L048B - Thu 22 Oct 1998 / Jeu 22 Oct 1998 1
HIGHWAY 407 ACT, 1998 / LOI DE 1998 SUR L'AUTOROUTE 407
The House met at 1830.
ORDERS OF THE DAY
HIGHWAY 407 ACT, 1998 / LOI DE 1998 SUR L'AUTOROUTE 407
Resuming the adjourned debate on the motion for second reading of Bill 70, An Act to engage the private sector in improving transportation infrastructure, reducing traffic congestion, creating jobs, and stimulating economic activity through the sale of Highway 407 / Projet de loi 70, Loi visant à intéresser le secteur privé à améliorer l'infrastructure des transports, réduire la circulation engorgée, créer des emplois et stimuler l'activité économique par la vente de l'autoroute 407.
Mr Gilles Bisson (Cochrane South): On a point of order, Madam Speaker: Our lead speaker was supposed to have asked for unanimous consent to split his lead between himself and myself. I'm wondering if we can still do this at this time. That would use the remaining 29 minutes.
The Acting Speaker (Ms Marilyn Churley): Are you asking for unanimous consent? Is that agreed? Agreed.
Mr Bisson: Thank you very much, Madam Speaker. I wouldn't say it is with a great amount of pleasure I have an opportunity to speak on this. The government has introduced this legislation fairly early here in order to be able to move towards the privatization of Highway 407. Just to put this into context, I would like to go through a couple of issues vis-à-vis how the Highway 407 deal was structured so that people understand what exactly the government is doing here.
The first thing we have to remember is that back in the early 1990s, during the time of the Bob Rae government, the government, under the leadership of Bob Rae and his minister at the time, Mr Pouliot, decided that it was important to develop Highway 407, a project that had been sought after for many years here in Ontario. Being that Ontario was in the midst of a recession and being that the government did not have the revenue coming in that it normally gets, especially at the time of recession, it was pretty difficult, and we had looked at different and innovative ways to be able to move ahead capital projects, for a couple of reasons.
First of all and foremost because Highway 407 was a road that was needed to take off some of the pressure that we have on Highway 401 going across the centre of the city of Toronto, but also at the same time it was thought, and I still believe this today, that in a time of recession when government can put on infrastructure projects such as the construction of Highway 407, you are creating much-needed jobs and you're injecting cash that's much needed into the economy.
In this particular case, Highway 407 cost $1.4 billion to construct. That meant that 20,000 jobs were created over a period of three years, 1993 onwards, while the highway was being built. It meant that contractors locally had work. It meant that suppliers supplied equipment, parts and various materials for the construction of this highway. All in all, it was a good project.
I remember at the time it was decided we were going to construct Highway 407, on the one hand, I, as a member of that government, felt very happy that our government was going forward with the construction of the highway. I was, however, a little bit disappointed that we had to go the way of a private consortium in order to raise the dollars to actually get that project off the ground. I remember caucus meetings where we had discussions on that, and my good friend from Fort York was there as well. I was of the view that I would rather have done it strictly from government coffers in order to do it. The problem was, if that was the case, we wouldn't have had the money to do it and that highway would not have been constructed even today. So we decided, and the decision was made by the cabinet of the day under Bob Rae, that a private consortium would be formed and the consortium would be used to help finance the construction of Highway 407 at a time of recession here in Ontario.
As you remember, that consortium was called the Canadian Highways International Corp and they got together with a number of companies, put together a proposal that eventually was selected as the way to build that highway. The idea and the way the deal was structured was quite simple. They would, first of all, finance this particular highway to the tune of $1.4 billion through private dollars and they would then operate the highway for a period of 27 years by way of tolls. Eventually, when they recouped their investment at the end of the 27 years and made a return on that investment, they would turn the highway back over to the province of Ontario - all in all, I think a deal that was good for the private sector.
It gave the private sector an opportunity to be involved not only in the construction of the highway - normally it is always the private sector that constructs our highways here in Ontario - but also a way for them to be involved in a different facet of the highway transportation system here in Ontario. In order to finance this, if that private consortium, Canadian Highways International, would have had to go out on the money market itself to raise those dollars, the interest having to be paid on a $1.4-billion project is fairly significant. The interest that you would have to charge on that money is fairly significant. In order to reduce the interest rate that the consortium had to pay, we basically set up the Ontario Transportation Capital Corp that secured the loan and lent the money to the private consortium and they were able to get, because the Ontario government had secured that loan through the Ontario capital corporation, a more favourable interest rate that saved some dollars.
Anyway, here we are a few years after the construction and the opening of the highway and now the Harris government says: "Well, Bob Rae, that was a good idea. You built that highway. You got it constructed in record time. You created many good jobs here in Ontario while it was being constructed and we have now a number one freeway across the northern part of Toronto called the 407."
It seems that the Harris government is not happy just with the idea of having the private sector involved in the construction and the operation of that highway. They've now decided that they want to sell it. You have to ask yourself the question why the government would want to sell this particular highway. You have to recognize that never, as I understand it, and maybe somebody will correct me later, has anyone ever sold a highway in the province of Ontario. I'm a little bit worried about what the precedent would be once the government moves forward and actually transfers over by way of a sale the property and the ownership of a provincial highway. You have to ask yourself the question, what kind of precedent does that set in Ontario?
I ask the question, and I want to look at the legislation a little more closely. I don't know the answer to this question, but it's one that I want to find out. When they do sell the highway, will the province of Ontario be transferring over title of the land that the highway is constructed on or are they just selling strictly the infrastructure of the highway?
Hon Rob Sampson (Minister without Portfolio [Privatization]): The answer is no.
Mr Bisson: I've been told that the answer is no. I'm glad that is the case, because if you hadn't done that, I would certainly be raising that issue at committee. But it raises the question, why is it that the government is selling this highway? I think for a couple of reasons.
Philosophically, I think this government has a belief that the private sector is better at absolutely everything. They can make sliced toast, they can make jam, they can run hospitals, they can run highways more efficiently than anybody else in the world. I have a problem with that view because I think government can actually do some things pretty darned well and has a pretty good track record over the years of actually running some very good systems through the government itself. But ideologically, the government says, "If it moves, get rid of it."
Mr Rosario Marchese (Fort York): Privatize it.
Mr Bisson: Sell it. We'll put it on the auction block and we'll transfer that over to the private sector and somehow or other we're all going to be better in the end. I wonder as an Ontario taxpayer how I'm going to be better once this highway is sold.
Mr Marchese: You just don't know yet.
Mr Bisson: I don't know yet, my friend from Fort York says. I just don't know that the government is trying to make us buy this thing, a pig in a poke.
I look at this year. The province of Ontario, as the deal is presently structured, is going to get the highway back in 27 years' time. We know that after the highway has been utilized for now another 25 years and that the proper maintenance has been done on that road, that highway is going to be transferred back to the province and back to another part of our transportation infrastructure.
If the private sector gets it, how is that better for me as a taxpayer? What do I get? Does it mean that overall I'm going to benefit in some way as an Ontarian? I say no. How the heck are you going to benefit? In the end the consortium will keep the highway, and do you think they're going to take those tolls off at the end of 27 years? Do you think they're taking this highway just for the good of it? Do you think they're going to turn around and they're going to say, "No, we're not going to" -
Mr Marchese: If there's money to be made, they're going to take off the tolls?
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Mr Bisson: That's the point. It means in perpetuity, if these people buy the highway. They're not going to be taking the tolls off Highway 427 at the end of the 27-year contract. They're going to keep them there.
Interjection.
Mr Bisson: Yes, Highway 407. My mistake. I apologize. Highway 407, not 427, but who knows? Maybe they will sell Highway 427 as well. But the point I make is, am I any better off at the end of the process if the government privatizes this highway? Just on the fact of the tolls, the answer is no. I'm not a big fan of tolls, to tell you the truth. I do not in any way like the idea of toll highways. At the time that we did it, I was a little bit upset, actually.
Mr Marchese: Me too.
Mr Bisson: Along with my friend from Fort York. But in the end, it was done. The point I make, and I'm not going to dwell on it, is that the government is going to sell this to the private sector. They're going to try to tell us that somehow we're going to be better off because we will have gotten rid of this debt we have in the province, to the tune of about $1 billion now, and that somehow we're going to benefit at the end, overall, with this particular move that they make. I say no.
Yes, we will eliminate part of the debt we have at the Ontario capital corporation, I don't argue that, but in the end it means that the private company is going to have to make a profit. They will not take the tolls off those roads, by any stretch of the imagination. What they will end up doing is, they will leave the tolls on and they will charge motorists what the market will bear when it comes to roads.
The second thing it does that I don't think benefits Ontarians in the end is, does this mean the government might possibly think of selling other roads? Who knows? I don't know the answer to that question. If the government turns around and says, "We're going to sell Highway 407," what's to stop the government from saying, "We're going to sell part of Highway 11, or Highway 69, or Highway 401, or Highway 2"?
What do we know? We know they've transferred a whole bunch on to the municipalities. This government, in its zeal to get rid of the responsibilities they have to maintain in this case a good highway infrastructure and in its zeal to move things away from the public sector into the private sector - there's nothing that tells me they're not going to start selling parts of highways around the province.
I have to ask myself the question, how am I going to benefit in the end, as an Ontarian, if the government steps up this precedent? I don't think we benefit. I think that in the end we need to recognize that the province has a role to make sure we have a good transportation infrastructure when it comes to highways. The only way, in my view, you can ensure that is by keeping it all as one system, as one network, not a bunch of separate networks of highways, some owned by AZ Highways, or in this case Canadian Highways International, and the other parts owned by Ontario. I think it has to be a network that is whole, that is publicly owned, that is operated by the province in a way that is in keeping with the standards, in keeping with the policies we set out in Ontario.
I want to ask my good friend the minister responsible for privatization across the way this particular question: Why is it that the government has brought this legislation to privatize Highway 407 ahead of when we're going to have anti-lobbyist registration in the province?
Mr Marchese: Coincidental.
Mr Bisson: Is it coincidental?
Interjection.
Mr Bisson: It's just a fluke. He's saying it was just a fluke. I just wonder about that. The government on one side is telling us in a debate here about a week or two ago that they were introducing a piece of legislation that would make sure you would have to register lobbyists. The government is saying, "We have to make sure that everything is on the up and up and we have to make sure there's no perception that people are going to profit from the actions of the government by way of lobbying for favour, either by way of contracts or by way of changing public policy."
It's interesting that in one of the biggest sales that this government has undertaken to date the government decides they're going to get all this done before they install and proclaim their legislation having to do with lobbyists. I wonder, is that a fluke? Is that a situation where the government may be doing that by design? I really wonder. I would want to know from the minister a little bit later, when he has an opportunity to respond, why they didn't first of all make sure they had their lobbyist registration in place, on the books as a statute of the province of Ontario, and then move towards their privatization scheme? I wonder why they don't do that.
I would make as a suggestion that at the very least you don't allow this legislation to go past second reading until after you've passed your legislation having to do with lobbyist registration, to make sure that everything's on the up and up. I want to make sure. I believe that the government in the end wants to have this on the up and up and they want to keep it straight. If that's the impression you're trying to give, especially vis-à-vis this particular boondoggle, the sale of this highway, it would be a lot better that you wait a little bit. Before you get to selling it, you should at least put in place your lobbyist registration.
The other point I would like to go back to that I think is in keeping in this particular debate is privatization. We have seen the government, by way of example, when it comes to the Ministry of Transportation, privatize the highway maintenance contracts here in Ontario. Just as in this legislation, the government back then was telling us what they're telling us now: "Trust me, this is going to be a good deal. We're going to save dollars. It's going to be more efficient. Our highways will be plowed" - they told us back then - "without any difficulty." They told us they would save more than 10% on the maintenance of our highways across Ontario. They told us it was all going to be better. Now they come in the House today and introduce legislation to privatize the 407, and they tell us it's going to be a better thing.
Let's go back and look to see what happened with highway maintenance in Ontario over the last couple of years. You know what? I remember asking the question of Dave Johnson, the then minister of Management Board.
Mr Marchese: He's busy right now.
Mr Bisson: He's reading. He has probably got fan letters from some teachers somewhere.
Mr Marchese: He's responding to the Hamilton board of education issue.
Mr Bisson: Oh, that's what it is.
I remember asking the question of the minister, "Minister, if we are able to show that in the end the privatization of the highway maintenance contracts, going over to the private sector, doesn't save us money, will this government stop the privatization of highway maintenance?"
The minister stood here in this House and he said: "Of course. If we don't save" - I think he said 6% or 8%; I forget the exact percentage. He said, "If we don't save 6% or 8% overall from what it used to cost us to do it ourselves, we will not go ahead and do this, because it will not be a good thing for Ontario."
Mr Marchese: What happened?
Mr Bisson: You know what? It's more expensive.
Mr Marchese: That can't be. He said it was different.
Mr Bisson: I know. I believe I'm confused, because I know the minister is an honourable man, and I know the government would not want to say a falsehood in the House. Of course not; the government wants to tell it the way it is. The problem is, when you look at the books, the two things don't line up. On the one hand, when they introduced the initiative to privatize the maintenance of highways, the government said to us: "We're going to save 6% or 8%. Look at all the money we'll save. We'll be able to save dollars and reinvest them in education" -
Mr Marchese: In health.
Mr Bisson: - "and put them back into health care. We're going to be so much better." Then they told us: "Oh, the highways will be better than they were before, because you know those public sector workers, they couldn't get it right after all these years. The private sector guys will fix the problem. They'll make sure that everything runs fine."
