COMMUNITY ECONOMIC DEVELOPMENT ACT, 1993 / LOI DE 1993 SUR LE DÉVELOPPEMENT ÉCONOMIQUE COMMUNAUTAIRE
ONTARIO PREVENTION CLEARINGHOUSE
ONTARIO FEDERATION OF AGRICULTURE
CONTENTS
Tuesday 31 August 1993
Community Economic Development Act, 1993, Bill 40
Ontario Prevention Clearinghouse
Bryan Hayday, executive director
Ontario Federation of Agriculture
Roger George, president
Carl Sulliman, chief executive officer
STANDING COMMITTEE ON GENERAL GOVERNMENT
*Chair / Président: Brown, Michael A. (Algoma-Manitoulin L)
*Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)
*Arnott, Ted (Wellington PC)
Dadamo, George (Windsor-Sandwich ND)
Fletcher, Derek (Guelph ND)
*Grandmaître, Bernard (Ottawa East/-Est L)
*Johnson, David (Don Mills PC)
*Mammoliti, George (Yorkview ND)
Morrow, Mark (Wentworth East/-Est ND)
Sorbara, Gregory S. (York Centre L)
Wessenger, Paul (Simcoe Centre ND)
*White, Drummond (Durham Centre ND)
*In attendance / présents
Substitutions present/ Membres remplaçants présents:
Conway, Sean G. (Renfrew North/-Nord L) for Mr Sorbara
Haslam, Karen (Perth ND) for Mr Fletcher
Hope, Randy R. (Chatham-Kent ND) for Mr Morrow
Jamison, Norm (Norfolk ND) for Mr Wessenger
Wiseman, Jim (Durham West/-Ouest ND) for Mr Dadamo
Also taking part / Autres participants et participantes:
White, Drummond, parliamentary assistant to the Minister of Municipal Affairs
Clerk / Greffier: Carrozza, Franco
Staff / Personnel: Anderson, Anne, research officer, Legislative Research Service
The committee met at 1028 in the Humber Room, Macdonald Block, Toronto.
COMMUNITY ECONOMIC DEVELOPMENT ACT, 1993 / LOI DE 1993 SUR LE DÉVELOPPEMENT ÉCONOMIQUE COMMUNAUTAIRE
Consideration of Bill 40, An Act to stimulate Economic Development through the Creation of Community Economic Development Corporations and through certain amendments to the Education Act, the Municipal Act, the Planning Act and the Parkway Belt Planning and Development Act / Loi visant à stimuler le développement économique grâce à la création de sociétés de développement économique communautaire et à certaines modifications apportées à la Loi sur l'éducation, à la Loi sur les municipalités, à la Loi sur l'aménagement du territoire et à la Loi sur la planification et l'aménagement d'une ceinture de promenade.
The Chair (Mr Michael A. Brown): The standing committee on general government will come to order. The purpose of the committee's meeting this morning is to deal with Bill 40, to have public deputations regarding the Community Economic Development Act.
ONTARIO PREVENTION CLEARINGHOUSE
The Chair: Our first presentation this morning will come from the Ontario Prevention Clearinghouse, Bryan Hayday.
Good morning. The committee has allocated 30 minutes for your presentation and the committee always appreciates your allowing some of the time for a conversation with the members, but you are free to use your time as you wish. You may start by introducing yourself and identifying yourself as to your position within the organization.
Mr Bryan Hayday: Thank you, Mr Chairperson and members of the committee. I certainly will balance the time so that unless your questions keep us to the full half-hour, you may in fact gain some more time.
I am the executive director of the Ontario Prevention Clearinghouse and it's in that capacity that I come to you this morning.
The Ontario Prevention Clearinghouse is a charitable, non-profit provincial organization, providing information, consultation and project management expertise in the areas of health promotion, community development and programs which promote optimal child and family functioning within communities.
The clearinghouse is also the trustee organization for a project known as Transitions: Corporate Strategies, which is working with the private sector, non-profit organizations and with the support of the provincial government to help welfare recipients make the transition to the workplace of the 1990s. It is in the context of these experiences that I would like to comment on the piece of legislation before you.
The significant role played by small business development in job creation in the current economy is borne out in my own organization's knowledge of activities across the province as well as in our market research for the employment project we are operating. So the clearinghouse would certainly like to lend its support generally to the enactment of legislation which supports community economic development in Ontario.
