Legislative Assembly of Ontario

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

CONTENTS

Tuesday 16 November 1999

Ministry of Municipal Affairs and Housing E-7

Hon Tony Clement, minister

Mr Michael Fenn, deputy minister

Mr Brian Coburn, parliamentary assistant

STANDING COMMITTEE ON ESTIMATES

Chair / Président

Mr Gerard Kennedy (Parkdale-High Park L)

Vice-Chair / Vice-Président

Mr Alvin Curling (Scarborough-Rouge River L)

Mr Gilles Bisson (Timmins-James Bay / Timmins-Baie James ND)

Mr Sean G. Conway (Renfrew-Nipissing-Pembroke L)

Mr Alvin Curling (Scarborough-Rouge River L)

Mr Gerard Kennedy (Parkdale-High Park L)

Mr Frank Mazzilli (London-Fanshawe PC)

Mr John O'Toole (Durham PC)

Mr R. Gary Stewart (Peterborough PC)

Mr Wayne Wettlaufer (Kitchener PC)

Substitutions / Membres remplaçants

Mr David Caplan (Don Valley East / -Est L)

Mr Bruce Crozier (Essex L)

Mr Rosario Marchese (Trinity-Spadina ND)

Clerk / Greffière

Ms Anne Stokes

Staff / Personnel

Ms Anne Marzalik, research officer, Legislative Research Service

The committee met at 1546 in room 228.

The Chair (Mr Gerard Kennedy): I'll call this meeting to order.

Thank you, Minister, for attending promptly. We will try and make a full sitting day today. We will commence the hearings of estimates on municipal affairs and housing today. We will begin with half an hour by the minister, half an hour to the official opposition, and half an hour to the third party, and then a response by the minister.

Just before we start, I would like to introduce Anne Stokes, our clerk; Sandra Arrizza, who is here from Hansard; our research officer, Anne Marzalik; and Adrian James, who is here with broadcast and recording.

One quick announcement, Minister; pardon me. The sitting times for estimates, I have been advised, are in discussion between the House leaders, so just to put all the committee members on notice that there may be more hearings than the ones we had planned for this week.

Second, just to let you know, I will be subbed as the Chair and I will be coming back a little bit later today.

Without any further ado, Minister, I would like to welcome you to the committee and I would like you to commence.

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

Hon Tony Clement (Minister of the Environment, Minister of Municipal Affairs and Housing): Thank you very much for the opportunity to be here. Before we got started I allowed myself a little bit of reminiscing, because three years ago I sat on this committee and participated in it. It's good to see some familiar faces as well as some new faces on this committee.

I am here on behalf of the Ministry of Municipal Affairs and Housing. With me with respect to the committee's proceedings is Michael Fenn. He is the ministry's deputy minister.

You have before you our ministry's 1999-2000 estimates outlining our proposed expenditures for the current fiscal year. I want to express my excitement at the opportunity to discuss these with you and to get this committee's input and analysis.

I'm pleased to take the time allocated to me to discuss some of the many accomplishments of the ministry.

As you know, our government was first elected in 1995 with a mandate to generate economic growth and investment in Ontario and to create new jobs. There were several keys components to our common sense plan, cutting taxes being a primary one, and our government has been pleased to announce a total of 99 tax cuts to date. I dare say we are only beginning.

Another significant component was spending taxpayers' money more responsibly. We knew there wasn't a household in this province that hasn't had to make the family budget stretch a little bit further. There wasn't a company in Ontario that hadn't found creative ways to cut costs and improve products or services at the same time. We knew it was time to demand the same things from our government.

We were determined to provide better services for taxpayers for less. We wanted to reduce the waste and duplication, we wanted to eliminate job-killing red tape, we wanted to ensure that the bureaucracy was more accountable and responsible and we wanted to make government more accountable and accessible to the people of Ontario.

Meeting these goals has been the focus of many of the initiatives of the Ministry of Municipal Affairs and Housing. Today I would like to discuss with you how we have worked to help municipal government be more efficient and more responsive to local needs, how we have streamlined the planning process to make it more effective and more accountable, how we have reformed and simplified the province's social housing program and how we are working to create a housing market that is both healthy and competitive. These and other issues will be the focus of my remarks today.

It has long been recognized that Canadians are one of the most overgoverned and overtaxed peoples in the world. As the government, one of our fundamental goals has always been less government. When we came into office we were determined to act and we started with ourselves. We restructured the provincial ridings to match the federal boundaries, which reduced the number of provincial politicians from 130 to 103, and we amended the Municipal Act and encouraged municipalities to restructure as well through the Savings and Restructuring Act, and they have.

Through restructuring, many municipalities have gained the size, which means the tax base, and the administrative strength to reduce the cost of services to their taxpayers. There have been many success stories. I'd like to itemize a few.

In Chatham-Kent there have been annual savings of $11.4 million which are expected at maturity; the amalgamated single-tier county of Prince Edward expects to reach annual savings of $1.36 million; and of course the new city of Toronto has held the line of taxes and has set a cumulative restructuring savings target of $150 million over three years. Thus far, they have already achieved savings of $120 million.

The township of Sable-Spanish River expects to save $149,000 per year. The newly amalgamated city of Kenora, to come into effect on January 1, 2000, expects to save $800,000 per year.

These are just a few examples. There are many more, because since 1996 our government has approved 118 locally derived, locally driven restructuring proposals. As a result of those proposals there are 229 fewer municipalities in Ontario today-we are down from 815 at the start of this process to 586 at present-and there are 1,059 fewer politicians, which is a 23% reduction. I'm excited about that. In fact, municipalities have told us that Ontario taxpayers can expect to save $200 million annually as a result of the restructuring efforts carried out to date. This is a remarkable achievement.

I would like to take a moment to congratulate municipal elected officials throughout Ontario, and their staff, for being part of this achievement. They have taken some tough decisions. They have run with the ball. They have shown that restructuring can be done and done well. We look forward to the same result in the regional municipalities of Haldimand-Norfolk, Hamilton-Wentworth, Ottawa-Carleton and Sudbury.

These municipalities are now in the midst of a 90-day period of local discussion and consultation. Our goal is to end the restructuring debate that has gone on for years in each of these areas. Our goal is to improve local government in these areas.

Provincially appointed special advisers have been leading this latest round of discussion and at the end of the 90 days, which will be later this month, the special advisers will submit their recommendations and our government will act.

Our plan is to introduce legislation before the Christmas break and, subject always to the approval of the Legislature, have the changes in place in time for the municipal elections of November 2000.

We think it is time for taxpayers in these four areas to benefit from simpler, more efficient and more accountable government. Taxpayers deserve more efficient government.

At this time I would also encourage municipalities in other regions to continue to look for ways to improve local government for the benefit of their own taxpayers.

At the same time as municipalities are looking at how they are structured, we are also beginning the fundamental shift in how services are delivered. Competition is being introduced into the public sector workplace and into local service delivery systems. Performance measures are letting taxpayers see how well their governments are doing, both in relation to last year and in comparison to similar municipalities throughout the province. This is called benchmarking, and of course benchmarking helps municipalities learn from each other in order to deliver services more efficiently and cost-effectively as well. This shift also means greater accountability. It means finding new and better ways to deliver services, and that means the taxpayer is the winner.

We created the Greater Toronto Services Board to manage GT Transit in the greater Toronto area and in Hamilton-Wentworth and to coordinate decision-making across the GTA. There are many success stories in terms of best practices. For example, my home region of Peel and the region of Halton have integrated their waste management contracts and have saved many millions of dollars. The Hamilton-Wentworth regional government has privatized its airport, resulting in significant savings for taxpayers. All of this is good news, and certainly our intention was that municipalities become more efficient, be more innovative, be more flexible and accountable to their taxpayers.

I want to talk a little bit about land use planning. That's also what the planning system needed, more efficiency, more innovation and more flexibility. Land use planning and development are of tremendous importance to the future of our province. They are an integrated part of our economic growth. Certainly a sensible planning system goes a long way to maintaining confidence in Ontario as a place to do business. Yet when we took office in 1995, Ontario's planning system was tied up in red tape. Getting through the planning approval process took too long and cost too much. Planners had to wade through more than 600 pages of provincial guidelines and a simple official plan amendment could take easily 405 days to complete.

We were determined to change all that. We wanted to concentrate on getting results rather than on the process by which these results were achieved. We wanted to give municipalities the autonomy they asked for and deserved. Local decision-makers needed to be able to implement provincial policy in ways that met their own community needs, and we wanted to offer a system that was less bureaucratic, that people could understand and that delivered an answer more quickly. We have addressed all these areas and issues, and our new planning system has been very successful. It's a system that is designed to recognize the principle that good planning is everyone's responsibility.

Municipalities have embraced their new roles and have welcomed their increased decision-making responsibilities. For example, last year community-based planning took hold as 80% of the population saw official plan amendments in their municipalities exempted from provincial approval. This means local autonomy. It means local accountability. It means responsibility for preserving one's local values.

This year, the ministry granted an additional 10 municipalities exemptions, bringing the total to more than 50. The ministry also gave subdivision approval authority to 16 local councils and 17 planning boards and gave approval authority for consents to 27 northern municipalities.

Our ministry has continued to work on speeding up planning application decisions, and there are some remarkable comparisons that I'd like to share with you. For example, back in 1995 it took an average of 678 days to process an official plan. This year it averaged about 142 days. In 1995 it took an average of 1,006 days, almost three years, to approve plans for subdivisions. This year it averaged 190 days.