We find out now, when we start looking at the area maintenance contracts in places like Chatham and other places, it's costing us more money. Do you know how they did it? I've got to tell you, because this was a really fine piece of work that the Tories put in place. They signed a contract that, if you looked at it on the surface, showed that it costs about the same amount of money as when the government used to do it themselves, but hidden inside the contract, further in, there is a section that says you can put additional charges back to the Ministry of Transportation for work done in reconstructing, you know, damages done, posts being knocked off the side of the road when the plow goes by, or potholes being fixed on the highway. They can charge those back to the ministry without even tendering, without any kind of a bid process; up to a certain amount of money, they can do it. Now, when we start looking at the fine print -
Mr Marchese: That's how they fixed it, in other words.
Mr Bisson: That's how they fixed it. They went to their private sector friends and said: "Don't worry, we'll put it inside the fine print. You'll make some more money. Don't tell anybody."
Then what ends up happening is that we find out now, when we get the documents back after we FOI things, that in fact it's costing us more money than it was before.
Mr Marchese: So they manufacture consent. They manufacture this big story.
Mr Bisson: There you go, exactly. It's the government of manufactured consent. That's a good way of putting it.
But I've got to tell you, I don't think Ontarians should buy a pig in a poke, the privatization of Highway 407. The government is trying to say now: "This is going to be better. We're going to save all kinds of money. We'll be so much further ahead."
Mr Marchese: The same old story.
Mr Bisson: The same old story. But when you look at examples of where they have privatized, we're finding it's not the case.
Mr Marchese: It's a boondoggle, is what it is.
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Mr Bisson: I want to come to that point. My friend Rosario Marchese from Fort York says it's a boondoggle. You know what? That's exactly what this is all about. This is about the Tory party of Ontario saying, "We want to create business opportunities for the private sector." What does that mean? It means there are some people who are going to make themselves a few dollars real quick.
Mr Marchese: Are we talking a few bucks? A lot of money? What are we talking about?
Mr Bisson: Put it this way: It's so much money that the private sector will make that you will not be able to fit it in this billfold. I can guarantee you that. You're talking about opportunities for people to really get in on what will be a big cash cow.
Mr Marchese: A bit wallet is what we're talking about.
Mr Bisson: A huge wallet. I say to the government across the way that you shouldn't be doing this. You shouldn't be going out privatizing those things that quite frankly are a necessity for the way we do business in Ontario and the way we work as a province ourselves. Highways are important for us.
I want to get back to the highway maintenance contract issue. There's one thing I wanted to touch on that. They had told us when they did this that it's going to be cheaper and, as I pointed out, we're finding out that it's actually more expensive. One of the other things they had told us was that once the private sector gets in, the competition in the private sector is going to create a climate that will keep the pressure on costs down.
You know what? I've got a document that was given to me last week by somebody from within the Ministry of Transportation. I can't say who it is. The poor soul thinks they'll lose their job if I ever said who it was. I'm just putting this information together. When you look at the Ministry of Transportation prior to the area maintenance contracts, they used to have a system where 50% of the work on average was done by ministry equipment and 50% of the work was done by equipment of the private sector. In other words, they would bid out. The reason they did that was quite simple.
The ministry would keep equipment - plows and graders and backhoes and excavators, all the equipment they needed in order to maintain and do work on highways - and they would have their equipment so that they had the ability to respond and to do what needed to be done. But more important, from a business perspective, they said, "If we have the ability to go out and do that work ourselves, it keeps the private sector a little bit keener when it comes to sharpening their pencils to put in bids because they know that the ministry can do it themselves."
So you have a healthy system of competition between the public and the private sector that quite helps. You have the private sector coming in with their expertise and offering their services to supplement what the government was doing, but the government's having equipment keeps the contractors a bit more competitive when it comes to price.
You know what we're starting to find out now? They sold off all the equipment. It's all gone. They fire-saled it. They sold some of this stuff 10 cents on the dollar. It was like: "We've got a deal for you. Come on down, my pal Al, we're going to sell you a snowplow." You know what? They were getting that stuff 10 cents on the dollar in some cases - equipment that the province paid through the hard-earned money of the taxpayers of Ontario.
Mr Marchese: They gave it away.
Mr Bisson: They gave it away. Some of the stuff they were selling off was like 10 cents on the dollar in some cases.
Mr Marchese: Isn't that a boondoggle to you?
Mr Bisson: It's the biggest boondoggle I've ever seen, because who has benefited out of the privatization and the sale of that equipment is the first issue. Not the taxpayer. The taxpayer didn't even get what the stuff was worth. Not only that, when they did sell the equipment, rather than doing it as they did before where you're able to go and bid in your local MTO yard, they shipped everything off to a place in Toronto and had some private contractor do all the selling off of equipment through some sort of auction system, and we ended up paying the transportation cost to get that equipment down to be bid on.
Not only did we not get the dollars at par when it came to selling the equipment and benefiting from that, we had to pay for the transportation to get that stuff down. But here is the interesting part. This is the one that really gets me, because I remember being in this debate with my pal Al when we were going through this and I said, "Al, if you allow the private sector to control all the equipment for highway maintenance, such as snowplows" - we'll just use one piece of equipment - "and the Ministry of Transportation in some areas have no equipment to respond, the private sector is going to say, `Got you where we want you.'" Then, when they come in to renew their contracts, you're going to say: "Equipment prices now are not what they used to be before. There's a big demand, so the price has gone up."
What we're starting to find now is that some of these renewals, the equipment charges that the private sector is bidding back into the government, are much higher than they used to be when we had a hybrid system of public-private sector equipment competing against each other.
Mr Marchese: But the public doesn't know this.
Mr Bisson: The public doesn't know. The people who know are the people who are making money off it. I'll tell you who else knows: the workers who lost their jobs. There are scores of people within the Ministry of Transportation who, because of this initiative, lost their jobs. Some of them, the government says, got jobs with places like IMOS. They did well, they say. Do you want to see how well they did? They said, "You go work for IMOS and we'll guarantee that you'll only get a 20% reduction in wages when you go to work for the private sector." They said: "The private sector's smarter. They know how to do it. They're better operators." They're not better operators; they pay their workers less money. That's how they save money.
Mr Marchese: Competitive.
Mr Bisson: Very competitive: Just keep them down.
I say on behalf of those workers, shame on this government. We had a good system in the province of Ontario that was balanced between the private and public sectors competing against each other in some cases to do the work. We had the quality of work being done by ministry staff. Now we're moving more and more towards a private system that in the end doesn't respond. I hear stories, not only where I live but in different parts of the province, in the way the staff was dealt with. It is really despicable, some of the stuff they've done.
I look at Mr Hopcroft and other ministry staff people up in my area who had 28 and 29 years of service with the ministry, who were just thrown out like an old shoe. They basically were told, "You go to IMOS, and if you go to IMOS you're going to lose whatever rights you had when you were with the Ministry of Transportation." Not a good way to deal with staff.
I want to get back to the 407. I only raise this other issue around highway maintenance with the point of saying we've heard it before. You on the government side have told us that the private sector is better, the private sector is smarter, and the private sector is going to do everything much better for us and save money. I believe the private sector does have a role to play; I really do. But I'll tell you, one of the things we need to ensure is that there are some controls about how you do things. What you're doing in this particular case is transferring things over holus-bolus, and in the end there's really not going to be a benefit for the people of Ontario.
If the government wants to do something positive when it comes to trying to find ways to give the private sector an opportunity, I would say there are better ways to do it than you are doing here, because in the end it will be the taxpayers of Ontario who will come up on the short end of the stick.
C'est toujours intéressant quand on vient à cette Assemblée et on a la chance de discuter les projets de loi du gouvernement. Dans cette instance, on voit un gouvernement qui nous dit qu'ils veulent transférer cette route au secteur privé ; ils veulent donner l'opportunité au secteur privé d'acheter cette route. Mais quand on regarde aux chiffres, c'est pas mal évident ce qui va arriver. Il va y avoir du monde qui va faire de la grosse argent, les amis de M. Harris et autres -
M. Marchese : Il y en a beaucoup.
M. Bisson : Bien, pas autant qu'il avait avant. Ça commence à diminuer.
M. Marchese : Les gens qui ont de l'argent.
M. Bisson : Les gens qui ont de l'argent, oui.
Mais ce qui arrive, c'est que ceux sur l'autre bord de l'équation, les contribuables qui paient pour le système, commencent à revoir qu'ils vont avoir de moins en moins d'opportunités dans l'Ontario de M. Harris.
Dans cette situation avec la 407, le gouvernement nous dit qu'on va profiter, ils nous disent que nous les contribuables, on est en avant de l'échelle quand ça vient à cette situation qu'ils organisent avec la 407, mais avec toutes les autres, on va voir que le gouvernement était mal et que nous, dans l'opposition, on était bons.
The Acting Speaker: Questions and comments?
Hon Mr Sampson: I want to thank my colleagues from Cochrane South and Lake Nipigon for their very lively debate and presentation. I'm always entertained, at least, by the two gentlemen who have spoken.
I want to comment, if I can, briefly on a couple of points. The member for Lake Nipigon gave us a very long and interesting story about how the previous NDP government was forced into proceeding with the construction of this highway in what they felt was a public-private partnership, and in doing so felt the best way to raise funds to finance this was to do it on the backs of the taxpayers. The story he spun was that they felt they had to do that because when they compared the interest rates between public debt and private debt - I think at one time he referred to a section of the Globe and Mail's Report on Business; I think that's a subscription he has on a regular basis - he said: "There are two different rates being charged here. The government rate is cheapest, so therefore the government should build the highway."
If you really look at that statement, it runs to the core of what he and the other members of his NDP caucus truly believe in, and that is that government should be running everything. If you believe the theory that he tried to tell us here, if indeed government has the cheapest source of funds, then government should be doing everything in this province. In fact, you should nationalize every entity that borrows money in this province, because clearly government would be able to raise the money cheaper. I don't know whether the member really meant to say that, but that's where his comments were going.
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The member for Cochrane South says he believes there's a role for the private sector to play. We do too, and we think we've properly structured it in this, like we properly structured the role for the private sector to play in the tree nurseries we sold, where there's going to be a $10-million investment as a result of our privatization initiative, yet you closed them.
Mr David Caplan (Oriole): I'm pleased to follow and I congratulate my colleague from Cochrane South for his comments. It's interesting that this government's officials have acknowledged that there are standard administrative policies related to public accountability when you buy assets. They are there to protect the public interest. However, and I would stress this is a very big "however," there are no specific regulations ensuring public accountability and a publicly accountable process in the sale of an asset, the sale of something the size of Highway 407, and that's really substantial. So how is the public interest going to be protected?
As the member for Cochrane South spoke about, the legislation is fairly mute. All it says is "Trust me," from a government which has shown it's totally untrustworthy when it comes to health care. It makes all kinds of grandiose announcements; we discover six months later with a lot of public pressure, when there's a crisis with emergency rooms bursting at the seams and long-term care is a total mess, that they are only prepared to act then, only when the light is shone in those very dark corners. So these "Trust me" arguments just do not hold any water.
When the Minister of Education stands up, he says, "Trust me, this will create more apprenticeship positions," or lower class sizes, or more money in the classroom. Those have been proven over a very short period of time to be just plain wrong. So it takes an amount of chutzpah to be able to say "Trust me" to the public of Ontario.
For maintenance or toll rates or expropriation for expansion, all the issues involved, there is no guaranteed protection of the public interest. That is the single greatest flaw in Bill 70 and why the government needs to act.
Mr Marchese: I congratulate my friend from Cochrane South, who has highlighted a number of important points. The biggest comment around this that he talked about is, "This is a boondoggle." Who is this a boondoggle for, except the private sector friends? They've got quite a few, because when they have their $1,000 fundraisers or $500 fundraisers, it's not Uncle Joe who goes to those fundraisers; it's these kinds of friends who are privatizing our public roads who go to them, and these are the very people who profit from these measures that M. Sampson, the minister of privatization, is involved with.
He says, "These guys on the other side say they want the government to be running everything." Good Lord, not everything, but essential things. Health is something we should be controlling, not private insurance. Education is something that belongs to the public sector, not private schools. And public roads belong to us. It is a public asset that does not belong in private hands. That's what the member for Cochrane South spoke to.
Once their friends control these roads, they control the tolls. The tolls go on forever. They don't cease, because that's the way they make money. Who are they trying to help in this regard? It's not me; it's not their Tory friends at the lower level, misguided as they are. It's not them; it's the big boys, the ones with the big bucks.
The member for Cochrane South pointed to this wallet. This is a little wallet; you can barely fit $20 in here. We're talking about their friends with big pockets, big wallets. They are the ones who will profit from this bill, not me, not the general public.
Mr Ted Chudleigh (Halton North): It was interesting listening to the comments from the member for Cochrane South. In listening to him, a lot of his comments dealt with how things were in the past, the great system we had in the past in Ontario.
My memory of the past is fairly lucid still. I remember the jobs that were disappearing in Ontario, the 10,000 jobs that disappeared in Ontario throughout the 1990s, and that was the old system. That was the system we had, which was destroying jobs.
I remember our school system in the 1980s and 1990s. In some cases, it was graduating up to 20% of students who couldn't read and write. That was the past. That was the legacy you left for Ontario.
I remember the hospitals in Ontario in those days, when hospital beds were being closed. Year after year of closing hospital beds and continuing to maintain the cost of those things.
Interjection.
The Acting Speaker: Come to order. Member for Oriole.
Mr Chudleigh: I remember that happening in what was the past in Ontario. There was no future in that past.
I also remember businesses moving out, no fewer than 16 businesses in the industry I was in, food processing.
Mr John Gerretsen (Kingston and The Islands): Margaret says they're all moving out of Mississauga.
