nature. The regulation clearly spells out that this creates a hands-off situation, and that any committee going in to study the financial and other aspects of their operation would be precluded from considering any matter or requisitioning any documents that legal aid clinic decided were reserved territory, so to speak.

I do not know if that is a satisfactory resolution of that problem. I think that has yet to be addressed and that there has to be full opportunity for review and investigation, an on-the-spot audit basis or whatever available to the committees if they are fully to perform their function of an ongoing monitoring of legal aid clinics.

Mr. Philip: You hypocrite. You argue that on this committee and then you argue the client-lawyer privilege on another committee.

Mr. Williams: But one of the interesting situations I was leading up to, and wanted to cite as an example of the activities of some of these legal aid clinics -- I guess one would question as to whether they are really operating within their terms of reference. They are clearly operating in areas of social action and legal reform, without really providing specific legal services.

10 p.m.

I can cite a situation as recent as in the past two weeks in which I as a member of the justice committee have been involved, and which I think perhaps highlights the problem. A number of different community organizations made representations to the justice committee with regard to what is commonly known as the Metro police bill. One of those community activist organizations was an organization called Citizen's Independent Review of Police Activities. We had as a spokesman for that committee before the justice committee a former alderman for the city of Toronto who is certainly not known as being a moderate -- a Mr. Sparrow. He acknowledged that many of the supporting groups and individuals of that self-appointed community organization were people who, certainly in the community at large, were known also for their less-than-moderate approach to some of the community and social issues.

Mr. Sparrow at that time cited the people who are commonly recognized and acknowledged to be the radical element within the city of Toronto council -- I guess largely the unofficial NDP faction within council. He also stated that a number of community legal clinics were endorsing this independent review committee. I cite in particular the Metro Tenants Legal Services, the Neighbourhood Legal Services and the Black Resources and Information Centre, all of which are in fact legal aid clinics funded under the plan.

It was interesting to note that Mr. Sparrow in addressing the committee made specific reference to some of these organizations and made no apologies for them -- nor did he need to. I think he had no hesitation in acknowledging his own position in the political spectrum within the city of Toronto or those of many of the people who were openly endorsing his organization.

In his testimony before the committee Mr. Sparrow was under questioning by the member for Etobicoke (Mr. Philip), who is a member of the justice committee. I might point out for the benefit of the members of the Legislature who are not members of the justice committee that the member for Etobicoke was endeavouring to establish that this organization was one of the more moderate community-based organizations in the city of Toronto.

Mr. Sparrow acknowledged a number of organizations certainly were heavily involved in the activities of his organization, those that he had cited, and he pointed out that these legal aid clinics that were openly endorsing him were going to openly support his community-based organization rather than work within the framework of the legally established community-based organization that will be brought into being officially when the police bill is enacted here within the next few days.

Mr. Sparrow said that most of the legal clinics in town, I expect, will be in on the Tenants Hot Line and will help clients field complaints through them, not through Mr. Linden or the current process. So it appears that it was Mr. Sparrow's perception that these legal aid clinics should be working in an adversarial position against what I suppose Mr. Sparrow would categorize as the establishment and should be working through his organization, which I presume he would label as anti-establishment because of his adversarial approach to that whole matter and group the legal aid clinics openly endorsing him as being in that camp.

I suppose that is the type of social action and legal reform activity that gives concern as to whether legal aid clinics should be moving out of the field of providing legal advice and getting involved in community issues that are, in many instances, clearly polarized into political issues. It is a matter that I do not think has been totally resolved at this point.

I am not critical of legal aid clinics per se. I think they perform a very useful function in the community. I would say, however, the basic point I am making this evening is that some have clearly strayed afield, probably inadvertently, from what is their proper mandate to get involved in issues outside their real terms of reference. I would suggest that --

Mr. Ruprecht: How many legal clinics are supporting this?

Mr. Williams: How many are supporting the Citizens' Independent Review of Police Activities? I cited the three that were officially and openly endorsing it. I am certainly not intending in any way to blackball or whitewash legal aid clinics as a whole. I made that point a moment ago. In fact, I am totally supportive of the process and the principle, but I think they do have to be subject to public scrutiny when large sums of public moneys are being put forward to make these clinics work.

I know that concerns have been expressed in committee on the Ministry of the Attorney General estimates. No funding has been withdrawn, nor should it be until such time as it is shown that one or more legal aid clinics are misusing the funds that may be allocated to them by going beyond their field of responsibility. I think it is something that has to be looked at and this report has highlighted the issue. It has not resolved the issue by any stretch of the imagination, but it is a matter that has to be pursued.

As I mentioned earlier, it is my understanding the ministry is continuing to monitor this. The Law Society of Upper Canada itself has apparently indicated in its report that it will tighten up on the funding process and be more diligent in addressing itself to the accountability aspects of the funding to these legal aid clinics. But I think their mandate does not stop there. I think they have the responsibility to consider that funding in the light of the known activities of these legal aid clinics.

That was a concern I wanted to spend a few moments addressing this evening in regard to this report. I hope it perhaps lays the groundwork for further discussion either at the committee level or there may be some other opportunity in this House in the near future to deal with this matter in a manner that would bring a clear and satisfactory resolution to the problem and to the concerns that make some of the members of the Legislature uneasy at this time. I would hope that in the immediate future these concerns will be addressed and resolved.

10:10 p.m.

Mr. T. P. Reid: Mr. Speaker, I believe I am the last speaker in the debate and I would like to make two comments. One that you are probably particularly sensitive to, Mr. Speaker, after some things that happened earlier today, is that in my remarks I kept mentioning that all members of the standing committee on public accounts had signed our 1980 report. It has been pointed out by those who know better than I that, in fact, all members did not sign the report. I was the only one who signed the report, and I suppose what I should have said was that they concurred in the report and did not refuse to sign it.

I would like to thank the vice-chairman of management board for the remarks he has offered tonight. I would also like to put on the record that while I was critical of some of the civil servants in the Ministry of Health, since our report came out last year I have been more than impressed with the co-operation and attitude of the deputies and their staff who have appeared before the committee since the election with -- I must say unfortunately again -- the Ministry of Health.

The House adjourned at 10:12 p.m.