1600

As I said earlier, it used to take about 405 days to process an OPA, an official plan amendment; this year it averaged 106 days. Consents have gone from nine months to three and a half. As a result of these improvements, the ministry's planning approval activities have been reduced by more than 75%, and through our one-window approval process nearly 60% of all decisions have been made within our ministry, without the need to consult any of the other seven ministries with a stake in land use planning.

We're very pleased with the success of these reforms, and our ministry continues to work with municipalities, planning boards, the public and all proponents to make sure that Ontario's land use planning system works for all Ontarians in the best possible way.

Hon Mr Clement: I want to talk a little bit about the ice storm because it is reflected in our estimates, as no doubt committee members are aware.

The Acting Chair (Mr Bruce Crozier): Are you forecasting one, Minister?

Hon Mr Clement: No, I'm looking retrospectively. Thanks for the clarification.

Of course, one of the most extraordinary expenditures by my ministry this year has been on ice storm disaster relief assistance. As we all know, in January of last year a horrific ice storm battered parts of eastern Ontario. It was the largest natural disaster in Canadian history. Many lived without heat and proper shelter for days and even weeks. They relied on friends, they relied on neighbours and they relied on strangers throughout Ontario and from the rest of the country.

It's safe to say that all levels of government worked together to help people recover and to rebuild. Our government provided an immediate initial commitment of $50 million. We established an emergency help fund, which paid out almost $12 million in aid to individuals and municipalities during the emergency phase. We assisted farmers, we assisted small businesses, we assisted tourism operators and we made emergency repairs to restore the power grid. All claims from individuals, from farmers, from businesses have now been resolved.

Combined with reimbursements to municipalities, a forestry recovery program, reimbursements to other Ontario government ministries for repairs to hospitals, school boards, correctional facilities and highways, along with other expenditures, it is estimated that the government will spend upwards of $200 million on ice-storm-related damages. We do, however, expect to recover approximately 80% of eligible costs under the federal disaster financial assistance arrangements program.

Part of our assistance program was to help those who suffered emergency expenses and uninsured damages to essential properties as a result of the storm. Under the Ontario disaster relief assistance program, we provided up to $4 for every dollar raised by the community.

Today I would like to take this opportunity to thank the Eastern Ontario Disaster Relief Committee for the excellent job they did. This committee was an umbrella group of volunteers, representing the eight local disaster relief committees in the affected area. They led this private property claims process. They put in a tremendous number of hours with a lot of commitment and a lot of hard work, and they did an exemplary job. The committee that I mentioned spearheaded all fundraising activities, and they successfully raised more than $8 million, money that went directly to the ice storm's victims.

I would also like at this time to thank the Red Cross, which generously donated $4 million to that total. The Eastern Ontario Disaster Relief Committee has settled almost 30,000 ice storm claims made by individuals, farmers and small businesses, and they have paid out more than $52 million to the victims of ice storm. So many people pulled together to get eastern Ontario through this emergency and to restore it to economic vitality. Front-line workers, committee members, governments, people on the street, from start to finish it was a remarkable experience for all of us who were involved. I think I can speak for all of us when I say we hope we never again see another natural disaster of that magnitude in this province.

I would like to at this time, with your forbearance, turn to the housing side of my portfolio. In June 1998, our government proclaimed into law the Tenant Protection Act-some of you may have heard of that piece of legislation-which reformed Ontario's system of rent regulation, because we knew the previous system didn't work. Tenants frequently lived with inadequately maintained units: faucets dripped, roofs leaked, balconies needed repair, plaster was peeling off the ceiling-I could go on and on. Housing stock was increasingly becoming run down, yet there was no encouragement in the system for landlords to improve existing maintenance or build new buildings.

Our goal was to deliver a balanced system that worked for the landlords but also worked for the tenants and the taxpayer. We also wanted to get investment rolling, encourage building more rental stock and to simply get things moving again. Our new act combined six pieces of legislation that governed landlords, tenants and rent, as well as provisions within the Building Code Act and the Planning Act. We are very pleased with the initial results, although I would say for the record that more has to be done.

Landlords are spending more to maintain the rental stock, with Ontario now ranked second among regions of Canada for money spent on renovations. We're second in Canada; we want to be first, but so far we're second and moving up.

The new Ontario Rental Housing Tribunal has proved to be very effective. This tribunal, to remind members, was set up to ensure a fair, more efficient process of hearing landlord-tenant disputes, moving them from the court system into a less formal system of mediation and adjudication. It has meant that disputes are heard much more quickly. It used to regularly take months and months to get a court date. Applicants are now generally getting their cases heard within three weeks. Members of the tribunal are getting their decisions out to the parties within two to three days.

In the first year of operation, the tribunal successfully mediated more than 5,000 applications, at a minimum cost to the taxpayers of Ontario. Another benefit, of course, is that this process has also made a dramatic reduction in the backlog to our provincial court system.

Under the Tenant Protection Act, tenants continue to be protected from unjust evictions. I would like to point out that, on a year-over-year basis, the overall number of applications to terminate a tenancy has remained constant, despite these changes that I've outlined. During the last year of the old provincial system, 60,200 applications regarding landlord and tenant issues were received. In the first year of the Tenant Protection Act, the tribunal received 60,550 applications, so a slight increase but statistically within bounds.

Under both systems, eviction applications made up approximately 70% of the total. The primary cause for application for eviction continues to be non-payment of rent. Additionally, statistics from the Superior Court of Justice show a slight decline in the number of writs of possession filed in the city of Toronto. I'm sure that's a great relief to our Toronto members on this panel.

Mr Rosario Marchese (Trinity-Spadina): I'm relieved.

Hon Mr Clement: Thank you for saying that.

For the period between January and June, 1998, when the provincial court system was still in place, there were 4,077 writs filed. During the same period in 1999, under the Tenant Protection Act, only 4,054 writs were filed, a slight decrease.

The tribunal has been very effective in terms of resolving disputes between landlords and tenants and providing information about the Tenant Protection Act to the people of Ontario.

I would also like to inform this committee that the administration costs of the rent regulation system are 4.3% lower than they were three years ago under the previous system.

It's time to talk a little bit about encouraging rental construction. Our government has always known that addressing rent control was a fundamental part of encouraging new apartment construction. We also knew that it was not the only action necessary. That's why we streamlined the entire land use planning system in the province and passed a new Planning Act. We cut back on the development charges that municipalities can load on to new housing, and we passed the new Development Charges Act.

1610

We reviewed the old building code, and we passed a new, updated building code that came into effect in 1998. We improved the property tax situation for the construction of new rental housing, and we announced the provincial sales tax grant program to encourage the construction of affordable rental housing across the province.

We also continue to press the federal government to change its policies with regard to the high GST on the construction of new apartments and to reduce the unfairly high mortgage interest premiums for the construction of rental housing.

Our government has set the stage. Clearly, it is an opportune time for the development of rental projects in downtown Toronto and across Ontario. We will continue to look for ways to remove barriers to construction and to encourage developers to build.

We can point to some successes. This year, there were 474 private rental starts in communities with low vacancy rates, such as Toronto and Windsor, almost double the target of 247 units-better, but not good enough. It takes time to turn around a system that had so many disincentives built into it that many developers gave up on Ontario altogether. I think we're on the right track now, and we intend to stay on it.

I am sure members would be happy to know that the final area I want to discuss today is social housing. Our government has always said that we were not interested in continuing the social housing boondoggle that existed when we took office. We got out of the so-called non-profit housing business. I don't know why it was called the "non-profit" housing business, because lawyers made profit, architects made profit and social planners made profit. Everybody was making profit, but there was a lack of affordability to the taxpayer.

We believe that the private sector can build housing better, faster and cheaper than we ever could. We have worked hard to deliver a more streamlined, cost-effective and accountable social housing program. We owe it to the taxpayers, who currently spend $1.5 billion every year to subsidize social housing in this province; $1.5 billion a year.

In the last year, we had achieved significant savings in the area of social housing. We have taken full advantage of the decline in interest rates and are averaging less than 6% on mortgage renewals.

Savings have also been found through the operational and cost efficiencies. This includes improving property management services and starting an asset-management process that allocates capital funding based on the need and the condition of the portfolio. We have managed to achieve lower costs without creating significant reductions to services.

We have also done a lot recently to benchmark social housing functions as another way to reduce costs. As you know, our government has always believed that social housing is a service that can best be provided at the local level. Municipalities have a long history of involvement in social housing, and they know best the needs of their own community. So, on January 1, 1998, we transferred the funding responsibility for social housing to municipalities, as part of the local services realignment. As part of the exchange in responsibilities under LSR, the province cut in half the education portion of the residential education property tax and provided more than $1 billion in funding to municipalities to help them assume their new responsibilities.

With this new division of responsibilities, local governments can now pay the costs of Ontario's 231,000 units of social housing. I am pleased to say that these costs have fallen by 15% compared to three years ago. Maintaining a unit of public housing is now less than $233 per month, which was our original target, and the cost per unit in non-profit and co-op housing built after 1985 is now down to $655 per month.

In order to fully devolve the administration of social housing to municipalities, we need to reach a federal-provincial housing agreement. We expect that that agreement will be finalized soon.

The Acting Chair: Minister, you have about two minutes.