The Acting Speaker: Member for Kingston and The Islands, come to order.
Mr Chudleigh: They either closed down or they moved back to the States because of the oppressive policies of the past -
Interjection.
The Acting Speaker: Member for Fort York.
Mr Chudleigh: - that your government in those days seemed to revel in.
Interjections.
The Acting Speaker: Opposition, come to order now.
Mr Chudleigh: Not today.
I also remember people from all over Canada moving to Ontario, not for the job opportunities but for the welfare payments that were 40% higher than the other nine provinces. It was disgusting.
If that's the past that you want for Ontario's future, you will have no support from this side of the House. In fact, I doubt you'll have any support from most people in Ontario. The past is not where we want to go. We want to go into the future, and, believe me, Ontario's best days are ahead of us.
The Acting Speaker: Member for Cochrane South, you have two minutes.
Mr Bisson: "Chutzpah" is the word I have to sum that up with. The member for Halton North tries to make us believe that everything that was in the past in Ontario was a dark cloud. Why is it that Ontario, up until this time, has always been the best place in Canada to live? It's the most prosperous province. It is a province where most people do very well.
But I look back, and the member talks about the past, and we had a better system of health care before Harris came to government; I agree. We had a better system of education before Harris came to government, and we had students who had less student debt before this government ever came to power. We had emergency wards that were operating before Harris government came to power. So I look at the past, and the past was actually not a bad thing as I compare it to what Harris is doing today.
I've got to comment, because the minister said it's because the NDP wants to nationalize everything under the sun. Not at all. That's not what we're saying. You're saying that the government should run everything. Not at all. But I'll say, like my friend the member for Fort York, government has a role to play, and government runs hospitals and the health care system better than anybody else. You just have to take a look at what happens between us and the United States. Never mind the issues of accessibility to good health care services for citizens, because we know we lead in Ontario and in Canada over the United States, but if you look at the cost of our system as compared to the United States, the Canadian Ontario model is a much more effective and efficient system when it comes to how much it costs us as compared to the United States. Why is that? Because we socialized the cost, because we have decided that the government does have a role to play when it comes to health care and we have learned that we can do that much better when we socialize the cost and socialize the responsibility for running a system that is efficient and responds to people and not to people's profits. So, yes, I believe the government has a role to play, and it should.
The Acting Speaker: Further debate?
Mr Chudleigh: Madam Speaker, it will come as no surprise to you tonight that I speak in support of Bill 70, an act to offer Highway 407 for sale to the private sector.
The government may not be in a position to fund the remaining construction on this vital link for years to come. In order to ensure the timely construction and the best possible financial deal on Highway 407 for the people of Ontario, we have an obligation to test the market for private sector interest in this project.
This government has been particularly good at following through on our promises, a fact that I'm very proud of. Today we fulfil another promise, a promise made last February to offer Highway 407 to a fair, open and competitive sale process.
It is my belief that such a sale will most quickly ensure this necessary piece of infrastructure is built. It will help the flow of goods and people, thereby stimulating growth and creating jobs in Ontario. However, it's important to remember that we will not simply give this asset away. Ontarians have contributed $1.4 billion to this project, and it is imperative that they receive in compensation a reasonable return on their investment.
In addition, the sale of Highway 407 would remove an encumbrance that could inhibit our ability to deliver further on tax cuts or reduce our ability to make necessary investments in health care, education and perhaps community safety.
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In any sale, our requirements, and thus the requirements of Ontarians, must of course be met. First, any potential buyer must complete the highway with extensions to Burlington in the west and a connection with Highway 35/115 in the east, with provisions to complete the link, the bypass, all the way to 401 in the east.
It's interesting that this was not provided for in the initial tendering of the highway. If you're going to build a bypass, it should reconnect with that section of road that you're bypassing. Yet this road didn't do that. So I wonder how much thought went into the process when it first began.
This construction needs to start no later than next spring, assuming legislation permitting it is in place. We must complete the highway to secure our future prosperity. While jobs will come with construction of the highway extension - many jobs - those jobs are temporary. The real benefits of the highway are the long-term jobs gained and maintained through improved transportation links and cheaper access to goods and markets.
The western highway extension greatly affects my constituents in Halton North and businesses also located in my riding of Halton North. Many of these businesses, such as auto parts manufacturers, warehouse operators and farm enterprises, rely on quick, easy access to business partners in the greater Toronto area.
Also, many of my constituents commute to jobs in and around Toronto. Although Georgetown, Milton and Acton are thought of as bedroom communities, it's interesting to note at this time that more people drive into those towns to go to work than drive out. So although commuting is important, these communities have built an industrial infrastructure of their own.
The extension of Highway 407 will help ensure continued prosperity for all of the greater Toronto area. Business is booming in Ontario, and we have to make sure the infrastructure is in place to keep it that way. Already Toronto is being choked by a serious lack of new transportation infrastructure, and Halton is fast becoming a bottleneck at the western end of the GTA. Mornings now when I come to work, quite often the 401 is gridlocked.
Past decisions to stop development of the eastern portion of the Gardiner Expressway, for instance, have contributed to some industries pulling up stakes and leaving the area, not because they don't want to do business or be located in the GTA but because they pay too high a price for an inefficient highway network. They can't get their raw products in and they can't get their finished products out in a reasonable sort of way.
Transportation links that do not quickly and easily allow raw materials in and that hamper finished products from being shipped out are almost worse than no infrastructure at all. Without good transit links, businesses would not have flocked to the greater Toronto area in the past. Now, thanks to years of inaction, many companies are stuck with huge investments in land and buildings which are now stranded behind gridlocked streets. This gridlock adds to the cost of doing business and ultimately cuts into our standard of living. It's time for us to catch up in order to secure our future and develop those future jobs that Ontario needs and deserves.
Imagine the poor economy we would have and the bleak economic future we would now be facing if those before us did not have the courage to complete Highway 401. Imagine, if you will, the robustness of our economic life if transportation through and around Toronto was not an issue. Consider the impact of trying to compete in the world economy without modern communication equipment and the true value of modern, updated transportation links becomes apparent.
This gag on economic growth must be loosened or established industries will look elsewhere for their expansions and new investment. Economic growth will bypass us here in Ontario because our biggest engine of growth, the greater Toronto area, will not be able to handle any more. We need this highway and we need it now.
In any potential sale of Highway 407 it is absolutely necessary to ensure it is completed and then used to its full potential by all Ontarians.
In any sale of Highway 407 we must ensure that fair tolls are charged. My colleagues will likely agree that any private operator will and should try to increase the use of the highway in order to maximize their profits. I expect variable tolls, based on time of day and day of week, will be charged. Given that there is a parallel public route, optimum fairness exists in that people choose for themselves which route to use and the user pays.
It is also important to remember that with Toronto bidding on the 2008 Olympic Games, important transit links like the 407 are necessary if Toronto wants to avoid the logistical mess that occurred in Atlanta, Georgia, the site of the 1996 summer Olympics.
One of the potential sites for competition in those 2008 games is in my riding and lies close to the route of the 407's western extension. Hendervale stables is a well-known equestrian venue and is growing in reputation and is one of any number of businesses which will benefit from the highway extension. This extension will also help enhance their bid as being easily commutable to Toronto.
In comparison, in most of northern Europe and also the eastern United States one can travel to probably within 20 minutes of most locations, virtually anywhere in those areas, on a four-lane divided highway. It's essential to an industrialized country to have and maintain these types of connections.
In addition, the timing of this sale is such that a foreign investor might see the value in purchasing a major asset in Canadian funds. Our substantially undervalued dollar promises that such an investment will only rise tremendously in relative value.
The second of our requirements in this potential sale is safety. I understand that the Ontario Provincial Police will continue to patrol the highway to ensure safety standards are met by drivers. I fully expect that in any sale design standards will be met or exceeded on portions of the highway yet to be built and construction standards will be maintained in the face of a demanding schedule for completion.
Mr Marchese: Speaker, on a point of order: There's no quorum in this place.
The Acting Speaker: Clerk, could you check and see if there's a quorum, please.
Acting Clerk at the Table (Mr Douglas Arnott): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Speaker.
The Acting Speaker: The member for Halton North, you can continue that thought.
Mr Chudleigh: I want to emphasize that the sale of Highway 407 is the type of creative solution not often seen in government and should be applauded.
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The Acting Speaker: Questions and comments?
Mr Gerretsen: As I said in an aside to the member, his speech could have been written about anything. It could have been written about the kind of Ontario we want, and I totally agree with him, but it had absolutely nothing to do with the public interest and this particular road in Ontario.
He was talking about there should be fair tolls charged on the road. I drove it the other day from the 400 to the 404 and about a month later I got a bill for I think it was $1.25 plus about $5 in administrative charges. I figured that little portion of about 10 kilometres on that road cost me about $6. That certainly didn't sound like a fair toll to me. That's not a fair toll to me.
There is absolutely nothing in the legislation that will show you how the tendering process is to be done. If you look at the legislation, the road could be sold for $1, $5, $10, $2 billion, whatever. There's nothing in the legislation that deals with that. It is one of those "Trust me" pieces of legislation. "Just go for it and trust us. We will do the right thing."
We in Ontario know you cannot trust this government. Look what they've done with health care: Emergency rooms being closed clear across this province; the Premier making a fool of the Minister of Health here earlier this week. He's handing out a cheque to one hospital here in Toronto and saying she's writing up the cheques for the other hospitals in her office and that's why she couldn't be there for the ceremony of turning over the cheque.
No, we don't trust you. We don't trust you with health care, we don't trust you with education and we certainly don't trust you with selling the infrastructure of Ontario.
Mr Bisson: Again, chutzpah. The member for Halton North gets up and the first thing he says is: "We kept our promise. This is another example of how we kept our promise."
I want to remind the government of some of the promises they made in the election of 1995. Do you remember what they said about education? They said not one cent would be cut from our system of education. They would make sure that the money was spent in the classroom. How much have they taken out? They've taken over $1 billion out of education since they've come to power.
They said not one cent would be cut from our system of health care. They promised they were going to ensure that all the hospitals in Ontario would be made whole and would be made safe. How many hospitals do they plan to close in the province of Ontario? I think we're at something like 27 hospitals that the government of Ontario is closing.
I'll tell you about chutzpah. One thing about this government is they've got a lot of chutzpah because they stand in this House and they're out there repeating the lines they've been given by their communications people who are not very close to the actual facts - as a matter of fact, they're very far away from the facts - and they try to make that gospel.
The other thing I want to say is the member talks about tolls and how he hopes, and he assures us, that tolls at the end of all of this exercise are going to be very okay, there won't be a problem, they won't go up. Then why don't you have anything in the legislation that would regulate the price of tolls once the highway is transferred over completely? Once the private sector gets it, they can decide to do what they want with it. Are you regulating the tolls in any way? They're not being regulated in any way.
What you're going to do is allow the private sector to determine what the market will bear. That's the belief of the government and we understand that, but don't come here and start telling us that somehow or other the tolls on Highway 407 are magically going to go down. If anything, they'll go up because they'll have to pick up the cost of buying the highway and the financing over a longer period of time.
Hon Mr Sampson: I want to thank my colleague for Halton North for his interrupted but I think quite eloquently delivered presentation. I know he has a lot of concern about this particular transaction because his residents see the highway in just about every aspect of their daily lives as they move around their area. It's a highway that's frankly very important for the people in the Halton region, whether they be in the north part or the south part. It's important for the people in the Hamilton area. It's important for the people in the Durham area and the York area. It's important for the people in the city of Toronto and certainly for the people in the Peel region of this province. It's important because it's a crucial part of our infrastructure, which is required to allow goods and services and people to commute back and forth.
This government will never agree on philosophy with the previous government. A member last night spoke very eloquently about how we might disagree on how to get to a certain destination, but we might all agree on the same destination. We'll never agree with the NDP on the particular philosophy as it relates to this highway, and I acknowledge that.
I understand that the Liberal Party has not caucused this particular piece of legislation yet. I'm still waiting to hear from the Liberal Party a definitive position on this particular bill, and I'm sure we'll hear that as the debate unfolds.
But I say to my friend opposite, who spoke about a tolling structure: I agree, whatever the charge was, $6 for whatever it is you travel and then for how long you were on the road, is not appropriate. But what we really have to do is get the road in the hands of private people who are more likely to respond to concerns like you have about the pricing of the road and make it affordable so that more people will travel.
Mr Caplan: I think I'll pick up where the minister left off. If it's not up to the government to make sure that people aren't being gouged through the tolling costs, whom is it up to? Is the private sector somehow going to look after it? If the minister acknowledges that this particular government has fallen down on that responsibility, why is the member so confident that the private sector is going to do any differently?
It's very interesting that there is just this recurring theme: "Trust me. Trust me that this is going to happen." I think that time and time again Mike Harris and his government have shown you just can't trust them. They break their promises. Look at tuition, for example. Tuition would be 25% of the operating costs of a university. On average, it's 35%. At Nipissing University it's 53%. "So trust me." The students of Ontario certainly don't trust the Tories. Patients in Ontario don't trust the Tories. They've seen their hospitals close. Four hundred residents at Riverdale Hospital don't know where they're going to go to get their health care. "Trust me," say the minister of privatization. "Trust me," says Mike Harris and the Tory caucus. Baloney. You can't trust Mike Harris. You can't trust the Tories. They just haven't proven themselves worthy of that trust.
It's very interesting, and it was brought up in an earlier comment, that they're going to move this legislation through before their so-called lobbyist registration. So we have the possibility for this backdoor, backroom wheeling and dealing. There's no guarantee how this is going to be monitored. What's the value? How do we ensure that taxpayer public interest is protected in Ontario? The government is silent. All they say is, "Trust me."