Our reading of the legislation in its current form does raise a number of questions for us, though, when we imagine its implementation. The clearinghouse would therefore ask the committee members to be sure that the legislation addresses the following points. I'd like to speak to these in the order in which I'd like to raise them.
The first point concerns access. During a time when the combined total of individuals on some form of unemployment insurance and/or welfare support represents 20% of the population of Ontario, does the legislation in its current form provide sufficient support and access to individuals who may not have formed a corporation, may not be in a partnership and may not have achieved sole proprietorship status of a small business?
My current reading of the legislation suggests that these prior steps are a prerequisite to access to financial support through the legislation. On the one hand, these safeguards make excellent sense. On the other hand, the steps required to both develop a reasonable small business plan as well as to achieve sufficient legal status to qualify for support require specific skill sets. I would ask the committee members to consider whether there is a role for non-profit community agencies to act as mentors, as stewards, as partners to support individuals who are making this transition to a very different marketplace from the one we've grown up with.
As such, for this legislation to be effective, an infrastructure seems to be needed at the community level which addresses the following:
Entrepreneurship: Entrepreneurship skills in microenterprise need to be both taught as well as cultivated and supported. The self-employment development initiative operated through the Ontario Social Development Council is an example of such a program which could be operated on a broader scale across the province.
A further point concerns mutual aid and support. The experiences of self-help groups such as the Metropolitan Toronto Self-Help Clearing House and the Community Skills Exchange program operating in Guelph are two sources, I think, of important lessons on the steps required to help individuals make transitions to increased independence, particularly economic independence.
The third point I'd like to comment on under the general heading of "Access" is community access. Revolving loan funds that organizations such as the Calmeadow Foundation have had experience with should also provide valuable lessons regarding the reduction of stigma, providing support at the community level and focusing on the elegance of simplicity.
If I may divert from my written remarks for a moment, the tone of the legislation at the moment seems to lack the principles of access and simplicity and support for what one might envisage as effective grass-roots mobilization and access to the kinds of skills that would be required to develop reasonable microenterprise operations without some of the usual bureaucratic and/or first-time experiences that might be required. This feels like a piece of legislation that would support people who've been in the marketplace and have had an opportunity to develop skill sets in these areas. It doesn't feel like a piece of legislation which, enacted, would facilitate that as effectively as you might hope for.
My second major point has to do with linkage. The clearing house is concerned with linkages and systems working in harmony with each other where possible. This point concerns linkage with the social assistance reform process.
In the Turning Point document which has been released for consultation by the Minister of Community and Social Services there are major elements which describe the preparation for employment and return to the workplace as key priorities for individuals able to make this transition. Would the opportunity planners envisaged by the reformed welfare system be in a position to act as informed, authoritative connections to the community economic development funds which would be made available through this legislation? Can we imagine these systems working together rather than working separate funding towers, as has been our usual experience of the rollout of programs?
The third point has to do with information and experience. What will the sources be of information concerning effective community economic development enterprises? What are the experiences of previous economic development enterprises, and how will these insights be made widely available across the province? What will the process be for ensuring that there is timely public information regarding the experiences of new enterprises through the community economic development framework? How can we, in effect, create a learning organization within this pilot, within this rollout, so that we learn from the excellence of others rather than reinvent wheels?
In summary, does the legislation sufficiently address questions of accessibility for individuals who are unfamiliar with establishing a business, developing a business, assessing a marketplace and approaching a lender? Approaching a lender can be a harrowing experience for people who have wonderful credit ratings. It's an experience none of us, I think, relish at any particular time. If we're talking about enabling as much as 20% of the population who have fallen on the margins of the marketplace, rejoining the marketplace with the assistance of the community economic development framework and legislation, what assists are we imagining? What's our vision of this?
The legislation at the moment talks about safeguarding public funds and safeguarding measures and conflicts of interest and restrictions and qualifications, and it feels to me as though it's lacking the principles of enablement that would strengthen it.
Are organizations that are already actively involved with the very groups that would benefit from this economic legislation authorized by this same legislation to act as partners, stewards and mentors? Does the legislation anticipate the implementation of an opportunity planning function within the welfare system to help individuals make a transition from social assistance to the marketplace?
In summary and in closing, our need to safeguard public funds must also be balanced with legislation which supports excellent access systems, small business development expertise, mutual support at the community level and easy access to information. I would ask the committee members then to think about whether or not this legislation sufficiently addresses these questions and whether or not there may be some additional recommendations made regarding the implementation of this legislation by the relevant ministries. I'll conclude my remarks at that point. If there are any questions, obviously, you can choose to direct them to me.
