Thursday 18 May 2000

Subcommittee report


Chair / Président
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)

Vice-Chair / Vice-Président

Mr Doug Galt (Northumberland PC)

Mr Ted Arnott (Waterloo-Wellington PC)
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)
Mr David Christopherson (Hamilton West / -Ouest ND)
Mr Doug Galt (Northumberland PC)
Mr Monte Kwinter (York Centre / -Centre L)
Mrs Tina R. Molinari (Thornhill PC)
Mr Gerry Phillips (Scarborough-Agincourt L)
Mr David Young (Willowdale PC)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Mr David Rampersad, researcher,
Research and Information Services

The committee met at 1108 in room 151.


The Chair (Mr Marcel Beaubien): Good morning, everyone. We'll bring the committee to order. It is after 10 o'clock. The purpose of the meeting this morning is to consider the subcommittee report of May 17, 2000. Who wants to start? It's in front of you; I think the report of the subcommittee is in front of each committee member.

Mr Doug Galt (Northumberland): Mr Chair, I have a very important duty here, and maybe we should get this looked after first.

The Chair: I will let you proceed with that.

Mr Galt: I'd like to make a motion. I move that the following substitution be made in the membership of the subcommittee on committee business: that Mr Young be substituted for Mr Arnott.

The Chair: You've heard the motion. Is there any discussion on the motion? If not, then all those in favour of that motion? The motion carries unanimously.

Any other motion? No? Then we'll proceed to the subcommittee report, which is in front of you.

Mr Gerry Phillips (Scarborough-Agincourt): I move the subcommittee report, Mr Chair.

The Chair: Mr Phillips moves the subcommittee report. Any discussion?

Mr Galt: I'm looking at the 9 o'clock start and wondering if the committee might consider a 10 o'clock start rather than a 9 o'clock start, for two hours on each of the two mornings.

The Chair: It's up to the committee to decide what your preference is. I am only the Chair; I cannot decide on your behalf. The subcommittee made the recommendation of 9 o'clock.

Mr David Christopherson (Hamilton West): I would suggest, since there's likely to be a dramatic shift between the subcommittee report and the final report, we get that settled and then see where we are. I mean, why amend this if you're going to kill the whole thing anyway?

Mr David Young (Willowdale): If it's in order, Mr Chair, I'd like to move a number of amendments to the subcommittee report, if I may. I have them here in a form that might be of some assistance to yourself and to the clerk. I have copies for each of you. If this document is considered in conjunction with the report of the subcommittee, it'll hopefully clearly indicate where it is I suggest this committee goes. I'll read them out, Mr Chair, but I have given you a copy.

The Chair: Mr Young, are those the only two copies you have?

Mr Young: I have one for myself. Do we need additional ones?

The Chair: We'll just take a quick recess; I'll get the clerk to photocopy.

The committee recessed from 1112 to 1114.

The Chair: First of all, Mr Phillips, since you moved the subcommittee report minutes, could you please read them for the record?

Mr Phillips: Sure.

"Your subcommittee met on Wednesday, May 17, 2000, to consider the method of proceeding on Bill 72, An Act to pay a dividend to Ontario taxpayers, cut taxes, create jobs and implement the Budget, and recommends the following:

"(1) That the committee meet in Toronto on June 1 and June 8, 2000, in the morning and afternoon each day and invite the minister and appropriate ministry staff to the meeting to explain the bill and answer questions.

"(2) That the minister attend the committee meeting for the first two hours on June 1 and that the ministry staff attend for the duration of the committee's meetings on June 1 and June 8, 2000.

"(3) That amendments be submitted to the clerk of the committee by 9 am on June 6, 2000, and that the clerk will distribute the amendments to the committee members the same day.

"It is noted that Mr David Young dissented from these recommendations."

The Chair: Thank you, Mr Phillips. Mr Young, I'll go back to you now.

Mr Young: Mr Chair, again so that the record is clear, I will read the amendments I propose, being as follows:

That section 1 be amended by removing the words "invite the minister."

That section 2 be amended by removing "the minister" and replacing it with "ministry staff" as the group to attend for the first two hours of June 1, 2000.

That section 2 be further amended by removing "ministry staff attend ..." and replacing it with "ministry staff be on call ..."

Finally, that the date in section 3 be amended to "June 2, 2000" and that the amendments be tabled by 9 am and distributed by 12 noon on that same day.

The Chair: You've heard the motion proposed by Mr Young. Any discussion on the motion?