The Acting Speaker: Response, the member for Halton North.
Mr Chudleigh: I thank the honourable members for their comments. The member for Kingston let us know that he drove on the 407 and paid a toll for it, which is what happens on a toll highway. However, on this particular toll highway you have a choice. You can drive on the 407 or you can drive on the 401. That is your choice and you pay for that privilege. You made your choice, an individual choice. You didn't have to pay that fare. That's the way that system works. It's a user-pay system and it's fair to the taxpayers of Ontario. It gives people a choice.
The member for Cochrane South was also concerned about tolls. Again, a private sector operator of this highway will intend to maximize his return on that highway and he will do that by increasing traffic. As so often happens in the private sector, when you put on a sale, when you lower the price, you increase your revenues and you increase your profits. That toll deal that the opposition seems to be so concerned about may turn into the best thing that ever happened to Ontario taxpayers.
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The member for Mississauga West, as might be expected in this House, said some very kind things and I appreciate that, especially from Mississauga West. For some period of my life I made my home in that lovely community and quite enjoyed living there until they built all those houses and I had to move back out to the country.
But the member did say one interesting thing. He talked about expecting a definitive position from the Liberal Party. I thought to myself, "Now there's an oxymoron if I've ever heard one in my life." However, I look forward to that same definitive position, at least on one issue, that the Liberal Party may come to in Ontario.
The Acting Speaker: Thank you. Further debate?
Mr Gerry Phillips (Scarborough-Agincourt): I'm pleased to join the debate on this bill. I'd just say to the public that one of the reasons we are suspicious of this bill is that the government has been caught playing games with the finances of the province. I'll just go through a few things that have happened recently, and you'll know why the Liberal caucus is suspicious of this bill.
First, the Provincial Auditor forced the government to change its books. He forced the government to take $1.6 billion off its books - forced it to. We've now found out that we have two sets of books. We have the budget and we have the public accounts, two completely different sets of books. Just about a week ago we were here in the Legislature and one of the Conservative members said: "We're very proud. When we inherited the government, when we won the government, we found two sets of books." We find now that you're back to two sets of books. We found yesterday actually, at what we call estimates, where in the estimates the government says, "We're spending $1.1 billion on teachers' pension" and in the budget they show $61 million. I said: "How could it be? You're showing two completely different numbers." "Well, one is one accounting system, one's another accounting system."
I'll give you a third example: Ontario Hydro, a crown corporation under the direction of the government. The auditor has now found that Ontario Hydro has not used proper, generally accepted accounting procedures but has used a unique authority they've got called the rate-setting authority to write off $6 billion in expenses that they had no right to do if they used generally accepted accounting principles.
Finally, I'll use the school capital. The government has proudly announced a new school capital program. Essentially, every year we'll spend $400 million as school capital, but we'll only show an expense of one twenty-fifth of that. That is a total debt-creating machine. It is a perpetual debt-creating machine.
The members may say, "Why are you suspicious of this bill?" There are four recent examples. The Provincial Auditor forcing the government to change its books to the tune of $1.6 billion - he wouldn't have signed the report if you hadn't done that.
I want to go over our concerns on this bill, which are significant. First, I'll say we are enthusiastic about the completion of 407. We understand and are very supportive of the need for a good infrastructure. Our auto sector is what is driving the Ontario economy. The most important page in the budget for me was where the government shows that exports are now 46% of Ontario's economy. In 1990, they were about 28%. They've gone from 28% to 46%. Over half of that is auto and of course 90% goes to the US. We need an infrastructure that will allow us to compete on the just-in-time delivery service necessary for the auto sector, and a huge part of our auto sector is located in the Durham area - Oshawa and things like that - so we need a good infrastructure. The issue is not whether the 407 should be completed; it's how it should be completed.
I want to go over the concerns we have with this bill. First is that the government has yet to show us the advantage to Ontario for the private sector to own this thing outright. The previous government had initially planned that the 407 would be built with private sector financing. I thought it was a good idea to have the private sector finance the project and to build and manage the project. That was fine.
At the last minute there was a change made and the private sector did not finance it. I thought that was a mistake, but that is one way to complete this. Say to the private sector, "We will take bids" - and by the way, I'll talk about my second major concern in a moment - "from the private sector to finance this thing and to build it and to have control of it for a period of time, after which it reverts to the public."
That's the first question. What is the advantage in selling this forever to the private sector? The government has refused to spell out that advantage, other than the fact we hear now: "We've got a low Canadian dollar. We think there are some US guys who will want to come up here and, at bargain-basement prices, buy our highway." That's what the government members just said. "With the low Canadian dollar, this is the time when those Texas oil guys can get up here and buy our highway."
You may get a good price for it; in fact, you probably will. But I want to know the long-term benefit to the Ontario consumer to sell it off.
Recognize what we're selling here. What we are selling, what they are buying, is what's called a stream of revenue. What these buyers will say is, "How many cars and trucks a day is Ontario going to get on to our road and how much can we charge them?"
By the way, whoever buys this will have an unfettered right to set the tolls and an unprecedented collection agency. There's no company in Ontario that has the right to collect the revenue, and if you don't pay it, you lose your licence. This is giving the private sector a terrific club that no other private sector company has. You'll have a gun to the people's head, saying, "Listen, you pay up or I'm going to tell the government to take your licence plate off."
What we're selling here is Ontario consumers' tolls, and we're selling them to the highest bidder. I want to know, because you haven't told us that - as a matter of fact, the annual statement of this transportation corporation is the most unusual financial statement I've seen. It has no income statement on it. There are business people in this room here. Would you ever approve a financial statement with no income statement? I think not. The reason is they refuse to divulge the tolls.
I say to the minister, who is here tonight, and I appreciate that, you tell us what you expect the annual tolls to be on this road and you tell us what you expect the value of this thing is, and then you'll begin to get support, perhaps. You tell us what happens five years from now to tolls. Is it unfettered? That's going to be the marketplace; just let it happen, let 'er rip. Okay. I just want Ontarians to know that.
What is the advantage to Ontario of selling forever? I just heard today it looks like it'll be some offshore buyer using the big American dollar to buy this thing. All right, you're going to buy our 407, you'll own it forever and you can set the tolls forever. What's the advantage of that?
I know one advantage is you may get a little more short-term cash for it doing that than you would if we put this out to tender and said, "Listen, private sector, build this, finance it, and for a 20-year period you will have the rights to the tolls, but after that period of time it reverts to public ownership." I just want to know, what is the advantage in selling this thing forever?
Why are we so suspicious of this government? I went through earlier that the Provincial Auditor caught the government and said: "Listen, I'm not going to sign those books if you're going to do what you did in the budget. You're going to have to change that." They forced the government to take $1.6 billion out of the books from 1997-98.
The school capital thing that's going on is, in my opinion - and the Ottawa Citizen had it right in the editorial. They said these are the accounting methods that Mike Harris attacked Bob Rae on, and now we're going back on it.
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The Hydro situation that I talked about: You look in the books, in the public accounts, and you'll find the government prepaid one firm $500,000, put it in last year's books for services that are going to be performed this year and next year. It's a good way to fiddle the books but it's not a good way for the public to understand the finances.
Here we are, the government says, "Come on, Liberals, sign on, sign the bottom line." We're buying a pig in a poke. There would be no business person who would ever sign this deal without knowing these things. Will you make the contract public? The answer right now is no. The public won't see this thing. The government will just sign the deal and keep it -
Mr Marchese: How come?
Mr Phillips: My colleague said, "How come?" Because they are too embarrassed to make this public. Here's what the government wants the Liberals to do: "Come on, sign tonight, sign this thing. We want to know, will you sign it?"
I say to you, first, will you commit today to making the document public? Will you do that? Second, will you spell out for the people of Ontario what is specifically the advantage of agreeing to sell this thing forever? Why have you not looked at the option of saying, "We will put it in private sector hands for a 20-year period of time and then it reverts to public ownership"? Because this thing, believe me, could be an absolute gold mine. Imagine if 30 years ago the government of the day had sold the 401, sold it off to the Texas barons. There wouldn't be enough transponders around to handle the traffic.
By the way, I've said I have, in principle, no objections to the privatization of things. I don't have a philosophical problem with privatization - it's all around us - but I do want to know the answers to these key questions. I want to know, how will the public in any way have any protection on the toll issue? Make no mistake, the area around the 407 is going to get more and more congested. That's just the way it is. But we, for now and forever, are going to sign a document that says that without any scrutiny, without any opportunity for any public input, the tolls will be set by the Texas baron who owns the thing.
We're going to also say that the public has no right to look at the sale document. The public has a billion and a half of their tax dollars into this thing, but they're going to have no right to look at the document that outlines the deal that you're going to make with the private sector.
The advantages to the public of turning this over - and after all, what we are essentially doing is saying to somebody, "We've got a bunch of Ontario residents who have to get from point A to B and they're prepared to pay money and we're going to sell that to you." That's what we're selling. We're selling nothing other than that. I think the public is owed an explanation on what are the advantages of that over the alternative of saying, "Let's simply put this out for bid to raise finances."
This isn't a question of whether the 407 should be built or not built. Of course it should be built and of course it will be built. The question is, what is in the best long-term public interest?
I go back to the Ontario Transportation Capital Corp. There is not one word in here on their financial statements about how much tolls they've brought in. I don't know whether the road is being phenomenally successful or whether it's a white elephant. You can't tell from this financial statement.
Mr Gerretsen: That can't be right.
Mr Phillips: It shouldn't be right, but it is right. Those are the financial statements.
As I say, the public, particularly those who will be impacted by this - and that's everybody, I might add - are owed some answers from the government. Maybe because Mike Harris says, "I want to do this," the government caucus is prepared to say, "Yes, sir, I'll do it," but we're not. We want those answers on the key issues of what the long-term public advantage is to a private company owning this road for the next 100 years, over the alternatives. The 407 did get built; it's two thirds open right now. It certainly is a fine road to drive on, and I gather the tolls are coming in. Tell me the advantages of those two options. They haven't done that yet. Tell me, will you make this document public, or is this going to be another backroom deal cooked up among the financiers?
As a small aside, I've always worried about who's looking after the public interest here. I've said this publicly before and I'll say it again. Ontario Hydro is now in the process of enormous change. There will be many new private sector generating plants built in the province of Ontario. One of our major financial institutions, a well-regarded institution, very successful, whose role it is to finance these private sector developments - guess who went on the board of Newcourt? The chairman of Ontario Hydro, Mr Farlinger. Mr Farlinger is a well-regarded, well-respected business person in the province of Ontario, make no mistake about that. But here is Mr Farlinger, the person who is trying to help Ontario Hydro through the transition, and then I see in the paper a big announcement that he's on the board of Newcourt finances, whose job it is to raise money for private sector organizations that will, among other things, develop things like power.
This requires the utmost in transparency and the utmost in public disclosure, yet the document is essentially rife with, "The minister will make the decision. The final decision will be made by the minister," and the documents won't be public. So if you wonder why we, and I believe the Ontario public, are at least skeptical, it's for those reasons. Clearly, as we head into an election - there will be an election some time in the next few months, and the government is furiously trying to get the books dressed up so they can be paraded out to the maximum advantage - I can see that you could sell this for more cash right away, particularly when you can take advantage of the weak Canadian dollar and bring in those American dollars to buy it. There's no question that you can get more cash for this thing by selling it off forever, and you'll be able to trot out to the public and say, "Boy, we sold this highway off forever for a great profit." That's the purpose here; you want to get that ready for Mike when he trots out the budget in April and says, "Not only that, we sold the 407 etc."
But what is the public advantage in selling it forever as opposed to the other options? Where is the protection on tolls? If you say, "There aren't going to be any" - for the next 100 years, while the Texans own this thing, they can charge whatever they want. I, as most of us, have watched the area that the 407 will run through become more and more congested. This thing, if it's breaking even today, will be a gold mine tomorrow. There's no question of that.
As I said earlier, the government thrust this contract called Bill 70 under our nose and said, "Sign it tonight, sign it right away," without providing the necessary evidence of the benefits that this Bill 70 is clearly the best approach for the 407. I repeat, the debate isn't about whether to build the 407 or not; it's going to be done. It has to be done. The debate is: Who cooked this scheme up, who's going to make all the big bucks and who's going to be left paying the interest on the big bucks for the next 100 years? I suspect the big bucks will be made on Bay Street and the people who are going to pay for it down the road every single day will be on Main Street.
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The Acting Speaker (Mrs Marion Boyd): Questions and comments?
Mr Marchese: I agree with most of what the member for Scarborough-Agincourt has said in this regard. He started out by talking about how one could trust this government when it plays with its finances as it does. It raises important points, because it is a matter of trust. What has this government done in a variety of areas that you, the public, have confidence in? From our point of view, we have very little confidence in them. That's why we raise the issues, because as you watch, you need to be able to judge for yourselves.
He raises the point about American interests coming into this country with their big bucks to buy up a lot of these contracts when you folks want to privatize these roads. For me, I don't really care whether they're American or Canadian. When you privatize, you're privatizing to big, private, corporate barons. It makes no difference. All they want is money. Whether they're American or Canadian makes very little difference, except to say that the Americans control most of our economy anyway, so it can only make it worse. In this regard it's worse; this is true. But the motive for these privatization schemes and for the private sector to get in is to suck up the profits that are to be made.
The disagreement I have with the member for Scarborough-Agincourt is where he says he has no philosophical objection to privatization. I do have a philosophical objection to privatization, generally speaking, with few exceptions. I take the opposite view and believe that there are many matters that should properly belong to governments, where governments need the responsibility to take care of the public interest. This highway would have reverted to us in 27 years. Under this scheme it will not, and that is against the public interest.