Hon Mr Clement: As this brief survey of our ministry's initiatives and achievements shows, our accomplishments have been many. We have opened the windows and let in some new ideas. Our goal is to work hard to ensure that Ontario is made of strong communities with efficient local governments committed to excellence. We have to have accountability to taxpayers and responsiveness to local needs. We will continue to work hard to ensure a housing market that is healthy and competitive.

I would like to conclude by saying that our ministry and our government will continue to do our best for all the people of Ontario, and we look forward to the challenge in the months and years ahead. I thank you for your time and your indulgence.

The Acting Chair: Thank you, Minister. We'll continue with the Liberal caucus, which will have 30 minutes.

Mr Mike Colle (Eglinton-Lawrence): Could we go right to questions?

The Acting Chair: It's your 30 minutes.

Mr David Caplan (Don Valley East): Mr Chair, I'd like to start. I have some questions for the minister. I'm going to start where I left off in question period in the House today. I asked a question of the Chair of Management Board about the announcement that was made back in March of this year by the Minister of Community and Social Services that certain government lands and properties would be sold for the purpose of providing affordable housing.

Today in the House, the minister responded that the Minister of Municipal Affairs and Housing can provide specific details about affordable housing projects and land. I want to ask the minister to provide those details of where the land is, how many units are being created and any other details that may exist.

Hon Mr Clement: Thank you, Mr Caplan, for your question. It was, I think, an important component of last March's announcement, and I would be pleased at this time to give you an update for the purposes of this committee. Perhaps my staff will have some additional thoughts on this.

From our perspective, we are still very much committed to the announcement that was made on March 23. We think the government can play a role in identifying properties that are suitable for a homelessness initiative, that are suitable for the construction of housing units that will assist us in dealing with this terrible problem we face in many communities. I think that's important to say, that this is a problem that has received a lot of attention in Toronto, and deservedly so, but it's also a problem in my community and it's a problem I'm sure in other members' communities as well.

The intention to proceed is still there. What I would like to share with the member, though, is a little bit of the complexity of the task involved, because if we're going to do it right, there are a number of issues that have to be sorted out, not only with the Ministry of Municipal Affairs and Housing but with our sister ministries as well.

A lot of it has to do with what sorts of lands are not only available-that's easy, to get an inventory of available lands-but which lands are best suited, which are even suitable for this particular style of project, because you want lands that, first of all, have the right kinds of services available to them in terms of water services or other hard infrastructural services. You also want lands that have the right kind of public transportation available to them so that someone-

Mr Alvin Curling (Scarborough-Rouge River): On a point of order, Mr Chair.

The Acting Chair: One second. The clock stopped. OK. We're just trying to make my job easier, that's all. If the answers could be kept as pointed and brief as possible, I suspect it will help them. If there are questions you ask where you wouldn't mind having the answer delivered later, that will also provide more time to you.

Hon Mr Clement: I apologize, Chair. I felt unconstrained by question period rules, and I got a bit carried away.

The Acting Chair: There you go.

Mr Caplan: I did ask a very specific question. The Chair of Management Board was very specific, that there is a detailed list of lands that have been set aside for affordable housing that this minister could provide. He went into some kind of philosophical debate or discussion. I want the detailed list of lands that you have set aside for the provision of affordable housing, as per the response-and it is in Hansard today-of the Chair of Management Board. Does that exist, yes or no?

1620

Hon Mr Clement: The answer is a bit more complex than yes or no, and with the indulgence of the Chair-

Mr Caplan: That's not what the Chair of Management Board said. Does the list exist?

Hon Mr Clement: Let me answer the question. I'd be happy to do that. There is a list of potential sites-

Mr Caplan: Will you provide that list?

Hon Mr Clement: -but again the issue that we are faced with, that we have the obligation to face as a government, is which sites are the most appropriate and make the most sense. We're committed to 500 units of shelter being available, but the issue is, where do you build them that it makes the most sense to meet the need, to ensure that the services are available there, that the transportation is available there and that folks who live there have access to jobs and opportunity? I think that's important as well.

Mr Caplan: The question is, will the minister provide that list?

Hon Mr Clement: Which list is that, sir?

Mr Caplan: You say you have a list of properties available for the building of affordable housing. Will you provide that list? Is that yes or no?

Hon Mr Clement: Yes, I guess if it's available, we can provide it for sure.

Mr Caplan: OK. I'll be expecting that list to be provided here at the estimates committee.

Hon Mr Clement: Yes, but let me just state for the record what this list is.

The Acting Chair: The minister has undertaken-

Hon Mr Clement: For the record, this is a list of Ontario Realty Corp potential properties which may not be appropriate for housing. If you want the list that is appropriate for housing, that list cannot be provided at this time.

Mr Caplan: The Chair of Management Board was very specific, Mr Chair, and I say through you to the minister-

The Acting Chair: I think the point has been made.

Mr Frank Mazzilli (London-Fanshawe): On a point of order, Mr Chair: The member across is cross-examining continually and putting words into the mouth of the minister about what happened today.

The Acting Chair: That's not really a point of order. You'll find that's what this is, to interrogate the minister.

Mr Mazzilli: But when the member doesn't get the answer he likes-

The Acting Chair: That's not a point of order. Now let's move this along.

Mr Caplan: I have many further questions, Mr Chair.

The Acting Chair: OK, in order to move it along.

Mr Caplan: Minister, in your opening remarks you said that "we"-I take it that is the government and yourself as minister-believe that the private sector can build affordable housing. Are you familiar with a gentleman by the name of Greg Lampert?

Hon Mr Clement: The name rings a bell, yes.

Mr Curling: The Lampert report.

Mr Marchese: Al Leach would know.

Mr Caplan: Yes, of course Al Leach would know. Greg Lampert is an economic consultant who has often been hired by your ministry to advise on matters of housing policy. This is a report that he prepared. I believe that you or your ministry have it. It's entitled Cost-Effective Housing Assistance: Comparison of Cost of Non-Profit Housing Shelter Allowance. This is another report, a follow-up prepared for the Ministry of Municipal Affairs and Housing, The Economics of Investment in New Rental Housing. In his report he explicitly states that there is no economic case for the private sector to build public housing. I would like you to tell me where you come to the conclusion that you believe that the private sector can build affordable housing in this province.

Hon Mr Clement: I want staff to have an opportunity to respond in detail, but my recollection of that report is that the conclusion was a bit different from the member's synopsis of the conclusion, if I can put it that way. There are a lot of factors that go into whether or not low-income housing is financially feasible.

Two of the aspects of it are the GST issue and the CMHC issue. Those are aspects of whether it makes it possible or not possible to do that. It depends on the parameters that you put into play, whether or not something is possible for the private sector to do. As I said before, it's going to take all governments working together, and your help would be very much appreciated as well. If we can work together on this, I'm sure we can find a solution.

Mr Caplan: I would suggest that the minister read a report commissioned by his own ministry just this year-it's not even a year old-which concludes conclusively, and I can read the passages to you, if you'd like, that there is no economic case for private construction of affordable housing.

I have several other questions so I'm going to move on.

Your predecessor had said, at the time of the passage of the so-called Tenant Protection Act, that 10,000 new rental units would be built in Ontario within the next two years. Obviously that has not come to pass. I think you gave us a figure of 474 this past year. I'd like you to tell me how many you believe will be created in the year 2000, how many rental units you are expecting to be created in Ontario.

Hon Mr Clement: With all due respect, I'm not in the prognostication business here. I will tell the member that we will have many more units if we can get the feds to reduce the GST. We'll have many more units if they can get some insurance issues from the CMHC sorted out. There are lots of factors that can make this a much better story than 474 units. If he's asking me whether 474 units is acceptable as a goal, it is not. It is not acceptable. We have much more work to do.

But I would say this to the member: The Lampert report, which he is so keen on quoting, said that the results of the provincial initiatives have moved the agenda forward on private sector affordable housing being created, but the main stumbling block is our federal friends in the House of Commons. If he wants to help us out, he just has to make a short trip over to his federal MP, who happens to be a Liberal, and I'm sure they can provide us with a bit more news.

Mr Caplan: It's very interesting that the minister's predecessor was fully prepared to have a specific target of rental housing that would be built in this province. Obviously, with the result of a lot of restructuring, a lot of legislative change, this minister isn't prepared at all to have any target for this province. I find that rather shocking at a time when we have an absolute crisis in affordable housing in this province.

I have several other questions. For example, in your estimates book there are all kinds of income tests and checks that are made for tenants for various shelter subsidies, rent supplement units. Would the minister please advise me what he feels the acceptable percentage of income the tenants should be paying towards their accommodation cost. Is it 10%, 20%, 50%? What per cent of income is acceptable to this minister, to this government?

Interjection: More.

Mr Caplan: More.

Hon Mr Clement: The government's position is 30%.

Mr Caplan: Thirty per cent. The minister will know that the results of the second phase of the study came out less than two weeks ago, which indicated that over half of Ontario's tenants are paying in excess of 30% of their combined household income on accommodation; in fact, 25% of tenants are paying more than 50% of their income. Is that acceptable to this minister?

Hon Mr Clement: No, and that's why we have a broken system that we're trying to fix. I think the honourable member and I are finally on the same side. The system that created that is the old, failed, broken system that we are trying to fix. Our problem is, after 25 years of that kind of mentality that the honourable member's government, when it was in power, represented and then was added to like barnacles to a ship by the previous government to us in 1995, that we've got a dysfunctional housing market that we are desperately trying to fix and we know it is going to take some time to do so.