Mr Phillips: Let me start by saying that I find it unacceptable that the minister is not prepared to come and defend the bill. I view this bill as the most sweeping tax bill we've seen in 15 years at least. I reread the campaign document of the Conservative government and it never mentioned corporate tax cuts of up to 40% and capital gains cuts of one third. In the end it will be $9 billion worth of tax cuts. It will, in my opinion, unless we see evidence to the contrary, threaten our health care system funding. It is a huge policy decision that we've decided we are going to have corporate rates lower than our neighbouring states. It's the first time I can recall where the budget essentially referred to simply how we compete with our neighbouring US states, and there are, as I say, huge policy implications. If this bill is passed, to make any future changes requires referendum.

I happen to think it's certainly the most important economic issue facing us. It just seems absurd to me that the minister would not want to be here to explain the rationale behind this tax policy. As I say, there was never a mention in the campaign about cutting corporate taxes like this, never a mention in the campaign about cutting capital gains taxes like this. I think we are owed a very fulsome discussion on the rationale. I now find that the staff will be on call. They can't even give us two days of their valuable time to be here to answer, hopefully on behalf of the minister, the policy issues and the detail issues behind the bill.

Essentially, in my opinion, it's an insult to the opposition, to the Liberal caucus and to the NDP caucus, that the minister can't find two hours to come and explain the rationale behind this bill and to have a debate on it. It is, I gather, the cornerstone of the Conservative Party policy. It's the thing you feel proudest about, I gather, and I think the government owes us a visit from the minister and an opportunity for a really vigorous debate.

I regret very much that the public has no opportunity for input into this. I have had calls from at least one group wanting to express their view on what I regard as the most sweeping tax legislation I can recall. I'm angry that the minister has decided he won't appear. I'm angry that the minister is only going to allow his staff to appear for two hours and then be "on call." I just find this unacceptable. I think the public has a right to have their business done in public. I understand that when you win elections you think you can do whatever you want, but that isn't how I view democracy. I can't imagine why anyone would support these amendments. I find it insulting.


Mr Christopherson: I share the concerns of the critic for the official opposition and feel even more strongly about the public being involved here. Quite frankly, other than maybe one session with the ministry staff, we achieve nothing here that we couldn't achieve by virtue of asking for a technical briefing and meeting with the staff one on one. To me, it's almost pointless beyond the first morning. Four sessions, four half-days of talking with staff, is not going to produce the kind of discussion that needs to happen here. You can't grill staff; that's not fair to them. Yet the questions we have to ask are of an adversarial nature. The minister won't come; he's hiding behind his bureaucrats. That's shameful. A bill of this importance, and the minister refuses to come forward. It's an insult to the people of Ontario by virtue of the fact that the opposition is the only voice for those who didn't vote for the government and don't agree with the government, and yet the minister who is sponsoring this bill refuses to come before the committee. Further to that, we can't bring anybody in from the outside. So we're all going to have a nice session of navel-gazing.

This is just outrageous. I can't put into words how strongly I feel that the government is muzzling the whole process of any kind of democratic interaction. And it's not just this committee; every bill that comes forward is being rammed through here with very little or no input by anyone. I've been around here long enough that I can see and feel the dramatic, draconian change that's taken place. This is just one more example of it. I not only oppose with my voice and vote but every fibre of me that this is any kind of decent way to deal with a bill that has the implications it does. We're getting further and further away from this Legislature and its committees having any relevance whatsoever. I understand the backbenchers get a little upset when people from the public come forward and say things that aren't nice about their government, but too damn bad. The fact of the matter is, there is supposed to be an open, lively debate, and we're not going to have one with these amendments.

Quite frankly, I will attend to the point where we're getting something out it, but once we just start going around and around and around and the bureaucrats start saying, "Well, that's the policy, that's the policy, that's the direction, that's the way the minister says," once we get to that kind of stonewalling, I am not going to waste my time at this committee being run around when there are other places where I could do something more productive.

If the government would give its head a shake and let the public come in and have a real discussion-they can bring in their supporters and we'll bring those in who disagree with the government and we'll have an open debate. That's the nature of this place. That's what's supposed to happen, and it's not happening and it's outrageous.

Mr Young: My colleagues may have some comments as well, but let me try to address some of the points raised by Mr Phillips and Mr Christopherson.

First of all, it's important to recall that this committee has spent a great deal of time consulting with the public. The views of the public were obviously very important to this body, and that undoubtedly explains why a total of 10 days of hearings were held across the province in, I believe, six cities-cities, by the by, represented by politicians of all different stripes. There were numerous representations made to this committee, many of them non-partisan. Some of them, as Mr Christopherson described future representations in this manner, would clearly be biased or partisan on one side or another; that inevitably happens and did happen, but there were a lot of excellent submissions made to this body. Many of those recommendations and submissions are in fact embodied in the actual budget document. This committee heard from 102 organizations representing unions, social advocacy groups, community groups, businesses, heard from individuals, and received written submissions.