Hon Mr Sampson: I'd like to reply to comments from the member for Scarborough-Agincourt. I've shared many discussions with him on a number of subjects - not on this one, I must admit - and I've always found him to have a reasonable understanding of business practices. I agree with him when he says there have to be clear reasons that the public purse, the public sector, the public in general would benefit should we proceed with an actual sale, and I say "should we" proceed with an actual sale. This bill does not contemplate that we actually will consummate a deal. It establishes the parameters under which we will entertain bids and offers. Should the bids and offers that come in not be acceptable, should the bids and offers not demonstrate a clear advantage to the taxpayer and the people who use this facility, should the bids not demonstrate any advantage whatsoever to Ontarians, clearly we won't do it. Why would we?
I can guess at some of the benefits of private ownership of this highway.
Mr Gerretsen: Guess.
Hon Mr Sampson: The member for Kingston and The Islands says, "Guess." Of course guess. As I said, we haven't received bids from people yet. You're asking me to demonstrate and to lay upon the table here a contract. Well, there isn't one, because we haven't gone out to the people who might be interested and asked them on what basis they would bid.
Mr Gerretsen: Will you make it public before you sign it?
Hon Mr Sampson: I know that the member for Kingston and The Islands, the ex-mayor of Kingston, the person who jacked taxes up in the city of Kingston about 30% during the time he was the mayor, has a lot of comments to add, and I would be happy to hear him speak to those. But as it relates to the potential benefits of private sector ownership, I would say there are a lot of them. Transfer the risk of construction of the highway to the private sector. Why is it that the taxpayer should take construction risk of a highway? Why is that? It shouldn't happen. Why is it that the taxpayer should be financing a highway and paying the tolls at the same time? It shouldn't happen. That's clearly why we want to see private sector ownership.
Mr Gerretsen: I will put my record of raising taxes in Kingston during my term as mayor against a Minister of Education who, during his term as mayor of East York, raised taxes a total of 106%. So there.
I ask the minister for privatization to look at section 2 of the act, which gives you absolute authority to determine what the conditions should be. Look at section 6, which says, "The minister for privatization may enter into any agreement that he or she considers necessary or expedient for carrying out the purposes of the act."
Look at section 5, in which you are given complete authority to determine which assets are to be transferred. You can determine the consideration to be paid. It doesn't say for fair market value or for anything else. You can determine any consideration at all. You can establish the terms and conditions etc.
Look at section 14, which says that the owner, whoever you enter into this contract with, can "establish, collect and enforce payment of tolls," can "establish, collect and enforce administration fees," can "establish interest rates to be charged on unpaid" bills, can even exempt certain vehicles from the application of section 13.
You have been given full and open authority, without any controls, to make sure that the public interest is protected. That's what we're looking for from you: Either protect the public interest fully, or, before you enter into any contract, give us your undertaking right here and now that you will make the contract or any supposed contract public before doing so.
Mr Bisson: To the member for Scarborough-Agincourt's presentation, a couple of points. He touched on the fact that the minister was saying that they need to develop this legislation so they can go out shopping to see if somebody would be interested in buying a highway in Ontario. That's basically the argument the minister put forward, that this is the best way to deal with the situation.
I say, why not go at it another way? Why not, if you're interested in privatizing 407, go out and see if there are buyers? Say to people, "We're interested in selling Highway 407" - I wouldn't agree with you, but at least do it this way - and then let the people come forward who want to buy. Then draft legislation based on who is going to buy it so we know in the end what the deal is going to be and if it's in the best interests of the people of Ontario.
No. You're putting the legislation first and looking for the buyer after. Why? You're doing it because a lot of this stuff is going to be done behind closed doors. I would like to examine some of that stuff afterwards, because I think we're going to be able to prove that this is not beneficial to the taxpayers of the province of Ontario.
To the comments about tolls, that somehow or other if the private sector takes over control of Highway 407 - and this is an interesting argument - they're going to be able to increase utilization of Highway 407 by lowering tolls and attracting new consumers on to the highway: Hello. Wake up. The 407 is already run by the private sector. If the private sector were able to figure a way to do it, they would have done it already.
The point is that it goes according to traffic flows and traffic patterns. As people move more into the region and as the economy picks up more, of course the highway will be used more. What will determine the cost of the tolls will be the recovery on investment, what the buyer wants to be able to recover on its investment.
The sad part is that at the end of 27 years, when this highway was supposed to come back to the province and the tolls lifted, it will not under the scheme you're putting forward. We will leave tolls on that highway in perpetuity.
The Acting Speaker: The member for Scarborough-Agincourt may respond.
Mr Phillips: I appreciate the comments of all the members. I just restate our concern and say that the minister responsible, in his response, didn't really address our concerns. Our concerns are, tell us again what's in the public interest for the private sector to own this forever.
What he said was, "Aren't you interested in guaranteeing a price for construction?" I say yes. In fact that was done under the NDP. There was a guaranteed price they could not exceed to construct it, and that's what they did. He said, "That's an advantage." I say that's already there. You don't need to do it differently. He asked, "Should the public be paying tolls and the financing charges?" No. Again, that doesn't require you selling off the highway forever.
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The minister's response simply reinforces the concern that the government has failed to demonstrate the advantage to the public of selling it forever. The minister said: "We haven't committed to selling it forever. We're just going to go out and ask people to submit bids. Then we'll make the decision whether we will or not." I say it's too late. Companies spend money on bids. They expect you are serious when you say you're contemplating selling it.
What we're being asked to do today is this: This is the final chance the Legislature will have to say yes or no on whether we're prepared to sell off 407 forever, because once we sign this document, it's gone. I urge the government to put forward a significant and better case than they have -
The Acting Speaker: Thank you.
Mr Bisson: On a point of order, Madam Speaker: I notice we don't have a quorum again.
The Acting Speaker: Clerk, would you check to see if we have a quorum.
Clerk at the Table (Ms Lisa Freedman): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Speaker.
The Acting Speaker: Further debate.
Mr Marchese: It's a pleasure to have this opportunity to address some of the concerns we have on Bill 70. I begin by commenting on or responding to what the minister of privatization said earlier. He said this bill doesn't necessarily privatize anything. He said it will certainly entertain offers, and, "If the offer is good, we'll take it," and then presumably privatize.
This fellow is the minister of privatization. His role is to sell. It's not to entertain anything; it's to sell, it's to give something away. That's his role. Why else would he have the title of the minister of privatization, except to give away an asset to somebody else? That's his role and he personifies the role of this government in their desire to rid themselves of things public. That's the role of the government. That is why this person symbolizes all of that through his role as the minister of privatization. He clearly tells you, as he said in his previous remarks, that the government should get out of the way of most things. I guess he would like to see only a skeletal remnant of some governmental power here in this place.
But I'm one who holds the view that we need government, that we need the role of government to protect the public interest. The role of the government is to make sure that the health we've enjoyed for a long time remains a public interest and in public hands, that education remain a public asset and that we not privatize and turn it into a two-tiered system. The public is demanding that; they continue to demand it.
That's why you have not moved as rapidly to privatize hospitalization services as you would like, although you've done your best. You do it incrementally because you know that is the only way you can get away with it, to do it imperceptibly so that the public doesn't realize what you're doing. I've got to tell you that you're doing an effective job, but not so effective that the public isn't alarmed by it. The fact you have not moved with as much alacrity to privatize things as you would like proves that the public is against your privatization interests. That's why you have not gone as fast as you would like. You know that, I know that. You know that because you do polling; otherwise you would have rapidly engaged in the plan you had before you came in this place.
Your role is to diminish government, and in this particular sense, with this particular bill, you want to privatize it, to give it to away to private interests. I can smell those corporate barons snorking at the trough just waiting for you to do exactly what they want you to do. They're snorking at the trough and you're right there to assist them as the best servants that you are. They're waiting for you because there is money in them hills. You are the instrument of those corporate barons and they're waiting for you to privatize because there is a lot of money to be made. That's why you're doing it, under the guise, naturally, of protecting the public interest and making sure we turn it into private hands because they do it best.
That's the argument you make, that the private sector does it better. If we rely on the private sector to do it better, we're in big trouble, I tell you. The economic crisis we are experiencing is caused by corporate barons, by financial barons, by bankers moving money instantly, billions and trillions of dollars every moment. They're causing this financial crisis. Half the world is in a recession because it's caused by private interests, financial interests, corporate interests that have the big bucks and we - oh, you look with that puzzled look as if you do not understand, but the public understands because they are suffering the effects of your private friends moving capital, moving money from one country to the other, from one moment to the other, destabilizing economies and countries in a way that most of you should understand. These are your buddies doing this, not my buddies. These are your private friends causing this frenzy, this chaos and the collapse of 50% of our economies globally.
Interjection.
Mr Marchese: Oh, I know. It's probably the workers causing this recession. Or better still, M. Ford, you know what it is? It's the unions.
Mr Joseph N. Tascona (Simcoe Centre): Yes, unions.
Mr Peter L. Preston (Brant-Haldimand): Now you've got it. Print it.
Mr Marchese: There you go.
The Acting Speaker: Order.
Mr Marchese: It's the unions that control it, isn't it, Mr Preston? It must be. How else would out explain it? It's got to be two culprits. Let me see if I can think of somebody else. I'm not sure. Workers, yes, because they're demanding too much. Speaker, you read this article today where it says the rich get richer as the wage gap rises. I suppose they're causing the recession. Right? The poor people are getting poorer, or is it the diminishing middle class, which this report speaks to? Are they causing the recession? It must be. Better still, again, it must be the unions causing this poverty. No, better still again, these poor workers should accept less to make us more competitive with the other collapsing economies across the globe. Is that the answer you Tories recommend for our population?
These are your private friends. The gap widens. People are working longer and harder for less, and are more insecure than ever, with unemployment as high as it is in a booming economy where the poor should be richer because you've got more money. The economy's been working well for the last three years - across Canada I would add; nothing to do with you fine Tories.
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Mr Preston: Nothing like Ontario, I might add.
Mr Marchese: Under a good economy, the poor should be elevated. Doesn't that make common sense? I think it does. Imagine if in a recession people are poor and in good times those poor people become poorer, does it speak badly of this Conservative government? I say it does.
I'm no defender of private interest. I am not one like the member for Scarborough-Agincourt, who says he is not philosophically opposed to privatization. I am philosophically opposed to privatization, plain and simple, by and large, with very few exceptions. That is a principle that I abide by because I believe it's wrong. The public has got to take a position on these matters. That's why, I know, a lot of people are watching: They've got to become more political, keep us accountable. And I don't say just them - keep us all accountable. The way you do that is to become more politically active. That's the only way you can make politicians accountable: by spreading a civic movement, by making sure that through your involvement they will listen to you. I know they haven't listened in the past, but eventually they've got to listen. An election is coming up. That's the best time for these people to listen.
I think of housing. Housing is a public asset. Highways are public assets. Universities are public assets, education is a public asset, health is a public asset. But to listen to these guys you wouldn't know it. They say housing was a boondoggle. I say privatization of Highway 407 is the biggest boondoggle we will ever see because, I tell you, there is big money to be made in this.
Mr Douglas B. Ford (Etobicoke-Humber): You said it was private when you introduced it. You're talking out of both sides of your mouth.
Mr Marchese: Uncle Joe isn't making the money, but their good friends, Conrad Black types, are making the money.
Speaking out of both sides of the mouth. Our previous government got into a joint venture with the private sector. It was a joint venture. It said that at the end of that 27-year period those roads would revert back to the government, control would revert back to the government, and so they should. They are public assets and this is a boondoggle. What's happening in housing is a boondoggle. Now what you people did or tried to do -
Mr Doug Galt (Northumberland): What you people did.
Mr Marchese: What we did was to put money into housing so people could be sheltered.
Mr Ford: Most expensive housing in history.
Mr Marchese: What you people are doing is to get out of the field of housing, leaving thousands homeless. A hundred thousand people on waiting lists for subsidized housing because they cannot find housing they can afford. You people are not building -
Mr Ford: Because they keep bringing in 100,000 immigrants all the time.
The Acting Speaker: Member for Etobicoke-Humber.
Mr Marchese: - and your private sector friends are not building because there is no money for them to be made unless you give away the store. If you give them the land and if you give interest-free loans to those people and so much more -
Mr Ford: Where do you get your brains from?
Mr Marchese: Mr Ford, this -
The Acting Speaker: Please take your seat, member for Fort York. Would you stop the clock for a moment.
It's still early. We've got a lot of time to go. People are being very raucous. They're not having any respect for what's going on in this place or the seriousness of the bill. I'm going to name people if they don't keep order. Particularly member for Etobicoke-Humber, please -
Mr Ford: Yes, Madam Speaker, but would you tell him to call me the member for Etobicoke-Humber and not Mr Ford?
The Acting Speaker: I would be happy to do that. The member for Fort York knows that he should be naming people by their riding and I ask him to do that. I would urge members that if this is the serious business that we are supposed to be doing here, that we do it seriously. Member for Fort York.
Mr Marchese: The member for Etobicoke-Humber, who loves to smile his tenure in this place - because that's all he does. Throughout his tenure here he smiles a great deal. I'm happy to see it because he beams up this place with a great deal of light and spirit, but I've yet to hear him declare himself on any issue. I hope he will respond to what I say, I really do.
The Acting Speaker: Member for Fort York, it would be best if you were not provocative but spoke to the bill.
Mr Marchese: He provoked me by saying where I get my head and I was thinking that perhaps I'd like to hear some parts of that head pronounce itself in the debate. That's all I was saying.
