BUDGET MEASURES ACT, 1994 / LOI DE 1994 SUR LES MESURES BUDGÉTAIRES
Report continued from volume A.
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Hon Brian A. Charlton (Government House Leader): Just before my colleague moves second reading of Bill 160, the House leaders for the three parties I believe have reached an agreement that the Liberal Finance critic, the member for Scarborough-Agincourt, should be allowed to stand down his opening remarks on this bill until he arrives later this evening. I would ask the consent of the House to have that happen.
The Acting Speaker (Mr Noble Villeneuve): Do we have unanimous consent to stand down the member for Scarborough-Agincourt's participation in the debate? Agreed. We have consent.
BUDGET MEASURES ACT, 1994 / LOI DE 1994 SUR LES MESURES BUDGÉTAIRES
Mr Sutherland, on behalf of Mr Laughren, moved second reading of the following bill:
Bill 160, An Act to amend certain Acts to provide for certain Measures referred to in the 1993 Budget and for other Measures referred to in the 1994 Budget and to make amendments to the Health Insurance Act respecting the Collection and Disclosure of Personal Information / Projet de loi 160, Loi modifiant des lois pour prévoir certaines mesures mentionnées dans le budget de 1993 et d'autres mesures mentionnées dans le budget de 1994 et modifiant la Loi sur l'assurance-santé en ce qui concerne la collecte et la divulgation de renseignements personnels.
The Acting Speaker (Mr Noble Villeneuve): Mr Sutherland has moved second reading. Does the honourable parliamentary assistant have some opening remarks?
Mr Kimble Sutherland (Oxford): It's a pleasure to rise and begin the debate on the Budget Measures Act, 1994. This bill includes amendments to certain acts to implement initiatives in the 1993 and 1994 Ontario budgets.
Recent news reports about Ontario's strengthening economy show that the government's plan is working. The 1994 budget initiatives are encouraging investment, creating jobs and helping our economy grow. The budget contained no new taxes and no tax increases. It cut taxes to encourage companies to hire new workers. It moved forward on major job-creating investments in highways and transit. For a second year in a row, the budget reduces both overall program spending and the deficit.
This bill implements some of the budget's key measures. Let me briefly highlight some of them.
The access to capital initiative will help small enterprises access the financing they need to grow and create jobs.
It amends the Co-operative Corporations Act to allow both members and non-members of co-ops to purchase shares while preserving traditional democratic control by members.
It amends the Labour Sponsored Venture Capital Corporations Act to facilitate employee buyouts of the employer's business and to encourage the creation of venture capital funds which channel capital from individual investors into small and medium-sized business.
It also amends the Loan and Trust Corporations Act to allow loan and trust companies to undertake a broader range of business lending and investment.
The bill changes the employer health tax to encourage small and medium-sized businesses to hire more workers. Under the changes, businesses that hire new workers will not pay employer health tax on new workers for their first year on the job.
Many of Ontario's new high-quality jobs will come from companies that invest in research and development. With this bill, the government is also supporting businesses that are creating jobs in the new economy. To encourage and support companies that invest in R&D, the bill will allow an innovation tax credit.
To make school funding fairer, the bill amends the Education Act to divide non-residential assessment on the basis of the number of people served by each board. The bill also amends the Crown Timber Act to provide for using forest renewal trusts funded from stumpage fees as a step towards improved management of Ontario forests.
Amendments to the Financial Administration Act will dedicate certain transportation-related revenues to the Ontario Transportation Capital Corp for ongoing investment in the upkeep of public transportation systems.
The Unclaimed Intangible Property Act will safeguard the rights of owners by providing a recovery and distribution method for unclaimed property.
And through the Ontario Public Service Employees' Union Pension Act, 1994, the bill establishes a separate pension plan for union members.
Those are the main provisions of the bill we are debating. These are, as I said, some of the provisions coming out of the budget, and I'd like to just make a few comments about where we've been and where we're at.
Speaker, as you know and as all Ontarians know, Ontario has been through a very difficult period. We went through the worst recession since the 1930s. Government revenues were drastically impacted as a result of that. Revenues went down three years in a row, which also hadn't occurred since the 1930s, and we also have to take into account the shrinking support from the federal government.
This government could have shied away from that challenge, could have avoided that challenge. Instead, we decided to try and deal with that challenge head on, and so we've done a lot of innovative things that in the long run are making this province far more competitive and far stronger and in a far better position to take advantage of the economic recovery that is occurring.
In the last couple of weeks, I've been extremely pleased to attend several events that are shining examples of that.
I was able to attend the opening of the new addition of Tavistock public school in the village of Tavistock in my riding. Those funds for that renovation came through Jobs Ontario Capital. The benefits of that project are tremendous, first of all, in terms of the jobs created for those working on the actual renovation. Second, Tavistock is a growing community. The school was built in 1967, and clearly, because of the increase in enrolment, they'd outgrown the existing facility. What we have now is a new facility that meets modern needs, has extra space in the school, more classrooms, a classroom for junior kindergarten so that can be expanded, a better gymnasium facility, better library facilities -- and a community facility, might I add. In conjunction with the local board and members of the community, with strong parental support, they've developed a community facility.
So the community is a better place. It's going to be more attractive for people to want to move to the village of Tavistock, and those students going to Tavistock public school are going to receive a much better quality of education due to our capital investment. That's what it means by doing the right things about investing in capital appropriately to create a better community, a better quality of education and of course a better future for the province.
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I was also pleased to attend last week the official opening of the new John Labatt Visual Arts Centre at the University of Western Ontario. Let me tell you, I took a great deal of personal pride in being there at that opening. As you know, I was the president of student council at Western for a year. That is a project the university has been trying to get funding for for many years, and that did not occur. I even remember lobbying the Leader of the Opposition when she was Minister of Colleges and Universities to try to get the funds for this new visual arts centre. The old facility was a bunch of portables put together. There was inappropriate ventilation. The students were working in very trying circumstances but producing a very quality product and a nationally recognized visual arts program.
It was a great pleasure for me to be there when the former Minister of Colleges and Universities, Richard Allen, came to Western to make the commitment of $7 million towards that project, a project the Liberals couldn't get done. They had lots of revenues but for some reason couldn't get it done. We gave the commitment and it's now complete. Again, jobs created through the construction, a facility that plans for the future, for growth. I must also tell you, not only are there a lot of full-time students enrolled but there are a lot of part-time and continuing education students who use this facility. Their quality of education is improved, just tremendously improved. Also, two weeks ago during constituency week, I had the pleasure of going to St Francis separate school in the village of Princeton for the official opening of its new gymnasium. This again shows how this government can work with local communities to come up with an innovative approach. They came up with and built a different type of gymnasium at the school, basically a much cheaper, more economical model for doing that. The Ministry of Education and Training saw fit to provide funds for this project. There was a tremendous amount of community pride in terms of the amount of fund-raising they did to help pay for this project. The community of Princeton and the community of St Francis separate school came together to bring funds together, to commit their time, their energy and their labour to bring this project about -- another example of getting things done.
Last Friday, again in the education sector, I had the great pleasure of going into St Mary's separate high school in my riding. Actually, let me say that it's an elementary school converted into a high school to meet the growing demand in Oxford county for high-school level Catholic education as a result of the commitment of full funding for separate schools. Their enrolment has been growing tremendously. They've spent a lot of money trying to make this an adequate facility for a high school, but as you know, there's only so much you can do with an elementary-level school to make it a high school. So I was extremely pleased to announce on behalf of the Minister of Education and Training $8.9 million for a new St Mary's High School.
This project is very exciting for several reasons, because the site of the new high school is going to go on the Woodstock Community Complex location. The Woodstock Community Complex is a very exciting facility. It has the Fanshawe College campus there, it has a child care facility. This government gave $3 million through Jobs Ontario Community Action to build the twin pad arena and gymnastics facility.
What we have here is the Woodstock Community Complex, a community facility. The municipality has put money in, we've put money in and of course the good citizens of Oxford county and particularly Woodstock, through tremendous fund-raising efforts, have raised over $1.5 million to support this project.
Now, through this further contribution, the separate school board is going to build its school out there, because it also has all the recreational facilities, and the public board plans to build a school out there eventually too. That spirit of cooperation that we all ask for between our different forms of government -- the provincial government, municipal government and our school boards -- is alive and well in Oxford county and being supported by this government.
We hear a lot from some of the opposition members that nothing's getting done in this province, that things just aren't happening. I want to tell you, when Frances Lankin came to the riding to make the $3-million announcement for Jobs Ontario Community Action, Deputy Mayor Phil Poole said, "This is the best thing that's happened to this city in 25 years." In 25 years. That proves that things are getting done.
On Friday, the principal of St Mary's High School said, "This is the best day in the seven years that I've been principal of this school," and the reason is because this government has a plan. We've implemented that plan. That plan is to get people back to work. It makes jobs the number one priority. We're doing that through capital investment. We're doing that through training. We're doing that through Jobs Ontario Youth and our summer employment program. We're doing that through Jobs Ontario Homes. We're doing that through Jobs Ontario Community Action. What a tremendous program Jobs Ontario Community Action has. I can't tell you the amount of positive response I've received from my communities already who have benefited from this very innovative program.
That's what this government has been doing. We've been making those strategic investments now that are going to result in future prosperity, not only future prosperity in terms of the government directly but for communities, for people in local communities, and that's what government's all about. It's supposed to work in partnership with the other agencies out there, our transfer partners, municipalities, school boards, other community agencies, and support of their needs, their goals, their aspirations. That's what this government has been doing. Unfortunately, in some ways this message has not been getting out there in the way it should because it's being clouded by some of the other messages that some people want to leave. I cite them as examples of some of the things we're doing.
Coming back to this bill a little more specifically, we know that during our finance and economic affairs committee pre-budget hearings we heard a couple of things: (1) no new taxes. This budget responds to that. We had consultations. We listened. We heard. We acted. We also heard about concerns about access to capital by small and medium-sized businesses. The budget dealt with that in terms of the provisions for loans and trusts and also in terms of the changes that we're making to labour-sponsored venture capital and employee ownership provisions. Again, people said, "We need that access to capital," and we're providing that. We're providing the leadership. We're giving the tools. As we're giving tools to communities through Jobs Ontario Community Action, we're giving tools to the small businesses and medium-sized businesses through giving them better access to capital.
Those are the types of things people want to see happen in this province. They want the tools presented to them so that they can get on with creating the jobs and making Ontario prosperous again and continuing the strengthening recovery that is already occurring.
Now we have before us a sense of different options about how we should proceed, and I'm still trying to figure out where the official opposition is. We did have a debate one day about what should be done and the member for Scarborough-Agincourt, who will be speaking later, said, "This isn't our plan. This is only our vision statement," some nebulous, warm, fuzzy "vision statement."
The people of Ontario know that in tough times they don't want a vision statement; they want an actual action plan. They want to know what you're going to do to get people back working. When you're looking at our record, when you're looking at this budget that was brought in and you're looking at the other things that we've done in creating jobs, over 300,000 jobs that we've helped support or create through the efforts of this government since 1990, that's a tremendous record. That's a tremendous plan. That shows that this government has been committed to supporting people and supporting communities in this province. But the Liberals: a vision statement, "A vision statement is our jobs plan." That's all they can come up with. They're not sure where they are. They don't have any policy.
Mr Robert Chiarelli (Ottawa West): Mr Speaker, I don't believe we have a quorum present.
The Acting Speaker: The member for Ottawa West is asking for a quorum check. Could the clerk please check if we have a quorum present.
Clerk Assistant and Clerk of Committees (Ms Deborah Deller): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk Assistant and Clerk of Committees: A quorum is now present, Speaker.
The Acting Speaker: The member for Oxford may resume his participation in the debate.
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Mr Sutherland: I assume the reason that there's only one Liberal left in the House is because they don't like to hear some of the truth that's being said about them not having any policies or visions. Of course, when they do develop a policy, as we found out last week, it can change from day to day, so we're never quite sure where the Liberals are. They're certainly not here in the House, but we're also not sure where they are in their policy ideas.
Some would say that they may be just bankrupt of ideas since they still may not have gotten over their defeat of 1990, and they can't come up with any new and innovative approaches. We hear a lot of general --
Hon Ed Philip (Minister of Municipal Affairs): Paint by numbers is a fine art.
Mr Sutherland: I won't repeat what my colleague said.
Interjection: Do it. Do it.
Mr Sutherland: My colleague was saying that their policy plan is probably developed on a paint-by-numbers approach, and some may think that.
It's interesting, you listen to the members of the opposition get up every day and complain about this and complain about that. The one I love hearing them talk about is tuition increases. They get up and they criticize this government for announcing what our tuition increases are, and yet they say, "We wouldn't have done that."
Do you know what their policy is on tuition increases? As expressed by Lyn McLeod on Focus Ontario, "A moderate tuition increase." Do you know what a "moderate" tuition increase is? I haven't got a clue. I assume most of the people in the province of Ontario have no idea what a moderate tuition increase is. But that explains the Liberal policy: "Let's do some warm, fuzzy, nebulous statement that no one can really understand, that we really don't know what it means, and maybe we can switch it tomorrow or the day after. If we think we can get political gain out of it, then maybe we'll do that."
Very clearly, Liberals do not have any policies. They don't have a clear plan, an action plan. They have some warm, fuzzy vision statements.
Then we come to the third party, the third party that put out some document that alleges a degree of common sense. It's really unfortunate that the third party is giving common sense a very, very bad name. That's really what's occurring, and I want to explain why. Even on economic principles it doesn't make a lot of sense, and the reasons are these.
The document claims that somehow they're going to create 725,000 jobs in about three years. They're going to do that, but we're going to have 3% economic growth. Well, if you go back and you look at what occurred in the 1980s, probably one of the biggest boom times since the Second World War, there were about 700,000 jobs created throughout that time, but economic growth was running at 5% and 6%. So, how are you going to create 725,000 jobs with only 3% economic growth? It makes no sense.
The third party likes to tell us, "We understand the economy; we understand how to manage things; we understand how to do all these things," and their economic model just doesn't make legitimate sense. People out there: "I can't believe these numbers." Then you're going to reduce taxes by 30% and cut spending by 20%, but you're going to get rid of the deficit. People are just not buying that. It's just not credible.
Hon David Christopherson (Solicitor General and Minister of Correctional Services): It's Reaganomics.
Mr Sutherland: That's exactly it. My colleague says it's Reaganomics, and that's probably what it is, Reaganomics at its best or, as some would say, Reaganomics at its worst.
Of course, as part of that document, "We're going to cut 20% of government spending but we're not going to touch health," and of course you've got your commitments on the public debt interest as well etc. So what that really means is, all those other ministries are going to have to take far more than a 20% cut. Some of them are going to have to take 30%. Some of them may even have to take 40%. So I think, well, there goes a lot of the funding to the Ontario Arts Council. Throw out the arts.
What about the Ministry of Natural Resources? I heard the new member for Victoria-Haliburton today speaking about his concerns about forestry in the province. A 30% to 35% cut in the budget of the Ministry of Natural Resources and he's concerned about forestry?
We think of Tourism and Recreation, budget cuts there in terms of different issues.
The list goes on and on and on. So when we're looking at that, people need to get the whole story. They really need to give a lot of thought to what is being presented by this so-called document that claims to have some common sense. It really doesn't. It doesn't make good economic sense. I don't think it is in tune with what the people of Ontario really want. They want government costs to decrease; we all understand that. But they want those essential services that have helped to define us as Ontarians and make the difference as to what makes us different from our neighbours to the south. They want those services maintained. They want a very planned, effective approach. This document does not provide it. It is, as my colleague said, simple Reaganomics: a slash-and-burn approach to trying to deal with things.
The thing I want to make one more comment on is when I hear comments in that document about what we're going to do on workers' compensation, and of course what we're going to do on Ontario Hydro. You'll excuse me, Speaker; I have to be a little bit cynical when I hear the third party talking about Ontario Hydro and workers' compensation.
When we took over government, the accumulated debt of Ontario Hydro was about $34 billion. Where did that all come from? You can't blame us for that $34-billion debt. That debt accumulated through the so-called 42 years of good management, as the leader of the third party, Mike Harris of the Progressive Conservatives -- sorry; they don't call themselves that any more. But most of that $34-billion debt accumulated through the 42 years of good management. That's what Mike Harris says. We had 42 years of good management in government. They didn't deal with the issue of Ontario Hydro. They let it run out of control.
The Liberals had an opportunity in their five years to try and deal with it. I don't think they really dealt with the problem either. Of course, in this difficult economic time the debts come due and people have to take decisive action. Again, as I mentioned earlier in terms of trying to get people back to work and the leadership this government has shown and how we have an actual plan, we've also been showing very good leadership in turning the tide around at Ontario Hydro. Tough decisions, no doubt about it, and not easy decisions, but we've certainly done that.
Then, of course, workers' compensation. Here the Tories go again. The Tories' plan to deal with workers' compensation? "Oh, hurt the people receiving benefits. It's all their fault. It's all their fault that the unfunded liability is about $11 billion. You know, these people are getting too much money." They ignore the fact that when someone goes on workers' compensation and they can't work again, if they're making pension contributions, they may lose out on their pension contributions; they may lose out on Canada pension; they may lose out on a whole bunch of other benefits. "We won't worry about that, because they're making too much money receiving workers' compensation."
Again, as has been presented, that 42 years of wonderful, good management also includes the Workers' Compensation Board. Speaker, did you know that in 1980, the unfunded liability of the Workers' Compensation Board was only $400 million? Only $400 million. To me, a very manageable amount at $400 million in 1980. They had good, effective leadership. If the appropriate decisions had been made, maybe our premiums on workers' comp wouldn't be as high as they are today. What was it by 1985, Speaker?
Mr Gilles Bisson (Cochrane South): What was it?
Mr Sutherland: Close to $6 billion. I just want you to know that that corresponds to a lot of the time the member for Nipissing, the leader of the third party, was there in government, being elected in 1981. So I think he needs to take some ownership of some of that increase.
As I said, by 1985 it was up to $6 billion. So, again, what about the Liberals? They were there for five years. They had an opportunity to really deal with the problem, to get that unfunded liability down to a manageable amount. What happened during their time period? By 1990, when we come into government, it's close to $10 billion -- $10 billion.
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I have to listen here, day after day in question period, to opposition members talking about this government: "You can't manage this. You can't manage. You're poor managers." And all I can think of: Workers' Compensation Board and Ontario Hydro. Let the facts and the record speak for themselves, that quite clearly many things were very mismanaged during the 42 years of the Tory governments, and even in the five years with the Liberals.
I just want to put those points on the record, and just to summarize what this bill is all about and to summarize what this government has been doing. Our number one priority has been jobs. Our number one priority has been getting people back to work. We've been doing that through many different means. We've been trying to get people back to work through our significant capital investments. We've been trying to get people back to work through Jobs Ontario Training, and let me say about Jobs Ontario Training, a very successful program.
I met with some of the local companies that are using Jobs Ontario Training. You know what they told me? They told me that they had not used a government training program in 20 years but that they're using this one because it has very little red tape and very little bureaucracy for them and it meets their specific needs. A very successful program.
That's what you've got to do. You've got to design programs, as a government, that get people back to work, that work in conjunction with our transfer agency partners, our municipalities, our school boards, other agencies out there in terms of meeting their needs, their capital needs, that also can improve the quality of the service they're providing and create many, many jobs, particularly in the construction sector, which was very hard hit by the recession.
This bill has a lot of provisions to it but it contains some very important job-creation provisions and some very important provisions that will enhance the economic strength of this province. We have been coming out of this recovery. We've been doing well. The economic growth is picking up, and I believe this budget will further enhance and support the efforts of the province's economy to get going and get people back to work.
That's what this government has been doing. It's been its top priority and I think we've done a very good job, in extremely difficult times, without much support from the federal governments, but we've done a very good job. We have a plan, we've implemented it and that plan is working.
The Acting Speaker (Ms Margaret H. Harrington): We have questions or comments to the member.
Mr Murray J. Elston (Bruce): That is a bunch of bumf. I have never heard so much foolishness in all my life. Those last two or three paragraphs about how you've been doing it all and you've got all these people back to work, you know and I know is a whole bunch of political hyperbole.
I know for sure that there is a tremendous number of young people who are out of work and are coming out of our schools -- our secondary schools are just about finished now -- and I'll tell you, there are many, many people who can't find work. There are many more individuals in our province who have lost their jobs, and permanently so, who are now languishing without any opportunity of coming up with alternative work for the jobs that have been lost.
Some of those jobs, to be quite honest, have been lost as a result of an economy which isn't totally controlled, obviously, out of the province of Ontario. There are world influences, but I can tell you that it has been made worse in Ontario by some misguided activities on the part of the New Democrats.
To be quite honest, some of the stuff that has been included in your budgets are the types of things that have prevented people from continuing on with the investments which they had originally planned. There should have been, in the remarks by the member for Oxford, an admission that they have not been able to do a very good job in some areas of our economy. There was no admission.
There should have been, in the remarks by the member for Oxford, an admission that the new Unclaimed Intangible Property Act has created some controversy, which, to be quite honest, was one that was there before, but they have chosen to reintroduce this without allowing for a proper amount of time to take away the sting of this new public policy adventure of theirs.
From my point of view, there should have been a much more forthright explanation of this bill as opposed to the political hyperbole that was chosen for our presentation today.
Mr David Johnson (Don Mills): The parliamentary assistant to the Minister of Finance -- I understand that's the capacity the member for Oxford fills -- is one of 32 -- am I right? -- 32 parliamentary assistants. That must surely be an all-time record. That's about 50% of the whole caucus would be parliamentary assistants.
Hon Evelyn Gigantes (Minister of Housing): Not at all.
Mr David Johnson: It's not a record. It must be close.
If I was the parliamentary assistant and my number one priority was job creation, and I was to stand up in this Legislature and say -- I'm quoting him -- "The number one priority of our government is to create jobs and get people back to work," and then on the other hand I was to take the budget, the 1994-95 budget, and looking at page 51 from the budget, which the parliamentary assistant I assume has had some influence in creating, I see that 4.937 million people were employed in this province in 1990, when this government took office.
I look at the following year, right from their budget, 4.770 million people, almost 200,000 people fewer were employed, and the following year again, 60,000 fewer people were employed in 1992. It's up a little bit in 1993, but at the end of this fiscal year, which will be in March 1995, the forecast is for fewer people to be employed than there were in 1990, when this government took office. Now, there is a record for job creation, for getting people back to work. That is some record to boast about.
Mr David Winninger (London South): I continue to be impressed with both the wisdom and knowledge of the member for Oxford. He's certainly wise beyond his years, not only coming out of the University of Western Ontario, as he said, as a former president of the student council and a young student himself, he not only found a job for himself here in the Legislature, but he's now using his high office to find jobs for other people, and I commend him for that.
He has spoken about the efforts of this government to create jobs across the province, and I think the objective indicators are now coming in. For example, the Conference Board of Canada, as I recall, said that individual and investor confidence has never been higher in five years. I believe it was the OECD and the Toronto-Dominion Bank that predicted that Ontario would lead not only the rest of the provinces in Canada but the entire industrialized world in economic growth over the next two years.
We're dealing with our debt, at the same time, in a much more constructive manner, as the member for Oxford observed, than the previous Liberal and Conservative governments did. We're making the necessary decisions, we're making them in a timely fashion and we've been able, for the first time in 50 years, to actually reduce government spending two years in a row.
I think, as the member for Oxford said, the plan is working. We're creating jobs. We're bringing our deficit under control. We're still maintaining a relatively high level of public services, notwithstanding the social contract and the expenditure control plan. I agree with the member for Oxford. This plan is indeed working. I think over the last few years we've seen some very tough decisions, but they've been fair and they're putting this economy back on track.
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Mr Bisson: I'd like to commend the member for Oxford for his comments in opening up this debate. I know that if the member had had more time, he would have gone on to mention some of the other things that have been very important to the economy.
I think what was interesting in his comments in this House is just the point of how the opposition reacted in trying to show that Ontario somehow is in a bad position economically, and that it was nothing but doom and gloom in the future. But they failed to recognize -- for example, the member from London had mentioned before that Ontario is predicted to lead the G-7 nations through the recession, through the economy, over the next two or three years.
That's not the government of Ontario printing that as propaganda. The leading economic predictors are showing that Ontario is going to and is leading the G-7 through the next few years. I think that's of some significance to what this government has been doing, and I think a show of confidence for what this government has done in order to be able to realign the economy to a certain extent and to change some of the structures by which the economy operates.
I just look within my own riding and this upcoming year we have close to $500 million in private sector investment through a number of different projects through my community, and that's not just in mining. Mining is one of them, and it's very important to my community, but also we're seeing it in forestry with the Malette expansion that is being talked about and hopefully is going to be announced over the next little while, through power generation with regard to Northland Power and Potter station that are now announced and under construction.
We're looking at over $500 million of private sector investment, and I know the member for Oxford would have wanted to mention that if he had had the opportunity. I would just say I don't think we've seen $500 million in private sector investment in my riding over the whole five years of the Liberal government or over the 40-odd years of the Tories, for God's sake. I think that's a pretty good record, and I know the member for Oxford would like to have mentioned that if he had had the time.
Mr Sutherland: I want to thank the member for Bruce, the members for Don Mills, London South and Cochrane South for their comments. The comments of the member for Cochrane South are quite accurate. There are all kinds of new private sector investments occurring -- tremendous investments across the province.
My colleague from Essex-Kent is certainly familiar with the significant investment the commercial alcohol industry wants to make in an ethanol plant, and so I guess the only comment I'd make to the member for Bruce is, I certainly hope that he is in constant contact with his federal colleagues, and particularly the federal Minister of Finance, to ensure that the exemption for ethanol fuel on taxes will be committed for 10 to 15 years so that this project can go ahead. It's not us holding up the project. We committed $6 million to it. We need the federal government's support to help out with that one, and that would go a tremendous way.
With regard to the Unclaimed Intangible Property Act, I believe a couple of my colleagues, particularly the member for London South, will be elaborating a little more on that bill during the debate period, and we'll hear some more information.
The member for Don Mills talks about jobs. If we had had some greater support -- at least I give the current federal Liberal government credit. They see the value of infrastructure investment. The federal Tories didn't see that. In the worst depths of the recession, that would've been the best time to do it but, no, they couldn't see themselves to bring about that benefit.