Are we on the right track? Yes, we are. Is it going to take some time to get to a functional housing market that has the right incentives for the right people to build the right housing for our citizenry? We are seeing improvements, but there is more work to be done. I'm glad the honourable member has that point about how rotten the old system was, because I agree with him 100%.

Mr Caplan: In fact the information is very current, that the crisis in affordable housing is growing under the watch of this government over the past five years. It is very clear and it is borne out in Statistics Canada data and Canada Mortgage and Housing Corp data that 40% of Ontarians are tenants in Ontario; 20% of Ontarians are paying more in their accommodation costs than this minister and the government consider acceptable. Yet what has this government done? It has gutted rent controls in the province, it has stopped providing any affordable housing and any non-profit and social housing projects. This minister has not given any confidence that these problems will be alleviated.

I have some other questions, Mr Chair.

In the estimates there are several references to the termination of rent supplement units as their agreements come to term. The minister will confirm this, yes? How many rent supplement agreements have been terminated in the past year and how many do you anticipate will be terminated in the next year?

1630

Hon Mr Clement: While we get a specific answer to that, let me also comment on the rental supplement, because the member made that point. I made reference in my remarks to the social housing agreement that we aspire to sign with the federal government. Upon the signing of that agreement, it will allow us the freedom for an additional 10,000 families to get rental supplements. So if the honourable member has any influence at all in Ottawa, if he knows anyone, a family member perhaps or a friend who sits in the House of Commons, please encourage them to get the federal government to sign the social housing agreement and we could get an additional 10,000 families helped out on rent sups. I'm encouraged by his remarks-

Mr Caplan: So the minister is telling me that the provincial government is prepared to cut back on rent supplement units that they provide, but they require federal cash to be able to provide new rent supplement units. Is that correct?

Hon Mr Clement: No, we're just trying to get the deal that every other province in the Dominion has had.

Mr Caplan: In your-

Hon Mr Clement: Let me answer the question, Mr Chair, because I believe there was a question buried in there.

The Acting Chair: Could we have just a little bit of order and we'll hear the answer to the question, please.

Hon Mr Clement: I guess under the previous government, which I believe was the NDP government, 176 were terminated. That was the policy that did that, not any particular member of the NDP, I would hasten to add. As a result of those terminations, some money was freed up which was then plowed back into supportive housing.

Mr Caplan: In your estimates you indicate over $1 million, about $1.5 million, has been reduced because of the termination of rent supplement agreements. How many units is that-that was the question-and how many are you forecasting to reduce next year? I'm still awaiting an answer to those two questions.

I'm also very interested in the minister's earlier reply, that the provincial government, while terminating rent supplement units-by the way, they cut shelter allowances as well, as a part of the general reduction in welfare and social assistance, so let's be very clear about the actions this government has taken.

Clearly the Harris government and this minister are not prepared to live up to their commitments to provide affordable housing. They're looking to off-load this on to another level of government, and are you telling me, Minister, that an investment will only be made if another government comes up with some cash? Is that your response?

Hon Mr Clement: I'm saying I want the same deal as every other province in the Dominion. Somehow Ontario hasn't got this deal yet. We have 101 federal Liberal MPs in the House of Commons, and yet we don't have a deal on social housing so that we can free up some money for 10,000 families to have rental supplements.

My only point was, if the honourable member knows anybody in Ottawa who can help us with that, please use his excellent advocacy skills to get us some action on this. That would be very helpful for the people of Ontario.

Mr Caplan: I'm still awaiting an answer to my first two questions. I'm going to turn it over to my colleague, but believe you me, I will be-

Hon Mr Clement: I didn't give up the floor.

Mr Caplan: -making some additional comments regarding housing and this government's lack of-

Hon Mr Clement: Mr Chair, I'm willing to answer the question, if the honourable member would give me some time.

The Acting Chair: I think he's indicated that we're going to move on.

Mr Colle.

Mr Caplan: I've asked twice.

Hon Mr Clement: Here's the answer once.

The Acting Chair: I've recognized Mr Colle.

Mr Colle: Minister, I have a question in a little different direction. In the last number of years, just before you came to the ministry, there's been a great deal of upheaval in municipal affairs throughout the province. We've had restructuring, we've had seven property tax bills and we've had 148-and I saw another today-regulations in the changing of how property taxes are collected in the province. Do you know how many municipalities have not issued their 1998 property tax bills in the province?

Hon Mr Clement: Gosh, I think I'd have to ask Ernie Eves that particular question. I don't think we have that information at the Ministry of Municipal Affairs and Housing.

Mr Colle: Maybe your staff has-

Hon Mr Clement: We might try to find out whether it's in the package, sir, but that's something that's typically handled by the Ministry of Finance.

Mr Marchese: We should have Ernie Eves here.

Hon Mr Clement: You had your opportunity.

Mr Colle: Can we get that from staff?

Hon Mr Clement: I'm afraid we don't have the number offhand, but perhaps we can undertake in the spirit of co-operation to-

Mr Colle: Yes, can you get that for me, the number of municipalities that have not issued their 1998 tax bills?

Hon Mr Clement: We'll try to find out whether that number is present in the government. It may not be present in the government, but we will see whether we can-

Mr Colle: It would have to be there, because as partners in the funding of education, you're an integral part of that now. So you would have to have those figures. I'd be surprised if you didn't have that. I'd be shocked, in fact, if you didn't have those figures.

Hon Mr Clement: Nothing shocks me any more, but we'll undertake to try to get that information.

Mr Colle: And how about 1999 tax bills? How many municipalities are there that have not issued 1999 tax bills?

Hon Mr Clement: If we don't have the 1998 information here in this room, we'll undertake to see what information is available.

Mr Colle: I wonder if I could get that made available to me, for 1998 and 1999.

Mr Marchese: By when?

Mr Colle: If I could have that for tomorrow. I'm sure I could have it: 1998 must be there, 1999 must be there, because we're almost into the 2000 tax bill.

What I'm worried about is a lot of municipalities haven't issued a tax bill for 1998 or 1999 and won't be issuing a tax bill until the year 2000, covering basically three years. I just wonder, Minister, if you're aware of the pressure that's going to put on the municipalities, not to mention the taxpayers who basically have no idea what they owe because of all the changes in legislation? Have you thought of the impact this is going to have on the taxpayers who may have a little store or a little home and they haven't received a tax bill for two and a half years? Has any action been taken to protect the taxpayer from this confusion?

Hon Mr Clement: I think my deputy would like to answer part of this question.

Mr Michael Fenn: As the member will be aware, there's a fairly extensive program that's been undertaken by the government to ensure that the cost of tax billing will be supported by the government and the rebilling that's associated with ensuring that business taxpayers are not unduly affected by the-

Mr Colle: Mr Chair, I can't hear. I know members across maybe aren't interested in this, but a lot of people have been phoning my office about the fact they haven't got a property tax bill in two years and they're still waiting for that tax bill.

The Acting Chair: I appreciate your problem, Mr Colle. I'll ask both sides, because I've heard everybody in this committee speak out of turn at one time or another, if you'll listen for the answer.

Mr Fenn.

Mr Fenn: As the member will be aware from speaking to his constituents, municipalities have been advising business taxpayers that there will be a final tax bill covering the periods involved going out very soon. We certainly, in our ministry, have provided the data required to issue those tax bills. We've urged municipalities to proceed with that and they are doing so. That is one of the reasons that there is the response the member is hearing about. It's moving ahead efficiently. We've had large numbers of municipalities now in a position where they are billing.

The schedule for the billing is a concern to us, as it is to municipalities, and we've been investing a great deal of staff time, computer assistance and support with the billing process. It's our view that the municipalities have done a good job of advising their business taxpayers that in fact the bills are coming, and prudently they would be setting aside the money to pay the property taxes on their businesses, as they do each year.

Mr Colle: In terms of this property tax collection, you put in this Ontario property tax analysis software across the province. How much has that cost the provincial government, the introduction of the system, the consultants that have been brought on board? What's the total cost of that program to date?

Mr Fenn: I would answer the question in two parts. There is an extensive program, as the member will be aware, in terms of covering the interest costs and the billing costs associated with this. That's an expenditure that the government has authorized to be paid to municipalities to help them with the process.

The direct cost to us, separate and apart from staff time and some of those kinds of activities, I believe is something in the area of $1.4 million for the computer programs and the CDs that have been sent to over 450 municipalities, I believe it is. That process is ongoing.

1640

Mr Colle: Does that include the cost of the people developing the programs, the software development? You're saying it's $1.4 million?

Mr Fenn: I don't have the numbers right at hand because, in part, some of those costs are incurred of course by the Ministry of Finance, associated with its responsibilities in this area. Some are directly responsible for the computer programming and the software amendments that have been necessary to adjust for the legislation changes to which the member referred earlier.

Mr Colle: Therefore, just part of the cost of the Ontario property tax analysis software is borne by your ministry and some costs would be borne by the Ministry of Finance.

Mr Fenn: Again, with the members' indulgence, I'm not sure exactly how the cost distribution on the computer program is done between us and the Ministry of Finance, but I believe that's our share of the cost and it would represent the lion's share of the cost.

Mr Colle: OK. I just want to ask: Minister, have you had concerned municipalities saying that this software is not working, that basically the software can't keep up to the 148 changes in the property tax system in the last two years? Have you had any concerns-

Hon Mr Clement: I personally have not had any correspondence or any verbal discussions with heads of municipalities in that regard, but if the member wishes to send me any concerns that he's heard, I'd be happy to follow up on it.