The Acting Speaker: And now you are being provocative with me, member for Fort York.
Mr Marchese: No, I agree with you, Speaker. I'll move on.
I'm saying to the member for Etobicoke-Humber that housing is a critical part of human life. People need housing. I'm saying to him that I get my head from my experience with living people in my community. My head responds to the needs of people in my community. I don't know what his community is like, but my community says people want and need housing. I don't know what he says or what his community says, but I most definitely believe -
Mr Galt: On a point of order, Madam Speaker: I'm finding this speech is on housing and people's need for housing. I think it's on 407 and the privatization of it. Do you suppose he might get on topic?
The Acting Speaker: Member for Northumberland, I have suggested a number of times that he do so and I will again. The member for Fort York.
Mr Marchese: Thank you, Speaker. A number of members, including my colleague beside me here from Cochrane South, have talked about important questions, such as who is benefiting from such a bill. Who benefits is the question that he hasn't answered, that none of those members are answering. One of the other questions that has been raised is, will he expose the contract that he has or has in mind? Will he release it and let the public know? I argue, why wouldn't he do that?
If this minister, his cronies beside him, behind him and across from him, don't want to release such a contract, why not? It's not a complicated question. We argue that it must make its privatization review public. It should be available so the public can judge for itself whether or not this is the right way to go. I believe the government promised a transparent privatization process, yet they refuse to release the review, citing commercial confidentiality.
Mr Bisson: What's that mean?
Mr Marchese: What it means is that the corporate barons are snorking at the trough and he cannot show us that review because to do so would mean that his private sector friends get exposed and he, as the minister of privatization, gets exposed. That's why they don't do it, but the public needs to ask those tough questions in order for them to know whether this is a cover-up or not and whether or not this review is a matter of public trust or not. They should judge this bill and this contract and this review, not the minister of privatization, whose sole goal is to privatize. Let the public judge. If he doesn't permit such a review, one has to question the process, the plans, the scheme, the intention of this minister. But it's not him; this government, the Premier is in charge here. He's but a tool.
We need to know whether or not at some point these future owners would, if there is some congestion on alternative routes, and we predict that there will be - whether he can tell us that the owner of that road will not jack up the tolls. Can he assure us of that? I tell you, he cannot and will not. I can almost guarantee that the tolls will be jacked up. There will be greater congestion on those roads close to 407, and when there is, there will be a desire for more people to go on that toll route and more tolls, higher tolls will be levied. I can guarantee it.
The public needs to ask those tough questions of this government. I believe the tolls will continue to be paid even after the road is paid for. I believe that will be the case. This minister cannot guarantee, will not guarantee, that will be the case. For me, this is the biggest rip-off that the public will have to endure, will have to suffer, and the public, the taxpayers of this province, will have to pay the price.
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I'm not a big fan of tolls. Yes, we engaged in it as a government, as a joint venture, but I am not, generally speaking, a fan of tolls at all. They belong to us, to the public, and we should be paying for those roads out of our income taxes. If we got a few more little bucks from your friends, a few dollars more from your big friends, the ones you want to give a big tax cut to, if we got a few more of those bucks, the member for Etobicoke-Humber, we'd be better off.
Mr John Hastings (Etobicoke-Rexdale): Why did you sacrifice your principles and not resign?
The Acting Speaker: Order, member for Etobicoke-Rexdale.
Mr Marchese: I know this is something we have before us and we've got to deal with it, but we do our best. We advance our case and let the public decide for themselves what they think of this deal, whether or not they trust this government with such a privatization scheme and whether they trust them that the tolls will be fair, that there will be no increases in tolls, that somehow this new private person will set the level of tolls that people can afford. You'll have to be the judge of that, as the public. But I've got to tell you, I don't trust these guys one bit. I know, from a number of these pronouncements this government has made, you the public don't trust them either.
You'll recall we've been debating for a long time now here the whole issue of emergency room backups, emergency disasters, hospital disasters literally, and all these fine Tory ministers do is simply talk about, "The money is coming." We announced it a couple of years ago, millions of dollars. We keep on announcing money, millions, that never reaches the people who need it. Do you trust them? I don't. Most of the public is beginning to not trust you either.
On school closings, the minister keeps on arguing that he's not the one making the decisions, yet he is the man who sets the rules. But he stands up every day saying: "It's the other guys. It's the boards. They're the ones in charge. They're closing. If they decide to close, it's not me." But it is him, and they're beginning to understand that. They're beginning to not trust you as much as you think. But you are trying and doing your best to manufacture consent, which is your role, and you're doing it, by and large, not too badly. But eventually the public becomes smaller as they begin to feel the effects of user fees across the board. That costs them a whole heap of money and they're feeling it. They're feeling the effects of your hospital cuts. They're feeling the effects of your education cuts. They're feeling the effects of your allowing companies to monitor their environmental policies. They're feeling all of that, and eventually they'll fight back, and they hopefully will fight this bill as well.
The Acting Speaker: Questions and comments.
Mr Galt: He's quite entertaining, the speaker from Fort York. He spoke on almost everything except the privatization of Highway 407. It was nice that he did zero in on occasion, and he talked about the giveaway. I don't know where he gets any idea that this is going to be a giveaway. There are certain rules and regulations, as I'm sure he was aware, having been in the previous government's cabinet, about how you dispose of government assets.
He talks about a boondoggle. Let me tell you what the boondoggle of the 407 is all about. I was at the Good Roads convention in 1993 when your Minister of Transportation, the member for Lake Nipigon, was there, and he talked about how the highway would be built by a private company or private consortium. I understood that was what was going to happen, and, lo and behold, I didn't know any different until I was here in the House for a few months. I found out it was the government that built it and they had changed their mind; it was going to be a private company that would actually take the tolls and look after it. They totally switched direction from their original commitment.
Then he talks about trust. How could anybody have trusted them when they would do that kind of thing? This government, this party, is doing what we said we would do. We made a commitment in the Common Sense Revolution. We went across Ontario as a party, we found out what the public of Ontario wanted, we then put it in a document a full year ahead of the election. It should only have been a few months, but you people couldn't decide when you were going to have an election. So it ended up out there a full year, and we're recognized for doing what we said we would do. When you poll and ask people if we're on track with what we said we were going to do, 58% are saying we're on track. If you talk about trust and you wonder who's going to trust whom, have a look at your own record and see what you people were doing. Had you carried out just on this example alone, this bill would not be necessary.
Mr Gerretsen: Of course the member is correct: It is all about trust. I challenge you, sir, to read this document, page by page, section to section, and tell me that this isn't one of the most open-ended documents that you've ever seen, where a government could do almost anything as it relates to this highway.
Before you start talking about commitments kept and all that sort of stuff, I suggest that you ask that of the people in 35 different communities who are going to lose their hospitals. The Premier of this province, when he was a candidate, clearly said he had absolutely no plans to close hospitals. Tell that to the Hotel Dieu Hospital in my community, where the sisters of the religious hospital of St Joseph's have given care and comfort and health care to the people of my area for 153 years and they were unilaterally told by your government, by your minister, "I'm sorry, your services are no longer required." Not only that, the services that are in the building right now will be taken over by another hospital institution in our community.
You talk about trust. You have the nerve to talk about that.
Mr Galt: Oh, no, they did.
Mr Gerretsen: You're talking about it too, exactly the same way. There are many other communities as well. Tell that to the community care centres, which were promised money with the so-called spending from the closed hospitals, when 2,000 patients in my community can no longer get the care that they've had for the last three or four years. I'm sure I'm not the only person getting calls on that. You're getting them too, except you're not saying anything about that.
Mr Bisson: The member for Fort York hit the nail on the head again. I listened to the government side, and every time the member for Fort York gets up to speak, you can see the wiggling. They feel so uncomfortable because they know he's actually exposing what's going on, because he's right. He hit the nail on the head. This is about trust. That's exactly what this is about.
The government, by way of this bill, is saying, "We're going to set up legislation that gives the minister all kinds of powers to be able to go out and cook a deal up with his buddies in the private sector," and we're going to have to buy a pig in a poke. From all of the experiences we have seen now with this government when it comes to its privatization initiatives, we have seen who benefits in the end. Is it the taxpayer of Ontario? Not at all. It's the friends of this government in big business, not in small business.
He talks about trust. When he was responding to the member for Fort York, he talked about how his government kept its promises. You go talk to the small business community in my riding and the small business communities in a whole bunch of other ridings around the province. They remember Mike Harris saying: "There's only one taxpayer. We're only one taxpayer, and we have to make sure that we drive the taxes down in order to help the small business sector and the economy of Ontario." What hogwash. We see what has happened. We have tax increases in my community of over 100% for the small business sector because of your bungling in changing the assessment system and the downloading of services on to the municipalities. As I go through communities, not only in Cochrane South but others, there are more and more small business people who are starting to understand that when Mike Harris talked about business, he wasn't talking about small business; he was talking about his friends on Bay Street and the big business people he is trying to help by way of this privatization bill. Talk about hogwash.
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Mr Gerry Martiniuk (Cambridge): I as usual enjoyed the comments of my friend from Fort York, but to put them in perspective, we have to take ourselves back to 1993. His government had been in power for three short years and they had taken what was once a proud and prosperous province to a debtor, to the poorest province in this country, one with the most welfare per capita of anywhere in this great country - unbelievable, in three short years.
Mr Bisson: What a bunch of simpletons.
The Acting Speaker: Member for Cochrane South, come to order.
Mr Martiniuk: The bankers were knocking on our door, and he knows from whence I speak. His rich union friends came to him and said: "Give us some work. Please, give us some work. You have ruined this province. We are unemployed. Would you please help us?"
So they started a joint venture. I remember that: a joint venture of private enterprise and government. What was the big benefit that our friend from Fort York promised us? The benefit was that it reduces dependence on tax and other provincial sources which can then be directed to other uses. Can you imagine? That's what he promised us in the face of Bob White giving him advice that put this province bankrupt. Instead of that, they set out on a scheme to spend $1.8 billion of taxpayers' money on a scheme that had no foundation, had no partners. It was not a joint venture; it was a scam, a poor scam.
The Acting Speaker: Response?
Mr Marchese: I thank all the members who spoke. I'll begin by saying that I'm always happy that I entertain the member for Northumberland. It's important in this place that somebody entertains him because, quite clearly, they can't do it among themselves. But he accused me of not speaking to the bill and then he used five seconds to reflect on the bill and then used the rest of the two minutes to babble about God knows what. I thought I would put that on the table.
I think it's important for them, if they really believe in what they say, that they put this privatization review to the public, put it out.
Interjection.
Mr Marchese: I don't know whether that means yes or whether that's a squint. If you believe in this, if you have faith in your process, put it out so that I could see it, so that -
Hon Mr Sampson: It is a public document.
Mr Marchese: It is not. The government promised an open, transparent privatization, yet you refuse to release the review, citing in quotations, "commercial confidentiality." Are we in the wrong universe here, minister of privatization? Make it public and make the agreement with the purchaser public too so we will know. Let us into the process. I think you've got a duty to do so. I don't believe you should act unilaterally as the only -
Interjection.
Mr Marchese: But you guys said you would offer a transparent process. You've got the wheels, and if you said that you want a transparent process, make it so so that we can all see clearly what you are doing and what you're offering, otherwise we cannot trust you.
The Acting Speaker: Further debate.
Mr Tascona: I'm very pleased to join the debate with respect to second reading of Bill 70, entitled the Highway 407 Act. The actual title is, "An Act to engage the private sector in improving transportation infrastructure, reducing traffic congestion, creating jobs, and stimulating economic activity through the sale of Highway 407."
Before I commence speaking on the bill, I want to refer to the actual text of the bill, which I have read from cover to cover. I'd like to say that the powers of the minister in this bill are certainly not as broad as suggested by the MPP from Kingston in his review of this bill. That may be just an interpretation difference between us two, but I think quite frankly when you read the bill, and I'll specifically refer to section 2, it says, "Despite any other act or regulation, the Lieutenant Governor in Council may direct the minister for privatization, on behalf of the crown in right of Ontario...." It's not the minister who is making the direction, it's the Lieutenant Governor in Council who is making that direction with respect to the transfer of assets.
If you also look at section 14, it has to do with the powers of the owner, but the powers of the owner are subject to the terms and conditions set forth in an agreement entered into with this government. They are dealt with specifically in terms of the agreement that is dealt with. The minister's powers, be they what they are under the bill, have to be with respect to the purposes of this act. It's not an unbridled, open discretion on behalf of the minister.
Mr Marchese: On a point of order, Madam Speaker: There is no quorum in this assembly.
The Acting Speaker: Clerk, would you check for quorum, please.
Clerk at the Table: A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Speaker.
The Acting Speaker: Continue with debate.
Mr Tascona: I was referring to the bill itself. I would submit that certainly the bill is not as open-ended as suggested by the MPP from Kingston. The minister's powers are certainly in the context of what's required under the bill and not out of line in terms of what's necessary to complete the task at hand.
I'd just like to refer also to Liberal MPP Gerry Phillips, from Scarborough-Agincourt, who was in quoted in the Star yesterday as saying that he has "no `philosophical' objections to selling off the highway." That's the Liberal member.
That's consistent with what his Liberal government cousins are doing at the federal level. What they're doing at the federal level is they're getting into privatization with respect to Via Rail, talking about splitting them into franchises, and I quote from the Globe and Mail of today:
"Transport Minister David Collenette plans to franchise out Via Rail by the new millennium, in order to bring private sector investment into the decaying passenger rail system.
"`This is the only way out,' Mr Collenette said.... `We would keep Via Rail, and it would be to oversee the franchise implementation. It would be the corporate body making sure it's a seamless service.'"