The points I want to make in summary again are: We've got a plan. It has been working. It continues to work. It's getting people employed, getting them jobs, and we don't see any statement from the Liberals. We see a fuzzy vision statement. There is no action plan from Lyn McLeod. Any time we do have a policy, it changes from day to day, as we witnessed last week. That's no vision. You can't lead a province by not having any plan.
The Acting Speaker: The member's time has expired. Further debate?
Mr David Johnson: I did come here today primarily to deal with Bill 160, but since we've got into the various plans of the various governments, and since the Liberals aren't represented here today, should I put in a good word for the Liberal plan?
The member for Oxford says that the Liberals don't have a plan. Well, I have their plan right here. Here's their plan. How many pages are we talking about? Forty-one pages of plan, and it's summarized in five points. They have five points to their plan.
Mr Bisson: Is it warm and fuzzy?
Mr David Johnson: "Is it warm and fuzzy?" the member for Cochrane South says. Let me ask you this. The first point is "Charting a Bold New Course." We must chart a bold new course. Isn't that specific?
Mr Bisson: That's the Star Trek theme, isn't it?
Mr David Johnson: That's from Star Trek, is it? Well, that's pretty specific, I would think. Maybe a little bit warm and fuzzy.
The second one is "Letting the Economy Breathe."
Mr Sutherland: How profound.
Mr David Johnson: The member for Oxford says that's profound. This is a specific plan the Liberals have here.
The third point is "Redesigning the Machinery of Government," because it's 1960s.
Mr Bisson: Is that a code word?
Mr David Johnson: I guess these are code words. "We've got to redesign the machinery of government." So there you are.
The fourth point is "Making Ontario the 'Home of the Best Workforce'." Now, you would agree with that. What NDP government wouldn't agree with that? Make Ontario the home of the best workforce.
Finally, the fifth point in this very specific plan is "Providing the Tools for the Future." Well, there you go. There is an excellent plan, a very specific plan. I don't know what they mean by "tools for the future."
Interjection.
Mr David Johnson: The minister says we need a hammer and chisel or something and we can build a new Ontario. I don't know. But there's the Liberal plan. That's quite an excellent plan. I have a suspicion we'll see a new plan before the next election or else we may see a party that's in trouble.
I was a little disappointed and a little surprised in the member for Oxford, though, in terms of his comments with regard to the Common Sense Revolution. I'm very disappointed.
Mr Stephen Owens (Scarborough Centre): Oh, come on, David, you don't believe that. You can't say you believe that.
Mr David Johnson: The member for Scarborough Centre asks that I raise this and show it again. I didn't come here to talk about the Common Sense Revolution, but the member for Oxford has brought this to our attention. He has asked in his speech for a little bit of enlightenment on the Common Sense Revolution and I'm very pleased to assist him in that regard.
This is no great surprise to the people of the province of Ontario. The people of the province of Ontario understand that if you spend more than you bring in, you've got a problem. If I have a salary of $45,000 a year and I spend $55,000 a year, I've got a problem.
Interjection.
Mr David Johnson: I'll need a good bank. You're right. I'll need some help. If I do that four years in a row, I'm going to be bankrupt. Well, that's what the province of Ontario has done for the last four years. As a matter of fact, it's worse than that. For the last four years, the province of Ontario, through this NDP government, has essentially spent about $55 billion a year and brought in revenues of about $45 billion.
Mr Bisson: What happened in Ottawa?
Mr David Johnson: What happened in Ottawa, asks the member for Cochrane South. Look, what happened in Ottawa wasn't right either. Two wrongs do not make a right.
Mr Owens: What did we waste money on?
Mr David Johnson: If the position of this government is that if some other level of government can't come to grips with its budget then it's okay for this provincial government not to come to grips with its budget, then I think they're sadly missing the point and I think they'll find that the people of the province of Ontario do not agree with that point.
The people of the province of Ontario understand that there's a financial problem that we face in the province of Ontario. They realize that when you have a $90-billion debt accumulated through the years, accumulated with various governments -- sure, not only NDP, not only Liberal, but Progressive Conservative governments; look, let's not point fingers; all governments have contributed to that debt over the years -- it has to be solved, or what sort of legacy are we going to pass along to our children?
That's the point of the Common Sense Revolution. It says: "Forget about who's at fault. Let's stand here today and apply common sense and try to address the fiscal mess that we face in the province of Ontario." We're spending too much. We're bringing in enough revenue, frankly. The people of the province of Ontario will tell you they're taxed high enough as it is today, the corporations, the individuals. Our taxes are high enough; it's that we're spending too much.
Since the member for Oxford hasn't read the Common Sense Revolution yet, I will endeavour to send him a copy tomorrow, because he doesn't understand how the numbers add up. The approach is to allocate certain priorities. Those priorities are health, classroom education and law enforcement, and then to apply, to the member for Oxford, a 20% cut on the government spending beyond that.
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That will add up to about $6 billion by the end of three years -- about a $6-billion cut in the spending in the province of Ontario. I might add that if you go back to 1985, which is a favourite year for many of us here, and take the spending that was in place in 1985, which was about $25 billion, then increase that spending by inflation through those 10 years, increase that spending by the population growth, the spending today would be $8 billion less than it is.
In other words, the Liberal government and the NDP government through the past 10 years have spent and spent beyond the rate of inflation, beyond the population growth, by $8 billion. The $6 billion that is proposed to be cut through the Common Sense Revolution will bring it back closer to the level of spending that we had per capita in 1985.
That's not a hard concept to understand and I would encourage the member for Oxford to take another go at it, read it again and see if second time around it doesn't make a little more sense than it did the first time around. That's part of the Common Sense Revolution.
Another part of the Common Sense Revolution deals with the high taxation level we have in the province of Ontario, and I'm going to come to that a little bit later in my speech, hopefully, if time doesn't expire. But most Ontarians watching today would agree that our taxation level is not only high enough, it's too high and it's a disincentive for job growth in our province.
What we're proposing to do, as the member for Oxford has pointed out, is to reduce the level of taxes, specifically a 30% reduction on personal income tax -- not on all taxes, and that may be where the member for Oxford misunderstands -- but a 30% reduction in the personal income tax. Today in the province of Ontario, through the personal income tax and the surtax associated with the income tax, we have just about the highest marginal top rate in North America. If the people of the province of Ontario think they're being taxed high through their income tax, they are right. We are the highest-taxed jurisdiction in Canada and just about the highest in North America.
The level of reduction that we're proposing through the Common Sense Revolution, at 30%, would seem drastic to the member for Oxford but, in actual fact, it brings us back to about the level of the province of Alberta. That's how far out of whack our taxation level has got in the province of Ontario.
The combination is for tax decreases that would total about $4 billion and expenditure reductions that would total about $6 billion. We believe the tax reductions would encourage job creation, business expansion and growth in the economy. Through all this, more people would get back to work, more people would be paying income tax, because we don't need higher taxes, we need more people paying taxes. Through the combination of that program the budget would be able to be balanced in four years. That's the basic framework of the Common Sense Revolution.
I want to say, as I'm joined by my colleague the member for Mississauga South, that program starts right from the top. The member for Oxford has said it's not fair to single out those on workers' compensation; it wasn't their fault that we have a problem with the workers' compensation system. He's absolutely right; it wasn't their fault.
It's not the fault of the people of the province of Ontario that we have a debt of $90 billion; it's nobody's fault. But the point remains that there is a huge, enormous problem that has to be resolved. Does the fact that it's not the fault of the injured workers that there's a debt in the WCB of $12 billion justify inaction: just to let that sit, let that grow, get worse? We can't do that. There have to be changes in the workers' compensation system. We're going to cut premiums by 5% and there will have to be a new approach to the workers' compensation system to make it balance.
It's not the fault of the people of Ontario that we have had four successive years where the province of Ontario has had to borrow over $10 billion -- unprecedented. When this government took office four years ago, the debt was under $50 billion. It was about $45 billion. Today, at the end of this fiscal year, it will be $90 billion.
It's not the fault of the people of Ontario that this has happened, but should we sit back and let that carry on? The people of Ontario understand that action has to be taken in that regard, and we are proposing, through the Common Sense Revolution, that action be taken. That action will start and include everybody. It has to include everybody.
Interjection: Workers' comp?
Mr David Johnson: Yes, it has to include the workers' compensation system, but it has to start right here in this Legislature. We're proposing that we reduce the number of elected members in this Legislature. Currently there are 130 members. In the province of Ontario there are 99 federal elected members. We feel that the provincial members can do an equal job, are up to the task of their federal counterparts. We think 99 members in this Legislature could provide good representation for the people of the province, so we're proposing to reduce the number of members in this Legislature from 130 down to 99, a reduction of 31 members. We're proposing to eliminate the pension scheme of the members of this Legislature, a very expensive pension scheme. We're proposing to eliminate the tax break that the members of this Legislature get.
So there will be leadership from the top. We are not asking the people of Ontario to buy into this program without providing leadership. This will be painful, painful all the way around, no question about it, but people understand that measures are required when year after year after year this province has to go out and borrow over $10 billion to balance the budget. And I'm not talking about capital programs, capital to a very small degree; I'm talking about programs such as welfare, health, ongoing operating programs. We have to go out and borrow over $10 billion to make ends meet for our operating programs.
The Common Sense Revolution is very specific. The member for Oxford can have good fun with the Liberal Party and with the Liberal Party's platform, which I agree with him is a very warm and fuzzy platform. It contains very few specifics, a little bit of tinkering around. Obviously it's a program that has been put forward by a party that perceives itself to be way ahead in the opinion polls and doesn't want to rock the boat, doesn't want to make any enemies.
The member for Oxford can have fun with that platform and I certainly would not discourage him in that regard, but he cannot make the same claim about the Common Sense Revolution. The Common Sense Revolution has been thought through in all aspects: the welfare system. In the province of Ontario we have a welfare system where the payments to the recipients exceed the payments on average in the rest of the country by about 30%. We would like to be able to give those who truly need welfare 30% more than they get in the rest of the country, but is that realistic? When one is piling up year after year $10-billion deficits, is that realistic? I say it isn't.
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It goes into all aspects of government. It looks at general governance. It recommends reductions in grants to businesses. Some may say, "Oh, you wouldn't touch the business community." In this document, the Common Sense Revolution, we say governments cannot sponsor or subsidize or give grants to the business community, the private sector. The private sector can do very well on its own, thank you. We have a great entrepreneurial spirit in Ontario.
If somebody is saying that the message of the Common Sense Revolution is doom and gloom, it's far from that. There are two messages I take from this document that are very positive.
One is that we have a great deal of confidence in the private sector in the province of Ontario, that the private sector will do well. If we create a level playing field for the private sector and if we permit the private sector to function competitively with other jurisdictions, such as those in the United States, we have the entrepreneurial spirit here in Ontario and in Canada that will survive -- not only survive but flourish.
The second point that is very positive in the Common Sense Revolution is that with that flourishing of the private sector there will be jobs that will be created -- not by government; we cannot afford to give everybody a government job. We have unfortunately extended the expenditures of the province of Ontario too far today. There will have to be jobs cut back through the bureaucracy.
Mrs Margaret Marland (Mississauga South): On a point of order, Madam Speaker: The member who is speaking has a great deal of important information, and a quorum should be present to hear what he has to say.
The Acting Speaker: Would the clerk please determine if a quorum is present.
Clerk Assistant and Clerk of Committees: A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk Assistant and Clerk of Committees: A quorum is now present, Speaker.
The Acting Speaker: The member may resume.
Mr David Johnson: As I say, I didn't really intend today to get into this kind of debate at all, and I'll simply wrap up the comments in this vein by saying that the Common Sense Revolution is a very specific, well-thought-out program that will permit the economy to grow, permit job creation through the private sector, reduce expenditures in government and allow us, the government, to balance the budget.
I would like to shift now to the topic today, which is Bill 160. Just to refresh memories, Bill 160 is one of these omnibus bills, which is very disappointing, to members of my caucus at any rate, because there are so many different issues jammed together. I have to say that it doesn't allow for a fair and open debate on all the different aspects, and there are many aspects of this bill. It contains 18 parts that amend 17 different statutes, and many are contentious with various parts of our economy in Ontario.
I know there are people -- businesses, individual people -- who would wish to speak to certain parts of this omnibus bill, but the whole thing is going to be rammed through as one entity, and that's very unfair. It's unfair to the opposition members on this side of the House, to be able to analyse it and speak to it, but I it's also unfair to those who are affected by the bill because it will not permit them to be part of the debate and have the input they would wish. I can tell you, through my speech later on, that many are going to feel very adversely affected by Bill 160.
To give some idea of the broadness of the bill, it deals with an annual filing fee by corporations. Every year a corporation will have to pay a fee, estimated to be $50, kind of a nuisance fee. But it's not only corporations, it's also non-profit corporations. Groups like Kiwanis clubs or Lions clubs or skating clubs or baseball organizations or many non-profit organizations will have to file a fee as well, perhaps some $25, and this is a great nuisance to them. That's part of it.
How education property taxes are allocated across the province of Ontario: Now here's a topic that's near and dear to the hearts of a large number of people in the province, and I'm sure many boards and many individual people would like to have an opportunity to speak to that issue.
Another issue affects the employer health tax. This perhaps is a positive measure, because a tax holiday is being promoted.
The Ontario Transportation Capital Corp is involved, the Loan and Trust Corporations Act.
There is a retail sales tax exemption for delivery charges from the dirt tax. That's an interesting one. I don't think I'll come back to that again in the future, but last year in the budget, just over a year ago, in 1993 the government introduced about $2 billion of new taxes in the province of Ontario, and one of those new taxes applied to sand and gravel, aggregates, various road material. They slapped the retail sales tax on those materials, and that of course affected construction companies, and municipalities were hit by that because municipalities build roads and sidewalks, and sand, gravel, aggregates, etc are essential ingredients of all that.
This was a method to raise funds, though. When your expenditures are enormous and your revenues are also enormous but not high enough to cover the expenditures, the approach of this government has been to try to raise revenues to cover those expenditures. One of the avenues one year ago was to impose the retail sales tax on sand, dirt, aggregates etc.
The member from Oxford has bemoaned the fact that all we do is accuse the government of poor management, but here is a case in point where the tax was implemented last year, and during the course of the year it was determined that in terms of the delivery portion -- so when sand or dirt or aggregates are delivered, that delivery portion -- in terms of applying the tax, was unmanageable. They did not think it through a year ago, and they have found that over the past year that portion is unmanageable, unworkable, and in this budget we have that particular component of the tax rescinded.
I'm certainly going to support rescinding that particular portion of the tax. We didn't support the tax in the first place. We didn't support any of the $2 billion in taxes that were imposed in 1993.
Then there's the sweetheart deal with OPSEU, the Ontario Public Sector Employees Union, contained within this bill. I think that's where I'll start, because Bill 160 is one of the 18 different parts of this bill that does contain a sweetheart pension deal for the Ontario Public Service Employees Union. My guess is that there were probably two objectives in achieving this: First, the government again is looking at ways to fudge the books so that the financial situation of the province --
Mrs Marland: The first time in the province's history that the auditor wouldn't sign off.
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Mr David Johnson: Yes, the auditor had severe problems and didn't sign off the books a year ago, and here's perhaps another indication of why the auditor has problems with the books.
Mr Chris Stockwell (Etobicoke West): Sneaky.
Mr David Johnson: "Sneaky" is a word that's been used by the member for Etobicoke West.
Mr Jim Wiseman (Durham West): When are you going to put up the cue cards?
Mr Stockwell: He's forgotten more than you know.
Mr David Johnson: I would think the member for Durham West would have enough difficulty with his landfill site, but I guess he wants to get into this debate.
Mr Wiseman: Thanks to you Metro guys. Thanks a lot. They remember when you were on Metro council.
Mr David Johnson: What's happened here is that the public service pension plan has been cut in two. Of the people involved in the public service pension plan, there are three prime groups that I'm aware of: First, there's the union members, OPSEU, the second group is the Ontario Provincial Police, and the third group involved is the non-union members, the management members.
One would think that if one were going to affect the pension plan of all three of these groups, it would be a requirement, an absolute requirement, to involve them all in the discussions. For heaven's sake, as employees, whether they're police, whether they're union members or whether they're non-union members, as they get along in their career, what is more important to them than to make sure they have a pension plan that's protected and is stable?
I can speak from personal circumstances. Over a year ago, when I was the mayor of East York, the provincial government was proposing that for investment purposes the province of Ontario would look at going into the Ontario municipal employee pension plan and using the funds from that pension plan -- do you recall those days?
Mr Stockwell: Yes, I do recall that.
Mr David Johnson: -- taking the funds from that pension plan and using them for wild investment schemes. Perhaps I'm exaggerating a little bit, but it was for various investment schemes within the province that the Premier and the cabinet wished to promote, those kinds of investment schemes.
I can tell you, the reaction was overwhelming, and the government soon backed down on that. Even in East York, those who had been in the pension plan for some number of years were livid that the government would even consider dipping its hands into their pension scheme, putting that money into an investment that would have some risk associated with it.
Mr Stockwell: A lot of risk.
Mr David Johnson: A lot of risk. What kind of government would do something like that and jeopardize their future?
Interjection.
Mr Stockwell: It's their money. Let them decide --
The Acting Speaker: The member for Etobicoke West is out of order.
Mr David Johnson: He's being helpful, Madam Speaker. He may be out of order, but he's being helpful.
What's happening here is another spin on that. You have the three groups -- the police, the union and the non-union -- and the provincial government has had discussions with only one group, that being the union group. The provincial government sat down with the union members and struck a deal with the union members, and then, after the fact, it's gone to the other two members of the group, the Ontario Provincial Police and the non-union members, and has said: "Here's the deal. You like it, don't you?" Well, they don't like it, I can tell you that.
The purpose beyond this is twofold. One is to make friends again with the union members, OPSEU, because the social contract last year was a severe strain on the relationship between OPSEU and this government. OPSEU gains more control over their pension plan, which is now severed from the public service plan. It'll be a separate plan. They gain more control over it, so OPSEU is happy about this. Not only that, but their plan does not contain any of the currently retired members. Their plan starts from scratch.
And beyond that again, what is alleged by the members who are excluded from this deal is that the assets that have been allocated to the OPSEU plan are superior to the assets that have been allocated to the rest of the plan. In other words, OPSEU got a better deal. The police and the non-union members were left with not a very good deal, I would say a bad deal.
The other point I might add is that because they've struck this deal with OPSEU, OPSEU has agreed that the provincial government would not be required to pay certain moneys over the next three years, because apparently there will be a little bit of a surplus in those three years due to the fact that salaries are not going up as fast as they contemplated and consequently the payments can be a little bit lower. I'm going to come back to that in a moment, though.
However, where does this place the Ontario Provincial Police and where does this place the non-union members? They have had an actuary look at the split and their actuary has said that this split is a bad deal.
Mr Stockwell: Oh, but the government doesn't agree with that.
Mr David Johnson: "The government doesn't agree with that," says the member for Etobicoke West. No, the government doesn't agree because it would ruin their plan. It would ruin their plan to curry favour with OPSEU. It would ruin their plan to defer the payments to the pension plan. We're talking about roughly $1 billion, $942 million to be exact, that is going to be deferred.
You know, the crime in all this is that the pension plan is underfunded at the present time. It's underfunded to the tune of between $2 billion and $3 billion, $2.4 billion I believe at present, and this money could be used to pay down that underfunding. The taxpayers are picking up the tab for that underfunding. Over a period of 40 years we're making payments, unfortunately -- 40 years, if you can believe it. Our grandchildren, our grandchildren's children will be paying off the unfunded liability in this pension plan for OPSEU members and others.
We had an opportunity here. With $942 million of surplus, we could have paid off some of that unfunded liability. Would that be good fiscal management? I would guess that 99% of the people in the province of Ontario would say, "For Pete's sake, pay it off." What do they tell you when you have a mortgage on your house? "Pay it off as fast as you can." People understand that. The faster you can pay off the mortgage on your home, the better off financially you are.
What's happened here with a golden opportunity to pay off this unfunded portion? They have deferred. They have chosen to make themselves look better in this fiscal year, using that money in their operating budget instead of paying down their obligation. That would have reduced the payoff period from 40 years down to 15 years.
Interjections.
Mr David Johnson: Madam Speaker, there's a little bit of a --
Mr Owens: How do you expect to pay it off?
Mr David Johnson: The member for Scarborough Centre doesn't seem to understand.
The Acting Speaker: If other members wish to make comments, they will have a chance at another time. The member for Don Mills has the floor.
Mr David Johnson: I think that's a real crime, but there are a couple of other real crimes that have been involved in this issue. One is that a year ago, when this government, through the social contract, came to an arrangement with the Ontario Provincial Police, one of the aspects in the social contract agreement with the Ontario Provincial Police was that they would not divide the pension plan. Just one year ago they would not divide the Ontario Provincial Police pension plan.
What have they done today? Without the consent of the Ontario Provincial Police, the pension plan has been divided and there is a clause in Bill 160 -- here it is right here -- that says, "Notwithstanding any agreement we've made in the past with the Ontario Provincial Police, for example, notwithstanding that agreement we made in the past, what we're doing in Bill 160 we declare to be legal." In other words: "We can make a promise one year and we can break it the next year. We can do that with the Ontario Provincial Police," and the Ontario Provincial Police, I can tell you, are angry about this.
Mr Allan K. McLean (Simcoe East): They should be.
Mr David Johnson: And they should be, for sure. What they have asked for is to have their own plan split off, but the government has turned them down in that. The police have said: "Well, it's fair for OPSEU, it's fair for us. Allow us to split our plan off too." But the government has turned them down.
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What do we have now? We have a lawsuit initiated by the non-union members, by the management group of the non-union members, suing the government because it has left them with a pension plan where they're afraid that in two or three years the payments are going to go up and the pension plan is going to deteriorate. The provincial police now, I understand, are joining in that lawsuit against the government. That's what we have. That's one aspect of Bill 160.
I think it's very unfair that employees, whether they be management staff, whether they be non-union members in other service in the province of Ontario, whether they be provincial police who are ensuring the safety of many of our towns and municipalities in the province of Ontario and putting their life at risk day in and day out to ensure the safety of our citizens -- these are people, in many cases, who have given long service to the province of Ontario. Then what happens? The thanks they get? Bill 160 takes their pension plan and divides it in two, divides it unfairly, according to the actuaries.
There was an agreement that the actuary used to divide the plan should be agreed upon by all parties, but it wasn't. The actuary that was selected by the government was the government's choice. I imagine OPSEU concurred in it, but the Ontario Provincial Police and the non-union members were not brought into those discussions and they did not have the ability to agree. This was a course of action that had previously been acknowledged and agreed to, but it was violated.
So here we have a most unfair situation. I think if we cannot be fair to our long-term employees in the province of Ontario, then it's a sad state of affairs. I hope that before this bill goes through the government takes another look at that most unfortunate aspect of Bill 160.
I'm going to slide along now, as time is going by, to another aspect of Bill 160, dealing with the corporate filing fees. This bill does permit and put in place an annual corporate filing fee. The amount would be determined in the regulations. The corporate filing fee was actually eliminated in 1976. I'm not sure who was in government in 1976.
Mr Ted Arnott (Wellington): The Conservatives.
Mr David Johnson: Oh, the Conservatives, that's right. The Conservatives were in government in 1976. It was eliminated in 1976.
Mr Gregory S. Sorbara (York Centre): The bad old Tory days.
Mr David Johnson: The member for York Centre's not in his seat, I might add, Madam Speaker, but we welcome in our midst the member for York Centre. He says, "The bad old Tory days." The next year of significance in terms of the corporate filing fee was 1989. Now do I hear, "The bad old Liberal days"?
Mr Sorbara: No, those Liberal days were good days. Liberal times were good times. Lots of people had jobs then.
Mr David Johnson: All right. So the member for York Centre says, "The bad old Liberal days," and we have to agree with him.
Mr Sorbara: Help me out here, Madam Speaker. I said Liberal times were good times.
Mr David Johnson: All right. I apologize for misconstruing.
In 1989 Liberal legislation, section 6 of the Corporations Information Act, allowed the minister to require a filing of the status of a corporation at any time. They brought the legislation back in, but it wasn't exercised in terms of requiring corporations to file until 1992. At that point there was some large number of corporations that hadn't filed, so a number of letters were sent out and as a result a number of corporations filed.
However, more recently we have seen this government bringing in a requirement, trying, I might say, and this is the third occasion, because this corporate filing fee was contained in Bill 29, which didn't get through. It was also contained in Bill 81, and it didn't pass at that time. Now it's in Bill 160. If this is like baseball, this is the third strike, and if it doesn't pass this time, then you're out.
What this would permit, through regulations, would be the fee to be charged to all corporations in the province of Ontario, some $50, and the apparent justification is that up-to-date information could be required.
Mr Sorbara: Just another tax grab by Marilyn.
Mr David Johnson: Just another tax grab -- that's absolutely right -- the member for York Centre says. He's absolutely right. It's another tax grab, and it's a tax grab not only for private corporations, but charitable corporations as well. I mentioned previously, Lions clubs are involved and --
Hon Ms Gigantes: It's $25.
Mr David Johnson: The minister from Ottawa Centre says $25, You know, $25 is no big deal to the minister from Ottawa Centre for non-profit organizations. This is the attitude: Nick them again. So what? It's only $25: $25 here, $25 there. Skating clubs, ball clubs, these are run by volunteers, Lions clubs. They're there to serve the community. They should be encouraged. They shouldn't be nicked for $25 for some blasted fee, a filing arrangement that they have to make. They should be encouraged. Why is the government dipping into the pockets of these non-profit organizations, which are providing excellent service to the people of the province of Ontario?
I think this is unmitigated gall, and the minister's attitude just demonstrates that. I have no doubt, if it's $25 this year, it'll be $30 at some point in the future and then $50. It's a tax grab. It's another way to get more money to pay for expenditures that are far too high. That's what this is all about.
The government's speculating that there's going to be some $12 million raised. That's what it's all about: $12 million into the coffers of the Ministry of Finance. The estimate is it might cost $2 million a year in administrative costs to bring that revenue in. Isn't that a sad state of affairs that we have to go out to our non-profit organizations, we have to go out to our companies who are struggling in a recession, who are trying to create jobs, and we have to pull an extra $12 million out of them in some fashion? And there's a bureaucratic cost of $2 million to do that. Isn't that wasteful? Isn't that counterproductive somehow?
Mr Ron Eddy (Brant-Haldimand): It's upsetting.
Mr David Johnson: It's upsetting. The member for Brant-Haldimand says he's upset, and I'm upset as well. We're both upset about that. I hope he speaks to this later, because I think the government should be given heck for doing this.