Mr Colle: In terms of another area here I'd like to ask, has the Ministry of Municipal Affairs done any cost breakdown in terms of the impact of sprawl and what it would cost municipalities and the provincial government in terms of the lack of control of sprawl? Maybe the minister has seen some reports. Has there been any kind of dollar figure put on it?

We know the Golden report said that if you don't have certain corridors of development, you're going to pay in extra sewers, extra road construction, extra schools, extra public facilities. Has the ministry done any breakdown of that in the last year or so? Has any report or any analysis been done of that?

Mr Fenn: What I would offer is that, as the member will be aware, most municipalities have gone through a process of developing a development charges study over the last year and as part of that review they have identified areas where they will experience capital cost pressures associated with growth. That has led to a number of conclusions about the cost of incremental growth and the form of incremental growth and that has, in turn, reflected itself in the planning policies they have developed and in the financing policies for new development. In that sense, we are encouraging municipalities to look at those kinds of issues, to make decisions on land use that reflect-

Mr Colle: But there's been no comprehensive costing done in terms of the cost of development that isn't contained, let's say in the areas of the 905?

Hon Mr Clement: Yes, you know, you get into a definitional issue too. I don't know what "sprawl" means or what have you. I will say this though, Michael, if I can: Certainly on the transportation issues, as the former Minister of Transportation, there were provincial or joint studies that showed the cost associated with traffic congestion, which is partially attributable to sprawl, if you want to use that terminology, and the cost in the GTA of congestion in terms of pure productivity loss, let alone the cyclical costs of loss of quality of life, is upwards of $2 billion per year. So I think you could probably find out there, and we have lots of academic experts-

Mr Colle: I'm more interested in the hard costs, obviously in terms of more wages paid, more fuel consumed, time lost, etc. I just wonder if the ministry somehow has gotten hold of any hard costs. I'm talking about sewers, roads, public facilities.

Hon Mr Clement: There's a lot of academic interest in these issues and we probably rely, like everyone else who is interested in this area-there are a lot of urban planners working on their PhDs-

Mr Colle: But there's nothing comprehensive across parts of our regional plans, regional analyses, in terms of what the cost is going to be to the taxpayer when this growth takes place without any kinds of corridors of planning rather than this American-style sprawl?

The Acting Chair: We have one minute.

Mr Colle: There are generally studies that-

Mr Fenn: Two points: The member referred to the region-wide reviews by individual regional municipalities. Certainly, that's being undertaken as part of the development charges review. When the government announced the creation of the Greater Toronto Services Board, it was in part a reflection of the review that had been done prior to that and one of the academic studies that was done during that period was the study that Pamela Blais did for the greater Toronto area, looking at the estimated cost of sprawl across the whole GTA.

Mr Colle: Has your ministry done a follow-up to that or have you tracked that at all?

Mr Fenn: What I would say is that looking at it comprehensively gives you an indication that certain policies should be applied, but the way that is best employed is in direct individual municipal jurisdictions to control the costs, municipality by municipality, region by region. That's the approach that works best in terms of identifying the cost.

Mr Colle: The province has a mandate to integrate these services and make sure there's cohesion. You haven't done any of that?

Mr Fenn: Mr Chairman, we're not involved in central planning, so we don't analyze those issues in that form.

Mr Colle: So you haven't done an integrated approach at all?

Mr Mazzilli: Mr Chair, time.

Hon Mr Clement: I think we've answered your question, Mike, to the best of our ability.

The Acting Chair: No, don't get excited. We're going to give you your due course too.

Interjections.

Mr Colle: Do you mind if I interrupt you when you're talking too?

The Acting Chair: Time's up. We get that from time to time. I'm sorry, the time is up. We're moving on to the next caucus.

Mr Marchese: Mr Kormos will begin the comments.

Mr Kormos: I'm not a member of this committee, but I'm here as a right pursuant to the standing orders and I'm grateful to the very capable Mr Rosario Marchese for letting me use some of his time.

Minister, the municipal and regional politicians down in Niagara-that's the Niagara Peninsula, the Niagara region-are all in a flurry because they understand you to have at least implied or suggested to them that they've got to start amalgamation processes speedily. Are they correct in that understanding?

Hon Mr Clement: Yes, I guess they are correct. What I've said to some media in the Niagara area as well as to some of the local members there is that we're always looking for ways to encourage the provision of better services for less to the taxpayers, more accountability, and reducing the size of government, reducing the complexity of government. So if there are locally generated ideas that wish to be given consideration by the government of Ontario, I would encourage them to commence that as soon as possible.

The context of the question that was asked of me was in relation to the August 23 announcement by the ministry that Oxford, Niagara, Waterloo and Muskoka were definitely areas where we are encouraging restructuring. The context in which I was asked the question was in relation to a potential restructuring before the next municipal elections. We know that those are November 2000, so certainly time is ticking.

Mr Kormos: And if those municipalities don't want to amalgamate, are you going to force them to do so?

Hon Mr Clement: This process that we announced here was that certainly we were looking to local municipalities, local stakeholders, local citizens to initiate something that they feel comfortable with. That's the process that has been initiated by this ministry.

Mr Kormos: And if they feel comfortable with the status quo, will you respect that?

Hon Mr Clement: Again, if they feel that the best way to achieve better government-less government for less cost to the taxpayer but better government and more accountability-then that's something we would have to assess. It's our responsibility to respond to that, so I don't want to answer a hypothetical at this point. We'd have to see what they came up with.

Mr Kormos: But you tell us that you believe in local autonomy. I was correct in hearing you say that?

1650

Hon Mr Clement: We believe that these should be locally initiated in the first instance, because that is where a lot of the input can occur and be very positive. We think we have a responsibility to all the taxpayers in Ontario. What we're looking for are proposals that mean that the taxpayers have savings. If you're asking me if someone comes to us with a proposal that doesn't mean taxpayer savings, doesn't mean greater accountability, doesn't mean getting better services for less, then that's not much of a process, in my estimation. I will say that right up front.

Mr Kormos: This is not a question. I put to you that municipalities like Thorold, Pelham, Port Colborne, the small municipalities in Niagara region, have some of the most attractive property tax venues, if you will, some of the lowest property taxes, in contrast to the bigger cities. They also have an incredibly strong sense of community. I couldn't begin to imagine how my colleague from the riding of Niagara Falls will explain to people in Niagara-on-the-Lake that they're going to be merged into a larger city and lose their unique identity. I can't for the life of me understand how my colleague from Erie-Lincoln, south and west of me, is going to explain to his constituents how an amalgamation and loss of identity is going to help Port Colborne or Fort Erie-again, small-town Ontario; very unique and with some very exceptional qualities.

I plead with you, and I put this to you: It is incredibly unfair and a denial of local autonomy for the provincial government to tell local municipalities, which have long histories and which are doing quite well, thank you, how to address the issue of local governance. I also put to you that if you truly believe in democratic resolution of issues, you then will respect the democratic rights of those municipalities, as expressed through their leadership, to make those determinations about governance.

I would also say this: If the issue is forced before the 2000 municipal election, that means that it would be an issue determined by municipal and regional councillors and leaders-to wit, mayors and regional chair-without ever having put the matter to the people over the course of an election. I would put to you that the ministry should just hold on to its horses in sufficient time for a municipal election so that candidates for positions of chair of regional government or municipal government or mayors of municipalities can make their views known so that the electorate can, through that process, make some decisions about the future of their municipalities. I plead with you to take that step and to send a message out promptly to the region that you understand that this process may take a considerable amount of time and that this process should also be one where people put the issue to the electorate by way of their respective campaigns.

Hon Mr Clement: Thank you for your input. I appreciate that.

Mr Marchese: I just want to suggest that if the staff of the Ministry of Municipal Affairs and Housing have other things to do for the next 20 minutes or so, they might use it more productively-unless they want to listen to me for the next little while.

Hon Mr Clement: I think it's important that you're here.

Interjections.

Mr Marchese: Since they're so much a part of the decision-making process around here. They have so many other important things to do, but the minister needs them in case there's some complicated question.

Chair, I have no questions of the minister, because, you see, I know the answers. So it seems stupid for me to ask questions for which I know the answers. I'm just going to talk to him for a while.

Mr Colle: You don't know the answers, do you?

Mr Marchese: Yes, we do. I asked him a question in the House just the other day about the need around social housing, and he said: "Are you kidding? We're now spending more on housing than any other government before." I couldn't believe my ears.

I have to tell you, first of all, Minister: Your decision-as a government, not you-to devolve housing responsibilities to the municipal sector is the most moronic thing that has happened in a long, long time in this place. You may argue, "It's a wonderful thing, and don't you trust municipal politicians, because aren't they so very capable, and shouldn't they, because they're so much closer to the public, have responsibility for this?" You might argue that. I tell you, it is the stupidest thing I have ever heard of-and for a variety of reasons.

One, you the province should hold on to that responsibility, because you are the one that has the money to be able to take care of the needs around housing, not the municipality. The municipality's source of funding for housing comes from the property tax. As you know, there are a lot of seniors who live in their homes. They pay as much tax as anybody else, depending on the size of their home, whether they've had an opportunity to renovate it and so on. These poor folks have only their houses as assets. Many of them don't have extra income. Many of the seniors are very poor, but they pay a whole lot of money in property taxes.

We argue that the best way to provide for housing is through the provincial sector. Why? Because it's a more progressive tax system. It's based on an income tax system that's supposed to be a little more progressive. When you shift that responsibility down to the municipal level, the only money they will get, that they have, comes from the property tax base, which we know is not a progressive way to fund housing, or any other thing, for that matter.