In addition, it is important to recall that the minister took part in extensive pre-budget consultation. His efforts included 13 round tables representing a broad spectrum of interests. His consultations involved discussions, in one fashion or another, with 370 organizations and individuals. I should add that since joining the Ministry of Finance two or three months ago, I too participated in many discussions with groups, ranging from community living groups to various business organizations. Some 300 individuals participated in total in that set of pre-budget consultations done through the ministry.

It should also be noted that the minister did attend at this committee. Based on my review of previous years, he attended longer, arguably twice as long as most ministers do. It's my submission-and I think the facts will bear this out-that the formative and primarily important part of this process we're now engaged in the last stages of takes place when one does go out and listens and crafts the bill, based of course on a position put forward by a political party during an election campaign, but also based on what one hears through those committee hearings. That's exactly what occurred.

As to Mr Phillips's concern about this fundamental shift, the notion of cutting corporate taxes being perhaps offensive but certainly unique in the manner he describes, I point out that as far back as 1995 in the Liberal red book, the Liberal Party acknowledged that corporate tax rates had to be cut to make businesses more competitive. They seemed to understand that at that time.

I should also point out to you that we are not only trying to be competitive in relation to other provinces and border states; we're now in global competition with countries that have cut tax rates for businesses and continue to do so, countries many of which, by the way, have very strong health care systems. Denmark, Norway and Finland are some that come to mind. The nexus that Mr Phillips attempts to draw between lower taxes and less health care funding is, in our respectful opinion, simply fanciful. The history of this government with cutting taxes and increasing health care funding suggests otherwise. Our commitments suggest otherwise. There is nothing new or unique in the direction we are heading here that is different than we have espoused over the last five or six years, both in the Legislature and in election campaigns.

In closing this segment of comments, I would also like to say that it's of course open to the members of the Liberal Party and the New Democratic Party to pose questions to ministers of the crown, including Minister Eves, during question period. By my count, this privilege has been utilized on very few occasions, if any.

Mr Phillips: Have you seen him there since the budget?

Mr Young: I have indeed, on numerous occasions, as a matter of fact, as recently as yesterday. So it seems to me that if there were some pressing political questions of the sort that Mr Phillips was describing a few moments ago, surely those would have been presented during question period.


The Chair: Any further discussion?

Mr Christopherson: You're damn right. The parliamentary assistant talks about the excellent submissions that came in beforehand and then somehow wants us to believe that's the end of the democratic debate, that everybody gives input and then you just do whatever you want and there's absolutely no comment afterwards, which is ridiculous. It matters probably more what you did with the input than the fact that you got it: whether you ignored it, whether you implemented it, whether you changed it, whether you brought in something that wasn't raised at this committee.

Your suggestion that somehow question period could be used for some of these things-if that were the case, then we would just triple question period and eliminate committees. The fact is, there are detailed questions here that are not macro enough to warrant a question in the House but certainly need to be looked at, and that's what committees are for. We're supposed to roll up our sleeves and do the detailed grunt work, quite frankly, that the media aren't interested in and that most of the public aren't interested in but that have major implications at the end of the day on how this province is run and, in this case, how our economy works.

We've got a bill that's about 36 pages, which is a fairly lengthy bill. It makes amendments to the Corporations Tax Act, the Income Tax Act, the Land Transfer Tax Act, the Mining Tax Act and the Retail Sales Tax Act. Given that taxation is one of the biggest levers of power that governments have, particularly majority governments, it makes sense that we would give people who are experts in this field-neither Mr Phillips nor I are economists, we're politicians, but we would like to have economists come in, both those who are supportive of this bill and those who are opposed to it, and point out to us what the concerns are.

I also want to point out that this is such a sham. The amendments that were just moved by the government have this committee meeting on June 1, and then on June 2 we're to have our amendments in. Then the committee meets, for the other 50% of the time, on June 8. What a absolute joke. You haven't even covered up the fact that it's a sham very well, to offer up two dates for committee discussions, and nobody gets to come in except bureaucrats, the minister refuses to attend, and then half the committee hearings happen after the deadline for amendments.