They might say, "Well, $50 to a corporation, big deal." I have a chart from the Canadian Federation of Independent Business representing some, I believe, 80,000 businesses across Canada, representing tens of thousands of small businesses here in the province of Ontario, and they've done an analysis of the tax burden on Ontario businesses.
They've done an analysis of all taxes: payroll taxes, local taxes -- by payroll taxes I mean workers' compensation, employer health tax, unemployment insurance, those kind of taxes; local taxes, which would be property taxes, both local governments and regional governments and school taxes; income and capital taxes and commodity taxes.
I don't know if the chart is picked up by those who may be watching, but unfortunately, on the left side of this chart is the province of Ontario, and if you compare other jurisdictions within North America -- and the other jurisdictions they compared are Quebec, Michigan, New Jersey, New York, Pennsylvania. It's probably readily apparent why they would take those jurisdictions, because those jurisdictions are geographically close to Ontario and they would be our main competitors in an economic sense, main competitors with Ontario.
If you look at those other jurisdictions, what you find is that in terms of total taxation, Ontario is unfortunately the highest. This is what the business community faces in this day and age here in Ontario: They are the highest-taxed area, highest-taxed province or state in this vicinity of North America. That is the problem.
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Hon Ms Gigantes: That's not the case.
Mr David Johnson: The minister from Ottawa says it's not the case. The Canadian Federation of Independent Business, representing businesses, says it is the case. They're looking at all taxes, Minister, not just one particular case. If you look at payroll taxes, then indeed they show here that Ontario wouldn't be the highest. But if you look at all the taxes together --
Hon Ms Gigantes: No.
Mr David Johnson: I would encourage the minister then to respond during her period, at the end of my time allocation, because this is certainly the data that the Canadian Federation of Independent Business has found. Having dealt with that organization over the last year, I have a great deal of respect for its ability to bring out the information.
Here we are putting another, admittedly small fee, but another fee on top of that, on top of a tax structure in the province of Ontario that's already higher than Quebec, higher than Michigan, higher than New Jersey, New York, Pennsylvania. Slap another tax on top.
Then the member for Oxford says: "Our main priority is to create jobs in the province of Ontario. Our number one priority is to create jobs." Here's how we go about creating jobs: We put another tax on our businesses. We already have the highest tax structure in Ontario. The number of employed people, as I indicated earlier, is lower today in Ontario than when this government took office four years ago, but "Our number one priority is jobs, and the way we we're going to go about doing that is to put another tax on, a corporate filing fee."
I'm at a loss for words to explain the rationale behind that. It will be counterproductive in a small way -- it's a small fee -- but it's another annoyance. It's not only the money involved but it's the red tape, the paperwork, going through all that process. Beyond the high level of taxation in the province of Ontario, if there is one concern of the business community, it's exactly that: It's the paperwork, the red tape, the forms that businesses in the province of Ontario are subjected to on a day-by-day basis. Here's, again, another piece of paperwork.
I'm going to slide along to another aspect of this bill -- there are so many aspects -- and that is the part of the bill that deals with unclaimed intangible property. I know the member for Willowdale is very interested in this --
Mr Charles Harnick (Willowdale): I'm rather exercised by this.
Mr David Johnson: He's rather exercised about it, and he'll probably speak to it in greater length and with much more depth than I will. But it is a huge concern in the investment community, the investment community, the investment dealers, those involved with banking institutions, trust companies. They are extremely concerned about this piece of legislation. The government may say: "Well, why should we have sympathy for investment dealers and banks and trust companies? Why do they deserve sympathy?"
Mr Sutherland: They had a lot of good things to say about Bill 134.
Mr David Johnson: They didn't have much good to say about Bill 160, I can tell you that. I met with them this morning and they have nothing good to say. But when you get around to what people have had to say -- and I thank the member for Oxford for reminding me -- the Minister of Finance back in 1989 -- this was introduced by the Liberals in 1989 as well. Maybe I should state that little bit of history, that 1989 was a great year for the Liberal government. They were rolling in money. In 1989 they had something like 16 tax increases by the Liberal government: the personal income tax; fuel tax increases; the tire tax was imposed that year; retail sales tax increases; a container tax. Do you know what year the commercial concentration tax was introduced?
Mr McLean: The good old Liberals.
Mr David Johnson: By the good old Liberals. My friend from Simcoe East says the good old Liberals, and he's not saying that too sincerely. In 1989, 16 tax increases: a bad year in the province of Ontario.
Also in 1989, perhaps with a little less fanfare, the Liberal government introduced a bill regarding unclaimed intangible property. That's a bit of a tangle, but unclaimed intangible property includes, for example, if you have money in a bank and you forget about it -- a small amount of money perhaps -- and you have not claimed that for a period of time --
Mr McLean: The government takes it.
Mr David Johnson: The government takes it, as the member for Simcoe East says. We're talking about that kind of thing. If you have insurance proceeds that you forget about or stocks or bonds that you have somewhere but somebody's keeping them for you, somebody else is holding these things for you but you don't claim them, that's what's called unclaimed intangible property. In 1989, the Liberal government introduced a bill that would have dealt with this property and brought it into the province of Ontario.
Mr Harnick: What did I say? Monkey see, monkey do.
Mr David Johnson: Monkey see, monkey do, says the member for Willowdale. I'll leave that to you to cover. But because of all the problems they ran into back there, the act did not get proclaimed. But I gather that within the bureaucracy, and perhaps within the NDP government, the embers were still burning and this was viewed as being another way to get their hands on money. The government estimates that some $30 million may come to it from the unclaimed assets of the people -- and businesses, I guess, but mostly people -- of the province, that it will somehow get its hands on $30 million in the first year and in subsequent years there will be a continued inflow of money, although perhaps at a lesser amount.
But when this was introduced in 1989 by the Peterson government --
Mr McLean: What did the Treasurer say?
Mr David Johnson: The member for Simcoe East wonders what the Treasurer said, and I assume you mean the current Treasurer.
Mr McLean: That's right.
Mr David Johnson: The current Treasurer, who was in opposition at that point, looking through Hansard, was very vocal about this point. I notice at one place he says, "There is a sense out there in the financial community that they have been snookered by the government on this bill." This is what the current Minister of Finance said just a few short years ago about a bill that he is now introducing. What's happened over the period of those years? The member for Oxford has accused the Liberals of flip-flopping on issues. My goodness, here's the Minister of Finance introducing Bill 160 containing exactly the same provisions today that just a few short years ago he called snookering the financial community. He said, "When it comes to specific discussion of this bill with the government, [the financial community] has not had it; it has not had discussion on the bill."
The interesting aspect is that the people I dealt with this morning, from the investment dealers and the trust companies, and this afternoon, some of the people in the banking community, are saying exactly the same thing: There have not been discussions on this bill.
The now Minister of Finance back a few years ago said, "Before anything definitive happens, you'll be consulted." He was dealing with the investment community. He said they'll be consulted, but they haven't been consulted. They've been telling us frantically that not only were they not consulted, they barely knew this was a component, one of the 18 components, of Bill 160.
Mr McLean: Tried to sneak it in.
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Mr David Johnson: They tried to sneak it in, and it has been found out. What they're asking is that this component of Bill 160 be divided off and considered separately. It is a major aspect of the bill and it does deserve that kind of debate, and to incorporate it into a bill that contains some 17 other provisions I don't think is fair.
The minister said back then that they really had not had an opportunity to deal with the bill and at that point to have a meeting, the financial institutions, the Canadian Bankers Association in particular, felt it was not fair to have this laid on them at the last moment. The minister back a few years ago was expressing concern that the bill was laying onerous positions on the financial community. I just wish he had those same concerns today.
And on and on it goes, several points in Hansard. The minister deals with the lack of consultation with regard to unclaimed intangible property, and today we have the minister bringing in the bill under the same circumstances.
I received a note from the Canadian Bankers Association. I don't know how much sympathy there is out there for the Canadian Bankers Association. Probably most people feel they do quite well. But they create a lot of jobs in the province, a lot of jobs in the province are in the banking institutions; a lot of people who are not wealthy people work in banks. If our real motivation, as the parliamentary assistant started off this debate today by saying, is to create jobs, if our number one priority is to put in place a playing field that will allow jobs to be created in the province, we ought not to be imposing measures without consultation, measures that are going to have a negative impact on any aspect of our economic structure in the province, including the banking industry, including the trust companies, including the investment dealers. If we do, they will become less competitive and they will not be able to create the same number of jobs.
The representative of the Canadian Bankers Association has written to say, "We are writing to express the banking industry's profound concern with the provisions of Bill 160." Going down a little bit, they say, "Notwithstanding that one brief meeting, there has been no meaningful discussion on the subject despite the fact that the act was passed in 1989." There has been no meaningful discussion on this bill; this from the banking association. "The fact that the amendments were introduced as part of the Ontario budget, with its attendant secrecy, does not justify this lack of consultation." They go on to say, "We request that part 16" -- which deals with unclaimed intangible property -- "be removed from the bill for further review and discussion." I think that's a legitimate request and I hope the members of the government will do that.
Beyond the lack of consultation on this most important aspect of the bill, there are a number of other specific concerns. One has to do with the burden that would be imposed on the businesses associated with this. One trust company did an analysis within several of its key departments -- this is one trust company -- and estimated that it could cost up to two and a half times as much to comply with this act as the money it would turn over. For every dollar it would turn over in unclaimed assets to the public trustee, and that's how this act works, that the money that would be turned over to the public trustee -- the public trustee, I might add, has come under fire by the auditor. The Provincial Auditor in the 1992 report had a great deal of concern with regard to the public trustee, and the public trustee is also gearing up to assume the substitute decisions legislation, which was a major piece of legislation. The public trustee's office is going to be hard pressed to deal with the substitute decisions legislation, and here is another onerous, major responsibility that will be dumped into that office. But that's where the money is intended to go, and what's being said here is that it could cost two and a half times the amount of money turned over to the trustee to administer to comply with this act.
The bureaucracy in the public trustee's office is a major concern. Obviously, the public trustee's office would have to expand considerably to assume this. The public will be responsible, through their taxes, to deal with this major cost initiative in the provincial government. This has been a suggestion: If there's a problem at present in terms of, for example, people being able to receive their unclaimed intangible assets, why not look at the present system, which is administered through the banks and the trust companies? Why not look at beefing that up somehow or improving that somehow? I was going to ask, why create a whole new bureaucracy, but what we're doing is adding significantly to the existing bureaucracy, through the public trustee's office, to deal with that.
Another point that's raised, and perhaps I'll leave this to the member for Willowdale to go further into it, is that this act is at odds with the federal government. The federal government has legislation that deals with this specific area and the two acts would be in conflict. Our businesses would be compelled to deal with the two acts somehow. In terms of federal legislation at present, the Bank of Canada assumes unclaimed property, and this act somehow assumes that the Bank of Canada will turn over that unclaimed property to the province of Ontario so the province can bring it into its coffers and use the money to spend on some program. But there's a real concern that the Bank of Canada may not do that and that the federal government may not allow that to happen.
There are a great number of concerns associated with that aspect of the bill, and it deserves to be cut out from the rest of the bill and dealt with separately.
Another aspect of this bill is with regard to the Ontario Transportation Capital Corp. The government has set up a crown corporation that has the responsibility of managing transportation improvements in the province. There is a strong suspicion on this side of the House that the transportation corporation was set up to make the books of the provincial government look better.
In other words, projects such as Highway 407, for example, that could probably be accomplished through the transportation corporation were formerly done under the budget of the province. Now, with the setting up of the crown corporation for transportation, those kinds of projects will be done under the auspices of that crown corporation. It will be a separate entity and will report back in a separate fashion, so the books of the province will look better in that they will not contain expenditures for many transportation projects.
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Indeed, this year the transportation capital corporation has some $600 million assigned to it for various projects, projects that I queried the minister about, but he was unspecific as to what projects they were. Highway 407 is listed in here at some $300 million.
What we've been led to believe was that this crown corporation would do the projects and there would be another crown corporation, called a financial corporation, which would raise the funds to pay for the road projects that would be performed by the transportation corporation. We wondered where the financial corporation was going to get its money to pay for those road projects through the transportation corporation. The original concept was to use toll roads, for example. In the case of Highway 407, there would be tolls and the users of the road would pay for that project through the tolls that were put in.
But now we see, through Bill 160, that the government has other ideas in terms of where the money should come from; that is, redirecting various fees that already occur. For example, in 1995-96, right-of-way fees and heavy commercial truck fees will be reallocated out of the operating budget and into the crown corporation. In 1996-97, light commercial truck fees will be reallocated from the operating budget into the crown corporation, and on and on it goes. What the government is doing is taking fees that are currently in place, reallocating from its operating budget into the crown corporation.
I'm not sure why we went through this whole exercise if that's all this was about, but it also raises the worrisome prospect that we will have a crown corporation that will have a major say in all the fees and licences involved with transportation; for example, a permit for a motor vehicle or trailer, a licence plate permit, all the various fees, literally dozens of them, that we pay today. Once they're transferred to that transportation corporation, as Bill 160 recommends, then the transportation corporation, not accountable to the people of the province -- this is a separate crown corporation that will not be directly accountable to the people -- will have a say in these fees.
I don't like to think doom-and-gloom thoughts, but what will be the attitude of this corporation in terms of raising these fees or in terms of recommending that these fees be raised? I don't know the exact mechanism. We cannot determine the exact mechanism of how fees will be determined in the future, but it's worrisome to think that an independent corporation, not accountable directly to the people of Ontario, could raise motorist licence fees, fees for vehicles, trucks, light trucks, heavy trucks, any of the fees that are important to the people of the province. This corporation could have a major say in that, simply to raise money to pay for projects in the province of Ontario.
People might ask, what's wrong with that? What's wrong with raising funds for projects that need to be done on our roads in the province? Well, I can tell you that at present there is a great deal of money raised for transportation projects in Ontario.
In the budget for 1994-95, this government has said it will raise $2 billion from gasoline taxes in Ontario. They have said they will raise $740 million from vehicle and drivers' fees across Ontario. That's almost $3 billion just in the gasoline tax and the vehicle and drivers' fees.
Indeed, associated with the auto industry and the gasoline industry, a huge amount of corporate taxes and retail sales taxes, easily between $3 billion and $4 billion a year, would be raised in taxes in Ontario, let's say associated with motorists in general.
By comparison, the money put back into the road system in the province of Ontario -- we have in the capital budget this year some $1.1 billion in the capital budget for roads. We have, through the Ontario transportation corporation, another $600 million, and the special project, Highway 407, another $300 million.
If you add those numbers up, we already collect from the motorists of the province of Ontario more money today than we pay into road projects in Ontario. That wouldn't be any great surprise to the average motorist, when you pay for gasoline at the pump, when you pay for your annual licence fee. When you think of all the people across Ontario and all the businesses across Ontario paying those fees and those taxes, you add all that up today and it exceeds the investment going back into our road system in Ontario, already, today.
The moneys are not allocated for those purposes, which I think is a sad fact. Those moneys go into the general revenues of Ontario. They go to pay for welfare. They go to pay for anything you name in the province of Ontario. If we were to just take the money today that motorists pay in taxes and fees, there would be more than the investment in our road system in Ontario.
Through Bill 160, we will now have a crown corporation that will have the ability to take those moneys, allocate them presumably to specific projects, but will that corporation also have some leeway in terms of increasing the licence fees, for example, that we pay in Ontario today? It's a very worrisome prospect.
There's one other aspect of this bill that I think will cause a great deal of interest in Ontario, and it's a tough one. It has to do with education taxes in Ontario.
I have heard over and over again since I have been elected, as an alderman, as mayor, as a member of provincial Parliament, that the impact of the education taxes on the individual, on the business community, is enormous. It's a tremendous burden on senior citizens who own their own home, who have very low income flow, who have a house perhaps that's paid for but have a very small pension or have no pension whatsoever and are just making ends meet. They realize that of their property tax, in the municipalities I represent, higher in some other municipalities, 55% or more of the municipal taxes they pay go to education. This is a huge burden on them.
The Board of Trade of Metropolitan Toronto has told me in no uncertain terms that of the taxes it pays, and it compared property tax with workers' compensation, with employers' health tax, with unemployment insurance, the property tax was the number one evil in that regard, that the huge amount of property tax here in Metropolitan Toronto for all the businesses in Metropolitan Toronto was a huge disincentive and was causing a great deal of problems. So the education tax in Ontario is of great concern to the business community, to individuals.
The Fair Tax Commission recognized this. The commission reported back in January this year, a report that is collecting a great deal of dust at the present time --
Mr McLean: And will continue to.
Mr David Johnson: "And will continue to," the member for Simcoe East says, and I think he's right.
That report recommended that the education tax be taken off the property tax. Unfortunately, it recommended that the tax be put on the income tax, which would drive our income taxes right through the roof here in Ontario, but they recognized the impact of the education tax on the people and the businesses of the province of Ontario.
This bill is proposing for corporations in Ontario to reallocate the education tax to the separate school system and the public school system, within those two systems. Currently, corporations are able, through their shareholders, to allocate the education tax based on their shareholders. If 30% of their shareholders were separate school supporters and 70% were public school supporters, then the corporations could allocate their property tax in that way, 70-30. But of course that's unworkable and very little, I suspect, of the education tax from corporations is allocated in that fashion.
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What Bill 160 now proposes to do: It says take the corporation tax within a municipality, determine the enrolment of the separate school system, determine the enrolment of the public school system and allocate the tax on that basis. This would be a reallocation, in net effect, away from the public school system to the separate school system.
The numbers would indicate that the public school system in Ontario would lose about $160 million; about $160 million will be lost to the public school system across Ontario. However, because of that loss, the grant structure would kick in and the public school system would get an extra $100 million in grants. There would be a net loss of some $60 million to the public school system and a net gain in the separate school system of the equivalent amount, some $60 million.
This bill also deals with grants in lieu, for example, grants in lieu pertaining to the telephone company. Again, as I understand it, this bill would allocate those moneys in proportion to the separate school supporters and the public school supporters.
This is a difficult problem. There's no question that the separate school system receives lower funding on a per-pupil basis than does the public school system. There's no doubt that the separate school system is struggling to give the same level of quality of education as is the public school system in the province of Ontario. I think most of us here in this House would say that every child deserves an equal opportunity of education. This is a problem that the separate school board has certainly brought to my attention and I assume has brought to the attention of many people within this Legislature.
At the same time, the public school board has argued that in terms of its needs it has to deal with many students with special needs. It has to deal with many students who do not have English as a first language, many people who have come from other countries, and it has many individual problems that require financing.
I know that both boards face an enormous problem. I think when we get back to it, this is an issue that should be discussed. I know the boards will wish to discuss this. The public school board will wish to discuss this. The separate school boards I'm sure will wish to discuss this. The taxpayers of Ontario, the business community of Ontario, will wish to discuss this, and this is an issue that should not be hustled through in the last two weeks before a summer break. This is an issue that should be allowed public hearings and should be discussed in an open and frank way here within the province of Ontario.
The feeling I'm getting from this government is that they want to have limited debate on Bill 160 at this point in time. Even though we're dealing with 18 different aspects of a bill, varying different aspects of a bill, they want to limit the debate to some eight or nine hours at this point, and then they want to hustle it through third reading next week, so that by the summer break this whole thing will be a fait accompli.
Here is one aspect of the bill, and I've dealt with a number of other aspects of the bill, that I believe we owe it to the public to have an open debate on. We should let the people speak and I would hope that the government would take that initiative and allow that to happen.
Mr McLean: That's only right.
Mr David Johnson: "That's only right," the member for Simcoe East says. It's only right, but unfortunately we've seen too many aspects of bills that have been hustled through.
I see my good friend from Etobicoke-Rexdale, the Minister of Municipal Affairs across the way there, and I think of the limited debate we had with regard to the Ottawa-Carleton bill. Now, we did have a debate, we did go down to Ottawa, but there were so many groups that wanted to speak to that bill and so many people who couldn't speak to that bill, I would hope maybe we learned from that process and we'd realize that, from many different aspects, education is such a key aspect of our services here in the province of Ontario, not only the funding of education but the provision of education.
We have a royal commission out there beating the bushes. I don't know what they're doing. They're costing about $8 million. Has anybody seen them? They're supposed to report back I think at the end of this year, but they're not talking about funding; they're talking about programs within the education system, and costing a great deal of money in doing that. Here is an aspect of funding and it should be debated.
Hon Mr Philip: When we try to streamline government, you're opposed to it.
Mr David Johnson: The minister says we're opposed to streamlining government. As a matter of fact, in the Common Sense Revolution we're suggesting government has to be streamlined. It has to start right here in this Legislature, Mr Minister, with the number of MPPs.
Interjection.
The Acting Speaker: Order.
Mr David Johnson: The minister says there are selective ways to streamline, but when we have a suggestion which starts right here in this House, then that's not the proper way to do it.
I said I'd send a copy of the Common Sense Revolution to the member for Oxford. I'll send a copy to the minister as well so he can see how we're proposing to streamline government. We have some very concrete ideas in here about how to streamline government, all governments.
Hon Mr Philip: We have one. We use it all the time. I tell people how you sent them back into the recession.
Mr David Johnson: We've got the minister riled there a little bit.
Interjections.
The Acting Speaker: Order.
Mr David Johnson: The member for Willowdale's asking about the deficits and the jobs.
Interjection.
Mr David Johnson: The prosperity? The prosperity is that we have over 100,000 fewer people employed today than we did in 1990. That's the prosperity. With prosperity like that, we don't need hard times, do we?
Hon Mr Philip: We didn't need the Conservatives in Ottawa and that's what happened.
Mr David Johnson: I see. The Conservatives in Ottawa now. One of these days, we're going to start dealing with the problems here in Ontario.
Mr McLean: Reality.
Mr David Johnson: Why don't we deal with the realities, as the member for Simcoe East says, here in Ontario? Instead of dealing with what they're doing in Ottawa, let's look here in Ontario and see what we can do for ourselves.
Hon Mr Philip: Ottawa did.
Mr David Johnson: I would encourage the minister to look right here and see what can be done.
Bill 160 also introduces amendments to the Health Insurance Act, and the regulations I guess that will come out as a result of the amendments to this act will determine exactly what's going to happen here, but apparently coverage for foreign students and foreign workers will be eliminated. There'll be a three-month waiting list for new Ontario residents to have OHIP coverage.
This government seems to be so enamoured of the health care system -- we all are, but they go to particular pains to indicate how protective they are of the health care system -- and yet day in and day out they're chipping away at the health care coverage in Ontario. In this case, it's the health care for foreign students and workers, and I suppose they feel that there won't be a whole lot of sympathy for people in that category.
More recently, they have downgraded the health care for Canadian residents who will be visiting in other countries. The province now will only pay $100 a day for those who need emergency hospital treatment, for those people travelling outside of Canada. Shame.
Hon Mr Philip: What does Alberta pay? Thirty-five dollars. That's the Tory government.
Mr David Johnson: Why don't you pick some other government, some other country somewhere else? That picks even less. The point is, what are we doing here in Ontario? The minister was elected here to serve the people of Ontario, not the people of Alberta.
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The Canada Health Act: The minister may wonder, what does the Canada Health Act say? The Canada Health Act says, "Where the insured health services are not provided out of Canada, payment is made on the basis of the amount that would have been paid by the province for similar services rendered in the province."
What is the rate here in Ontario? It's deemed to be $400 a day for emergency hospital treatment. What are they paying outside now, as a result of a new initiative from this government? For seniors, Ontario residents who visit the United States, for example, what amount is paid? Only $100 a day, so they'll have to pay out of their own pocket. What about the senior population who have served Ontario, built Ontario for years, now visit Florida, for example, in the colder months? What if the snowbirds run into medical difficulties in Florida? They pay out of their own pocket, even though the Canada Health Act says they should get equal treatment. Ontario, hiding behind Alberta or someplace, says: "No, sorry, we only give you $100 a day. You pay the other $300 a day yourself. We don't care how long you've lived here in Ontario. We don't care that you've helped build our province. We don't care how many taxes you've paid this year and over the years. You pay the extra money yourself."
So we have the snowbirds now taking the province to court on this very issue, and rightly so. Isn't that a sad state of affairs, when the senior citizens of the province of Ontario, simply to get the health care they're entitled to, the health that they have paid for through the years --
Mr McLean: And earned.
Mr David Johnson: And earned, says the member for Simcoe East. They have to take this province to court to get that health protection they're entitled to.
Mr McLean: Which is a federal law.
Mr David Johnson: And it's a federal law. A federal law says they're entitled to that, but not here in Ontario. Here in Ontario, I guess we don't care about federal laws. We don't care about seniors. They have to pay the extra amount.
You know, $55 billion a year is spent, and think of the fraud in the welfare system and all the other fraud --
Mr McLean: Health cards.
Mr David Johnson: How many health cards are out now that are not accounted for?
Hon Mr Philip: I don't know. How many health cards are out?
Mr David Johnson: The minister doesn't know either how many health cards they're out. Minister, there must be over 500,000 health cards they're out by. When you think of the fraud in Ontario in the health system, do we focus on that or do we focus on making the snowbirds, the senior citizens, pay the extra $300 a day for? This is emergency hospital treatment we're talking about, treatment they absolutely have to have; they have no choice in the matter, they have to have that treatment. So that's what we focus on in a $55-billion budget.
My time is running down to the last few seconds. I will simply say that when you look at the financial situation of the province, look at the unfortunate economic climate for businesses in Ontario, it's gloomy. But we have the entrepreneurial spirit, we have the people, and if bills like this are properly addressed, and if we can not clutter the private sector --
Interjections.
Mr David Johnson: Mr Speaker, it's impossible to speak over this din.
I simply urge the government to take another look at Bill 160 and separate out the points that need to be further discussed before proceeding with the whole thing.
Mr Sutherland: We've just had an hour and a half of lack of real information, of attempted commentary. Let me just comment on the comments you made about seniors. Let me say that the seniors in the province of Ontario are better treated than seniors in any other province in this country. Let me tell you why: Seniors here don't have to pay a copayment on their drugs; seniors here were actively involved in the long-term care reform initiative where over 70,000 people participated, long-term care that is going to meet the needs of the seniors. It's going to meet the needs of the seniors.
The member also talks about financial situations. He talks about unfunded liabilities and pension plans. How did they come about? Who was the government at the time that allowed those unfunded liabilities to grow substantially? If we go back and look at the Tory record we will see that this is another example. I mentioned earlier about Ontario Hydro and Workers' Compensation Board, how they weren't managed. If we go back and look at the real history of how some of these unfunded liabilities in pension plans accumulated, the story will tell, history will tell, and facts will tell that a lot of it happened during the Tory government.