I wanted to tell you from the beginning that very few jurisdictions in the world have the responsibility, generally speaking, for housing; it's mostly in the hands of the provinces or states or national governments. You might be able to find an example or two somewhere in the world where they do that, but by and large I argue that it's a moronic thing to have done. That's the first point I wanted to make.

Secondly, your predecessor, M. Leach, talked about the need to change the system because there were so many things we needed to fix in order to get the private sector to construct housing in general. M. Leach and your government were wrong then and you are wrong now, because we're not seeing any construction whatsoever. This bill has been in place for two years. You might argue for the next two years that you'll need four years, you'll need eight years, you'll need 10 years before the private sector gets in. The reality at the moment is that nobody is building; you're building very little.

The reality is that Canada Mortgage and Housing Corp says we're going to need 80,000 units to be built by 2001. By 2001, we will have built a projected number of 6,000 units. At the moment we've built about 3,000 units. From 1996 to 2001, we will need 80,000 units; we will have built only 6,000. We're seriously short of the required number of units we're going to need. In my view, it's a national disaster. In my view, it's a provincial disaster. In my view, the private sector will not get in for a long time.

By the way, your M. Lampert did say that the private sector should be doing it. He does say that, if I recall. I forget on what page in the report it says that. But you'll have to do a whole lot of things before the private sector can come and build. The elimination of rent control was only a small component of the $3,000 gap that he said existed between what it takes to build and what people could afford to pay or would have to be able to afford to pay in order to have the private sector build. He said there was a $3,000 gap. In order to get rid of the $3,000 gap, he listed about eight to 10 things that you would have to do. The elimination of rent control alone, he said, eliminates only about $200 out of that $3,000 gap. You didn't completely eliminate rent control, you simply decontrolled rents, so presumably you've only got anywhere from $100 to $150 reduced from that $3,000 gap. But it's a big gap.

The private sector is going to need a whole lot of things in order for them to start building, Minister. I don't know whether you know that or not. But a $3,000 gap is not easy to accomplish. The GST elimination is only one area, and PST is only another little area. I forget his list, but it's in that report on page 6 or 7, if I recall. To get to that whole list is going to take a whole lot.

My view is this: If you're going to have to give the private sector so much of what they ask for them to build, I say we, the public sector, should be building it. You know why? Because at the end of the day, that housing stock would be ours and not the private sector's. If it takes so much for us as a government to give away so the private sector can own the housing stock, I say it's not worth giving it to them. Why should they be able to have control of the housing stock to do what they want with at the end of the day after we, as the public sector, said, "No problem, we'll clear the way for you. These are all the things you want? We're going to give it all to you"? You will say it's not a public cost at all; I argue it's a public cost. I'm not willing to give the private sector all they want in order to have them own the stock and for them to be able to build.

1700

The reality is that they're not building at the moment, and they won't build simply by all the measures you will take alone, because you're going to have to involve the federal government, and you know that. The federal government has said since 1993 that they're not in the housing business either, like you guys. You guys started a bit later, in 1995. They made some announcements just the other day. They leaked a report saying they're going to kick in some money for housing. We'll wait and see what that money looks like, in what form and how that would be spent; we don't know. But if they release approximately $700 million, it goes a long way to producing the kind of housing that we desperately need. But that won't be enough. They're going to need you. I'm not sure where you're going to stand once they make that announcement public, but it certainly goes a long way. Maybe they're beginning, at the federal level, to listen to the level of need that we have in the housing sector.

You guys are not building, the private sector is not building, and therefore we have a crisis on our hands. What does the crisis consist of? It consists of many things. First of all, people are paying more now than ever before in their rents. These folks who did the study, and you know who they are, have documented that in Where's Home? Part 2. They did a previous report six months ago and this is the Part 2 document, commissioned by a number of people: the Co-operative Housing Federation; the Ontario Non-Profit Housing Association; the city of Toronto was part of that, Putting Housing Back on the Public Agenda. They are tracking the problem, which you are unwilling or unable to do; I suspect unwilling to do, because you probably have the resources to do it.

A few groups are out there commissioning these studies to track problems, and without them we wouldn't know, except by hearsay. What are they tracking? They're tracking that rents are going up; and rents are going up beyond inflation. You will know that most people's wages have been frozen for the last 10 years. In some cases and in some sectors, some people are getting increases, but most of the people are still at that level where they haven't seen an increase in a long time. Inflation has been steady and has been there, but the level of wage increases has not. Rent increases have been higher than inflation and higher than what people have been getting through their wages, so you've got a double whammy of a problem, right? We've got wages not increasing, inflation going up and rents going higher than inflation. It creates a problem. You can see it. It's logical; it's hard to deny. It's hard to deny because the studies have been done, and they clearly show that this is a universal problem that is happening across Ontario and not just in Toronto, because it's good for government sometimes to dismiss the problem as simply a Toronto-specific thing. What they've documented is that this problem exists all over.

What they're also documenting is that in some areas there's a shrinking supply of housing and a vacancy rate that is not as low as it is here in Toronto, for example. But even there, where you would expect the marketplace to take over and competition in terms of vacancy rates to take over and therefore reduce rents, it isn't working. In fact, even where you have a high vacancy rate and normally you would expect rent increases to go down because you have a high vacancy rate, they've said it isn't the case, which is the usual philosophical, political thing the Tories would say: If you have a high vacancy rate, rents will go down. It's not working. Rents are going higher and higher everywhere, even where you don't expect them to go up.

You're seeing an increase in rents all over. You're seeing a decrease in wages all over. You're seeing above-guideline increases happening all over, where the private sector, those poor landlords are saying: "We don't have enough money. We need more and more to be able to care for the buildings because we suffered so much under the NDP that we need to be able to get those rates up." So you've got above-guideline increases happening. I'll come back to that in a second.

Then you've got the Rental Housing Protection Act, which has disappeared, therefore making it easier for the owners of rental buildings to demolish, which constitutes about 1,000 units of rental accommodation that's about to be demolished or they're in the process of demolishing, and very little supply coming in.

You've got about a quarter of the population who rent who pay over 50% of their income on rent alone.

Mr Wayne Wettlaufer (Kitchener Centre): Homeowners do too, you know; they pay more than 50%.

Mr Marchese: Homeowners are-I'll come back to that if I have time.

So a quarter of the population renting pays more than 50% of their income on rent alone. Now more than 50% means it could be 60%, it could be 70%. It's a whole lot of people who are having a hell of a difficult time meeting their human needs beyond simply having a place to stay. I'm painting a picture of the seriousness of the problem that we're facing.

In response to that point you said, "Well, you see that's why we're here trying to fix the problem." I don't know how you would do that, I really don't. This problem is not fixable by you and your policies. The so-called tenant protection package is not helping these people whom I have alluded to. They're paying a whole lot of money on rent alone, and your so-called Tenant Protection Act isn't helping that and cannot, and you've said nothing by way of what your government could do to fix this problem that convinces me that you understand the problem and/or how this might be alleviated somehow.

When you have a few more moments later on you might tell me how you're fixing the problem, because they know that, rhetorically speaking, you can say as you often say, and other ministers in the House, "We're fixing the problem." I don't know what problem you're fixing, but you're fixing something. The public doesn't know how you're fixing it. They think you're fixing something because you say you're fixing it, but those of us who are in the business know that it's just a game that governments play, at least some governments more than others. So I know you can't fix this problem through your policies and through your politics.

I'm actually desperate for a whole lot of Ontarians. I feel the desperation for them. I'm lucky enough that I have a wage as an MPP, that I won't starve, that I won't be thrown out of my house-I've got a house; I'm not renting. I'm lucky enough to be able to provide for some other needs like clothing, some recreational activities with my children, my daughter who likes music, she likes to sing, and my son who likes to play hockey. I'm fortunate enough that my salary, although it doesn't go far enough to pay for the tuition fees for my daughter who is in university-my other daughter will go to university next year-it's not enough for that, is at least taking care of some other human needs which for some might be considered basic.

I don't know how you worry about them, I'm sure you worry for some of these people, but I don't know how through your policies you worry about these people who don't have any luxuries at all, because most of the money they have goes to pay rent. I want to know, when you have your opportunity, how you respond to those human needs in a practical way so that I feel better, at least, at some attempt of yours to say: "Yeah, we do worry about these people. Yeah, they're having a hard time. Yeah, their wages are not as high as ours, you're quite right and we worry about them." Then tell me, if you worry about them, how you are actually going to help them in some way.

That the Americans are spending a whole lot of money on housing, and I want to say that because you Tories usually look down there for answers on a whole lot of things. Whenever you have a welfare kind of idea you go to the US for your ideas, right?

Mr Wettlaufer: Their welfare state doesn't measure up to ours in any way, shape or form.

Mr Marchese: Of course not. No, because you guys are really good. You're the best, right? You take up a bad idea that the Americans have and you make it better. I understand that.

Why can't you guys just take this good idea here, that the Americans are spending billions of dollars-

Mr Wettlaufer: They've got far more poverty than we have.

Mr Marchese: Yes, and they're spending so much money on these issues. I don't understand it.

Mr Wettlaufer: Yeah, how is that?

1710

Mr Marchese: I don't know. Maybe you can help me when you get an opportunity to speak, Mr Wettlaufer.