There's no way you can make the argument to any reasonable person that you really care about what anybody thinks about your bill. I don't even know why we're bothering. It's an insult to refer it to committee and somehow suggest that the parliamentary committee process is alive and well, because it's not. That's why I'm so outraged. It's just an absolute sham, a fraud perpetrated on the people of Ontario that somehow their parliamentary system is working the way they expect. No, it isn't.

Absolutely nothing of any value will come out of these hearings except what the government wants. There won't even be an opinion from outside of this committee meeting except for those of us who are members, and there are two of us here who have an opposing view to the four of you across the way. That's all that's going to happen. It's so insulting, and what drives me crazy is that it's so blatant. I can scream all I want from the rooftops, but that doesn't do any good if nobody's listening and the media doesn't seem to feel that this is any particular problem. I'm trying not to be over the top about it, but the reality is that the democratic process, the parliamentary tradition, the notion of a pluralistic society, doesn't exist much around here any more. This is one of the most blatant examples; however, it's just another example, because there are lots of them. There's absolutely nothing that the parliamentary assistant's said that in any way, in my opinion, mitigates the legitimate criticism of this farce and this insult.

Mr Phillips: The tragedy is that the parliamentary assistant says it and almost sounds like he actually believes it. This is an insult of the first order. The consultation that took place was input. The bill is now implementation. That's all background. Now the government has declared itself and has introduced a bill, in my judgment a hugely important bill. It sets up Ontario's own tax system for the first time ever. It sets in place corporate tax-rate cuts that will put our corporations substantially lower than the US. That may be acceptable, but I've outlined the questions in detail that we need answers to. It sets in place by legislation small business tax cuts, including in the future, by the way, for organizations like doctors. I understand that, but I've got questions on it.

It is unbelievable that a minister wouldn't want to come before us and defend the bill. It is unbelievable that with what I regard as the most sweeping tax bill in Ontario, certainly since I've been in the Legislature-I defy anyone to find one more sweeping-that the Minister of Finance won't even give us two hours of his time to come in and defend it, explain it. I've taken the time to write a four-page letter outlining what I regard as some of the key issues, questions and discussion points.

You've got the votes, so you can ram it through, you can muzzle us, you can cut off debate on it. The Minister can say, "I'm not coming," and he won't come. "Furthermore, I'm going to allow my staff to be there two hours and then they're leaving. If you want them, you've got to phone them to come back." I just say this is obscene. That's strong language, but that's how I feel about it.

I can't imagine that anyone who got elected to come to here to do the public's business, to involve the public, to let the public see what's going on, to allow some opportunity for input, would accept this. As my colleague from the NDP said, it is turning legislative committees into a farce, and I can't imagine why the government members would allow themselves to be a part of it.

Mr Galt: It's interesting to hear some of the comments coming from across the floor. This is my first year to be sitting on this particular committee. I was extremely impressed with the extensive consultation we carried out in the month of February, both in Toronto as well as, I believe, some six communities around Ontario, north, east, west. Over and above that, the minister carried out extensive consultations, and I personally chaired a task force on rural economic renewal which again went around the province for some seven days getting input for the Minister of Finance. It's really impressive the extensive consultation that was carried out by many different facets of the government prior to the budget being struck.


I think it's interesting how well this budget has been accepted by the public. Certainly when I was on CJBQ a week ago Friday, half the calls coming in over a two-hour period were congratulating the government. There was practically no criticism of the budget. Listening to CFRB recently, driving in yesterday morning, there was approval of the $200 rebate and the budget in general. As was previously mentioned by the parliamentary assistant, I believe there's only been one question in the House to the Minister of Finance questioning this particular bill and the budget in general.

I do empathize with the opposition on ministry staff availability. I think there's a bit of a misunderstanding. Certainly whoever they would like will be here; it's just a matter of identifying who they need as a resource person. We don't need a whole army here from the Ministry of Finance as we go through clause by clause. There are areas of expertise that are needed and other areas of expertise that are not needed, and from an effective, efficient point of view of government, I don't think we need a whole lot of people sitting in here for two full days.

Interjection: How insulting.

Mr Galt: Well, how many would you want here? How big an army do you want for the two days? All you have to do is let us know who you want here and we'll have them here for you. But I don't think we need 20 or 30 people sitting in this room at your beck and call just to make you feel good. Those you need, we'll ensure they are here.

It's interesting how the opposition talks about this deteriorating into a sham. Chair, I'd like to let you know just how much time was spent on committee work by the opposition when they were government. In our first term, from 1995-99, we had 798 hours of committee work on the road. What did the NDP have? It had 645 hours. And what did the Liberals do during their five-year term? They had 349 hours. I think that in itself speaks well of this government and what we've been doing.