I think the clear thing here is that the member didn't talk about all the good things this government has done, as I mentioned earlier, about the job creation, about that being the number one priority, and how we are making Ontario a better place for people to invest. That's why there's been $4 billion of investment in the auto industry since 1990. That shows confidence in the province of Ontario. Ontario's economy is improving. People are going back to work. They're getting jobs. They're being able to support themselves. This budget is going to continue that, and I wish the member for Don Mills would recognize that fact.
Mr Stockwell: I think that considering the number of pieces of legislation that are a part of this bill, the member for Don Mills brought quite a bit of topical information to the legislation that we're dealing with today. It's rather discouraging to --
Interjection.
Mr Stockwell: Sorry? The member for Middlesex was chirping again. I didn't hear it.
The information that he did bring was insightful. The difficulty is that this is such a wide-ranging, broad piece of legislation that it's very difficult to think that you could handle it during this little bit of time that they're allotting for -- is it 17 separate pieces?
Mr David Johnson: Seventeen.
Mr Stockwell: Seventeen separate pieces of legislation. As broad and wide-ranging as the question was asked today about the moneys that are left in bank accounts, turned over to the public trustees -- all kinds of tax implications to this piece of legislation. It seems to me that when you're talking about a measure this broad that you would allow enough open and public debate during the Legislature to the weight it deserves. It seems discouraging to me that we would deal with it in one night from, say, 5 o'clock till midnight, dealing with that complicated piece of documentation.
I say across the floor to the member for Oxford, who tends to jump up and take the defence of the government at any call -- as far as he's concerned they've done no wrong and they've done all right -- I would say to the member for Oxford, if that is the case why do we have record unemployment levels, why are the welfare rates higher than they've ever been before, why are deficits so high, why is our debt going to approach $100 billion next year? That's what constituents ask me: Why, why, why?
The one thing you talked about: Ontario Hydro. You keep coming back with the deficit and the debt etc. I will remind you that your party had a promise: It was going to stop Darlington. You were going to stop it. You were going to stop that dead in its tracks from the day it was announced and you were going to go to government and discontinue it. Well, you know, it seems kind of funny that this government decides at this late date, when they get elected, that that promise was as hollow as the rest of them.
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Mr David Johnson: I thank the member for Oxford and the member for Etobicoke West for their comments. The member for Oxford asks: Who was in power when these deficits etc were raised? He presents a large target when he says that and I'm kind of surprised because the biggest debt, if you look at the debt of the province of Ontario, the debt of Ontario Hydro, the unfunded liability of workers' compensation and the unfunded liabilities of the teachers' pension fund and the public service pension fund, the biggest aspect of that is the debt of the province of Ontario, some $90 billion at the end of this fiscal year. Who was in government when we ran up that debt? When the NDP took office in 1990, the debt was about $45 billion. At the end of this fiscal year, according to the Treasurer of Ontario in the 1994 budget, the debt will be over $90 billion. Simple arithmetic says that there's some $45 billion of debt that this government --
Mr Sutherland: Who ran it up?
Mr David Johnson: The member for Oxford says, "Who ran it up?" It was the NDP that ran up that $45 billion. That's the greatest chunk of the outstanding debt. In terms of some of the others, sure, all governments have been a participant in running up this debt. But are we going to simply point fingers or are we going to look at how we can get out of this mess today? I think the member for Etobicoke West was referring to that.
Interjection: We made the tough decisions.
Mr David Johnson: You "made the tough decisions." You made the tough decisions and yet spending is still up this year over last year. The spending is higher. You love to say the program spending is lower, but look at the spending in the province of Ontario. It's higher this year than it was last year -- no decisions. Tinkering has been made. Tinkering. That's all you've done with the budget, and we need real action. That's what the Common Sense Revolution is recommending.
Hon Brian A. Charlton (Chair of the Management Board of Cabinet): It's a pleasure to rise this evening to speak to Bill 160 and the focus of my comments this evening will be on the pension issues because although it is the Minister of Finance's legislation that's here before us tonight this is a piece of that legislation for which I have primary responsibility.
It's interesting listening to the debate because we often have to remind ourselves not only of who did what but what the alternatives are. The Tories stand up in the Legislature here and promote themselves as an alternative and the reference by the member for Don Mills was just made in his last remarks to the $90-billion debt in the province of Ontario where the carrying charges on that debt are 15 cents on the dollar. But after good Tory management in Ottawa for a decade the carrying charges on the federal debt are at 35 cents on the dollar. If that's the road they want to lead us down -- and let's talk about some of these issues in the context of their consequences in the province of Ontario.
The member for Don Mills and the member for Scarborough-Agincourt have been on their feet a number of times in this House raising questions about the changes we're making in this legislation to the OPS pension plan. The members opposite will recall that all through the spring leading up to the budget there were serious rumours about cuts in transfer payments to municipalities, school boards, universities, colleges, hospitals, cuts in the welfare rates in this province, and a number of other very dire predictions. I have to give some good thanks to the leadership and the membership in OPSEU, because thanks to the good graces and the good sense of a bargaining agent who understood a difficult situation, unlike some members of the opposition, and a bargaining agent who was prepared to sit down at the table and discuss government reductions in both their contribution rates and special payments to the pension plan in order to save significant numbers of public sector jobs to the tune of about 15,000, and other vital services in this province -- these issues have to be discussed in the context of what they are, what they're intended to do and what the alternatives to those particular measures are.
The member for Don Mills in his comments raised the remaining stakeholders who are left in the OPS plan -- the OPPA was his specific reference -- and he alluded to the independent actuary whom the OPPA hired, Mr McCrossan, a former Tory MP. In the member for Don Mills' comments, he suggested that Mr McCrossan --
Mr Stockwell: The guy's an actuary, for Christ's sake.
Hon Mr Charlton: That's right. He's one of many. The member for Don Mills, in any event, suggested that we should, as a government, have hired an independent actuary, as the OPPA did, which was the silliest comment of this debate to date.
The number of actuaries who have looked at the work that has been done on the OPS pension plan is staggering. Mr McCrossan is only one of them. The member for Etobicoke West, in his two-minute set of comments, was suggesting that the time this evening was not a particularly appropriately long time to debate this question, and that's perhaps correct when the assumptions in the debate are so often based on incorrect information. The debate always takes much longer in that kind of a case.
The assumption, first of all, that's been made by both the member for Don Mills, and the member for Scarborough-Agincourt on a couple of occasions in questions here in the House, is that our actuarial assessment of the OPS pension plan and the split into the remaining OPS pension and the new OPSEU plan was done by government actuaries and by government actuaries alone. That is not a correct assumption.
Mr Gerry Phillips (Scarborough-Agincourt): Nobody said that.
Hon Mr Charlton: I said that.
Mr Stockwell: Who said that we didn't say it?
Hon Mr Charlton: He just suggested that we didn't have independent actuaries look at the split. Not you, the member for Don Mills.
The Acting Speaker (Mr Noble Villeneuve): Order, please. Please address the Chair and it would be a lot less confusing.
Hon Mr Charlton: Mr Speaker, the member for Don Mills suggested that we, as the OPPA had done, didn't have independent actuarial advice. First of all, the actuarial report upon which all of the assumptions about splitting the plan were made was not done by the government at all. It was done by the independent actuaries hired by the Ontario Pension Board, an independent agency that manages the OPS pension plan. Those actuaries work for a firm named Mercer's. They did the actuarial report upon which all of this work has been based. None of that work was done by the government.
Secondly, in the process of sitting down and negotiating the split of the plan with OPSEU, we had, yes, government actuaries working on that process; we also had independent actuaries who had been hired by the Ontario Public Service Employees Union to look after their perspective in all of this. But in addition to that, because we didn't want to make a mistake, the government went out and hired Towers Perrin, a gentleman named Shiraz Bharmal, who is also one of the most well respected pension actuaries in the province of Ontario, for an independent view of everything that was done and negotiated in that package.
The interesting point about the member for Don Mills's reference to Mr McCrossan and the OPPA position is that, yes, Mr McCrossan is a respected actuary and, interestingly, when Mr McCrossan some weeks ago sat down with our actuaries and went over all of the detail of the pension plan split, Mr McCrossan had to agree that the government had not jeopardized either plan in the split. He did state a preference, and I'll set that out clearly, for one over the other, but Mr McCrossan said clearly to our actuaries that the government had not jeopardized either plan in the split. Both plans are fiscally and actuarially sound, and that's the premise on which the government has worked from day one.
But I think even more importantly than that, there are some who have made reference to a sweetheart deal with OPSEU: that we negotiated joint trusteeship with OPSEU in a separate plan; that we granted a 1% premium reduction for three years to the members of OPSEU; that we extended factor 80 until March 31 in the year 2000.
Well, the present circumstance in the remaining plan, in the OPS plan, is a circumstance where the government, for the moment, is still totally responsible for that plan. We are the sole guarantor of the remaining plan. In the OPSEU plan, OPSEU has assumed 50% liability for all future shortfalls.
2000
In the OPS plan, which remains for the OPPA, for the government lawyers, for the engineers, for those in the new unrepresented unit, for those in management and for a few of our own staff who work for the caucuses and for MPPs, those employees are all still in a plan that is 100% guaranteed by the government at this point. So all future liabilities will be the responsibility of the government, not of the employees in question. They are fully protected.
But even taking it a step further than that, we have said to all of the stakeholder groups in those other employee groups that we are prepared to begin discussions with them, if they so choose, around the questions of governance around that remaining pension plan. If the OPPA and the lawyers and the engineers and the other groups involved want to sit down and start to work towards a jointly trusteed plan like we've agreed with OPSEU, we've said we're prepared to start working in that direction.
In addition to that, the 1% contribution reduction which we've negotiated with OPSEU will be extended to all of those other employees, and the extension of factor 80 early retirement until the year 2000 will also be extended to all of those other employees.
I guess to put it as clearly as I can, in this set of pension negotiations and in the split which this legislation reflects, nobody's pension benefits have been changed, nobody's pension benefits have been threatened, both of the plans are actuarially sound and these employees in the remaining plan have a clear choice. They can either sit back and say and do nothing and remain in a plan that continues to be guaranteed by the government, and all future unfunded liabilities guaranteed by the government -- the existing one already is -- or they can sit down and commence the negotiating process to start to move towards a new governance model, because we want to eventually see all employees in this province reaching a stage where they in fact have a say, not only in the benefits they may negotiate for pension purposes but in how their pension plan is operated and administered, how the investment decisions are made and all of those other things that become important to employees, that become part of this issue, that have to at some point be resolved for all of the employees in question.
I think there's a number of other important aspects to all of this that my colleagues across the way have neglected in this debate. The member for Don Mills has suggested in his comments -- and the member for Scarborough-Agincourt will mention it, no doubt, later on tonight -- the fact that by reducing its contribution rate to both the OPS pension plan and to the OPSEU plan and by reducing the government payment of special payments to those plans, we're reducing our commitment to the unfunded liability.
First of all, the 40-year payment schedule which was set out not by this government but by the previous Liberal government will be met by this government. It will not be extended. The unfunded liability will be paid off in a time frame that the members across the way felt was adequate, appropriate and fair.
But even more than that, if the members across the way will take the time to sit down and read the sponsorship agreement and the plan agreement that the government has reached with OPSEU, they will see in that agreement a commitment on the part of the government, jointly with OPSEU, to proceed in any and every way that we can to reduce the 40-year time line and to pay off the unfunded liability as soon as is humanly possible.
That was one of the major points that OPSEU raised with us during the negotiations, because, as is the case with the taxpayers of this province and the members of the Legislature, the employees who rely on the future viability of that pension plan want to see that unfunded liability paid off and paid off as soon as that can happen. I'm not going to go into all of the very complicated details of that agreement with OPSEU, but if the members across the way could find it in their hearts, rather than flying by the seat of their pants in this debate, to sit down and read that sponsorship agreement, they would find a very responsible and a very determined approach, both on the part of the employer and on the part of the employees, to deal with that question.
Another issue, which the members across the way have neglected in all of this debate when they talk about a sweetheart deal with OPSEU, is that in the splitting of the plan, the unfunded liability doesn't all reside with the remaining OPS plan. The assets are split and assets go the OPSEU plan. The unfunded liability is also split on the same ratio and that unfunded liability moves with the assets to the new plan. The commitment that was reached in the negotiation with OPSEU, if it does nothing else, will force this government, in a signed agreement, which the previous government never subjected itself to, to work to reduce the time that it takes to pay off that unfunded liability.
The previous government, as you are well aware, Mr Speaker, because you were here at the time, simply arbitrarily set out a 40-year payment schedule -- didn't negotiate that payment schedule with anybody and didn't agree, under any circumstances, to attempt to reduce the payment time lines. We have now done that, in an agreement with OPSEU, and, as I've said, we're prepared to sit down in discussions with the other bargaining agents, with the other employees who are a part of the remaining plan, and start the same process with them.
We're prepared to start to reach consensus and understanding with all of the employees who still remain in the OPS pension plan, both for the protection of their present pensions but, more importantly, for the protection of the long-term viability of their pension plan, because it happens to be one of the most important aspects of the whole process that we're talking about.
The member for Don Mills also raised in his comments that the OPPA had approached us after we completed our negotiations with OPSEU and, for the first time in their history, suggested that they would like to see a similar situation for themselves. They'd like to split off into another separate pension plan.
OPSEU has been attempting for 20 years to negotiate a split of the OPS pension plan. Since the Liberals passed their legislation in 1989, legislation which again, Mr Speaker, you're well aware, created the framework for splitting the plan -- this government didn't create that framework; the former Liberal government created the legislative framework for splitting the pension plan -- OPSEU has been working full out towards a split.
When we approached OPSEU some months ago to come to the bargaining table, they were ready, with all of those years of work at their fingertips. The splitting of a pension plan is very complex. It's a matter that no member should ever take lightly, and that's especially true of the member for Don Mills and those in the OPPA who have talked to him about another split. Other splits may occur in the future; that's a possibility. But there is no other bargaining agent who is a member of the OPS plan who has done the work and the thinking to understand the process.
2010
I'll just repeat, when the Liberals passed the legislation in 1989, OPSEU started working the next day towards the split that we finally agreed to with OPSEU. There are mountains of work ahead of those who would contemplate future splits before we can proceed, because it's such a delicate, complex and important matter, both to the future security of their own pensions and to the future security of those who are left after another split might occur. So none of those issues is beyond the pale. None of those issues should be tossed aside lightly; neither should they be run at like a bull chasing a matador. They are issues that have far too much importance to people's futures to deal with other than in a very professional and careful way.
Now, there are a number of other aspects of this pension split that I think have to be dealt with in this debate, because, again, the members across the way have raised questions and at least tried to create the impression that the government was going to be creating a big problem by what it's doing.
I started out my comments by saying, and I want to go back into that aspect of it, that what we're doing with these pension plans has to be weighed not only in and of itself, but it also has to be weighed over and against the alternatives. In and of itself, this pension deal with OPSEU and the pension plan and the offer we've made to the remaining employees is a good one. I repeat: The pension board actuaries, the government's actuaries, the independent actuaries at Towers Perrin that we hired, OPSEU's actuaries and even Mr McCrossan, who was hired by the OPPA as an actuary, all agree, without exception, that the split into the two plans, the OPSEU plan and the remaining OPS plan, is a sound actuarial split. Neither of the pension plans is in jeopardy. Neither of the pension plans will have difficulty maintaining both its liabilities and responsibilities to plan members and retired members. Neither of the plans will have the unfunded liability payment schedule extended. Put another way, in terms of their security, both plans have maintained an identical security circumstance for the employees involved to that which existed before the plan was negotiated.
The alternative, and I go back to it, that the government was confronted with in terms of whether to proceed with these kinds of discussions around the pension split or to deal with its fiscal circumstances in other ways, I think, and if the members across the way think about it -- the member for Don Mills, for example, during the course of his comments, and I don't remember what all of the comments were, made reference to his time on municipal council. I go back to suggesting to the members across the way that they need to think very carefully about the criticisms they make about the approach this government has taken in terms of its fiscal circumstances around the budget, because we didn't reduce transfers to municipalities and we didn't reduce transfers to school boards and colleges and universities and hospitals, and we didn't cut social services, social assistance rates to the most vulnerable people in this province, all of which was rumoured and all of which may have come true if we hadn't found alternative ways to deal with part of our fiscal pie.
You can't deal with each of the pieces of a package like this totally in isolation. Yes, each of them has to be measured unto themselves, but the debate that's coming from the opposition deals with each of these items in silos and never makes the connection between the silos. That's a big problem, because if that's how they would purport to run this province, then the $90-billion debt that the member for Don Mills was complaining about a few moments ago when he was speaking would look more like the federal debt at 35 cents on the dollar.
The member for Don Mills made reference to the fact that there were 100,000 fewer jobs in Ontario in 1994 than there were in 1990. You will recall, Mr Speaker, that 1990 was right at the end of the largest single boom period in Ontario since the Second World War; 1994 is at the end of the worst recession since the Great Depression, and we're on the way back up.
Yes, the jobs recovery has been slower than any one of us would have liked, but it has begun. Yes, the profit recovery and the reorganizational recovery in business is happening faster than the employment recovery, but for anyone to suggest that at the end of the worst recession since the Great Depression you should be at or above what you were at the end of the biggest boom period in the province's history is just a bit much. The biggest boom period in the province's history, like the boom in every other sector of our economy, is the peak, not the norm. We all know that in every sector of our economy, whether it's real estate, whether it's steel, whether it's auto, all of those industrial sectors, commercial sectors and the retail sector, they have boom-and-bust cycles. You don't equate the place those industries are at at the end of a recovery with where they were at the end of the boom.
If I went out and looked at the steel industry in the province and talked to the executives at Stelco, Dofasco or Algoma and asked them why their production and profits aren't above their 1989-90 levels, they'd laugh at me, as they would at you for suggesting the same thing. If I went and talked to those in the auto sector and asked them why their production levels and their profit levels haven't surpassed their 1990 levels, they'd fall on the floor laughing.
The kinds of policies and programs this government has pursued have started us down the road to recovery. It's not happening as fast as anyone would like it, but the alternatives that are being suggested by some on the other side, the alternatives of not having done some of the very important things that are part of this bill, like the pension package, would have cost the loss of 15,000 jobs in the broader public sector.
In the municipality that you represent, the one you were formerly the mayor of, you'd be laying off staff, and at the school boards in Hamilton and Thunder Bay they'd be laying off teachers. In the hospitals, which are already extremely hard- pressed by the changes that are going on in the health care sector, if we had had to reduce hospital transfer payments further, the jobs consequence would be horrendous.
It doesn't matter how you cut the pie; you can't get away with avoiding the alternative when you decide to kick the first choice.
2020
Mr David Johnson: I see the clock's just changing. Okay. We're certainly very thankful to the minister for explaining the benefits of this government in terms of increasing the debt from $45 billion to $90 billion. I'm sure all the taxpayers are thankful for that, and that's reflected in the polls that have been taken in the province of Ontario over the past few months.
But I have three specific questions for you, Mr Minister: Number one, you've charged that I didn't have my facts correct. I'm speaking the message of the Association of Management, Administrative and Professional Crown Employees of Ontario, AMAPCEO, and they have charged that you have reneged on your assurance that if the assets of the plan were split, and that's what I was talking about, that all the stakeholders would have to agree on who would perform the initial valuation, who would be the actuary. They say that you did not give them the ability to have a say in who that actuary would be, and that's what I said in my speech. I believe the OPP didn't have that right either. So they say you have reneged on your agreement with them.
Secondly, one section of the OPP's sectoral agreement from the social contract, section 7, stated explicitly that there would be no split of the pension plan assets. That was one year ago, and now you've split it today. How can you do that when you made an agreement just a year ago? That's the second point that I made.
Thirdly, because of the deal that you made with OPSEU, you had the opportunity to pay down -- and you've admitted this in your own speech -- the debt for the unfunded liability over a three-year period by almost $1 billion. Minister, why did you not take that opportunity? The people of the province would say that if you can pay down the debt of the province, which is increasing astronomically, you should have taken that opportunity. Why didn't you do that?
Hon Mr Charlton: The member opposite from Don Mills obviously listens to parts of people's speeches but not all of them, because I've answered his questions already during the course of my speech twice.
It's very simple, and the members opposite are going to have to come to terms with looking at initiatives and alternatives. The alternative for the government of Ontario of not proceeding to do what we did would have been to cut transfer payments to municipalities, school boards, hospitals and others. It would have cost 15,000 jobs in the province of Ontario. All of those people, as the member well knows, would end up on social assistance and adding costs to the debt of the province.
It doesn't make any sense. Think about it. It doesn't make any sense. If you're going to talk about reducing the debt of the province, then you have to take a full-debt perspective in terms of the debt the province has.
Yes, there is an unfunded liability in the pension plan. It is an unfunded liability that's guaranteed by the province that was set out in a 40-year payment schedule by the former Liberal government. Those payments over the 40 years will be met. The unfunded liability at the end of those 40 years will be zero. It is our hope, as a result of the negotiation with OPSEU, that the unfunded liability in the OPSEU portion of the plan, now that it's been split, will be zero long before the 40 years are up, but that unfunded liability, even if it takes the full 40 years, will be paid off.
So why would the member opposite want to suggest that we should have taken that money and put it towards an unfunded liability that is already on its way to being paid off and, at the same time, increase the $90-billion debt that the province of Ontario has that he's complaining about? It doesn't make any sense.
The Acting Speaker: Further debate? The honourable member for Scarborough-Agincourt, as lead speaker and as previously agreed to, has up to 90 minutes.
Mr Phillips: I might start by saying I appreciate the members of the House agreeing to let me speak somewhat out of turn.
Ms Sharon Murdock (Sudbury): We did it for you, Gerry.
Mr Phillips: That's very kind of you. I appreciate it.
Ms Murdock: We wanted to hear you.
Mr Phillips: You're here to hear me, and I appreciate that too. I might begin by saying that I hope people out there watching this appreciate that what we're dealing with here is an extremely important comprehensive bill. To use the jargon we use around here, this is an omnibus bill dealing with 13 -- actually, I'm sorry, it's 17 -- major separate pieces of business here in the Legislature, many of which I think should be separate bills so that we would have an opportunity for a very detailed debate, because we're dealing with the pensions of 100,000 people, billions of dollars of their money, billions of dollars of taxpayers' money at stake.
We're dealing with the whole issue of toll roads, the capital corporation. We're dealing with what many in the financial community view as an enormously important aspect of this bill called the Unclaimed Intangible Property Act. We're dealing with something called the labour-sponsored venture capital corporations. Each year the taxpayers of Ontario are spending $60 million or $70 million on this alone and we are dealing with it almost at the snap of a hand here in the Legislature.
I think it's fair to say that many of the parts of this bill should go to committee and we should have an opportunity for a good public debate on it, and I'm frightened that we're not going to. I'm frightened that the government is going to try and get this bill through in the next two weeks and that the public will not have an opportunity for the necessary input.
I'd just like to begin perhaps commenting slightly on points made earlier around the whole issue of the pensions. I think it's fair to say that this one, for me at least, is particularly concerning. If the public aren't aware of this, they should be aware of this. What we're dealing with here is that the government plans to defer any payments at all against a roughly $3-billion unfunded liability in the public sector pensions. So the government's saying, "We're going to take a three-year holiday from making any payments against that," and there's a $3-billion unfunded liability. In other words, the public owe $3 billion to the pensioners. The government of Ontario has 100% of that responsibility and the government has taken a three-year holiday from making any payments against it.
I would also say that the government of Ontario has taken a three-year holiday from making any payments against a roughly $8-billion unfunded liability in the teachers' pension fund. One of the ministers across the way said, "If we didn't do this, we would have had to cut spending elsewhere." Let's be very clear on this: The spending is going on in these unfunded liabilities every single day. These unfunded liabilities are growing. Because we're taking a holiday, they are growing at the rate of about $800 million a year. So the unfunded liabilities are continuing to grow at $800 million a year and we're making no payments against them.
It isn't as if we've kind of saved this money, that we've got a three-year saving because the actuary said that the unfunded liability was less than we thought it was before. The unfunded liabilities are growing at the rate of $800 million and we're making no payments against them. That's serious.
The minister, as I say, said, "If we didn't do this, we would have had to cut spending elsewhere." It's all an accounting trick. I will say this: The money markets, the people who watch the finances of this province, understand that. Frankly, no wonder the credit rating agencies have the microscope on Ontario. It's because they see through these things.
2030
Another part of the legislation we're dealing with here is that each year the province of Ontario, historically, contributes 8% of the salaries of the employees into the pension fund. Under this proposal, the plan is that the province will not contribute 8%; they will contribute about 3%. So instead of 8% of the salaries of the employees of the province, it will be 3%.
I have been told that the government has sound actuarial backup for this. I have been also told that they've had some conflicting advice on it, that the actuaries do not necessarily agree that this is a sound decision to make. But I would say this: We are talking about hundreds of millions of dollars here and these are dollars that we have the responsibility here in the Legislature for looking over on behalf of the taxpayers. So that's the second part of the pension issue that I think would benefit from going to a public hearing, where we would have an opportunity to hear what I think is conflicting evidence.
I understand OPSEU has negotiated this deal, and that's good. I have a lot of respect for the leadership of OPSEU, and I understand it's an agreement between the government and OPSEU, and that's fine.
But I think the public probably are aware that this plan splits the pension into two. There is the OPSEU plan which essentially involves current employees. None of the retirees will be in the OPSEU plan. So the OPSEU plan has been negotiated. There is a comprehensive memorandum of agreement, the sponsorship agreement, as it's called -- and I will say I've read the thing -- between OPSEU and the government, and that's fine. The OPSEU plan is set up.
The OPSEU plan is set up, involving all of the OPSEU members, 55,000 in the OPSEU plan, virtually everybody currently working. The other plan that's been set up will have 34,000 active members -- in other words, people who are working right now -- and 40,000 retirees. I think it's kind of an unusual plan, with more retirees than active members.
That begins to raise questions that I think require members of the Legislature to review them, for these reasons. One is the three-year holiday from any payments against the unfunded liability, and as I said earlier, that continues to grow. That's not just sitting there benignly at a standstill for three years. It's growing and we are paying interest on it, 7 1/2% to 8% interest. In some respects we're paying heavier interest than had we gone to the market to borrow the money. That is growing.