But they have decided, as a policy, that cities are important, that they are generators of a great deal of wealth, not just social but economic as well. So they said as a policy, nationally and as states, "We can make an important contribution towards the renewal of our economies."

They don't even talk about having a plan. Cities talk about, "We've got a plan." The Tories say, "We've got a plan." They talk about-I forget the word but it is a renewal plan. It is a regeneration kind of idea. The language is different. It goes beyond a plan; it's more visionary.

Part of that vision includes spending money on a few things-recreational facilities as well and cultural facilities, if you can image that. The other is on other important infrastructure such as the transportation infrastructure. The third component of that is housing. Can you believe that? It's housing.

They're spending money on the rehabilitation of buildings, meaning existing buildings that are there that they want to maintain, heritage buildings or otherwise, which they use money to renovate and keep, and also in the creation of housing. Does that sound like an American thing to do? I was beside myself when I read that and said, "That isn't possible, that the Americans could think in this way," and yet they are.

But it's something we did in the 1970s. Toronto did that in the 1970s and it lasted for 20 or 25 years or so, but we need now to move on, we need to regenerate. But cities can't regenerate on their own because they don't have the base. The property tax base, as you know, is very limited. Homeowners get very nasty when you increase their taxes on a regular basis. Cities and city politicians know that, so they've got to keep their taxes down.

Mel Lastman made a promise not to raise property taxes, and by God, that promise was a great promise because people like that. It doesn't matter about the negative consequences of keeping that promise, but the promise was important. We kept it.

Now the streets are not very clean. People are complaining. Now we've got roads that are dilapidated, where people I think are complaining that some of the roads are not cleaned and/or renovated and so on. But we kept the promise in that people don't like their property taxes increased.

You have managed to be able to download and devolve so many of the responsibilities down to them, just so many savings, you say, for municipalities. Even Mel Lastman said, "We've saved millions of dollars." How did we accomplish that? I think he said he saved $70 million by firing 1,200 workers, I think last year and this year as well. He was proud of the fact that we're making savings. How do you make savings? You fire people or positions are no longer and you don't fill them again, which some people think that is a good thing.

Others say, "When the job is eliminated and it isn't filled again, it's an economic loss, it's a problem." It means that job doesn't exist any more. Someone is not earning a salary and someone is not paying taxes. So for some people it's a problem, but for others, for Mel, "We're making $70 million in savings."

Anyway, it's a poor place to go, because property taxes cannot sustain the kind of renewal we're talking about. That's why the Americans have said, "We need to help cities," and they're pouring billions of dollars-not millions; billions of dollars-into it. I never expected the Americans to do that.

Minister, I am saying to you, you've got to look at that. You've got to look to see what the Americans are doing and help us all out and help the cities out. At the housing front, if you don't get back in some way, we will face a human disaster in housing. We're feeling it now. That quarter of the population that is paying over 50% of their income is in danger of losing their rental accommodation. That's what that report was saying. These people could become homeless.

We've got a problem in terms of housing; we've got a problem in terms of homelessness. The need is there and it's getting bigger.

We know that it takes anywhere from three to six years, or possibly longer, to build a non-profit complex or a co-operative complex. It takes three to six years. If we've got a need now that isn't being felt and you at some point decide we've got to do something and it takes three to six years, imagine how far away we're pushing the crises and the disaster.

I'm not sure you people are contemplating these problems but I really want to know, beyond the rhetorical elements of your speech and other ministers' when they speak about these problems, how you folks are going to address this identified need, that we will need 80,000 units by 2001 and we will have only 6,000 units being built.

The Chair: Now we'll turn to the government, the minister, for a half-hour response to the statements that we've heard.

Hon Mr Clement: With your indulgence, Chair, I have a cabinet committee responsibility that I have to participate in to meet some of the challenges that Rosario outlined. My parliamentary assistant is willing to stand in my place and I will be back tomorrow for the full duration of the committee.

The Chair: Certainly, Minister, we appreciate you have those other responsibilities. We may wish to re-arrange some of the questioning; we'll see in your absence. Are you leaving at this time?

Hon Mr Clement: That's right, and I believe at that point the parliamentary assistant is going to make some comments and then will be available for any time that is remaining on your schedule today.

The Chair: All right. Could the parliamentary assistant come forward.

Before we start, it's normal practice for ministers to make themselves available or to advise the committee when they will not be available. We have not had that information in advance so I will rule that the official opposition, if it wishes, can defer 20 minutes of questioning for when the minister is available tomorrow if they so wish. Otherwise, the parliamentary assistant will be here and, as the minister has said, is ready to respond.

Mr Curling: Could I then respond to that because I think that we're on to some very pertinent topics and I know that the parliamentary assistant is quite a capable individual but I'm not quite sure if he would be able to respond to some of the questions that may be put to him. So maybe we should-

The Chair: I think we appreciate the fact the minister did attend today. Unfortunately, we did not have the notice ahead of time that he would only be able to make part of this session and that's why we will extend that option. You'll indicate at the time that your round comes, which is at the end of this, whether you would like to take that today or subsequently when the minister is available.

Now I would like to invite you to proceed with the 30-minute minister's response to what you've heard. Use that time as you see fit.

Mr Brian Coburn (Carleton-Gloucester): I appreciate this opportunity in this new environment to explain some of the initiatives and reply to some of queries by my colleagues.

One of the things that I think has happened-it started before 1995-is that it was very evident that with the change in our society and the changing demands and challenges that we're facing in all aspects of our society, if government didn't change to meet those challenges, we were headed for a disastrous future. This government, I believe to its credit, is taking some of those initiatives. Whenever you get into promoting change, you're subject to considerable criticism. That is understandable.

I think we all sit around this place, though, trying to make things better for the residents of Ontario and the people that we represent in trying to address all of the problems.

In my former life as a mayor of a municipality and as a councillor, one of things that had been a constant for years and years, through AMO and through the municipalities to the government of the day, was the very fact that the provincial government had usurped too much power. We devolved some of that power back to the municipalities so that they could make decisions on issues that were close to them. They were closest to the people they represent.

1720

It was this government that listened to that request. As a result, a number of initiatives were undertaken over the last five years. I will attempt to go through them in the course of my 30 minutes. It started off with the restructuring of municipalities. The Who Does What panel tried to determine where a service was best delivered most effectively to the people who were affected by it. That resulted, of course, in Bill 26 and the initiation of a considerable amount of restructuring throughout the province.

As a result of that restructuring, there is evidence-lots of it-that restructuring does work, provided it's implemented properly. We have a number of success stories. We can even begin with Chatham-Kent, where there are annual savings of $11.4 million expected at maturity. The amalgamated single tier in the county of Prince Edward expects savings of $1.36 million. Even in something of the magnitude of the city of Toronto, there are projected savings of $150 million-to date they have achieved $120 million of those savings-on an annual basis. Sable and Spanish River, even these smaller situations, are projected to save $149,000 per year. The city of Kenora has come into effect in January 1 with projected savings of $800,000 per year. So it's not necessarily isolated to the higher-density areas in the province. There are savings to be achieved throughout the province in a variety of different ways.

Since 1996, our government has approved 118 locally driven and derived restructuring proposals. As a result, there are 229 fewer municipalities in Ontario, with 1,059 or 1,060 fewer politicians. That is a 23% reduction. Ontario taxpayers can expect to save in excess of $200 million annually as a result of these restructuring efforts that have been carried out to date.

The most recent initiatives are of course in the four regions of Haldimand-Norfolk, Hamilton-Wentworth, Ottawa-Carleton and Sudbury. Through that process, where we've had advisers appointed-they had 90 days to consult with the stakeholders, the public, businesses, service clubs and local councils and come forward with their recommendations to the minister. Those recommendations are to be forwarded to the minister's office on about November 26. The consultations were extensive, and these are four areas where they've had never-ending discussions. In Ottawa-Carleton, for example, this was going on for over 25 years. Everybody thought they were all working for Ford: They all had a better idea on how government should be restructured.

Finally it's going to be brought to closure, with a model and a plan to achieve those savings and provide a better model of governance that reduces the number of politicians, reduces taxes, so that the taxpayer, at the end of the day, gets a better bang for his buck. In Ottawa-Carleton, for example, over 1,000 submissions were presented to Mr Shortliffe-1,600 altogether in the four regions. So they've had ample opportunity to provide their input, and the advisers are presently writing their reports to be submitted to the minister.

To bring closure to this issue, our government would like to have this through the Legislature before Christmas so we can accommodate the restructured municipalities for November 2000, with the new elections, so they can put some initiatives into place that will save taxpayers money right from the get-go.

Other initiatives that we've taken to help municipalities deal better with their new responsibilities have a lot to do with the reduction in red tape and the approval process. Particularly in this ministry it has to do with planning issues.

From my own personal experience, planning issues and getting approvals is enough to drive a sane man nuts. It took something like three years to get plans of subdivision approved. It used to take 405 days to process an official plan amendment. That has been reduced, on average, to about 106 days. I still think we can do better. With the capable staff we have, that is something we're always striving for, to improve these timelines, which in turn affects development in our local municipalities. Our goal is to have a one-window approval process, where we can handle the majority of decisions in a very timely fashion.

This has a lot to do with the issue of rental units and new development. If we present and prepare the proper climate for investment, we believe that will invite the private sector to build the rental units.

In 1995 there was a situation where we as a government and our taxpayers simply could no longer afford the programs that we were involved in with respect to rental housing. In June 1998, our government proclaimed the Tenant Protection Act which reformed the Ontario system of rent regulation.