How many bills were passed, and days of sitting? Sessional days were 431 for our government, and we passed 114 bills. What did the NDP sit? It was 385 days and they passed 163 bills. The Liberals sat 297 days and passed 183 bills. That can be broken down into how many sessional days or how many bills per sessional day. We have spent a lot more time in debate on each and every bill, whether it be second reading or third reading. You can talk about hours, you can talk about days. Whatever measure you would like to use, we have had far more consultation, far more debate on the bills, on second and third reading as well as in committee.

What they're saying about how this government operates, ramming things through-I think they're remembering what they were doing rather than the government that's now in place that does pride itself on and certainly carries out extensive consultation, extensive debate. I'm quite comfortable with the amendments. I would like to see that we meet from 10 to 12 on the two mornings rather than 9 to 12, but that's certainly flexible.

Mr Young: Very briefly, Mr Chair. I appreciate that I've spoken before, but I did want to comment on a couple of points and ask what is perhaps a rhetorical question.

I heard with interest that Mr Christopherson was not pleased, to say the least. I think he said every fibre of his body was offended, or something of that sort. I wonder if the same offence was felt in 1994, when there were four bills that might be properly characterized as budget bills: the Ontario Loan Act, the Budget Measures Act, the Revenue Act and Liquor Licence Act. Based on my review of the documentation, not one of those bills spent a day at the committee stage. I can recite other bills at other times. While I appreciate that my friends have different positions, and they've certainly put their positions forward in a very emphatic way, I do question their comments about the unprecedented nature of what is being proposed here. I think that is not an appropriate characterization. I think we have had a good discussion with the public and with others and that two days is a sufficient amount of time to complete this process.

So I'll be supporting the amendments I have moved. I have the utmost confidence that it will allow for the process to be completed in a reasonable fashion.

The Chair: Thank you, Mr Young. I will now pose the question on the amendments to the subcommittee-

Mr Phillips: May I ask a question before we get-why won't the minister appear?

Mr Young: If the question's posed to me, Mr Chair, I'd be pleased to have the opportunity to answer it. The minister did appear at this committee previously. He appeared for rather an extended period of time, based on past precedent and on the precedent that has been established over the years. The minister has, at a very crucial time, been in front of this committee. I know it's the opposition's job to try to waste time and elongate processes to try to get some attention in the media, but there's no purpose served by it at this juncture.

The Chair: We will now go to the amendments that Mr Young submitted:

That section 1 be amended by removing the words "invite the minister."

That section 2 be amended by removing "the minister" and replacing it with "ministry staff" as the group to attend for the first two hours of June 1, 2000.

That section 2 be further amended by removing "ministry staff attend ..." and replacing it with "ministry staff be on call ..."

Lastly, that the date in section 3 be amended to "June 2, 2000" and that the amendments be tabled by 9 am and distributed by 12 noon on that same day.

Mr Christopherson: A question on the motion: Do I understand correctly that indeed halfway through the committee discussions the amendments are expected to be put in by the opposition and then the committee continues for the other 50%? Do I understand these dates correctly, Chair?

The Chair: That's the way I would read it, Mr Christopherson.

Mr Christopherson: That pretty much sums it up.

The Chair: So all those in favour?

Mr Phillips: Recorded vote.


Arnott, Galt, Molinari, Young.


Christopherson, Phillips.

The Chair: The amendments carry.

Now we'll need a motion on the subcommittee report as submitted.

Mr Ted Arnott (Waterloo-Wellington): So moved.

Mr Phillips: Recorded vote.

The Chair: All those in favour of the amended subcommittee report of May 17?


Arnott, Galt, Molinari, Young.


Christopherson, Phillips.

The Chair: The amended report carries.

Mr Young: Chair, just a point of clarification: Dr Galt, just as we were commencing the vote, correctly asked whether or not that was to be 9 o'clock or 10 o'clock by way of a commencement time. I thought we had achieved some level of agreement that it was to be 10 o'clock.

Mr Christopherson: You've got no agreement about anything.

Mr Young: Then let's start at 9. You can get somebody to cover you as House leader.

Mr Christopherson: You can do whatever you want.

Mr Young: Nine o'clock is great.

The Chair: What I have in front of me right now is that the amended subcommittee report recommends that we meet at 9 o'clock. That's my understanding, correct?

Mr Phillips: Yes.

The Chair: Any other business? If not, then I'll entertain a motion to adjourn.

Mr Arnott: I move adjournment.

The Chair: We are now adjourned.

The committee adjourned at 1148.