And there is, I think, a legitimate question to be asked on behalf of all of the 40,000 retirees: What is the justification for the reduction from 8% of salary to 3% of salary? What is the rationale for all of the retirees being in one plan, and how was that determined?
I'd been told earlier, "We can't delay this, because we need the money." I would say, that's simply not true. The government has the authority, when the bill's passed, to retroactively claw back the money. The government did this with the teachers' pension: actually went back and took cash out of the teachers' pension. I will say, it was most extraordinary, because the teachers' pension has an unfunded liability of roughly $8 billion.
It would be illegal for the pension commissioner to ever approve taking money out of a pension fund with an unfunded liability. It just can't be done, and you can understand why. Do you remember Conrad Black? Do you remember the famous Dominion Stores exercise where the board of directors of Dominion tried to take money out of a pension fund that had an actuarial surplus? There was the evidence that it had the surplus; it couldn't be done. But the government actually passed legislation that permitted it to take cash out of a pension that had an unfunded liability of $8 billion.
Mr George Mammoliti (Yorkview): The reasoning behind it, though, eh?
Mr Phillips: The member says, "The reasoning behind it." I understand the reasoning behind it. But my point is this: The Pension Benefits Act is an act passed by the Legislature to protect pensioners in the province, and there's a commissioner of pensions. This bill we're passing --
Mr Arnott: It is not passed yet.
Mr Phillips: It's not passed yet, and I hope we will have a chance for a good airing of this at a public hearing. But this bill, if passed, exempts the government from getting any authority from the pension commissioner and it bypasses the Pension Benefits Act. That may all sound like jargon, but it is most extraordinary. In fact, I don't think there would be any private sector company that would be permitted to bypass the Pension Benefits Act, exclude itself from the Pension Benefits Act. But this bill does that.
Listen to this: The plan "shall be deemed to comply with the Public Service Pension Act and the Pension Benefits Act and the regulations made under that act so long as it complies with this act." In other words, the legislation completely exempts the scrutiny of this act from the Pension Benefits Act and from the pension commissioner. That is in my opinion a most extraordinary move because it essentially says they can't look at it. "We will pass this and we will do what we proposed in our plan and they can't comment on it."
So who is speaking on behalf of these people? It's the Legislature, but we are going to have a very limited opportunity for debate here and we will not have an opportunity, I'm afraid, if we don't get agreement to move it to committee, for it to be aired at committee. I repeat that we're not dealing with some small matter here. We're dealing with the pensions of well over 100,000 people. We're dealing with, as I said earlier, an unfunded liability of probably by now $3 billion, of assets of $14 billion.
I understand the motive of this. The fundamental motive is to try to find a way to delay payments. The fundamental motive here is to find a way to delay making payments into these pension funds for some time. But I will just say to all of us that this is not a savings of spending; the spending's going on. It is a reporting of lack of payments. And we're going to go along with no payments for three years and then it will click in at about $800 million a year. So you go along making no payments for three years and then it clicks in at $800 million a year.
The members opposite will know as well as we all know that to find $800 million is extremely difficult: zero to $800 million in any one given year. We all appreciate that that is an enormous amount of money, to suddenly find a new $800 million. That's what we're buying with these two plans, the teachers' pension plan and this one: deferred payments. We essentially are deferring payments here. We shouldn't be fooling ourselves. As I say, we'll go for three years, zero, zero, zero, and then a brand-new $800-million expense. I worry about that. I worry that any government, to find an incremental $800 million, is going to be very stretched. I repeat, I think we all have seen the difficulty of finding $1 million, but $800 million in three years.
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If I'm wrong on these numbers, I would like to know because I've done the best research I can do on it, and I guarantee you there is an enormous new hit in three years.
I know why the teachers agreed to the plan. In my opinion, it was part of trying to work their way through the social contract, looking for ways that they could minimize the impact of the social contract. I understand all of that.
I understand there are some significant benefits for OPSEU in here, joint management of the plan. As I read the legislation, there's arbitration here, I believe. I would like to learn more about the arbitration process. Is the government bound by arbitration? If the arbitrator decides that the benefits should be increased, is the government then bound to fund that? Those are questions. It isn't clear in the legislation.
I'm saying I understand OPSEU and why it thinks this is good, and it was reached through collective bargaining. It is an enormous step forward with the joint management program, but what they and others have given up is what I think should've happened. What I think should've happened on the payments to the unfunded liability is that in both cases of the unfunded liability, the actuaries said, "Listen, it's about 15% lower than we thought it was." The government chose to essentially say: "Therefore, we will simply take that 15% holiday for three years. It's 15% lower than we thought it was." The unfunded liability is, as I say, roughly $10 billion when you add the two of them together. It was 15% lower than they thought it was. That's roughly $1.5 billion of payments. They simply said, "We'll take a three-year holiday."
What should've happened, in my opinion, is they should've said, "We will reduce our payments by 15%." That would've been the fiscally responsible thing to do. That would not get us in this situation where we go for three years with no payments and then, bang, roughly an $800-million-a-year brand-new payment. If I had my way, that's what I would've had done.
For the government, it's chosen, as I say, a different route. "We will take all of the savings and we essentially will spend it," spend it in the sense of not making payments into the fund. I don't think that's the right thing to do fiscally, and so that's one big aspect of this bill.
I hope we have a chance to have a good, long -- a good debate, not long, but a good debate at committee in ensuring that everyone's interest is represented here.
The challenge we're going to have is to range through this bill, and to raise the issues that I want to talk about in the relatively limited time that we have.
In question period today we also talked about the Unclaimed Intangible Property Act. This one I too hope we will have an opportunity to discuss in more detail at committee where there's an opportunity for the public to come and comment on it, because we're dealing with what by all accounts is an extremely significant matter here. Certainly as the communities become aware of it, I've had several quite urgent messages saying that this is something that we should all recognize is not a routine matter that can be dealt with in this debate which is a debate in principle, it's second reading and we can simply move on to it, but it's going to require a good deal of input and advice from the community, particularly from the financial community that only now, frankly, seems to be aware of the details of it, and is responding to all sides fairly vigorously. In my experience, they're organizations and associations whose advice we should listen to very carefully. Just in the last day or so the Investment Dealers Association of Canada has raised some very serious matters. It was dealt with in detail by the member for Don Mills, so I won't go into it. The Trust Companies Association of Canada, the Canadian Bankers Association, have all raised major issues around this part of the bill. So, as I say, I don't plan to get into the details on that tonight, but I would hope that we can get the bill to a committee, where they will have an opportunity to give their more detailed advice to us.
The third part of the bill that I wanted to talk about is called here the Financial Administration Act, Public Transportation and Highway Improvement Act. This is the beginnings of how we are going to fund these capital corporations, and what we're finding in the province is that we have found some very creative new ways of, in my opinion, hiding debt and deficits. Here too is an issue that the Legislature owes itself to look at in detail.
I just want to say that, again, I understand the government's motives on these things. What we're doing is we are moving an enormous amount of our spending and our debt, to use the accounting jargon, off the books. I'll just give you one example. Historically, in this province we have spent each year roughly $600 million on school, hospital and university capital in the form of grants. The government has found something very creative to do. Instead of giving it in the form of grants, they've gone to something called loan-based financing. What they say is: "Rather than us give the $600 million to the school boards and what not each year, what we're going to do is we're going to have the school boards go and borrow the $600 million on our behalf. It won't be on our books, and we will undertake to repay it over 20 years."
That was $600 million last year. This year in the budget it's $1.6 billion. I asked the question: How much debt will we have in five years? How much money are we going to owe off the books, brand-new debt off the books? The answer is $8 billion; just in this one area alone, $8 billion. It never shows up as part of the government's deficits; it's shown on someone else's books. But the government confirmed to me in writing that in five years there will be $8 billion owing to this "loan-based financing."
I realize many people out there may be saying, "What in the world is all this stuff about, and who really cares anyway?" But this $8 billion just in that one area alone off the government books is more than the debt of five of the provinces in this country. So we're talking enormous sums of money. Just the interest on that is probably $700 million a year.
The reason I raise that is that we have also established four new capital corporations, and one of them we're dealing with in the Budget Measures Act, this omnibus bill. The area we're dealing with here is on ways that fees and tolls and even, I guess, revenue from signs is going to be fed into the transportation corporation.
The reason I raise this is that you may remember the great project on Highway 407, which incidentally I think is not a bad idea. Our caucus is supportive of that. But we were supportive on the basis that the plan was that the private sector was going to raise that money. Do you remember that? In fact, the proposals went out that way. They said: "Do you want to bid on this? You raise the money." That's how the proponents went out looking to raise the money. That's one of the reasons why at least we were supportive of it. It's one of the reasons why I thought it was quite creative: that the private sector would raise the money. I liked that.
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Incidentally, if I might just as an aside say, I am very worried about the casino side of things as we head down the road of what looks like building more casinos. I wish that we had got in that casino act the amendment that the government would not be on the hook for the deficits of those casinos, because I can see many of them being built at $300 million or $400 million. The minister is looking puzzled, but in the final analysis the public could very well be on the hook for those.
Hon Mr Christopherson: Make more money than anybody ever planned.
Mr Phillips: I love that. The Windsor Casino will be a rip-roaring success, there's no doubt about that, and fortunately a lot of it's American money coming in, which is good stuff.
Interjection: What's your problem?
Mr Phillips: My problem is this: There is no doubt that we will build more casinos, there's no doubt that most jurisdictions in North America will build casinos and there's no doubt some of them won't work. I just don't want the taxpayers on the hook.
Hon Mr Christopherson: Says who?
Mr Phillips: The member says, "Says who?" That's my judgement, and that's why I don't want the taxpayers on the hook for it.
Similarly, on Highway 407, I like the idea of the private sector raising the capital. There's nothing like the discipline of having to raise the funds and figure out how you're going to service that debt to make sure that it is a viable business proposition.
But what happened was that as we got down towards the end, surprise, surprise, the government went out and raised the money. The answer we got on why they did it is: because they could borrow the money cheaper. That's a given. The government knew before it ever sent the proposal out that it could get money cheaper than the private sector.
So why was it positioned as, "We are going to raise money privately"? Why did the proposals call for that, and then when the smoke all cleared, the public raised the money? The answer I got was: because the public can raise money cheaper than the private sector. Of course they can, because they've got the guarantee; at least right now they can. Everybody knew that going in.
So my point is that we now are dealing here with ways that we are going to fund the transportation corporation, the fees that are going to begin to flow into the transportation corporation, presumably to service the debt in there. But also the challenge is that they get into the transportation corporation and no longer do we monitor them here. Many of us believe that the government is going to continue to look aggressively at raising money through fees, and there's nothing wrong with cost recovery, but you remove the discretion of the fee-setting from the Legislature, you get it off over into the transportation corporation and we lose the opportunity for scrutiny on that. So there is another huge part of this bill that does require a better debate than we're going to be able to have time for here in the Legislature.
I think the fourth area that requires a broader debate than we're going to have here is actually the Health Insurance Act. Within that, I will just raise several concerns. I will say, on a broad front on the health area, that I looked with interest on the document the government put out last week, I think it was on health. I think we are making, however, in that document, an absolutely fundamental mistake. We talk throughout that document about how we are controlling health spending in the province. We make a huge mistake in there because the province of Ontario funds roughly 76% -- no, I'm sorry, roughly 66% of health spending, I think it is -- yes -- and roughly 34% comes from other sources. That's what it is. In that document, we are not looking at health spending in the province, we are looking simply at the provincial spending on health. It's a big mistake because of this: 34% of health spending isn't from the provincial coffers. If we really want to know what's going on in health, we've got to look at the total package.
I don't mind the government talking about controlling spending on that $17 billion. Good. But, in my opinion, what we really have to look at is health spending, not how much money the province spends on health. As I say, there's roughly $25 billion a year, as I understand it, spent on health, and we are only really looking at $17 billion of it. We're not looking at the total $25 billion.
I would just say that, as I watch health, I think right now health policy is being driven as much by, "What things can we get other people to pay for?" as it is by, "What is the best health policy?"
When we had the all-party committee hearings on the pre-budget stuff and the OHA was in to see us, I was quite surprised to find that 30% of their money comes from sources other than the province. But if you look at the government documents, they focus very much on the 70% from the province. They don't really look at, how much money are hospitals spending? Big mistake, in my opinion.
The discussions with the doctors: I can understand many of the needs for things that are going on there, but I think we're going to have to keep our eyes on, what is the best health policy, and clearly, how do we fund it? But right now I'm afraid health policy is being driven by, "Can we find somebody else to pay for this?" As I say, in the hospital area now it's 30% of the funding that comes from elsewhere, and for those who deal with hospitals -- and we probably all deal with them -- you know how hard they work on finding revenue sources. Most of them now have foundations and all those sorts of things.
You look at what's going on with the doctors and the OMA agreement and you can see the various things: I gather, trying to get workers' compensation to pick up a larger share; the third-party billings; I think very much the issue of out-of-province spending is driven by that; all those things. And they may be the right policy decisions, but I think they're being driven as much by, "How do we get other people to pay for health care?"
My point is this: We make a mistake in thinking that we are looking at health spending, and I found the document actually very disappointing in that respect. I hope that I have a chance some day to perhaps deal directly with the Minister of Health on it, because we should be looking at the $25 billion we're spending on health, the provincial share plus what's being spent privately.
The reason I raise all of that is because if you share at least my concern that this is driving health policy -- "Where can we find somebody else to pay for this stuff?" -- and I don't know. I think we have to watch what's going on. I think if I were running a hospital today and I was very much in need of revenue, I'd be looking as creatively as I possibly could for sources. The risk there is, we never want a hospital or a doctor ever in a conflict with what's the right thing for the public and what's the right thing for ensuring we've got the revenue to do things.
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That leads me to the health insurance part of this bill. I think there's a debate here. One big debate is, we now will be charging psychiatric patients an accommodation copayment.
Mr Harnick: Is that a user fee?
Mr Phillips: The member says, "Is that a user fee?" What is that? I can see if you are in a nursing home, somewhere of your own volition, but I have a feeling that many people are in psychiatric hospitals not necessarily of their own volition. Is this medical treatment, and if it is medical treatment, could you argue this is a user fee for medical treatment? Again I go back to what I think is driving health policy, and that is, how do we find somebody else to pay for this?
There's another section in here that is of interest to me; that is, the bill allows for an awful lot of cross-referencing of information within the government for the new health cards. I'm not a lawyer, as they say, the lawyers sitting here, but one of the emerging concerns has to be for all of us protection of privacy. In an era of rapid use of technology, how do we ensure personal privacy? This bill as I read it has some fairly broad-ranging opportunities for what's called interministerial sharing of information. I probably will not be able to find it in the bill quickly enough, Mr Speaker, but just trust me; it is in here.
Where will that lead? I think that's not a simple matter of saying, "The Ministry of Health can have access to other ministries' information," particularly when we are in an era where medical records have to be extremely sensitive. So in the interests of efficiency, there is a significant risk in this bill, that we step over the bounds between efficiency and intrusion. So as you can see, just in that aspect of the Health Insurance Act, part VIII of this bill, there are three or four major areas.
I've already indicated my concern with how broad-ranging the opportunity is for sharing of information, and whether there's sufficient protection for individuals in there, and there is, I think, a fundamental question: Where do we stop? How do we define services for psychiatric patients? There's no doubt it permits an accommodation copayment, and I think there's a legitimate question: Is that a user fee? Where do we begin to draw the lines? How do we draw the lines?
The next part of the Budget Measures Act that I wanted to talk about was the Labour Sponsored Venture Capital Corporations Act. We should all appreciate that we are spending an enormous amount of the taxpayers' dollars in this area, these labour-sponsored venture capital corporations.
I don't want to give a pitch for them, but you can invest in these organizations $5,000 a year, and they are RRSP-eligible. It works like this: You can get a 20% provincial tax credit which means you would save yourself 20% of $5,000 or $1,000 of provincial tax payment. That's straight savings. You get a 20% federal tax credit. You save yourself another $1,000 and it's RRSP-eligible, so for anyone reasonably higher up the income scale -- $50,000, I think -- you save yourself another $2,500. So you can put $5,000 in and it costs you, out of pocket, $500.
They are well-run organizations. The Legislature approved setting these things up two years ago. But I'm just saying, firstly, there's a lot of taxpayers' money in here. For every $5,000 that goes in there, there's a $2,000 tax credit and a $2,500 RRSP tax deferral, really.
They have as an objective something that I support very much, and that is the investment in smaller businesses, in venture businesses, in helping get things rolling, and these proposals in here, as I understand them, broaden the scope for the labour-sponsored venture capital corporations, and I understand, by the way, right now there are five of them in Ontario, the largest one being Working Ventures, which I must say an old friend of mine runs, and a very competent individual too, I will say. But there's going to be a proliferation of these.
As I recall, the Ontario Medical Association agreement permits the OMA to set up a labour-sponsored venture capital corporation, and I gather that there are now five of them in the province. I think we're going to see quite a few more, because it's pretty attractive to say: "Listen, invest $5,000 and you only have to put in $500. We give you a $4,500 tax credit."
What this does is it expands the scope of investment for these organizations, and we all agreed to the scope of investment earlier on, two years ago. On the one hand, I hope it will see more investment, and more investment in Ontario firms, more job creation, but on the other hand, we are heading down the road to a fairly significant tax expenditure.
There's one thing I appreciated the Fair Tax Commission really highlighting: the amount of money that the taxpayers pay on tax expenditures. We often think of expenditures just being money we put out, but I think it's fair to say that when we give a 20% tax break to an individual, that's an expenditure. That's revenue that would've come in, doesn't come in and it's every bit as much an expenditure as if we had spent the money somewhere else.
I think we have to assess these things very carefully because they don't show up that clearly. They only show up as reduced revenue, and we've all seen what's happened to our revenue in the province, much of it as a result of the recession, much of it low inflation. We might argue that the tax increase has been counterproductive, but another thing that is contributing to revenue slowdowns is when we give tax expenditure breaks.
The other part of this bill makes it easier for employees to purchase their companies. I think that's great. I don't think there's much doubt that when you have an investment in your company, you very much get a stronger attachment to the organization; you very much feel you are sharing in the risk and you're sharing in the rewards. This has some fairly significant improvements for the employee ownership part of it. For example, somebody can put $150,000 in it and get 10 years of $15,000-a-year tax credits. And it removes the Ontario Securities Commission approval of financial disclosure documents for employee buyouts and it allows the minister to authorize control of these eligible businesses.
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I believe the cost of this program in total is $250 million, although I'm not positive of that. What I am positive of is that we are starting to get into a significant amount of expenditures here. I repeat: As we expand the opportunities for the labour-sponsored venture capital corporations to invest in businesses -- we're going to make it quite a bit easier for them to invest too, I might say -- and as we make it easier for employees to purchase their company, there is for the taxpayers a corresponding increase in the cost. I personally think we're going to see, as I say, quite an explosion in this area, for understandable reasons. But before we proceed with this, and at the risk of in two weeks the bill being forced through, you can see that even this section of the bill is significant and would benefit from some public discussions and public hearings on it.
I've talked about the pension thing, which is very large and very significant, the Unclaimed Intangible Property Act. There's a small part of this bill which we haven't had much discussion on, and this is the Public Lands Act, which I understand allows for the government to increase the fees to hydro-electric generating organizations in the province. I gather there are a large number of companies across the province which are generating hydro-electricity which have an existing agreement with the government on how much money they pay for renting the rights to the water power, and this allows for the government to step in and substantially increase the fees in that area. Again, I understand where the government's coming from. They're looking for every possible revenue source. But I have a feeling that if we approve this, as I say, at the nod and it just goes through without an opportunity for the organizations that are going to be impacted by the possibility of a substantial increase in their fees in those areas, we're going to hear from those people, particularly from the ratepayers, whose fees will go up dramatically. But again, on a bill introduced well through the month of May, we are only now beginning today, just a matter of three hours ago, to begin debate -- a bill that I hope the public see is very wide-ranging in scope and has some significant impact.
I know that my colleague who has the responsibility for the education area will want to talk later in the debate around the education portion of this, where we are again looking at some fairly significant changes in the sharing of assessment for school purposes.
As I said, what we're dealing with here is a bill that I really think should have been brought forward as several bills rather than trying to deal with it in an omnibus way.
I wanted to go back just to the pension one for a moment, because it's the one that, for me at least, is the most concerning. I know OPSEU is happy with it, and that's good. The people whom we have to ensure are looked after and who have an opportunity to be confident that as this proceeds it has had public scrutiny are those 40,000 people who are retired now. The minister says the opposition is unnecessarily raising concerns. The concerns are the ones that we've talked about: the three-year holiday from any payments against the unfunded liability, which is right now at roughly $3 billion. It grows every year, just that one, by $250 million. None of it stops, but we're not going to make any payments against it. When you combine that with the teachers' pension, we're going to go along for three years with no payments and then suddenly, an $800-million payment. I just don't think that is sound fiscal financial planning. It may make the books look good for a moment, but it's not sound fiscal and financial planning. Other concerns in the plan: Are the assets being split fairly -- I understand the government's satisfied with that, but I think the public has an interest in that -- and are we being sound and solid in saying we can cut the payments from 8% of salary to 3% of salary for roughly three years? If I'm not mistaken, there's $1 billion just in this pension area alone -- $950 million, at least -- over three years, of reduced payments, below what were planned to be made into the plan.
The members may say: "What's to worry about? If it isn't solid and sound actuarially, if we don't have enough money, the government's on the hook to make sure it does, so it'll just have to throw it in later on." I don't think that's sound financial planning, when we could be making sure we are making the right payments as we go along.
The reason I'm so concerned about that is the need for us all to come to grips with the true state of our finances. I know I've talked many times here in the Legislature about what I think the real finances are and what are reported, and sometimes I feel like I'm, as they say, a one-trick pony. But when we're dealing with several billion dollars of a higher deficit than is reported, we only fool ourselves. That's why, on the pension one, I keep raising it.
This year's budget said the deficit is going to be $8.5 billion. I think the real deficit is $2.5 billion higher than that. The public may say, "Who really cares?" Well, $2.5 billion is a lot of money and it is of major concern to the financial markets. That's what they're looking at: Is Ontario making progress against its deficit or is it simply reporting progress and not really making progress?
I just want to go over the things that I think are very questionable in the way the finances are being reported in the province. The reason I do that is because two of my concerns are in this bill here. I know the Premier loves to say, "We've taken the deficit from $12.4 billion to $9.4 billion to $8.5 billion. We've reduced the deficit by 30%," or something like that.
The problem with that is the $8.5 billion is a number that the Provincial Auditor would simply say isn't an accurate reflection of the finances of the province. He's raised concerns in several areas and I want to raise them tonight because, in my opinion, the Provincial Auditor, when he signs the books, the financial statements for the year that just ended in March -- he'll sign them probably in the summer of 1994 -- I believe he will give a strongly qualified opinion on the books.
For the first time in the history of the province, on last year's budget the province got a qualified opinion from the auditor. It's the first time in the history of the province where the Provincial Auditor has refused to give an unqualified opinion on the books of the province.
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I think he's already signalled his concern about several of the areas, two of which we're dealing with here tonight, and I believe he will strongly qualify the books this year, and it will be in these areas: I talked a little bit earlier about the whole area of how the province is dealing with capital, the loan-based capital, and you can see in the budget that we this year have moved to $1.6 billion of loan-based financing.
I explained earlier how that works. The province says: "Spend the money, but you go borrow it. We guarantee to pay it." That's $1.6 billion of loan-based financing off the books. The auditor says that this type of thing we shouldn't do. The auditor has said we should be reporting it as an expenditure, but we're not. As I said, in five years, there'll be $8 billion of debt just in this area alone.
The second big area and the auditor has said that it is wrong to not show these unfunded liabilities as part of our debt and the growth of them as part of our growth in debt. This is what we're dealing with tonight.
When we take a three-year holiday from any payments against a $10-billion unfunded liability that's growing at $800 million a year and we don't show that, we're kidding ourselves. I don't accept for a minute what the minister said that we are saving this money, and it allows us therefore to be able to retain services elsewhere. We're not saving the money. It is growing as debt in the unfunded liability. That deficit debt has not stopped growing, and the Provincial Auditor said that is wrong.
The third very questionable area I think we all know is in the continued questionable sale of assets. The reason I raise this is that we are dealing with one of the new capital corporations in this bill, but the public should be aware that the government is systematically "selling" government buildings and then leasing them back. What we're doing in the province is we are showing $250 million a year of revenue coming in to the province that isn't revenue at all. All we've done is we've remortgaged the government buildings, and we've given ourselves that mortgage, the $250 million a year, but we should not be claiming that as revenue, and we've taken on a whole new expense called lease payments to these buildings.
Also, as I think you may all recall, last year we took all the GO trains, $400 million worth of GO trains, and we sold them to a Bermuda company. Remember that? We got a Bermuda company to buy the GO trains and then we leased them back -- a very creative deal, I might say. It was something that probably Bob Rae would've criticized the corporate welfare bums for ripping the system off by using tax loopholes to avoid paying taxes, but the government has jumped both feet into this one. It said: "All right, if we can get somebody to buy these trains and they can own them in an offshore company, they can depreciate the trains. They'll save some taxes, and it's a good deal for them and a good deal for us."
But all we've done, the trains never left the country. They're still down on the waterfront. They're still running every day. All we did is we went out and we put a loan against them, a $425-million loan, against all the GO trains, and now we're paying every year. I think we're paying $80 million a year against that loan.
What we're doing this year, folks, is the trains have all been sold offshore, and now I gather we're selling all of our ferries, our planes, and I gather our heavy equipment is what I understand. I'm not sure where. It'll be sold to some offshore company. Who knows where?
Hon Mr Philip: They didn't like my suit, though.
Mr Phillips: Were you in Bermuda?
Hon Mr Philip: Yes. I never did get an offer on the suit.
Mr Phillips: My point is this: We are using every conceivable trick in the book to artificially reduce the reported deficit. The auditor, by the way, is on to this. The auditor said: "Listen, you've got to change your ways. I'm not going to put up with this. You've got to report the books in a different way."
I actually was very disappointed. I thought there was agreement to present this year's budget, the 1994-95 budget, in a way that the Provincial Auditor would find acceptable, where we would stop playing the games, where we would report the deficit in the way that he wanted. I thought I had the assurance, but I didn't listen carefully enough. I was told, "Yes, the government plans to report its finances in accordance with the way the auditor wants them." I said: "Okay, great. The budget will be prepared that way. The government will report its finances in the way the auditor wants them reported. The budget's going to be reported that way."