It goes on to say in this article, "As is done in England, the federal government will consider giving franchise operators some subsidy money in advance rather than spreading it out evenly year after year, the minister said. That way, the companies will have more leverage to take to capital markets for loans.
"They would have a 15- to 20-year contract to pay back the money, and would still be supported by the federal government's subsidies."
That's the Liberal way: subsidize a private sector venture.
"`We would keep the national rail system as an identifiable, seamless service.... We have to learn from their mistakes.'" He's referring to England.
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I find the statement with respect to a national rail system as "an identifiable, seamless service" a complete joke. In my riding of Simcoe Centre, CN has been given approval by the federal government, through their own legislation, to abandon the railroads between Barrie and Bradford, 35 kilometres of critical infrastructure to the rail system in this province, in my riding of Simcoe Centre, pivotal to the transportation system, pivotal to economic development, pivotal to the problems we face in terms of an ever-growing economic region. Yet he says, and as the MP from my own riding indicated -
Mr Bisson: On a point of order, Madam Speaker: Again, the Tories are not able to hold a quorum. I believe we have lost it once more.
The Acting Speaker: Clerk, would you check to see if there is a quorum.
Clerk at the Table: A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Speaker.
The Acting Speaker: Continue, member for Simcoe Centre.
Mr Tascona: Thank you, Madam Speaker.
As I was saying, from what I've been told in dealing with Mr Collenette, he has basically said that the federal government is not responsible for the rail system when he tells me, "We're not going to be able to help you with respect to abandonment of the rail line by CN between Barrie and Bradford." Yet he is quoted here as saying that he wants to make sure there is "an identifiable, seamless service" with respect to the national rail system. Quite frankly what he is saying is that in the circumstances where it fits the federal Liberal government, "We're going to take responsibility for the rail system, but when it comes to smaller operations" - not the ones from Ottawa and Toronto and what he's interested in - "we're not going to take responsibility."
What we're looking at here is a double standard: basically the federal Liberal government getting involved in privatization on their own with respect to rail systems, and yet they're not helping out Ontario in a fundamental area where CN is abandoning their rail line. I find that quite amusing, and distressingly so in terms of their commitment to this province and to my riding of Simcoe Centre.
The fact of the matter is that the federal government is prepared to get into privatization and at the same time subsidize the private sector in order to make its plans work, an interesting gesture. Obviously the taxpayers' money will probably be well spent by the private sector in that initiative and obviously the federal government will be using taxpayers' money to try to make itself look good.
The fact with respect to Highway 407 is that the taxpayers of this province own this highway and have financed its construction. We think it is unacceptable that users of the highway pay twice: once through their tax dollars and again through the payment of tolls. When our government began its review of Highway 407 in June 1997, we said we would examine the options for involving the private sector in the financing, building and operation of the highway extensions and the financing of the Highway 407 central. We talked about the need to provide a congestion-free traffic corridor around the GTA. Minister Sampson and his crew then rolled up their sleeves and got to work with the review. Some have asked quite frankly, "What has taken so long to get to this point?" The answer is that our government has taken the time to do things right.
Earlier this year, in February 1998, Minister Sampson and Minister Clement announced the results of the review. After a thorough and careful seven-month review it was determined that the best option would be to (1) sell Highway 407 through a fair, open and competitive process and (2) require the new owner to build the highway extensions.
What we want to do is get the private sector involved in this process to build and finance the extensions to make it truly a bypass highway and relieve the traffic congestion on 401, 403, the QEW and other nearby roads. That's fundamentally important to this area and specifically to the riding of Simcoe Centre because we have grown significantly. There are many businesses and people who commute who use Highway 407 and they use it for business purposes. The extensions will obviously be a blessing because of the congestion on Highway 400 and Highway 401. I think that this initiative is in the interest of the business people in my riding, and also welcome news to people who have to commute. It's also important to point out that construction of the extensions is expected to create over 6,000 jobs. That's a lot of jobs.
I would also like to remind members of the recent history of the highway. As I understand it, the previous government originally planned to have the private sector finance the construction of Highway 407. In fact I have a backgrounder issued by the previous government in 1993 which states - and I'll refer to this document in terms of the project description:
"The two consortia bidding on this project will prepare proposals for developing Highway 407 from Highway 401 at Winston Churchill Boulevard in the west to Highway 48 in the east. The new 58-kilometre, six-lane, east-west freeway will be an alternative route to Highway 401, bypassing Metropolitan Toronto. When it is complete, the 407 will extend from the 403 in the west to Highway 35/115 in the east. Traffic is expected to be using the first section, Highway 400 to Highway 427, by 1996.
"Each consortium has been contracted to undertake a process known as value engineering in the preparation of a project proposal. The value engineering assignment calls for the consortia to review current plans for the 407 and determine the most-effective design and schedule to meet the province's requirements. Aspects of the project expected to be considered include such details as the layout of interchanges and the numbers of lanes in various sections.
"When the value engineering process is complete, the consortia will then prepare bids on the entire project.
"The development of Highway 407 is the largest single initiative supported by Jobs Ontario Capital."
What's important in this backgrounder is that it sets out in bold type the benefits of private sector participation in the 407 project. It says:
"Since private financing is not tied to government revenues and the annual capital budget, it will allow the highway to be delivered faster (from Highways 401 to 48 by 1998 instead of from Highways 410 to 404 by 2000).
"Economies of scale and speedier construction will reduce the overall cost of the highway.
"The project's 26,000 jobs will be generated sooner.
"Ontario industry's competitive position will benefit from faster, more efficient transportation through the greater Toronto area as early as 1998.
"Reduced congestion, improving air quality and enhancing safety in the greater Toronto area will be realized sooner.
"With governments around the world looking for private sector partnerships to create infrastructure on a large scale, the Ontario-based companies involved in the 407 bidding will gain valuable experience they can use across North America and overseas."
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This is a news release put out by Jobs Ontario Capital through the previous government of the day. It's obvious that they were committed at that point in time to endorsing private sector partnerships to create infrastructure on a large scale.
That's what didn't happen. Partway through the process, the government of the day decided to fund its construction, and taxpayers, not users, have been financing the construction debt. The NDP government had originally planned to have the private sector build, own, operate and finance the highway for a fixed term, after which time ownership would revert to the province. Such an arrangement was never secured. Instead, the province financed the project and secured contracts with private sector parties to operate the highway and to toll users of the highway. While the previous government referred to the arrangement as a public-private partnership, in fact there was no sharing of the financing and ownership risk with the private sector, a fact that the Provincial Auditor highlighted in his 1996 annual report. I'll refer to that at this point.
"The Provincial Auditor's Comments on the Original 1993 Deal" - this is from the 1996 Annual Report, Office of the Provincial Auditor.
"The Provincial Auditor identified the following problems with the last 407 deal."
Mr Bisson: Point of order, Madam Speaker: I think the member is making a fantastic speech, to the point, and there is no quorum in the House. It's a real pity.
The Acting Speaker: Clerk, would you check for a quorum.
Acting Clerk at the Table (Mr Douglas Arnott): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
Acting Clerk at the Table: A quorum is present, Speaker.
The Acting Speaker: Continue debate, member for Simcoe Centre.
Mr Tascona: When I left off I was referring to the Provincial Auditor's 1996 annual report. The Provincial Auditor identified the following problems with the last 407 deal. That was the deal that was entered into by the NDP government.
"Significant financial, ownership and operational risks remained with the province - a public-private partnership (involving the sharing of risks and rewards) was not established....
"In future partnership agreements with the private sector, the government should strive for a better balance of risks and rewards."
That's from the Provincial Auditor.
While there are contracts with private sector parties for the operation and maintenance of the highway and for tolling, the highway is presently owned and financed by the province of Ontario.
The Acting Speaker: Order. Would you please take your seat, member.
Could I ask that there not be conversations in the middle of the floor, especially right in front of the member who's trying to speak. Please come to order.
Mr Tascona: The point I was making was that the highway is presently owned and financed by the province of Ontario.
What we have to deal with here also is, how can taxpayers be assured that the public interest will be protected and the best value received? The Ontario Privatization Review Framework has been designed to be open and fair and to protect the public interest. Ultimately, the decision rests with elected officials who are accountable to Ontarians, in particular with the minister of privatization and this government.
The privatization principles are very simple: It's to be an open, fair and competitive process. The Common Sense Revolution set the ground rules for privatization. The integrity of the process will be ensured throughout by the establishment of strict criteria for selection of assets, rigid guidelines for protecting the public interest, independent review of a deal when a deal for sale has been made, as well as enforcement of rigorous conflict-of-interest policy and ensuring that the entire process is open to scrutiny by the Legislature and the public.
Ontario has followed the privatization framework to review and implement its strategy. The framework has three main objectives: (1) to see if there are better ways to improve service and value to taxpayers; (2) to identify where greater involvement by the private sector could help improve the quality, efficiency and choice of services; and (3) to ensure that privatized services or businesses continue to meet public policy goals.
Under the framework, we have injected sound, proven private sector techniques into public sector activities in several ways. These options run the gamut from public-private partnerships to joint ventures to long-term leases, as well as retaining and improving an entity and injecting some private sector discipline in various ways.
The government owes it to Ontarians to review the businesses it owns to see if there are ways to improve service and value to taxpayers. That's why the Ontario Privatization Review Framework has been established.
There are other consequences with respect to dealing with the proceeds that come from the sale to the private sector of government assets. The government will fulfill its election commitment contained in the Common Sense Revolution to apply the proceeds of the sale of Highway 407 to pay down the provincial debt. By reducing the debt, we will ultimately have more flexibility to fund priorities such as health care, classroom education and community safety. In fact, in the 1989-90 budget, the debt interest payment for the province was $9.2 billion. That is almost half of the amount the government spends on health care in this province, which is currently at $18.7 billion.
It takes basic common sense to see that if we can reduce our debt by accountable and very prudent management of government assets and the way we operate, we can reduce the debt interest payments that affect our budget every year. If those payments of $9.2 billion are eliminated some day, that's $9.2 billion that the government can use with respect to determining its priorities, be it further tax cuts, be it health care spending, be it educational spending, be it more social spending. But the bottom line is that you need to have flexibility with respect to the way you operate, and if you're burdened with debt interest payments, you're not going to be able to have that flexibility.
I fully support this bill and have had the pleasure to speak to it.
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The Acting Speaker: Comments and questions.
Mr Gerretsen: I'm pleased that after talking about this for the last three and a half years I've finally found a Tory member who has actually agreed with me. I too agree that we should be paying down the provincial debt and that we're paying way too much on annual interest payments. They're $9.2 billion in the latest financial reports, whereas they were $7.1 billion about three years ago.
But where was he when the government gave a tax cut? If the tax cut hadn't been given, we wouldn't have gone from the $88 billion we were in debt when you took over to the almost $115 billion worth of debt that's out there right now. That has been the whole argument, sir. Where were you then? At least you were honest enough to admit that the main reason why you want to sell this highway is so that you can take the cost of building the highway off your books and it will look better, especially around election time, that the public debt isn't quite as high as it would have been if you had not sold the highway. That is the bottom line.
My ears were just rattling when he said that, because I couldn't believe he could actually say that. I would like him to assure us that he was one of the Tory members who spoke against a tax cut in his caucus because he felt it was much more important not to increase the public debt of this province. I hope he's going to tell me that in his response, because I'm sure the people of Ontario want to know that. The debt of this province is getting worse and worse and, sir, you during your term of government have added on $25 billion of that.
Mr Bart Maves (Niagara Falls): Wrong, wrong.
Mr Gerretsen: Yes, you have. The interest payments on the debt have gone up by $2 billion -
Interjections.
The Acting Speaker: Order.
Mr Gilles Bisson (Cochrane South): I want to congratulate the member for Simcoe Centre, who actually gave a fairly well-reasoned argument for what he believes the government should do. I disagree philosophically with what he's saying. I have problems with some of the assumptions he made and the arguments he put forward, but all in all it was a good speech. He thought through his arguments, and he put them through very clearly so that we know where he's coming from. I've got to give you credit; it's an argument well put forward. I think it was a good speech. It's a good example of a member doing his research before getting up and giving his speech on an issue.
When it comes to some of the presumptions you make about where we're going to be 10, 20 or 30 years down the road with this move to privatize, I disagree, because we know one thing: One thing for sure is that under the deal that was put forward by our government in 1993, that the private sector finance the project through a special capital fund that we set up, in the end the highway was going to revert to the province and the tolls were going to come off. Why we got into this in the first place was because we couldn't construct that highway with public dollars at the time because of what was going on with the recession. We thought this was a good way to bring the private sector in, accelerate the construction of the highway and utilize private dollars to get that built. The pill we had to swallow was that there would be tolls on the highway. I wasn't a big fan of that, but I understood the necessity to build the highway nonetheless.
Whenever you make legislation here, you have to ask yourself who benefits. I ask the member just this one question in the end: With this legislation, who in the end will benefit when this thing happens, if it does? I don't see the taxpayers coming out on the big side of this thing. Yes, it will be a short-term gain, in regard to cash that comes into the province to offset the debt that was written on the highway, but in the long term we're not going to see tolls come off those highways. So, what's the benefit?
Mr John O'Toole (Durham East): I just want to compliment the member for Simcoe Centre. He was a lawyer in his former life and an expert in many respects, and his presentation was balanced and well-researched. I can't say more.
I listened - it was quite interesting - last night to the member for Lake Nipigon. He was the Minister of Transportation who brought this in. I think he really wants this to move forward. It's an important project. He argued that the revenue is up well beyond what they had initially forecast, so it looks like the project that they started, the public-private partnership, was the right thing to do.