The previous system, in a lot of people's minds, including this government's, didn't work. There were not rental units being built. We had to change the environment, the investment climate, so people would invest and build rental units. Tenants were not having their accommodations fixed. There were leaking faucets, leaking roofs, doors that wouldn't close, elevators that wouldn't work, that kind of thing, and they weren't being repaired, because there wasn't that spread in the investment, return on investment, to enable them to that. So there were games being played, as we all know, between the landlord and tenant in terms of providing affordable and reliable accommodations. As a result, our housing stock increasingly became run-down. There was no encouragement for landlords to improve maintenance or build new buildings.

Our goal was to deliver a balanced system that would work for landlords, tenants and taxpayers and would encourage the builders to get back into the business of constructing new rental housing. We're pleased. The results that we've had so far are encouraging. They're not monumental, but it is a start. As I mentioned earlier, when we change a system it does take some persistence and some initiative to make the plan work. But it is encouraging with some of the initial results received.

Landlords are spending more to maintain their rental stock. Ontario now ranks second among regions in Canada for money spent on renovations. If you talk to some of the construction people or the renovators in your own communities, they are busy; they are busier than any other form of tradesperson in our communities.

We've also introduced the tribunal, which is very effective in terms of resolving disputes between landlords and tenants and providing information about the Tenant Protection Act. The tribunal was set up to ensure a fairer, more efficient process of hearings between landlord and tenant disputes, moving them from a court system into a less formal system of mediation and adjudication. In the past, it would take months to get a court date; now applicants are generally having their cases heard within weeks, in many cases within three weeks.

Members of the tribunal are getting their decisions out to parties within two or three days. In its first year of operation, the tribunal successfully mediated more than 5,000 applications, at a minimum cost to the taxpayers of Ontario. The admin costs for the rent regulation system are 4.3% lower than they were three years ago under the previous system.

Under the Tenant Protection Act, tenants continue to be protected from unjust evictions. On a year-over-year basis, the overall number of applications to terminated tenancy has remained constant. During the last year of the old Provincial Court system, 60,200 were received, and in the first year the Tenant Protection Act the tribunal received 60,550 applications.

1730

Stats from the Superior Court of Justice show a slight decline in the number of writs of possession filed in the city of Toronto. For the period between January and June 1998, when the Provincial Court system was still in place, there were 4,077 writs filed. During that same period in 1999, under the Tenant Protection Act, only 4,054 writs were filed.

The Tenant Protection Act has rules about demolition, conversion of condominiums and renovation of rental units, including requirements for compensating tenants and providing alternative accommodations. The Tenant Protection Act changes the focus of the previous legislation. Old legislation focused on protecting units. The Tenant Protection Act shifts the focus to protecting tenants, while at the same time promoting a better climate for the building of much-needed new rental stock.

Landlords are still required to provide tenants with security of tenure or compensation. In the case of demolitions, landlords must provide tenants with at least 120 days' notice of termination before the end of the term of tenancy and landlords are required to pay the tenant the equivalent of the three months' rent or offer the tenant another acceptable rental unit. In the case of conversions to condominiums, the Tenant Protection Act provides tenants with a lifetime security of tenure and right of first refusal to purchase their units after conversion. Tenants continue to be protected-

Interjections.

The Chair: Sorry, Mr Coburn. I'd just remind committee members that we did have good attentiveness during the other-

Mr Marchese: Yes, but it's so tiring-

Mr James J. Bradley (St Catharines): Mr Chairman, did I come in during the reading of the book of myths? I'm not quite sure.

The Chair: Mr Bradley, your attendance and intervention are noted, but out of order. I would direct, and ask the committee members' co-operation, to Mr Coburn's remarks and look forward to the rest of his presentation. Mr Coburn, please.

Mr Coburn: Thank you, Mr Chairman. I can have this bound and you can keep a copy by your bed, if you'd like.

Mr Marchese: Oh, please. I want a copy now.

Mr Caplan: I'm going to wait for the movie.

Mr Coburn: Tenants continue to be protected by rent control and can be evicted for reasons set out in the Tenant Protection Act. While the Tenant Protection Act removes the impediments to condominium conversion, demolition or renovation of rental buildings, municipalities may adopt or continue to have policies and they have those tools at their disposal to control demolitions.

The approval of demolitions and conversions and major renovations of rental stock continues to remain a municipal responsibility through provisions in the Planning Act and the building code. Municipalities have authority through their official plan policies to restrict the conversion of rental stock to condominiums. Many municipal official plans contain policies that regulate conversion of rental housing stock. For example, municipalities may establish a minimum vacancy rate threshold that must be met before they will consider a conversion application.

Addressing rent control is a fundamental part of encouraging new apartment construction, not only a necessary action. We streamlined the entire land use planning system in the province and passed a new Planning Act. We've cut back on development charges that municipalities can load on to new housing and we passed a new Development Charges Act. We have reviewed the building code. We passed a new updated building code for Ontario which came into effect in 1998. We've improved the property tax situation for the construction of new rental housing, and we've announced a provincial sales tax grant program to encourage construction of affordable rental housing across the province.

We also continue to press the federal government to change its policies with regard to the high GST on the construction of new apartments and to reduce the unfairly high mortgage insurance premiums for the construction of rental housing. This year there were 474 private rental starts in communities with low vacancy rates, such as Toronto and Windsor, and almost double the target of 247 units.

But it takes time to turn the system around, as I had indicated previously. It had so many disincentives built in that many developers gave up on Ontario altogether. We are on the right track and we are confident that investors and builders will return to this province to fulfill our plan.

Ontario taxpayers currently spend $1.5 billion every year to subsidize social housing. In the last year, we've achieved significant savings in the area of social housing. We're averaging less than 6% on mortgage renewals. Savings have been found through operational and cost efficiencies, and these of course will be passed on to municipalities. Our government has always believed that social housing is a service that can best be provided at the local level. Municipalities, as we all know, have a long history of involvement in social housing and they know the needs of their community better than anyone.

On January 1, 1998, we transferred the funding responsibility for social housing to municipalities as part of the local services realignment. As part of that exchange in responsibilities under the local services realignment, the province cut in half the education portion of the residential education property tax and provided more than $1 billion in funding to municipalities to help them assume their new responsibilities.

With the new division of responsibilities, local governments now pay the cost of Ontario's 231,000 units of social housing, and the costs have fallen by 15% compared to three years ago. Maintaining a unit of public housing is now less than $233 per month, our original target. The cost per unit in non-profit and co-op housing built after 1985 is now down to $655 per month.

In order to fully devolve the administration of social housing to municipalities, we need to reach a federal-provincial agreement, which the minister spoke about earlier on this afternoon, as we expect that agreement to be finalized in the very near future. The federal-provincial agreement will let local government simplify social housing programs, streamline administrative arrangements and serve plans more effectively. It would also allow Ontario to fulfill its commitment to create a new $50-million rent supplement program, which will provide accommodation for some 10,000 low-income families and individuals.

These are some of the initiatives we have taken to improve the housing situation in Ontario. The challenges are indeed great, for us as a government, and for all members in the opposition and the third party, to work together to try and solve the many challenges that we face. We believe that by taking some of the initiatives we have in other areas to improve the investment climate in this province, it will prove to be a place where individuals would want to reinvest again, like they did in the 1970s and early 1980s in this province, and return the province to prosperity.

I think there is proof in the pudding. If the economy of Ontario is to function in an efficient manner and on all cylinders, we have to make changes in every aspect of our society. There are results coming in that show we are on the right track: the very fact that the economy has improved and that we have helped create over 500,000 jobs in a short of period of time, that the economy has turned around and we are leading the G7. Yes, you can say part of that credit goes to the strong economy in the States, but I think some of the credit is deserved here at home for some of the initiatives that we have taken within this province. Ontario is looked upon as, and is and is expected to be, the economic engine of this country. The leadership role that we have to play is of paramount importance.

Those challenges that are in front of us we take as serious, or more serious than the next person: the very fact that there is not enough housing, the very fact of where a person is to get their next meal in some instances. Those are very serious issues that we do have a tremendous amount of concern about. What is the right combination? If it was easy, we would all have the answer. It is a constant, day-in, day-out challenge to be able to meet the changes in our society and to be able to help those who are less fortunate.

Our government is open to suggestions, but not the old ones that haven't worked. There is plenty of evidence that we've flogged some of these horses and they haven't taken us anywhere except into further trouble. With the growing population that we have, and the prosperity, I think it does bode well that there are solutions out there where we can help those who need affordable housing and adequate housing so they can look to a future where they can achieve some of the dreams that we're in a position to take advantage of on a daily basis.

I believe that some of the initiatives we've taken haven't borne full fruit yet, but it's early in our mandate. There are signs that we are on the right track and that it will pay dividends to us in the future.

The Chair: Thank you, Mr Coburn. You still have approximately 10 minutes left in the allotted time. Did you wish to entertain questions, or how did you wish to use that time?

Mr Marchese: I think we should go.

Mr Coburn: Do you want to go?

Mr Marchese: Yes.

Mr Coburn: You'd rather get at the big guy.

The Chair: Mr Coburn, what is your disposition?

Mr Coburn: We're finished for this evening.

The Chair: You're finished with your presentation. We have an indication from the official opposition that they would prefer to question the minister, and for the circumstances described previously, we'll permit that to happen.

We'll start again at 3:30 tomorrow. Thank you very much.

The committee adjourned at 1740.