How it turned out was that what's called the public accounts will be presented the way the auditor wants them. Now, this may all sound like jargon out there, but what it means is that the budget was done in a way that the Provincial Auditor would find unacceptable, because the Provincial Auditor has indicated there are at least four areas, the way the budget is reported, that he finds are unacceptable. The public accounts will be prepared the way he wants them, but the 1994-95 public accounts aren't done and released until September 30, 1995. So we're not going to get the finances of the province reported the way they should be.
Now we see a deficit coming out at $8.5 billion and every single person in the financial community doesn't believe it. Every single person in the financial community says, "No, no, the real deficit is $2 billion to $2.5 billion higher than you're saying." And they go through the exercise. The problem when that happens is, our credibility takes a severe drop, and believe me, we're going to want international credibility as we continue to go to the market for funds. We have hurt our credibility in the international marketplace by continuing to play games with the way we report the finances.
The reason I go through all of this is that the bill that's before us, part of the reason it's before us is in my opinion to allow the government to play games with the way the numbers are reported in the pension area and in the capital corporation area. As you talk to people who are involved in the whole area of raising money for governments, let's make no mistake about it, there is concern in the international money markets about Canada, about Ontario. The province is I think required to go to the market this year for roughly $1 billion a month. Fortunately, I gather we've built up a fair bit of cash so we've got some flexibility in there, but the international money markets are apprehensive at the best of times, and when they can't trust the way the finances are reported, they get even more nervous. As I say, in this bill we're implementing two of the areas of concern of the money markets.
On the details of the bill, I hope I have indicated how I think the pension should have been handled. I believe it's wrong to take that holiday. I think we should be making reduced payments into it and not in my opinion misrepresenting the finances of the province.
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The Unclaimed Intangible Property Act is major, and only now are we hearing about some of the very major concerns about the people who will be impacted by this. There is zero doubt that this needs a thorough airing publicly.
The Provincial Offences Act I haven't talked about tonight, but that's where there will be a surcharge placed on the fines in the province. Our critic for that area will have an opportunity to talk in more detail later on.
The Ontario Home Ownership Savings Plan Act I'm frankly pleased to see. I think all parties were pleased that the plan is continuing and I'm not aware of any major concerns in that.
There is a Retail Sales Tax Act that excludes delivery charges on certain items, and as far as I can see, that's a good thing.
The employer health tax holiday for one year on payroll increases is also an area that has some merit. I think it's the right way to go. As I understand it, your entire payroll growth is excluded for one year, and that makes sense.
But the areas where there is no doubt that there are significant concerns -- the financial, the Public Transportation and Highway Improvement Act, the Health Insurance Act, with some of those very wide-ranging intrusions into the privacy of individuals in the province -- that clearly need an opportunity for the public to have comment and input into them, and I think there's a debate that needs to take place.
Oh, the Minister of Health's here now and I appreciate that. I was saying earlier, Minister, that I appreciated the document the government put out last week on health. I believe there's a fundamental flaw in it, in that throughout the document you talk about health spending in the province as if health spending in the province was solely the $17 billion that is funded by the province.
In my opinion, there is another $8 billion of spending on health that has to be put in and looked at if we want to understand what is being spent on health care in the province. We make a huge mistake if we simply look at the $17 billion and think that's what's being spent on health. I understand why you did that, but I think it's wrong. If we want to know what's happening in our hospitals, you cannot simply look at the roughly $7 billion the province spends. The hospitals are spending $10 billion on health -- you're providing $7 billion and they're raising $3 billion -- but your whole document, as you know, talks simply about the $7 billion and how that's being spent.
I don't know what share of the doctors' fees is raised outside of the amount of money provided by the province, but I presume it's significant. I don't know what that number is, but according to the discussions I've had with officials, 34% of health spending in the province right now comes from sources other than the province. So if I could provide one piece of advice on the document, it would be that I think we've got to start looking at that, because as we all know, we use a percentage of gross domestic product to measure how well Ontario is doing versus other jurisdictions, but that percentage of gross domestic product is more like $25 billion, not $17 billion.
The reason I think that's important is because, in my opinion, understandably, any Minister of Health would be looking to find sources of revenue other than the province to fund health. The problem we run into is if that drives health policy, if the understandable pressure to keep the provincial share of spending down starts to drive legitimate health policy -- and I don't know whether it is or it isn't. I said earlier that if I were a hospital administrator, I might often be in conflict. I might be in conflict because maybe -- I'm not saying this happens -- it's better for me to have private rooms and semi-private rooms than ward rooms because maybe it's better for my revenue. Certainly, I must say, as we go to visit friends in hospitals, the amount of money we now have to pay for parking fees is enormous.
The reason I raise all of that is that there is at least, in the Health Insurance Act part of this, a risk that we are letting that drive health policy. As I say, the one now -- I think there's a legitimate debate. Is it legitimate to charge our psychiatric patients a copayment, or are they there because they are undergoing medical treatment? Certainly we would have difficulty if we were charging a copayment in a hospital for individuals. If a psychiatric patient is in a facility in one of our acute care hospitals, is it legitimate to start charging them this copayment? I suspect not, but we're heading down that road.
I talked also to the House about some fairly wide-ranging intrusions into access of information under this Health Insurance Act. Firstly, I predict that I think this is an area that we should legitimately have a discussion around, and secondly, I'm convinced that it's only a matter of time before the Legislature is really going to have to come to grips with the whole issue of how broadly we are prepared to share access to information.
If you would want to solve the underground economy, for example, you can do it through access to an awful lot of information. But how far do we want to go? This particular bill, as I read it, gives the government an opportunity to range through virtually all the information within the government, and in some areas, extremely sensitive areas in the health area, I just think we have to be really careful on that.
So this is a bill that is wide-ranging in scope, one that I'm convinced would benefit from an opportunity for the public to participate in several aspects of it. I'm hopeful that we will have an opportunity to do that, and when we do get to committee, I look forward to an opportunity to talk in more detail about the issues that I've raised here in the Legislature and about the need to hopefully address and amend the bill so that we can accommodate our concerns.
Mrs Marland: This Bill 160, as the member for Scarborough-Agincourt has said, is just a typical NDP government bill from the standpoint that when they sat on this side of the House, we heard all the Robin Hood stories and now that they're over there, of course they're enacting them, so they think. The point is that if you really want to look at what is, I was going to say, a Hans Christian Andersen fairy tale, you can look at the whole record of this government. Any government that sells something that the taxpayers of this province already own and then leases it back at a tremendous cost has to be totally out to lunch.
The fact that they did that with the GO Transit rolling stock is one thing. The fact that they do all this offloading of debt through the establishment of new crown corporations so that debt no longer is under the umbrella of the government and therefore not on the government books -- it's now in a crown corporation, so that debt belongs to that crown corporation; it no longer is the responsibility of the government, therefore it's not "their debt" -- is totally misleading the public of this province. The way the GO Transit stock was sold in itself is kind of ironic when you think about them whipping off to a place like Bermuda in order to sell something in a fire sale that the people of Ontario owned.
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The Deputy Speaker (Mr Gilles E. Morin): Thank you. Your time has expired.
Mr Sutherland: I appreciate the member for Scarborough-Agincourt and his contributions to the debate. He always tries to present his views from a rational standpoint and does probably a better job than some of the other members who present their points.
I think, though, it is important, since the member for Scarborough-Agincourt spent so much time talking about the pension issue, to reiterate a few points that the Chair of Management Board made when he participated in the debate and dealt quite extensively with the rationale for separating the plans, for the proposals and to the actuarial soundness of the proposals, but particularly with the issue the member for Scarborough-Agincourt seemed to raise, the concern about: "I wouldn't have done it this way. I would have used this to pay down unfunded liabilities," and didn't really discuss, though, the alternatives, and the alternatives of not doing this type of proposal on this year's budget and what that means in terms of the impact on our transfer partner agencies. Of course, the Chair of Management Board did reiterate that we're talking about 15,000 jobs; 15,000 jobs. That's very significant and would have, I think, a detrimental impact on the economic recovery.
I think it's important, just to round out the points the member for Scarborough-Agincourt made, that more discussion on his part needs to be made about the alternatives of not doing the type of proposal we did with the pensions and what impact that would have on jobs, because we know the member for Scarborough-Agincourt talks quite a bit in this House about his concern about jobs in the province and the fact that the unfunded liability is still going to be taken care of under this agreement.
Mr Charles Beer (York-Mackenzie): I want to rise and congratulate my colleague from Scarborough-Agincourt for his participation and for a very sober reflection of what is contained in this bill, not the least of which is his comment that we really should not be dealing with an omnibus bill of this kind, but there are some very critical elements to it which should have been taken out and brought before the House as separate bills. I hope to have an opportunity to speak about that later.
I did want to share with members the most recent publication of the Ontario Urban Development Institute, which makes reference to the member for Scarborough-Agincourt, who is the Liberal Finance critic. I want to quote from that because I think it reflects the kind of information that he has provided today and does on a consistent basis.
In this document it notes that: "Gerry Phillips, the Liberal Finance critic, usually provides the best all-round analysis of NDP budgets and spending of any of my sources. In a factual no-nonsense style, he dissects the words and numbers and, as you may expect, to the detriment of the government. Good, well-thought-out stuff, information and opinion. His latest is no exception." The member was referring to that latest issue, which looked at the budget.
What is also interesting is that the writer notes that in his estimation the platform for the next election, in terms of jobs and growth and fiscal policy, "will be a reflection," and I'm quoting, "of the careful optimists with a practical bent like Phillips."
I think, again, that his comments this evening, as he has wound his way through all of the 17 parts of the Budget Measures Act, demonstrate that competence, and I would share with the writer of the Ontario Urban Development Institute that those are exactly the kinds of comments and thoughts that we need at this time.
Mr David Johnson: I will stand and offer my congratulations to the member for Scarborough-Agincourt as well. I may not be quite as glowing in my response to him, but certainly there's no question he looks at things very factually and very fairly.
The member for Scarborough-Agincourt and I yesterday attended a function at the Hellenic Home for the Aged. There was an extension for a nursing home section to the Hellenic Home for the Aged. There was also a downpour that we got caught in. I think we both dried out, but that was quite an experience.
The member for Scarborough-Agincourt has raised concerns with regard to the pension plan and has indicated that this is one of his major concerns with regard to Bill 160. I would say that he is bang on in that assessment. The member for Oxford indicated that the Chair of Management Board had commented on the pension plan, but in my questions to the Chair of Management Board he failed to address two of the questions.
One of the questions pertained to the fact that an undertaking was given to all the members of that pension plan that should the pension plan be divided, they would all have the opportunity to select the actuary who would do the independent analyses of the plan. According to the non-union members, the government reneged on that promise, and I believe this is a concern of the member for Scarborough-Agincourt.
The second point is that in terms of the sectoral agreement last year with the Ontario Provincial Police, again, not only an undertaking but written right into the agreement was the fact that there would be no dividing of the pension plan. Again, there was a reneging.
The Chairman of Management Board replied to neither of those questions. These are concerns not only of myself but of the member for Scarborough-Agincourt, and he's bang on in those concerns.
The Deputy Speaker: The member for Scarborough-Agincourt, you have two minutes to reply.
Mr Phillips: I appreciate the comments around the House. I might also take this opportunity to maybe correct the record. I think I said earlier that the payment could be up to $80 million against the GO train thing. The $80 million was a historical number and I think the number is probably substantially lower than that. It doesn't change the fundamental thrust, which is that this simply isn't revenue that we're getting from the sale of GO trains. I think most of the public say, "Boy, government should get rid of all the excess assets it has and sell them off to reduce the deficit," and we agree. But the GO train we never sold off; we simply put another $400-million mortgage on it and we're leasing it back.
The member for Oxford misses the point that's important. He says, "Listen, by taking this holiday from making any payments, we've saved all this money." Believe me, everybody, and understand this: There is a $10-billion unfunded liability in the teachers' pension and the public service pension. Ten billion dollars. You agree with that; the actuaries agree with that. The government is paying roughly 8% interest on that. So what we're doing is each year running up $800 million in the unfunded liability. Believe me, this is real debt and it goes up every year $800 million. The member for Oxford says, "If we hadn't done that, we couldn't have afforded other things." We're still spending the money. The money's being spent every single day, roughly $2 million a day. It's just that we're not reporting it. The auditor says that's wrong.
Mr Harnick: I intend to take part in this debate and confine my remarks to the Unclaimed Intangible Property Act, an act that I think is somewhat of a strange act to be resurfacing in this place, given the checkered history of the first time around. I think in very many respects it's more the mentality of monkey see, monkey do. The Liberals did it, so the NDP are going to try and do it too, but the NDP are desperate for cash. That's the only reason the Unclaimed Intangible Property Act is rearing its ugly head again.
This bill was first introduced and it was in fact enacted by three readings of this Legislature by the government of David Peterson in 1989. What this act essentially does is provide that the crown has the right to receive and use for its own purposes unclaimed intangible property in Ontario. Intangible property includes deposits of money, insurance proceeds, stocks, bonds, uncashed cheques and money orders, credit balances on charge accounts and unpaid wages. Land, cars, boats and houses would be examples of tangible property. We are dealing here with intangible property that has been unclaimed. So if it is unclaimed for a specified period, where there's no communication between the owner and the holder, it's deemed to be unclaimed intangible property. The requirement of how long it has to remain unclaimed varies with the different types of property, and all of those different exceptions are set out in the bill.
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The particular act applies to all individuals, businesses and government organizations. It includes financial service companies, airlines, retail establishments, utilities, landlords, lawyers, fiduciaries, municipalities, anyone who might be holding intangible property of other persons.
There's an interesting story about how this bill arose in 1989. There was an American bounty hunter, for want of a better description, who through a connection with the Liberal Party, through a lawyer with close ties to the Liberal Party, went to the then Treasurer, Mr Nixon, and said: "Boy, have we got a great idea for you to collect all this money that's sitting in people's bank accounts, refund cheques from insurance companies that have never been cashed, traveller's cheques that have never been used. All this money is sitting out there in people's accounts and it's just sitting there. So we have this idea where you can come and collect all that money, put it in your coffers and use it."
There was never an outcry on the part of the public for any legislation of this nature. The public, in fact, when they realized they were missing unclaimed intangible property, would go to the source where that property was and the money would be refunded or given to the rightful owner. There's never been a problem with the money being paid over. It's never been a problem. When people have realized the money was missing, they would go and reclaim their property. There was never a difficulty that way. There has never been a hue and cry in the public for the government to step in and grab up all of these assets, which this government and the former Liberal government intended to do.
Let me get back to my interesting story about the bounty hunter and the lawyer with the close ties to the Liberal Party. Once this all started, the bounty hunter and the lawyer got together and they started a lawsuit -- get this, Mr Speaker -- after this bill was passed by the Liberal government of David Peterson in December 1989, claiming a finder's fee based on a percentage of the first year's take from what was going to be the collection of all this unclaimed intangible property. So that goes to show you the foundation upon which this legislation received its inception.
It's awfully strange. No one was asking for this legislation. The public didn't need it. The government just jumped in because there was a buck to be had here. This is nothing more than a government grab of other people's money. That's all it is. It's the government coming down and trying to control every bit of what's out there.
Just the same way they're trying to be Big Brother with photo-radar, here they're coming along and saying: "If it belongs to somebody and nobody is picking it up, rather than leaving it with the financial institution in whose hands it rests, we are going to come and scoop it up and use it for government purposes. Along the way, we'll advertise once a year. We'll put people's names in a newspaper, in the Ontario Gazette. If they come to pick up their money, fine. Otherwise, we will use it. It will be used as part of the government's general revenue operation."
At any rate, the other aspect of this bill is that all of this money will ultimately be given to the public trustee to administer, and I'll get back to some remarks about that shortly.
There was a great problem when the Liberals passed this bill in 1989. They passed this bill and it proceeded with virtually no consultation with any people in the financial community. It was almost hidden, brought out and rushed through the Legislature, much the way it has been in this particular session of the Legislature.
This failure to consult adequately resulted in legislation which was fundamentally flawed. The legislation was passed and nobody really knew about it, but it was after it was passed and the Peterson government pressed ahead with it that all of a sudden there was this great hue and cry about how this piece of legislation could have been passed the way it was.
One has to understand that financial institutions have had long-standing systems and procedures in place to segregate unclaimed funds, to search for and locate owners of dormant accounts and to resolve these claims. These systems attempt to locate beneficiaries at an early point in time when the likelihood of identifying the owner is the greatest. There's really nothing wrong with this system and, as I said earlier, there has never been a public cry for the government to step in and take all this money and then ultimately spend it for its own purposes.
Concerns initially about the bill dealt with retrospectivity, the retroactive nature of the bill going back as many years as you possibly could to collect everything that was out there. Now the bill seems to try and limit that to five years. I'm a little unsure as to whether that means five years from 1989, which I think it does, which means it goes back as far as 1984, which means that when this bill is passed there will be 10 years' minimum worth of unclaimed property that will now be remitted by companies obligated to file this information and deliver this money to the public trustee.
In addition, other problems with the bill, as I said, were, there was no consultation with the public. The bill was complex to administer, the new bill still is, and it's an inefficient way to raise money with no significant increase in the return of property to the owner. I think that's very significant. If we could be assured that there was some realistic idea that there would be a greater return of property to the owner, this bill might be more easy to accept, but that just isn't so.
The government is relying on the fact that it has reviewed certain consultations from 1990, when it didn't proclaim the bill. That's the Liberal government. Included now are some suggestions of what they were told at that time, but that does not constitute, as far as I'm concerned, adequate consultation, particularly given the complexity of the legislation and the burden it will impose upon the community.
By contrast the parliamentary assistant said, "We did this credit union legislation earlier and it was very well received by the economic and financial community." The reason was because from the inception of that legislation, there was a process there where there was appropriate consultation, where problems were being addressed in a practical and a cost-effective manner. That has been totally lacking in this particular bill.
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The other thing about this bill that concerns me a great deal is the cost that will now be imposed on financial institutions and on individuals who have to comply with this bill. In terms of the legislation that was introduced in 1990, there was a trust company that estimated that the Unclaimed Intangible Property Act would cost the company, in several key departments, two and a half times as much to comply with the act as it would to turn the money over to the public trustee. The cost of administration is yet another burden being placed on businesses that are trying to create wealth in the province of Ontario -- more red tape. The last thing that business needs in this province right now is more red tape.
In addition, we're going to have a new bureaucracy created in this province to administer the Unclaimed Intangible Property Act. That bureaucracy is going to be within the public trustee's office. The public trustee is already preparing to assume extensive new responsibilities in connection with the implementation of the substitute decision legislation.
I suspect, in reality, that what is being done here is that a pool of money is being collected, upwards of $25 million estimated for the first year, $20 million estimated for the second year, $15 million a year thereafter. That's what this is going to collect for the public trustee and for the government.
I suspect, in very large measure, that one of the reasons the government wants this bill is to finance the bureaucracy it is going to need to finance, to implement the Substitute Decisions Act. That is why there is a charge on to implement this bill as fast as possible and collect the money, because the Attorney General's department cannot afford to come up with the money otherwise. They cannot afford to put the money into the public trustee's office because they don't have the money. They don't have the money to fund legal aid. Where are they going to come up with the money to fund this bureaucracy and the substitute decision bureaucracy?
That is what this grab of money is. It's not really a tax grab; it's a grab of other people's money, people who don't even know that the government is going to be taking it. That is what I believe it will be intended to do.
The other thing that I must add about the public trustee's office, I say to the Attorney General, is, is this really the most appropriate place, of all the bureaucracies that you could stick this in, to put it? The public trustee's office is a disaster as it is. It can't administer the funds of people who know their money is there. How are they going to deal with the money of people who don't know their money is in the hands of the public trustee?
We saw the auditor's report. The auditor said that, quite frankly, the public trustee's office was in a shambles. It was starved for the resources it needed to do the job that was presently before it. How will it possibly deal with this bureaucracy and the substitute decision bureaucracy? I can't understand how this is going to happen and how it is going to be paid for, other than the fact that this money will be usurped by the government to carry out those functions.
There are other issues I want to touch on, one of which is the fact that there is a serious conflict between this particular bill and the jurisdiction that the government has to implement this bill and the federal Bank Act. I have been told, and I believe it's true, that the former Attorney General was very much opposed to this piece of legislation and in fact did not see eye to eye with the former Treasurer, Mr Nixon. I'm talking now in terms of Mr Scott, the former Attorney General with the Liberal government.
I understand that there is a legal opinion in the Attorney General's department that quite clearly says that the government does not have jurisdiction to do what it is going to do. If the Attorney General can enlighten us about that or even produce that legal opinion, we would all be ever so grateful, because I do not believe that this act, the Unclaimed Intangible Property Act, is an act that this government can deal with without being in conflict with federal jurisdiction over banks.
The problem is more significant given the existing unclaimed regime in the Bank Act, and rather than address this issue through discussions with the federal government, the government seems to be moving along in a very unilateral way. I don't think they've had consultations with the federal government. They certainly haven't had consultations with the, to use their lingo, stakeholders in the province of Ontario. That's what the stakeholders say.
Quite frankly, I cannot see any reason that this particular bill is not standing on its own but is part of a tax act, to be buried so that nobody even notices that it's there as the government scoops up all this money that doesn't belong to it in a situation where the public has not ever, ever asked it to do that. What I say is, like everything else that the government, particularly this government, touches, that money will be wasted in a skinny minute. In short order, it will all be gone.
The Unclaimed Intangible Property Act is nothing more than a revenue-raising device. Just to quote the reservations that Mr Laughren, the present Treasurer had -- and I'm quoting now from the debate of December 13, 1989 -- Mr Laughren had this to say, "I would just like the assurances of the parliamentary assistant to the Treasurer that this is not meant to be a tax grab by Tax-to-the-Max Nixon, Maximum Bob, as some people will call him." If that's how the Treasurer today refers to the former Liberal Treasurer, as "Tax-to-the-Max Nixon" and "Maximum Bob," I can't imagine the kinds of epithets we could pin on Pink Floyd, because he's a bigger taxer and a bigger spender.
If he wanted assurances then, how do you think the public feels now? How do you think the public feels about this particular bill right now? It's nothing more than a revenue-raising device, and there is no evidence whatsoever that this piece of legislation is at all necessary.
There are numbers of other questionable technical aspects to this bill. This bill demands to go to committee. I don't know how the government intends to proceed, but I would urge the government to sever this particular aspect of a tax bill, and I'm talking about the Unclaimed Intangible Property Act, from the balance of Bill 160 and at least let it go out and be examined by a committee.
This particular piece of legislation is not burning up the public. The public has never indicated a need for it. The financial community surely is going to face the brunt of this legislation and deserves the opportunity to make public comments, because neither the Attorney General nor the Treasurer has afforded the financial community the opportunity to discuss this bill before it was quietly stuck into the budget and brought forward buried in Bill 160, which deals with a myriad of other items. I can't believe that the government did not have the guts to deal with this as a freestanding action and to confirm that it would permit it to be sent out to committee.
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I want to quote again from Mr Laughren's remarks on December 13, 1989, when he said we should "get the bill out there and let everybody have a go at it because, having had no such legislation since time began presumably, there is no reason that this needs to be rushed through in the next couple of days without full hearings. If the concerns of the financial institutions are legitimate, then surely to goodness we should be listening to them." That's what Mr Laughren said before he was Treasurer.
I suspect he would be the last person in the province of Ontario today to publicly say that he didn't believe the financial institutions' concerns were legitimate. And by financial institutions, we're not just talking about the big banks and the big insurance companies and the brokerage firms; we're talking about people who run hardware stores, we're talking about places where people leave deposits and we're talking about all kinds of places where people order goods or services and pay by way of down payment. We have all kinds of small businesses that thrive by doing business in this very way. Anywhere there's credit being offered, anybody who buys a traveller's cheque can find himself in this position.
It is inconceivable to me that the government has been so hush about this legislation that it won't even stand up to say, "We think it's a great piece of legislation, but yes, we'll at least allow the public some opportunity to comment on it in the form of public hearings." So far we have not seen a single, solitary word about that.
One other thing before I complete my remarks, and that's this idea that I suspect we will be hearing more of, that this kind of legislation exists in the United States. Well, it does exist in the United States for banking purposes, and the reason it exists in the United States for banking purposes is because banks are state-regulated in the United States. In Canada banks are federally regulated, as are most trust companies. Because of that, we only need to worry about legislation at the federal level dealing with banks, and we have that legislation.
We have the Bank of Canada that looks after the remission of, for want of a better expression, dormant bank accounts, stale bank accounts. We have that in Canada. We do not need this piece of legislation to regulate banks. There is no necessity that the province of Ontario step into this field. I don't believe they have jurisdiction to step in, at least as far as banks and trust companies are concerned at any rate, but the fact is they don't need to do it. The federal government has already done it.
The other aspect about this is that every day we hear stories in this Legislature about auto insurance and the price of premiums going up. If auto insurance companies and casualty companies -- everybody needs auto insurance and home owner's insurance -- if all of these companies now have to go back to 1984, five years from the 1989 date, they will now have literally millions and millions and millions of dollars to send to the public trustee, dollars that have been reported as income by these companies.
When these companies send all that money to the public trustee, all of a sudden they no longer can show it as income, and all of a sudden there is pressure, even more pressure, to raise the rates of premiums that people in the province have. So if you think by coming up with this cockamamy piece of legislation, conceived by an American bounty hunter, delivered by a Liberal lawyer who had access to the Liberal caucus, if you think that's going to have positive effects on the cost of goods and services for the people in Ontario, you are very, very much mistaken.
Interjections.
Mr Harnick: My friends across the way think this is very funny. They think it is very funny that they've resurrected a piece of legislation that the Liberals rejected because they came to their senses and realized that this piece of legislation did not help anybody in the public. It didn't help anybody in any community, in Willowdale or Brampton or Mississauga.
This piece of legislation isn't going to help anybody; it's only going to help the Treasurer of the province. He's going to scoop up all this money that doesn't belong to him and he's going to spend it all. He's going to spend it all and waste it all. We know that, and that's always what happens, because this money is earmarked for general revenues. It's going to go into general revenues, and it's going to be spent, and two years from now the first $25 million is going to be gone and nobody's going to know where it went.
Nobody has asked for this piece of legislation. When people realize there is unclaimed property they have, they go to the Bank of Canada and get their money, no problem. They go to the insurance company with the stale-dated cheque and a new cheque is reissued. We don't need to set up a bureaucracy in the public trustee's office to feather the nest of the Treasurer of this province.