I was a member of Clarington council and Durham region council at the time. I saw this occurring. Some 10 to 15 years ago, the discussion started on the 407 alignment and issues. I must put on the record that there were a number of important constituents of mine - whom I still listen to; whether or not they vote for me, I still listen to them.
Mr Len Helpard led a very important consultation in the community of Tyrone, which is a small rural community. This highway would go right through the middle of it. The proposed route would go right through the middle of a community. In my riding of Durham East, this isn't acceptable. There was another member, Jim Slyfield, who moved to the country.
On the other side of this whole thing, the municipality of Clarington is on record as being opposed to the 407, and they're in the Durham region, which is anxiously anticipating the 407 for the economic engine in our sector of the province.
I wanted that to be put on the record, that it is an issue in my riding. This proposed route is not fully designed, but I have the assurance of the ministry that the EA process will be recognized and that the alignment will respect the environmental issues. I think it's arguably the most important thing for the Durham region economy that we could look forward to. I thank the minister for making this project work for all of us.
Mr Caplan: I must admit, I was a bit struck when the member for Simcoe Centre talked about the Provincial Auditor and the finances here in Ontario. It was the Provincial Auditor who refused to sign off on the books of Ontario just a couple of weeks ago because the government is essentially cooking its books. He forced them to take $1.6 billion off the books, which they put in restructuring costs. We've seen examples of this.
I'll give you another example. Yesterday in estimates, we reviewed the estimates of the Ministry of Education and Training. We discovered that the people of Ontario are spending in excess of $1 billion on the teachers' pension fund. Yet, when you look at the budget and the numbers presented by the Minister of Finance, it shows only $60 million of public money being spent on the teachers' pension fund. So it's interesting that the member would want to quote the Provincial Auditor and the veracity of the books. These guys have two sets of books. I distinctly remember hearing government members standing up and accusing the past government of that kind of practice, telling us how horrible it was, and now we've discovered that we have this kind of practice taking place in Ontario today.
The last member who spoke, the member for Durham East, said he has the assurance of the minister, that he thinks he can trust the minister. You obviously can't trust this government. You can't trust Mike Harris. They're cooking the books. Their numbers are consistently wrong. The Provincial Auditor has said so.
I know the people at home are watching these deliberations. They know that you can't trust these guys when they present a bill that essentially says, "Trust me."
The Acting Speaker: Response?
Mr Tascona: I'm very pleased to respond to the various members for their thoughtful remarks and points of view.
With respect to the MPP from Kingston and The Islands, all I can say is that it's a fact that the tax cuts through this government have created jobs. Since we've been in power, there have been over 400,000 new net jobs created in this province. Last month, this province created 85% of all the new jobs in this country. The fact is that the tax cut has increased revenues because of the economic growth in this province, and that has allowed us to increase our spending with respect to health care from $17.5 billion to $18.7 billion presently, today.
When we took power, the deficit was $11.3 billion; for the 1998-99 year, it will come in at $4.3 billion. That's a significant reduction. But the fact of the matter is that there's no doubt that the debt has gone up because the books haven't been balanced at this point in time. That's what our objective is, to balance the books so we can deal with the debt.
I just want to answer the question from the MPP for Cochrane South with respect to who is going to benefit from the legislation. In my opinion, the taxpayer will benefit. He has provided no credible evidence to refute this statement.
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With respect to the MPP for Durham Centre, I'd like to thank him for his vision and his thoughtful remarks. He's obviously interested in the economic well-being of his constituents in Durham Centre.
With respect to the MPP for Oriole, I wish he would stick to the topic. I wasn't here talking about teachers' pension funds. Obviously they're significant and I'm glad that he pointed out to the taxpayers how much it is.
The Acting Speaker: Further debate?
Mr Gerretsen: It's hard to know where to start this particular discussion on the privatization of Highway 407. It seems to me that in this House we are constantly talking about the past: what happened in the mid-1980s, what happened in the early 1990s, what happened whenever. I will tell you, that is not what the people of Ontario are interested in. They want to know what a government, whoever might form the government the next time around, will do for Ontario to bring Ontario into the 21st century. It is amazing how in this place people seem to get totally caught up as to what happened in 1985 or 1990. It would be interesting to take a poll on this, it really would, but I'm convinced in my own mind that most people out there really don't care. They have a vague general idea as to what the Davis years were like, what the Peterson years were like and what the Rae years were like, but they now want to know, "Where do we go from here?"
The same thing applies to the 407. I found it very interesting. I thought some sort of love pact had been agreed upon between the third party and the government party from the number of attacks we've been taking on this side of the House for the last couple of weeks. Obviously the government is trying to boost the numbers of the NDP and do all sorts of wonderful things before the next election. So it was very interesting to see this dialogue taking place between the third party and the government party as to what exactly was intended when the 407 was built, who was going to own it and this, that and the other thing.
I personally think at this stage that is totally and completely immaterial. I think what the people of Ontario want to know with respect to this privatization or any other privatization is only one question: Is it truly in the best public interest that this particular activity or that particular activity be privatized? Is the public interest best served by that? That's the sole issue.
We heard all sorts of wonderful speeches here tonight about the benefits of the 407 and the benefits of the piece that hasn't been built yet and what will happen if it gets to be built. All that stuff is self-evident. All you have to do is live around or drive into the Toronto area on a weekly basis or a daily basis to realize that the infrastructure in and around Metro Toronto or the GTA is in great need of the completion of another major highway.
That is good for everyone. It is good for the drivers, who must be getting anxiety attacks as they deal with gridlock on a daily basis, both coming to and from work. It's good for commerce, because commerce can move its goods quicker to its various markets. It's good for development and everybody. Nobody is going to disagree with that.
The question is, how is that extra link going to be built? How is the total road, the piece that's already been built and the piece that's going to be built, going to be financed and how should it be owned? That's all I'm interested in. I really don't give a hoot whether or not the NDP government promised that it was going to be built privately and then it wasn't, or that these people are carrying out what they perceive to be the original mandate, and I don't think the people of Ontario care. They really don't care. But is it in the best public interest that it be done in a public way?
It's in that respect that I would like to have a serious public and open debate in this House or in any other forum. I haven't heard one good reason why it should be privatized. Philosophically, I have nothing against privatization. I think there are many activities that ought to be done in the private sector and many activities that ought to be done in the public sector.
Mr Maves: Like what? Name some.
Mr Gerretsen: Name what should be done in the private sector? Most economic activities are taking place in the private sector right now, for goodness' sake. Let's get serious about this. It's the private sector that drives the whole Canadian economy, by and large, but just because that is so doesn't mean that this particular road ought to be privatized. That's no reason for it. There has to be a good economic reason for it.
I always fall back on a very simple principle when it comes to issues like this.
Interjection.
Mr Gerretsen: No. The principle, quite frankly -
Mr O'Toole: Let Elinor's son speak.
Mr John L. Parker (York East): Mrs Caplan's son.
Mr Gerretsen: If you want to start making some personal attacks again, just go right ahead. Quite frankly, the people of Ontario aren't interested in that.
The basic theory that I follow is this: If you're privatizing, whatever the activity is, if there are an awful lot of potential buyers lining up, then it must be something good that you're going to sell. The private sector is not going to get involved, whether it's the privatization of this road or anything else, unless they can make a buck out of it. Then I say to myself, if they can make a buck out of it and if it's basically a public utility out there, why the heck should we be selling it unless they can build it, operate it and manage it so much cheaper than government can?
That surely has to be the guiding principle in all this. Whether we're talking about railroads, whether we're talking about transportation systems, whether we're talking about roads, it doesn't matter. It seems to me if something is a really desired commodity by a certain group of people, and I won't put any kind of motives on it at all, then they've got to be able to make a buck out of it. That is the way private enterprise works.
I am all in favour of private enterprise. It's the one thing that made this country great, the fact that people could benefit from their own entrepreneurship. That's what brought many people to this country for many centuries.
Mr O'Toole: Tax and spend.
Mr Gerretsen: I'm not talking about tax and spend.
Interjection.
The Acting Speaker: Order.
Mr Gerretsen: I'm sorry, sir, you don't even know what I'm talking about. We'll just leave it at that.
Private entrepreneurship is what made this country great.
The Acting Speaker: Member for Durham East and your friends in that part of the room, please. We only have a few more moments to finish. Let the member for Kingston and The Islands finish his comments.
Mr Gerretsen: The real issue should be, what does the public get out of the privatization of this? We've heard from the member for Simcoe Centre that the one benefit we get is to write off the public debt of this highway, which I understand to be something like $1.8 billion. OK. The books will look better. Instead of $115 billion that the province will owe on its public debt it will be $113.2 billion. That's an attractive aspect of it. I'm not sure whether that is enough, particularly when you look at the bill.
I noticed that the member for Simcoe Centre tried to attack my interpretation of the bill, but he only stuck to one little clause. Remember, he only talked about one little clause in which he said, "Oh, there's nothing unusual about that."
I would invite each and every member of this House to take a look at section 5, section 6, section 14, and there are a number of other sections as well, and you tell me. Try to take a dispassionate view of the whole situation; not that it's your government that's presenting it or not that we're in opposition and we're dealing with it in that manner. Tell me whether or not you think it is appropriate for the crown to have that much say in the sale of a public asset where there's been nothing said about the public process in which this is going to be dealt with. The document is completely silent on that.
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Interjection.
Mr Gerretsen: Minister, you'll have your chance to rebut anything I'm saying.
I for one would like to see a process set out that is transparent, so that when we're talking about the sale of a major asset of this province everyone can determine for themselves, at some given point in time, whether it makes sense to actually go ahead with it. That's what I would like to see. I don't see that process in here. I see this as a bill that gives the minister and the government -
Interjection.
Mr Gerretsen: He said something about the Lieutenant Governor in Council rather than the minister. Give me a break. Who is the Lieutenant Governor in Council? It is when cabinet acts and then the Lieutenant Governor in Council puts that into operation. That's the same as the cabinet. They're the people who decide.
If you want to throw some more mud, go ahead, but just refute what I'm saying. This bill is an open-ended invitation to the public of Ontario to basically not have an opportunity to know what's going on with respect to the sale of that. I'm saying to myself, why would you want to have the public sale of one of our major assets left in such an open-ended fashion? Ask yourself that.
It really comes down to, "Trust me," which of course is the good old Tory philosophy that has been operating in this province, for better and for worse, over the last 150 years. It's always: "Trust me. We know what's good for you, the people of Ontario." Over the years there were some governments which interpreted that - and I'm particularly referring to a significant portion of the 40 years when the Tories were in power before, when the trust that the people of Ontario gave to them was handled in a very fair and consensus-building fashion. But I don't believe, and I don't think the people of Ontario believe, that this government is anything like what operated at that point in time.
We can talk about all your promises and "A promise made is a promise kept," but say that seriously to the people who need health care services in the communities where you're closing hospitals. The basic theory that you used was, "We're going to close hospitals and take that money and reinvest it in that community and put it into community care," and at the same time you're closing hospitals and you're also cutting off the community care that a lot of people have been using over the last number of years. Why are you cutting it off for a great number of people? Not because you're mean and nasty to those people. No. Because of your hospital closures there are so many people all of a sudden coming into the home care stream that not everybody can be accommodated. So you're cutting off the people who, according to whatever the criteria are, need that service least.
Mr Caplan: Property taxpayers.
Mr Gerretsen: Talk about the property tax payers, and I'm sure you've heard from these people as well, the small business owners in your community whose taxes have gone up anywhere from 10% to 300%. You now have the nerve over the last three or four days, your spin doctors have the nerve to start blaming this on the local municipalities. You have picked on just about every group that's out there.
First of all, you took on the most vulnerable in our society, the people on welfare, on social assistance. They're not as united; they were very easy to take on back in the summer of 1995, and you probably think you did a good thing. I challenge each and every one of you to try to sustain yourself and live sometime on $1,000 or $1,200 per month. Just try it sometime. After that, you went after the public servants of the province, and then you went after the nurses and then the teachers. Of course, then you also went after those big, bad unions, "Those unions, they're the problem."
Interjections.
Mr Gerretsen: Yes, that's how you operate. Now who are you going after? You're going after the municipalities. I'll tell you, we knew it was part of your plan right from the very beginning. We knew you were going to download a whole bunch of services on them. You were going to get involved in these large restructurings. In all restructurings, the outer communities, the bedroom communities are starting to pay more for city services than the downtown areas. That's what's happening everywhere. Then you threw market value assessment on top of that and you said, "We'll somehow throw it all into the mix and we'll see how it comes out, and if they don't like it, we're going to blame them because it's the local councils that are doing it." I'm telling the people of Ontario, don't believe it.
The Minister of Finance here one day, in response to a question I asked, openly admitted and was very proud when he said, "One third of the municipalities in Ontario have had no tax increase, one third have had increases of up to 5%," and he left it there. The only conclusion you can draw from that is that the other municipalities had to increase their taxes by more than 5%. Here we have the Minister of Finance himself openly admitting that two thirds of the municipalities have had to increase their taxes by 5% or more.
Mr Maves: Give your head a shake.
Mr Gerretsen: You give your head a shake. You tell that to Icah Bryant in Kingston, whose realty taxes have gone from $4,000 to well over $12,000, and I could go on and on.
Interjections.
Mr Gerretsen: Is it already over, Madam Speaker? I think I have one more minute left.
Minister, all I can tell you is, do yourself, do your government, do the people of Ontario a favour by making the process as transparent and open as possible. This document certainly isn't giving the people of Ontario any protection whatsoever.
The Acting Speaker: It being 9:30 of the clock, this House is now adjourned until 1:30 of the clock on Monday, October 26.
The House adjourned at 2128.