At the very least, if that's what you intend to do, as a courtesy to the financial community and to small business people all over this province, afford them the opportunity to come to public hearings and give them the opportunity to tell you why this piece of legislation should not proceed.
Mr Winninger: I've seen the member for Willowdale carried away on his own flights of fancy before, but rarely have I seen him go to this extent.
I reject the assertion that this is a cash grab. What this legislation is designed to do is reunite lawful owners of property with that property.
I also reject the assertion made by the member for Willowdale that the Liberals rejected this package because it didn't make any sense. As the Speaker well knows, the original legislation passed third reading, it was granted royal assent and would have been implemented had it not been for the election intervening in 1990.
But what that period of time between 1989 and now allowed the government to do was consult with the industry to ensure that many of their concerns were met, and most of their concerns have in fact been met. Retrospectivity, constitutionality, the paperwork burden: All these concerns expressed by industry have been adequately addressed in this legislation.
We know as a fact that every state in the United States, as the Treasurer observed earlier today in response to the question from the member for Don Mills, in every state south of the border where this kind of legislation has been introduced it has been successful. I'll be alluding in my own remarks to the measures of success in the state of Texas, where many owners, had it not been for the government intervening and advertising for the owners, advertising the unclaimed property, would never have been able to claim that property. It's successful; it's economical --
The Deputy Speaker: Thank you. The time has expired.
Mrs Marland: It's interesting. I guess the Liberals are not getting up to congratulate the member for Willowdale on his excellent analytical review of this bill.
The point, of course, as the member for Willowdale has said, is that this bill originated with the former government, as have so many things, actually, that the current government, our wonderful socialist government, has chosen to continue. It's really interesting to hear the member for London South refer to "flights of fancy." That really is a wonderful description of what this current government is doing, and in particular this current Treasurer.
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It seems that every time somebody can dream up some new form of cash grab, they do that, and they do it whether or not they have looked at the impact on the people of this province. At the same time they are making these absurd decisions about, "Where else can we collect some money?" -- certainly the $50 filing fee across this province, not only the money but the actual paperwork of it is an absurdity in terms of the nuisance factor for small business people who have one more piece of paper to file with a cost factor attached.
But in spite of all of this, this government is still not fulfilling its obligations in terms of priority of need to human beings first. This government still ignores the people in this province with special needs, and I'm talking primarily about our developmentally disabled adults and children. This government continues to ignore them.
Mr Sutherland: I want to pick up on the comments made by my colleague the member for London South, who is going to be speaking next and talking in more detail. I find it rather interesting that the member for Willowdale seems to want to be the great defender of the banks and the trust companies etc when this bill is about protecting individual consumers. That's really what we're talking about here: to ensure that there is adequate notification that this property is available, that the unclaimed tangible property is available, doing far greater notification than is required now or than any of the banks or trust companies will do. That party, that allegedly has fought for property rights, all kinds of property rights -- now we're the defenders of property rights and we're doing something to try to make sure individuals do get their property and are able to claim ownership of it, and they're opposed to it.
The other thing to make very clear is that this is not quite exactly the same bill or the same provisions that the Liberals had put forward. There has been a lot of consultation from the time the Liberals put the bill forward to the time we've brought it forward.
We have consulted with the different industries and addressed a lot of their concerns. But I do find passing strange that somehow, on the road to Damascus, there is this new conversion, that the third party no longer supports individual property rights. That's what they're admitting here this evening, by basically saying: "We want to support the banks. We want to support the large trust companies. We don't want to support the individual who rightfully owns this piece of property or has this rightful claim." No, they don't support that any more. Or are they just flip-flopping again and unsure of where they stand?
Mr Mahoney: I think there might be an opening.
Mr Stockwell: I thank the Liberal member for Mississauga West for allowing me this opportunity. First, let's deal with the issue here. The issue is, as the government member suggests, they're trying to reunite money with people. That's the game plan here. They're going to get this money from all the institutions that people have left in accounts that have been closed and so on and then they're going to go out and find those people and reunite them, the people and their money.
Let's just think for a moment. Let's say they don't find all the people who are supposed to get that money. That's called "divorced" money, not reunited money. That money sits out here, and where do you think the divorced money goes? You'd think they'd search high and low to find out where the true owners of this money are. But no, this government then takes the money to the public trustee and puts it in general revenue. But that has no bearing on why they're introducing this piece of legislation. Sure, they're going to generate millions of dollars, but that has nothing to do with what's on the table today. They don't think the banks and the other institutions should have this money. They believe the government should have it so they can reunite it with those people who really should have it, and if it can't find them, it'll keep it.
The cynical out there would say, "My gosh, I think this government's just doing this so it can get the millions of dollars that people don't claim, that they can't reunite," but we know the member for Oxford's not a cynical sort and we know the member for London South is not a cynical sort. They may be a lot of things, but they're not cynical, because they bought this line the Treasurer sold them hook, line and sinker. "We only get millions of dollars out of this but we're only doing it for the good of the people so we can reunite their money with them, and if there's some left over, well, we'll keep it."
The Deputy Speaker: The member for Willowdale, you have two minutes.
Mr Harnick: They've introduced a $50 corporate filing fee, they've sold the GO Transit rolling stock and they're leasing it back, they're now going to sell ferry boats and lease those back, they've increased every fee in the province of Ontario -- the Outdoors Card, probating a will, getting your driver's licence -- and now they've come up with a scheme to reunite people with their property. This scheme to reunite people with their property and at the same time throw $25 million a year into the government general revenue fund -- talk about cynical. I don't want to seem cynical, but how can you come to any other conclusion? Reunite people with their property, the member for London South says. Are you serious? Were you born under a rock? I can't believe it.
We talk about retrospectivity. They've really fixed up retrospectivity. They've only got different years of retrospective action for every different type of financial instrument. How is the person running a small business ever going to know what to do?
Just a word again about the United States. Every state has this legislation for banks. The banks are state-regulated. How many times do you have to be told that? In Canada they're federally regulated. We have this legislation. You can't deal with banks; it's not in your jurisdiction.
The office of the public trustee: Let me tell you about the office of the public trustee. They can't do what they're doing now. How do you expect they're going to be able to administer this money? To the member for Oxford, I'd like you to name one real person who asked for this piece of legislation.
The Deputy Speaker: Further debate. The member for London South.
Mr Winninger: As you may recall, on May 5, as part of the provincial budget, the Minister of Finance announced this government's intention to go ahead with proclamation of the Unclaimed Intangible Property Act. This legislation we know will create an active public interest and consumer protection program for Ontario.
As other speakers have remarked, this law was passed in 1989. It actually passed three readings and royal assent but was never proclaimed. It provides a convenient way for people to get back lost or forgotten money or other property that rightfully belongs to them. Every year in Ontario, we estimate that $50 million worth of bank accounts, insurance proceeds, stocks and bonds, unclaimed cheques, even unclaimed wages are abandoned and forgotten by their owners. Sometimes people simply forget to cash a cheque, or they move and forget to close a bank account, or they forget to notify their insurance broker. In some instances, the heirs of a deceased person are unaware of the true magnitude and location of the assets of the deceased. Whatever the reason, this money remains in the hands, frequently, of businesses that it does not legally belong to.
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The Unclaimed Intangible Property Act requires that if businesses are unable to track down the rightful owners, these assets will now be transferred to the office of the public trustee.
The member for Willowdale and others have made allegations against the office of the public trustee that are no longer well founded. We know the office of the public trustee has taken many progressive steps to reduce its case load and to hire additional staff to ensure they have the additional resources to deal with clients on an efficient and inexpensive basis. They're responding in a more timely way to their clients than ever before, and it's important to be mindful of that.
Once a year, the government will publish the names of the owners of property in a newspaper supplement to be distributed across the province so that owners can come forward to claim their money. The government will continue to hold the money until it's claimed, using it in the meantime for the benefit of the public, for taxpayers across the province, to fund hospitals, schools, roads and social programs.
It was mentioned earlier that in every state in the United States such a program is already in existence. I brought with me today a section from a Texas newspaper. What it says on the front cover is, "You'd be surprised how hard it is to return money, but that's what we do every day." It goes on to say: "You think it's fun and easy to return money to people? Basically that's true, but the hard part is convincing people to look for their name. Are you going to look? Think you couldn't possibly find your name in here? The folks who received over $26 million from us last year didn't think we had anything for them either. It only takes a minute." This is a message published by the Texas state treasury, and it lists 122,000 newly reported names just for 1994.
Inside are several testimonials from satisfied customers:
-- "Didn't know they owed me." This person had changed jobs, employers, or worked part-time over the past three years or more.
-- "Didn't think I needed to. I once had an account." No deposit or withdrawal was made in the bank account for five years or more.
-- "Thought I had contacted everyone." This person had moved and failed to give a forwarding address to all those with whom he had done business.
-- "I didn't know where to start looking." This was an individual trying to settle a family member's estate.
Quite clearly, this kind of program, which has worked not only in Texas but across the United States, is very successful and many of the people who have had their property returned are grateful to that program.
This legislation is progressive. It's the first of its kind in Canada. The experience in the United States bodes well for Ontario as well. Through such programs for unclaimed property, the United States jurisdictions have been able to return, on average, about one third of all unclaimed property to rightful owners. If that pattern were to hold true here, we would be able to return $15 million a year of the estimated $50 million that would be remitted to the office of the public trustee; $15 million could be returned to the people lawfully entitled to that property.
Perhaps it was lost on some of the members in the opposition who spoke earlier that the government remains obligated to the rightful owners in perpetuity. Our goal ultimately would be to return all of this money to the rightful owners. But in the meantime, that money that cannot be returned because we've been unable to locate them can be used for the benefit of the general public and not just for the benefit of banks, trust companies and other investment businesses. So the rightful owners still retain the right to reclaim the money, the property, the assets at any time.
When this legislation was passed, as I said, in 1989, Ontario's financial community expressed concerns about difficulties inherent in complying with the new law. We've listened to their concerns and as part of Bill 160 made amendments to make the act work better for all concerned. The amendments address many of the specific issues raised by the financial community.
For example, we've reduced the paperwork burden on businesses by moving from a cumbersome two-step reporting system that was part of the Liberal legislation to a more streamlined one-step system.
We've limited the application of the act to property that was unclaimed as of May 1989, the date the original act was introduced, thereby eliminating the unlimited retrospective application of the act as it existed then.
We've also improved the legislation -- harmonized it, if you will -- to make the law work in conjunction with federal laws such as the federal Bank Act so it won't conflict with them.
We've addressed also a number of technical but very important concerns that the business community raised with the original act. Following passage of these amendments, the original act can be proclaimed as amended.
On May 19, we released a description of the amendments to the act, the major features to be contained in the regulations and an interpretative bulletin on the jurisdictional scope of the act.
Several people, including the member for Don Mills, the member for Scarborough-Agincourt and the member for Willowdale, suggested that consultation had not been taken with the financial community prior to this stage. I remind the members opposite, as indeed the Treasurer did earlier today in a response to a question posed by the member for Don Mills, that extensive consultation has taken place with the financial community.
In developing the program, the government made extensive use of detailed consultations and submissions which were received over the past four years. It was the Liberal government, as I said earlier, that introduced a flawed act in 1989 without proper consultation. The financial services sector identified very clearly the problems with the Liberal bill. They were very detailed in their proposals as to how those problems might be rectified. We took careful note of these comments and we've taken steps to address the problems found in the Liberal bill.
In addition, we met with industry representatives in March of this year to review their concerns with the earlier bill and we received many helpful suggestions. Among the groups we met with in March were the Canadian Bankers Association, Canada Trust, the Credit Union Central of Ontario, the Canadian Life and Health Insurance Association and the Investment Dealers Association of Canada.
We announced the new bill in the 1994 budget on May 9. Immediately following this announcement, in fact the very next day, we again met with representatives of the financial sector to address the next steps.
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We then introduced Bill 160 on May 18, and the following day we issued a detailed information package and invited comment on any outstanding issues. A letter went out to the financial community on May 19, and among other things, Susan Himel, the acting public trustee, said:
"I'm enclosing a package of information for your assistance, including the original act, a copy of amendments tabled yesterday, a brief description of the first regulations to be filed when the act comes into force, a draft administrative bulletin on whether intangible property is located in Ontario for the purpose of the act and a media release."
So since May 19, and as recently as May 19, all the materials the financial community could want were mailed out. Yet we hear today, I believe for the first time, that insufficient consultation has taken place.
It's important to remember that the essential purpose of this legislation is not simply to deprive banks, trust companies and other investment institutions of the use of that money. The purpose is to ensure that wherever possible this money can be restored to the rightful owners. In the meantime, rather than having the benefit of that money accrue to the holders, we feel it's more appropriate that the benefit of that unclaimed money in the meantime inure to the benefit of the general public, including the taxpayers of Ontario.
We know thousands of people across Ontario are entitled to money they don't even know about, and certainly the government has the economies of scale and the resources to reach out to these people, to let them know the government holds their property in trust, in perpetuity, and to encourage them to apply to reclaim their property. Until the rightful owners are found, the unclaimed money will, as I said, inure to the benefit of the general public.
I believe this legislation is a good-news item. I believe there are many rightful owners out there who have forgotten about their funds, or lost track of them, that the government can restore. We have the experience in the US jurisdictions where unclaimed property legislation has been extremely successful and returned, on average, approximately a third of all funds remitted to the state treasuries.
There will be some administrative costs, but as I said, the public trustee has certainly regained control over its case load. It has sufficient resources to manage this in an effective, timely and cost-efficient manner.
I would like to take the time remaining to me, or part of the time remaining to me, to say a few words about the victim fine surcharge. The provincial fine surcharge was introduced May 18 as part of Bill 160 as well. Since 1989 there's been a federal victim fine surcharge in place. That fine surcharge was never paid into a dedicated fund until such a dedicated fund was set up at the end of February of this year. That money is designed to be used for the assistance and support of victims of crime.
What Bill 160 does in effect is introduce a similar victim fine surcharge for the province of Ontario, and it applies to part I and part III of the Provincial Offences Act. As I've said, it's dedicated to support current and new victims' services.
The requested amendments to the Provincial Offences Act provide that persons convicted of an offence under parts I and III of the act be required to pay a surcharge in an amount to be determined by regulation. I'm talking here about offences under the Liquor Licence Act, the Highway Traffic Act and other provincial legislation that attracts penalties. The surcharge would be applied to all offences in which a fine is imposed on the offender. It includes municipal bylaws as well but does not include parking offences. Revenues generated from the provincial surcharge and the existing federal surcharge, as I said, will be held in a dedicated fund called the victim assistance fund.
I recall several years ago, when I was still practising law, that there were judges who imposed fines on offenders under provincial and even federal legislation at the time. Those judges would impose fines which varied according to the judge and the court, but after a period of time the provincial court judges were saying: "We don't know where this money is going. We don't know if it's actually going to assist victims of crime. We know it's going into the consolidated revenue fund, but we're having trouble tracking it." In effect, what they decided was, "We won't impose any victim fine surcharge; we'll just let it go until a dedicated fund is set up."
That's what this government has done, as I said at the end of February. It's set up a dedicated fund to ensure that those victim fine surcharges assessed against offenders will go towards victim assistance services. We have in Ontario at 12 locations a victim/witness assistance program, that's typically run through the court facilities, which provides the kind of emotional and informational assistance that witnesses and victims of crime require as they face what is often a very awesome and daunting judicial system.
At the hearings before the standing committee on justice, on a standing order 125 referral regarding victims of crime, we heard from several deputants their desire that this kind of program, if possible, be extended across the province. We also heard testimonials to the effectiveness of the child witness program in London and a similar one in Toronto, that were originally funded by the federal government on a pilot project basis. When the federal government withdrew its funding a few years ago, the province stepped in and provided that funding, first on a temporary basis and now on a permanent basis.
There are people across the province who are saying to us that perhaps we should look at the feasibility of similar child witness programs in other locations. It's initiatives like the victim fine surcharge that will enable this province ultimately to study and review those needs and see what can be done about expanding the victim/witness assistance program.
The government, as you may know, already provides considerable financial support to services for victims of crime. The victim fine surcharge, of course, will play an important role, but it's just one modest portion of the funding that the province directs towards victims of crime presently.
In 1992-93, for example, approximately $107 million was spent on services for victims, including $72 million spent on wife assault prevention initiatives, another $21 million spent on sexual assault prevention initiatives and $14 million on criminal injuries compensation. In fact, when the Criminal Injuries Compensation Board found itself short of funding, this government increased its funding by an additional $1.5 million, which allowed it to meet its obligations under the statute and also, for the first time in a few years, to publish a report of its activities.
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In today's economic climate, there are simply not enough funds to support the many excellent initiatives requiring financial support, and it's the victim fine surcharge that offers us greater potential to tailor our victim assistance packages to meet the ever-increasing and diverse need in the community.
We've made significant gains, though, in recent years in providing a high number of quality services to victims. We acknowledge that much remains to be done. We have to ensure that existing services are consistently and equitably distributed across the province and look at what new services might be required.
It has been argued that many offences under part I and part III of the Provincial Offences Act are without victims. In fact, though, most seemingly victimless crimes, such as under the Highway Traffic Act, the Liquor Licence Act or the Game and Fish Act, just to name a few, while not ostensibly with victims, cost the taxpayer a great deal more in terms of health and other related costs.
The member for Willowdale mentioned our photo-radar legislation in his remarks earlier. At that time, when I participated in the debate, I mentioned the fact, as did the parliamentary assistant to the Minister of Transportation, that there's an enormous physical and financial toll taken by highway accidents. Every year, there are 90,000 accidents in Ontario. We have approximately 11,000 deaths on the highway, we have 90,000 injuries, and an enormous cost in terms of health care, lost income, insurance and property costs that photo-radar will help to cut down on, along with many of our other road safety initiatives.
To suggest that it may be appropriate just to impose a victim fine surcharge on some offences and not on others is very difficult administratively and it ignores the fact that there is a cost to society of all crime, whether there's a direct victim or not. The money that can be generated from victim fine surcharges can be used directly to underwrite the cost of victims' services. Because of the sheer volume of convictions occurring under the Provincial Offences Act, it's appropriate to impose a surcharge for all covered offences, including speeding.
It is the government's firm belief that these kinds of initiatives we can fund with the victim fine surcharges will go a long way towards making the system more sensitive and accessible for victims while improving the assistance they receive. It also reiterates the government's existing and proven commitment to victims' services.
In conclusion, there are two measures in the Budget Measures Act that directly impact on the Ministry of the Attorney General: the Unclaimed Intangible Property Act, which as I said is very progressive, the first of its kind in Canada, but one that has been tested successfully in all jurisdictions in the United States, where one third of all property remitted to the state treasury was returned on average to the rightful owner while the balance of the money was used for the public benefit.
We've taken steps through our consultation to amend the legislation that was passed by the Liberals back in 1989 that addresses many of the valid concerns expressed by the financial community: retrospectivity, constitutionality, undue paper burden. We've streamlined the process. We believe this legislation offers a vehicle to ensure that property is returned to rightful owners while at the same time balancing the right of the owner and the benefit of the public.
Certainly the victim fine surcharge is good news to the victims and their families, many of whom have appeared before standing committees of this Legislature and also of the federal government. It's a surcharge that will provide additional money to improve and expand the standards of assistance that we give to victims. I think it speaks well of this government's commitment to the welfare and recovery of victims of crime.
The Speaker (Hon David Warner): I thank the honourable member for London South for his contribution to the debate and invite any questions and/or comments.
Mr Hans Daigeler (Nepean): I must congratulate the member for London South, because it appears he's worked wonders. He might be surprised to hear that from this side of the House. I'll tell you, Mr Speaker, why I think he has worked wonders, and perhaps he could work that magic a little bit more often.
At about 11 o'clock at night, he brought out more cabinet ministers to listen to the speeches this evening than there are at 2 o'clock in the afternoon, at the beginning of question period. So I do think the member for London South must have something to it in his speech. I don't know what it is, because I don't think it could have been the content; I don't think it could have been the tone. There must be something else that I'm missing here, but obviously the cabinet members are all here.
I think the only reason that I can find for this is a new meaning of cabinet solidarity, because all the backbenchers have had it up to here. Only the cabinet I guess can be forced to be here tonight at 11 o'clock in the evening. Most of the backbenchers of the government are absent and only even senior cabinet members are here. So I think this should really tell something about this government. They don't have sufficient control any more over their own backbenchers that they have to bring in the senior cabinet members to fill the seats at night when we are in extended sittings.
I think, as I say, the member for London South has brought something about. He's brought at least, finally, the cabinet into this House, which we on this side have been asking for for many, many weeks, that they would come during question period.
Mr Cameron Jackson (Burlington South): I listened with interest to the member for London South commenting about the victim fine surcharge. I happen to agree and applaud the government for bringing in this piece of legislation. Quite frankly, I started asking for this legislation when it was first passed by the federal government some six and a half years ago.
The Liberal Party of Ontario, when it was the government, I remember asking Ian Scott in this House, when was he going to bring in a victim fine surcharge, a dedicated fund. He stonewalled the issue. In fact what we saw was the revenue, starting as high as millions of dollars, dropping down to zero revenue from this source last year, because we had no policy in place.
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So when the member for London South says this speaks well of this government, I'll tell you how well it speaks of your government: You're the last province in Canada to have conforming legislation in place. It took you four years on behalf of victims.
The member mentioned the child victim/witness assistance program, a pilot project by the federal government when it changed witness legislation and law in this country for victims across Canada. Because of the British North America Act, we administer our courts here in Ontario and in each province, and so the feds set up these pilot projects. Every single province expanded their child victim/witness program -- I think PEI is the only one that didn't -- except Ontario. We have nearly 40% of the entire population of this country and yet we're the last province to develop a full-time program.
So when I say I applaud the government for bringing in a victim fine surcharge finally, I am also suggesting that it would be somewhat misleading to suggest that it speaks well of the government's commitment, because in fact we're the last province to get this program in place. It's long overdue and it's about time it was done.
Mr Sutherland: I want to compliment my colleague the member for London South for giving us a very thorough explanation about the unclaimed intangible property piece of legislation and how it works. I think that was an important part of his speech.
Let me say, the victim fine surcharge is also a very important initiative to support victims. I wonder how the member for Burlington South expects the Conservative Party would be able to expand those services when it's not going to increase funding for anything. They may maintain it, but they're not going to increase it. So it shall be interesting to see how they would expand those services under whatever proposals they could come up with.
But I really have a question for the member for London South regarding the unclaimed intangible property issue, and that is this: Earlier in some of the speeches, particularly that of the member for Willowdale, it was said that we didn't need to do this. The federal government already does it. The federal Bank Act already allows it.
Well, the member for London South in his comments cited an example of an insert that appears in Texas where they list all the people who have property owing. I guess I would just want to ask him, has the federal government ever done that type of insert in any advertising? I follow one of the significant regional daily papers in our part of the province. I've never seen that insert. I've read that paper for probably 10 or 15 years.
So if the federal government is doing this, who is it telling about these unclaimed properties? How are the residents and the constituents of Ontario finding out what the federal government is doing? Maybe the federal government just isn't informing these people about their unclaimed properties out there. Maybe the member for London South could elaborate on that point, and maybe that would help explain to some people why we need to do this from a provincial standpoint.
Mr Beer: I think the comments of the member for London South and indeed, before him, the member for Willowdale underline one of the real problems in dealing with this Budget Measures Act. I don't speak at all to the comments that were made with respect to part XVI or the other part, part XII, that the member was discussing, and the member for Willowdale of course was talking about the Unclaimed Intangible Property Act.
The frustration, I think, is that we've been here now discussing this bill since, what, somewhere after 5 o'clock. There are two other key elements, and indeed I'm sure other members see other key elements. One, part III, to deal with the Education Act: We have not had in this Legislature over the course of the four years an appropriate debate around the future of educational financing, and it doesn't look like we're going to have that tonight.
The other section that I think is very important on the social side is part VIII, which deals with the Health Insurance Act. Again, some critical issues there. Both of those, in my judgement, ought to be in separate bills.
So the question that I have, because my friend from Oxford wanted to put a question, is that it was noted by the member for Nepean that you seem to have some tremendous power over your party and cabinet in terms of the people who are here, and perhaps I could ask the honourable member for London South if he would not use his influence to persuade the government to break this bill up, to separate a number of key components so that they can go out to committee, in other committees indeed, and really be appropriately and properly examined. We simply don't have the time to deal effectively with all of the different components of this bill. Some 17 have been noted, and I would ask the member for London South to do that for us.
The Speaker: The honourable member for London South now has two minutes in which to reply.
Mr Winninger: I was pleased to hear from the member for Nepean. He applauded me for getting a good representation among the cabinet ministers here tonight. I think that speaks to the commitment of our cabinet ministers to these proceedings and the importance of this debate on the Budget Measures Act, but at the same time, if the member for Nepean is bemoaning the fact that he can't get more cabinet ministers here for question period, perhaps that reflects on the quality of the questions that are being asked. Perhaps if the questions were more interesting or more challenging or more appropriate to the needs of the members of the community, there would be more cabinet ministers here to respond.
The member for Burlington South, who sat with the standing committee and in fact was the sponsor of the standing order 125 referral on victims of crime, knows how eagerly some of the deputants and their families have awaited the dedication of a victim fine surcharge fund to provide the kind of funding that's required to assist those victims and their families. It may be true that we're the last province in Canada to dedicate such a fund, but we can't be responsible for all of the governments that came before us that failed or neglected to move on these issues.
The member for Oxford posed a very interesting question about the Bank Act of Canada and what the federal government has done to alert owners of property. All I can say is this: Our legislation, as amended, is designed to harmonize with the Bank Act. They'll remit the money to us after two years, then we'll advertise. We'll find the rightful owners of the property.
The Speaker: The member's time has expired. Is there further debate? I recognize the honourable member for Nepean.
Mr Daigeler: Although it is late, I appreciate the opportunity to at least put a few thoughts on the record, in particular since I have such a valued audience here, so many cabinet members, as I indicated before. I certainly hope that they will listen attentively, because some of the things that I'm pointing out, I think, are of great importance, not just to my riding but across the whole province.
Now, just for the benefit of those people who may be switching in after the news, I should recall what we're actually debating. It's actually a relatively thick bill, quite an extensive bill. It's called An Act to amend certain Acts to provide for certain Measures referred to in the 1993 Budget and for other Measures referred to in the 1994 Budget and to make amendments to the Health Insurance Act respecting the Collection and Disclosure of Personal Information. That's the title of the bill. I stressed "1993" in order to ask, is this really good management of the government, that almost a year and a half after the 1993 budget was introduced, we're still discussing and debating and perhaps passing legislation that was part of the 1993 budget?
I can understand that the 1994 budget normally would be discussed at this point, obviously. But to still discuss and debate measures from last year's budget at this time, I think, says something about the management ability of the current government, and I don't think it says something very encouraging and very good. But be that as it may, I should point out that Bill 160 is what they call in the legislative terminology an omnibus bill, meaning that it covers a whole salad of questions.
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Let me tell you what is contained in this omnibus bill. There are something like 17 major parts of this legislation. There are changes to the Co-operative Corporations Act; part II, the Corporations Information Act; part III, the Education Act.
My colleague the member for York-Mackenzie just indicated that really it would be time, long overdue time, to have an extensive debate about changes to the Education Act in general. Really, we should be spending special moments, and more than moments -- days, perhaps -- in this House in order to discuss some of the changes that the education system needs and in particular the financing of education, but certainly in this overall omnibus bill we won't get an opportunity to do this.
Part IV of this bill deals with the Crown Timber Act; part V, the Employer Health Tax Act; part VI, the Financial Administration Act and the Public Transportation and Highway Improvement Act. That ultimately will be the section to which I want to address myself more specifically, being the Transportation critic for my party.
However, I should tell you there's also something in there about the Game and Fish Act, part VII; part VIII, the Health Insurance Act; part IX, the Labour Sponsored Venture Capital Corporations Act; part X, the Loan and Trust Corporations Act; part XI, Ontario Home Ownership Savings Plan Act; part XII, Provincial Offences Act; part XIII, the Public Lands Act; part XIV, the Retail Sales Tax Act; part XV, Small Business Development Corporations Act; part XVI, Unclaimed Intangible Property Act; and part XVII, finally, enacts Ontario Public Service Employees' Union Pension Act.
If you've ever seen an omnibus bill, this is it, because there's about everything under the sun that seems to be included in this Bill 160. The only problem, however, is that some important matters that perhaps could have been included and should have been included aren't. If this government was interested, as a last minute -- who knows, perhaps we're going into an election in the fall. I certainly hope so, because the timing would be right. Perhaps they want to pass as much legislation as they can in order to face the people.
If that's the case and if that's the reason why they put in such omnibus legislation, why are there not some very important aspects of public policy included in this omnibus bill? That's what brings me to part VI, the Financial Administration Act and the Public Transportation and Highway Improvement Act, because there are some provisions in this part that could have been included and that in fact the Minister of Transportation promised he would bring in as legislative amendments, and they're not in this bill.
I just want to mention two, in particular, that the Minister of Transportation said he wanted to introduce and that we haven't seen. We haven't seen them in this bill and it looks very much like we won't be seeing them in this session, because in order to introduce new legislation, he would have had to announce that last week.
But since he put everything else in this bill, or the government did, why didn't he put those two provisions in? What are those two provisions? First of all, the member for York Mills actually got a question on earlier this week. He just upstaged me, as it were, by one question, because I had the very same question and I congratulate him on getting into question period before me.
The question was about axle weight. The trucking industry, for many years, has complained that carriers were forced by unscrupulous shippers to put loads on to their trucks that were really illegal. However, shippers would say: "If you don't do that," and essentially break the law, "you can go somewhere else. I will find someone who will take this load." The truckers, if they wanted to be within the law, were losing the business. It was really quite, and still is, unfair competition, or undue pressure certainly.
This amendment that the member for York Mills was asking about, that I wanted to ask about as well and that was requested for quite some time by the trucking association, this legislative amendment that is missing in this bill would simply say that the responsibility for axle weight compliance is shared between the shipper and the carrier. If the carrier gets a fine, the shipper gets a fine as well.
I think that's a reasonable approach. That seems fair. Frankly, the Minister of Transportation, in his response last week, said, yes, he's in agreement and he wants to do that. He said he's waiting for the cooperation of the opposition parties. We are certainly prepared to cooperate if the minister only would bring forward the legislation. I'm saying that here in this omnibus bill he would have had an opportunity to do this.
Frankly, there's a second point that I'm missing here in this legislation and in the House. If the minister had brought it in in some other form, that would have been fine with me as well, but I don't see it anywhere.
Here's a letter that the Minister of Transportation wrote to me personally on January 27, 1994. It's almost half a year ago. I had written to him at the end of November, pointing out to him that during the social contract negotiations, which of course I wasn't privy to, I was told by municipal officials in the Ottawa-Carleton area that apparently a promise was made to the municipalities that public transit funding would be forthcoming in three instalments per year rather than in one instalment. Why would the municipalities want that? They were asking for this. This was seen by the government as an enticement for the municipalities to come on board with regard to the social contract legislation.
The reason why the municipalities, frankly, were open to this kind of an enticement was that they would save considerable amounts of interest money. Obviously, if they have to pay up front the moneys for public transit before they get the funding -- usually it's 75% of those costs from the province -- it costs them a lot of money in interest carrying costs. Instead, the government said, "If you come on board with regard to the social contract legislation, we'll do a different funding arrangement with the public transit."
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Here's what the Minister of Transportation said when I brought that to his attention. He said, on January 27:
"I can assure you that the Ministry of Transportation has already prepared the necessary legislative amendments to the Public Transportation and Highway Improvement Act which would see three advance payments to municipalities, as follows: May 1st, 40%; July 1st," another "40%; November 1st, 10%.
"The final payment, which would be based on an actual claim, would be acknowledged by February 19, thus resulting in payment being made by March 15th.
"With this method of payment in place, you are quite correct in saying that it will eliminate most interest costs associated to the delay in receipt of subsidy payments.
"Please be assured the government is working on this legislative amendment."
Mr Speaker, that was on January 27, and to tell you quite honestly, I was quite excited when I got this letter. I thought, "Gee, this is great." I didn't expect, frankly, such a positive response, nor, I must admit, did the municipal officials who brought this to my attention. They thought: "This is great. Perhaps this government is serious. When they made their promise with regard to the social contract, perhaps they were honest. Perhaps they were going to keep their promise and they were going to stick with their side of the bargain."
So I did get back a letter, frankly, from the chairman of the Ottawa-Carleton region, addressed to me, saying:
"Thank you very much for your efforts with respect to the issue of subsidy payments to public transit properties as outlined in your correspondence to Mr Stacey. The letter you received from Mr Pouliot is very encouraging.
"As you know, we have based our 1994 budget, and hence our service plan, on the government fulfilling its promise."
Now, that was February 15. Today, it's almost June 14, in another 45 minutes or 35 minutes, and I haven't heard a word. I checked with my municipal officials and they still haven't word a heard -- heard a word. I'm sorry.
Mr Frank Miclash (Kenora): It's getting late.
Mr Daigeler: Yes, it is getting late, says the member behind me.
And what's the reason for it? If the Minister of Transportation and if this government were serious about keeping their promises, they could have brought in this amendment in this particular omnibus bill, since everything else but the kitchen sink, I guess, is in this bill.
Now, this would have been two very important points that would have been significant, first of all, for a major industry in Ontario, the trucking industry, and the second initiative I was just mentioning would have been very important and still is very important for the municipalities across the province. I regret that those two provisions are not in the bill.
However, some things are in the bill, not very much in the section I'm talking about, part VI, the Public Transportation and Highway Improvement Act, because essentially what this provision does is it allows the new transportation capital corporation to receive the moneys the province, or the Minister of Finance, is collecting and then on its own account to spend them.
Now, the main reason, as you probably remember, Mr Speaker, for the establishment of the transportation capital corporation and for this provision in this bill here for this corporation to be able to collect fees is the construction of Highway 407. I think all of us support and applaud the initiative to get this major road built as quickly as possible, and frankly, for the 407, if it takes tolls, that is probably the way to go, because what does that permit? The collecting of tolls does permit building this road in a much shorter time frame than if it would happen through the normal appropriation process every year.
Frankly, I see that as the only difference about Highway 407 and as the only advantage about this famous new approach to highway-building that this government, and particularly the Premier, is so proud of. I've heard the Premier numerous times saying this project is going to create 20,000 new jobs and it's going to get the economy moving again and it's a new way, doing new things. It's almost a little bit like the promised land's going to be achieved with this new approach to road-building because it's going to be done faster and cheaper.
The reality is that the only thing that's new is that the government is going to charge tolls and because it's charging tolls, it can build the road faster. That's what's new about the building of 407. That's what's new, since the private consortium that is now building and operating and going to operate the road is no longer, as it was supposed to do originally, providing the upfront capital for the construction of the road.
Frankly, that is becoming increasingly clear to the road builders out there in the province, that really, to some extent, they have been hoodwinked, that, as I say, the really only new element to this road-building project is the charging of tolls.
Hon Richard Allen (Minister without Portfolio in Economic Development and Trade): Go and talk to the roadbuilders.
Mr Daigeler: I think, if I heard right, the member for Hamilton West just said, "Talk to the roadbuilders."
Hon Mr Allen: Go and talk to them, yes.
Mr Daigeler: The member just asked me to talk to them. It's good that he's asking that question because I happen to have three letters in my hand here from all parts of the province --
Hon Mr Allen: From the consortium?
Mr Daigeler: No, not from the consortium, but the first one here, and I think this gentleman even lives in the member's area, is from the chairman of the Better Roads Coalition, so this is not just some far-flung individual. This is the chairman of the Better Roads Coalition, who has a deep interest on behalf of his members to get new roads and better roads built.
Listen to what he has to say about this project. He does say, like I did, "Firstly, Minister, we again wish to congratulate your government for the acceleration of this work." I'm quite agreed on that myself.
"However, as we have explained in a letter to Mr Guscott," who is the assistant deputy minister of policy and planning at the Ministry of Transportation, "the Better Roads Coalition has a major concern with the procedure used for the analysis of the competitive bids. In fact, sir, our concerns really follow two major areas."
By the way, this letter is addressed to the Minister of Transportation and it was dated May 25, so it's a very recent letter.
"First, the public was advised that private financing was a major objective for this work. The question still remains, would there have been more competitive bidding if the engineering and construction industries had been aware that the government was going to do the financing?
"Second, as we have said to Mr Guscott, the Ontario government and the construction industry over many years have established an open, public system of tendering that has the confidence and respect of the people of Ontario. In fact, it has been followed by many jurisdictions, not only in Canada, but throughout the world. To throw this openness out to safeguard the competitiveness of the bidders in other business ventures, in our opinion, is not in the public interest. Public contracts are just that, public, and the contractors are aware of this when they enter into this work."
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Therefore, Minister, the Better Roads Coalition, while congratulating your government for accelerating Highway 407, is first asking you to provide an analysis of the two competitive bids received for this work, and second, seeking your assurance that any future bidding procedure be implemented with the full knowledge that the bids will be made public.
Clearly, the concerns that I raise this evening and that I have in fact raised in this House before are shared by some very important members of Ontario's roadbuilding industry all across the province, because -- seeing that I have only seven minutes left, I can't read it into the record -- I also have a letter right here from a major contractor in my area, the Ottawa-Carleton area, who makes exactly the same point; and another one here from Graham Brothers Construction in Brampton which has written many times on the same subject, and again makes the very same point that the integrity of the tendering process is extremely important and even more so since the consortia are no longer providing the upfront financing.
Very briefly, since we are talking about tolls, I cannot fail but mention Highway 416, in particular since the Minister of Housing is here, the member for Ottawa Centre. I didn't hear it myself on television but I was told that she pretty well said, "If there are no tolls, there won't be any road built." Frankly, I find this unacceptable and so do many members of my community.
Hon Ms Gigantes: Wrong again.
Mr Daigeler: The minister is saying "Wrong again." Frankly, I hope so. If I am wrong on that, that's great, because I have been certainly asking this government and I've been asking the Minister of Transportation that if the federal government is giving you $60 million and perhaps even more, the least you can do, the least the NDP government can do for eastern Ontario is pick up its two thirds, because normally that road should be built by the provincial government, no questions asked.
This government, through the tremendous efforts of the federal member for Leeds-Grenville, Jim Jordan, whom I wish to thank again, as I've done before, for his effort to get federal funding for the completion of 416 --
Mrs Marland: Is he a Liberal?
Mr Daigeler: Yes, he's a Liberal, very much so, and I'm very proud of it.
Hon Ms Gigantes: Don't go too far now. You may be sorry.
Mr Daigeler: The member for Mississauga South, who is a Tory, is saying, "Is he a Liberal?" Yes. I want to assure her he's a Liberal and I'm very glad.
All we are saying is that the rest of the 416, with the federal contribution, should be built and must be built without tolls. I just want to send that message over there to the Minister of Housing, who's there, and to all the other cabinet ministers who are sitting there and, as I say, at this late hour are thankfully listening to my speech. I do hope they will convey this to the Premier, to the Minister of Finance and to the Minister of Transportation.
One other point that I must mention, since we are talking about fees and about tolls and who will be able to collect and get the money for fees under Bill 160, is that famous ferry fee question in eastern Ontario. The member for Kingston and The Islands is here, the whip of the government side. I wonder what he is thinking, because frankly I think that was an unmitigated disaster and again shows the abysmal lack of straightforward management ability by this government. Wouldn't you have thought that this government, the Minister of Transportation and his cabinet colleagues would have checked beforehand whether they had the legal authority to impose ferry fees? Wouldn't you have assumed that?
Last week, for example, the Premier said, in response to a question or a point by the member for Brampton South, "It strains credulity if we wouldn't have checked that the amendments that we were going to introduce on Bill 167 are found to be within the rules of procedure and that they in fact do not destroy the total meaning of the bill and that we can have these amendments and that they won't be rejected by the chairman of the committee." The Premier said, "Obviously, we've checked this."
I say on the example of the ferry fees in eastern Ontario, we have serious questions about the straightforward management abilities of the government, because as it turns out -- and I have the judgement right here. It's quite a lengthy judgement by the Ontario Court (General Division), a judgement by Madam Justice Helen MacLeod, which was dated May 27, 1994. She found -- guess what? -- that the Minister of Transportation and this government had no statutory, no legal authority to impose fees. What do you say about that? Would you not have assumed that this would have been the very first thing this government does, check to make sure that they have the legal authority to impose the fees?
They could have saved themselves so much political hassle and trouble. All the people in eastern Ontario are mad as hell at the two Wilsons because the government went ahead with these ferry fees. They could have saved themselves all that trouble. It was about a week before the government was going to start collecting the fees that the people of Wolfe Island went to the court and the court, in frankly a very damning decision, said -- let me just briefly quote here, and this is at the very end of this 20-page judgement.
It says here -- this is the judge: "As a result of my finding that the Minister of Transportation acted without lawful authority in the exercise of his statutory power to impose fares and thereby made a reviewable error, a declaration shall issue that the Minister of Transportation does not have the statutory authority to impose rates of ferriage under section 99 of the Public Transportation and Highway Improvement Act for the Wolfe Island ferry service."
If the government wanted to do something, it could have included at least that provision in this bill that's before us and that we are discussing.
Thank you very much for the opportunity to participate.
Mrs Marland: The member for Nepean brought to the attention of the House the complexity of this Bill 160 in his comments. I guess what an omnibus bill really is, as he was addressing, is the fact that it's a whole lot of things put together that the government wants to slide through as one bill.
It's very significant, when you start reading this bill, as the member did, to look at some of the areas that are addressed. Of course, they're now legalizing the collection of the annual filing fee for corporations. The fact that they've been doing it without a bill, without legislation and authority to do it, for the last two years is quite interesting in itself.
But what is really interesting for a government that claims it is never going to charge user fees is that for the first time in writing, in a bill in health care, we see the words: "The amendments also provide for copayments for accommodation for insured persons admitted to hospitals, as defined in section 46 of the act. The copayments would be prescribed in the regulations." Finally, we have this government admitting that it does charge user fees in health care in Ontario. That in itself is very significant.
One of the other parts of this bill that is particularly interesting is the fact that the poor individual in Ontario who happens to be a commercial fisherman is now going to pay royalties for the fish that he or she catches. That's really the bottom of the barrel, the bottom of the ocean, when we're going to charge the fishermen royalties for the fish they catch.
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Mr Sutherland: The member for Nepean touched upon a lot of issues in his half-hour, but I did hear him talk about Highway 407. That project going forward is a shining example of how this government is taking a new and innovative approach to have economic progress occur in this province. Highway 407 was going to take about 20 or 30 years at the regular rate. This government showed leadership. This government took the initiative to come up with a new and innovative approach to financing expanded highway construction.
Mr Daigeler: Tolls.
Mr Sutherland: We have set up a transportation capital corporation, and, yes, as the member for Nepean says, tolls, a designated toll towards the construction and maintenance of that part of Highway 407. The member for Nepean may have concerns about that, but you ask anybody, any of the truckers who go through Toronto on a regular basis, how much it costs them in the traffic tie-ups that occur there. You want to talk about a significant industry? The auto industry relies quite a bit on the trucking industry getting their goods from place to place just in time. Think of the savings to business. Think of how that's going to create a much better investment climate for those people who want to do investment in the province.
It was not the official opposition, when they were in government, bringing in this approach, nor was it the third party when they were in power for 42 wonderful years, as Mike Harris likes to tell us. It was this government. It was this government that provided leadership, that provided innovation, that worked with the private sector to expand this project and bring it about much sooner than any other government would have.
Hon Mr Allen: I'd like to comment a little bit further on the member for Nepean's remarks with respect to the construction and the bidding process around Highway 407.
We all know that nothing is more common than that those who lose out in bidding processes or perhaps were slow off the mark complain about the unfairness of the process in question, so that is not a very uncommon story the member refers to. But when he says that the fact that the government has become involved in the initial financing and the loan arrangements for the project eliminates all that is unique about this project and otherwise interesting about it, he's quite mistaken.
In point of fact, one of the major reasons for us doing this, and the way we did it, was to construct a major consortium that could build huge transportation complexes and thereby be able to bid on the international market for such projects abroad. The major problem we have in our construction sector in that even our large construction industries, by an international scale, are remarkably small. The bidding process in the past whereby we have had a series of small bids on parts of construction projects has perpetuated a situation in which the industry has not had the capacity to deal with very large international transportation projects of this scale. Doing the 407 in the innovative way in which we have done it has put in place a consortium in this province that can in fact do that and get major export capacity for our economy in the international marketplace. I think that's very significant.
The Speaker: The honourable member for Nepean has up to two minutes for his reply.
Mr Daigeler: I appreciate that the member for Hamilton West had an opportunity to respond, because he raises an important concern that as assistant minister, I guess -- I'm not quite sure what the title is -- for Economic Development and Trade I'm sure he wants to put forward, and that's the fact that only large megacompanies might be able to compete on the international market for such big projects.
Frankly, I'm kind of surprised that the NDP is now the friend of these large multinational companies and is pushing that agenda. Be that as it may, I'm quite prepared to look at that if they are going to show that expertise and if the bidding process is fair, if in the future other contracts are going to be tendered in a proper fashion and if it doesn't completely shut out all the other construction companies in the province. I'm prepared to look at that. I think that's an argument that's worthwhile to consider.
But to say, as the member for Oxford said, "This thing is innovative, this is tremendous, it's totally new and only we have thought of it" -- the key new thing here is tolls. Let's not kid ourselves. What's new about this is tolls, and that's building the road faster. As the gentleman I quoted -- who by the way is not one of the losing contractors at all; he's the chairman of the Better Roads Coalition and has nothing to do with the bidding consortia -- says: "The important thing is that the road is built. We agree with that." And so do I. If it does require tolls for the 407, fine, but don't go around and say, "This is totally innovative," because pretty well the only thing that's innovative and new is tolls.
The Speaker: Is there further debate?
Mr David Turnbull (York Mills): I rise to speak on this omnibus budget bill. Once again, I have suggested in this House that omnibus bills of this nature are not very savory, because they put together a whole bunch of measures which are completely unrelated, and some of the measures we approve of and others we don't. But this is quite typical of the way this government has acted. This bill has 18 parts and contains 17 different statute amendments. We need to send this out to committee so the various groups that will be affected by this legislation can comment on it.
Just consider some of the things this government has done by way of omnibus bills. We know that last year Bill 29 killed the commercial concentration tax, which I applaud the government for because we, like the NDP, during the last election criticized the Liberal government for bringing in this very bad piece of legislation. Unfortunately, they had crept into the bill an aspect which would have devastating effects on pharmacists. What do pharmacists have to do with commercial concentration tax? The answer is absolutely nothing. Then we had Bill 47, the famous photo-radar bill. Wedded into that we had, under the guise of road safety, sweeping changes to the Administration of Justice Act.
Let's just look at some of the things we agree with in this bill. Under Bill 160, some of the impediments to job creation are removed in that there is a tax holiday for new hires on the employer health tax. However, this is a very short-lived creation. Within our document that the government likes to mention so often, the Common Sense Revolution, we suggest there should be a moratorium on employer health tax for any companies with a payroll of less than $400,000. Why $400,000? Because we know that small companies are the ones that drive the new businesses and job creation in not just this country but around the world. It isn't the large corporations, which are reducing the size of their operations. Small and medium-sized businesses are the ones that are creating the jobs.
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Turning to the annual corporate filing fee of $50: I have never been so surprised as by the amount of hatred for this measure. But when one stops to consider the implications of this, this is a government that says it wants to create business and wants to stimulate business in a terrible recession -- which certainly wasn't entirely of their making; it's a worldwide recession -- but the government brought in a tax measure of a $50-per-year filing fee for corporations.
Originally when they brought in this filing fee of $50, it was to be a one-year measure. This government adopted, I suppose, the same stance as so many governments around the world in the First World War when they brought in income tax. They said: "Oh, this is just a temporary measure. We'll take it off." The government got a great appetite for that $50. There is real hardship for some small business people who may, for technical reasons, need to have several companies, so that requires that each company needs to have that annual filing fee of $50. It does create hardship for small businesses that have that situation.
This omnibus budget bill is taking away the retail sales tax they introduced last year on the delivery of dirt, clay and gravel. Why is that? Because they found they couldn't enforce it, couldn't catch the delivery of this, so they've said, "Well, because some people have been cheating and we know they've got away with it, we won't tax it." If that is the yardstick by which this government approaches taxation, we're in for some pretty serious problems -- instead of going to the root cause, which is that we're overtaxed and we should back off in a controlled way; not in a reactive way, saying, "They've managed to get away with it, so we won't touch them."
I want to turn particularly to the area for which I'm a critic, which is the Ontario Transportation Capital Corp, contained in part VI of this bill. The concept of having a corporation which will operate semiautonomously from the government and raise funds is in some ways quite appealing, but unfortunately we believe that what the government is doing is using this as a mechanism to hide debt. Indeed, the Provincial Auditor has commented to this extent.
Last summer, on August 17, the Provincial Auditor, in committee hearings on Bill 17, establishing the capital corporations, raised his concerns about the lack of accountability of the crown corporations. Here are some of his quotes:
"We saw accountability clauses appearing and disappearing in the draft legislation without being able to provide input or without finding out why these clauses were disappearing." I think that's quite a serious indictment.
"I view Bill 17 as a first opportunity to enhance legislation for better accountability with the view that value for money be obtained. It is the result that I'm interested in, to ensure that we are obtaining value for money for the taxpayers' dollars." A very reasonable sentiment by the auditor.
The auditor's concerns were along the lines of accountability provisions, and he didn't see them incorporated into the legislation but instead by way of memoranda of understanding. That's not acceptable, and it isn't providing the protection that the taxpayers seek.
The Provincial Auditor goes on to say:
"They're not tools" -- he's talking about the memoranda of agreement -- "that assist you, as members of the Legislative Assembly, in ensuring that you have the right tools to monitor, to control and take corrective action where necessary as these corporations are starting down the road and undertaking their activities."
A further quote by the Provincial Auditor at that time: "The Legislative Assembly should have controls over the corporation's revenue and spending and over the total provincial debt through legislation since memoranda of understanding are outside the scope of the Legislative Assembly."
A further quote: "The accountability rules should be strengthened to provide a financial position statement which combines the consolidated revenue funds and these corporations, and indeed all other government-owned corporations, so that the public has a picture of the overall financial position of the province."
This is something which has been echoed over and over in this Legislature and should be of great concern to all the taxpayers of this province. In fact, it should be a concern right across Canada where governments are hiding debt and not presenting information in a manner which is accessible to the average taxpayer.
Indeed, the bond-rating agencies see through this kind of ruse. This year's stated deficit in the budget for the period 1994-95 is supposedly a deficit of $8.548 billion, whereas the bond-raters' deficit -- if we take the list, there's the NDP's stated deficit of $8.548 billion, then there's non-recurring revenue of $432 million, pensions of $828 million, off-book capital of $1.6 billion, for a total bond-raters' deficit of $11.48 billion.
It's very easy to see that the government is in fact hiding debt when one compares the stated deficit of the province to the amount of money it's raising on the international markets. That indeed is the acid test.
The concern has already been expressed by the critic for the Liberal Party this evening about the building of the 407 project. Now, the 407 project is to be funded now by the government. In trying to curry favour from both the road builders and indeed from the opposition parties, the government sold a bill of goods that it was going to allow private consortia to bid on the construction of this huge $1-billion project, and then the best bid would receive the work.
It was appealing because it would be debt that the government wouldn't be involved with. They could wash their hands of it, and in, say, 35 years' time the government would take over the road and would have no debt on that road.
The opposition parties bought into that concept. The government said, "This is a creative way to ensure that we build our infrastructure." However, just a very short period before the 407 contract was announced, the government said, "Oh, we've now decided that we're going to get some deputy ministers to make the decision and clean our hands from that." When the decision came out, lo and behold, the government said it was going to raise the funds "because we can borrow money at a cheaper rate than business."
Quite frankly, that is just an insulting position. Nobody who has any knowledge whatsoever of raising money on international markets has any doubt that in all circumstances a government would raise the money at a lower rate than a private consortium. There could never have been any question of that. For them to suggest that this was the reason they were suddenly changing their minds is absolutely wrong and is misleading by this government.
I see, Mr Speaker, that you're getting a little bit nervous. It being 12 of the clock, I move that we adjourn the debate.
The Speaker: I'd find this an appropriate place to break his remarks. It being 12 midnight of the clock, this House stands adjourned until 1:30 of the clock Tuesday afternoon, June 14.
The House adjourned at 2400.