The Chair: Thank you. We will do the questions in rotation, as is our practice.
Mr Bernard Grandmaître (Ottawa East): Most of your questions really are directed to the ministry. I would ask the parliamentary assistant to respond to about 15 or 20 questions about accessibility, and if are there other regulations that are oncoming to make this program more accessible. So you've got about 15 or 20 questions that I'm anxious to listen to.
Mr Drummond White (Durham Centre): The responses to.
Mr Grandmaître: Yes.
Mr White: I think that's a rather daunting prospect.
You do mention a number of issues in terms of the access, the linkage programs. I think, given my own experience and background in social work, I certainly see those as being very valid concerns, especially in terms of the linkage. I know certainly the Jobs Ontario programs in many areas, the linkages are there; they've been established. That's a programmatic issue, though, as opposed to a legislative one.
The access issue you've mentioned as being very important, the legal definitions, the business definitions which you feel might exclude people who need access to those programs: My understanding is that the program will be funded extensively at that level for training, for access to the individuals, both in terms of the setting up of the community loan funds and the CISCs, and also those community loan funds and CISCs enabling the individuals who want to make benefit of a CED, so that education is a very large part of the funding for the program and in fact through that education, that other part of the funding, that is, for the loan defaults, for the provincial guarantees, because of the extent of the training funding and the consultation counselling work that's involved there, the moneys for that other part, which is the provincial guarantees, won't be as large or as necessary. Certainly, the experience in other jurisdictions is that the default rate is at the same level as or lower than with traditional financial institutions.
I don't know if that answers all 15 questions and I'm not quite sure why I took on that task.
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Mr Grandmaître: We do have the very same questions. What has been identified this morning is that the legislation that's been, or trying to be, introduced by this government is not responding to the real needs, and I think these are most of your questions about accessibility, sufficient support, all of these things. Had you been consulted by the government before this legislation was drafted?
Mr Hayday: I think some of our views are certainly on public record, so it's entirely possible that information's been available to people. Whether or not we were specifically consulted, I'd have to say no.
Mr Grandmaître: You weren't? And yet you're tied very closely with the government on this issue, right?
Mr Hayday: I think that we have shared aspirations of a well-functioning community economic development function. We were consulted by representatives of the Ministry of Agriculture and Food in the early stages of design on the consultation concerning community economic development. That may have seemed sufficient at the time.
Mr Hans Daigeler (Nepean): Just a quick question. Thank you very much, first of all, for your presentation. I came in a little bit late. Would your organization, despite the concerns that you have, be possibly involved in helping people take advantage of the provisions of this bill? And if so, how do you see your own organization assisting the objectives of this bill, which frankly I support? I support the objectives of it.
Mr Hayday: Our experience with welfare reform is extensive and has been for the last half-dozen years, and it's in that context that I'll answer the question, if I might. People making a transition from social assistance to the workplace, one of the choices that should be available to them is a self-employment option. A self-employment option should not necessarily have to have as a first step in it incorporation as a sole proprietorship or the development of a partnership or the establishment of a non-profit corporation without share capital. Those are hurdles for people coming off that system that in our experience should not be first steps and they shouldn't be steps taken solo. So I'm not sure that there's a sufficient mechanism in the legislation to allow that kind of partnership to go forward so that those first steps are taken by individuals in a mentorship or partnership or stewardship situation, where there's a handoff at a certain point, when the individual's business plan is sufficiently established.
So our experience around welfare reform certainly, and in listening to people who have been involved in various community economic developments -- the Calmeadow experience both in this country and other provinces and in other countries -- is that we're not very good at making it possible for people to get a running start. We require them to have a lot of accreditation before we allow them to start. So it feels to me like the balance is disproportionately on the accreditation and permission rather than on the enablement.
Mr Daigeler: And your organization, however, would be willing to assist in this enablement? You could see a role in that?
Mr Hayday: Absolutely. We certainly are actively involved in an extensive pilot, at the moment, with a number of private sector corporations as well as some other non-profit organizations, working specifically with welfare recipients who are trying to make that transition. So we are already in the business.
I'm trying to imagine whether or not this legislation is something that we could work with as full partners or whether or not we'd have to be silent coaches trying to figure out through the back door how to help somebody qualify. It seems to me like any time I have to spend time helping someone get in through the back door rather than the front door, I just made my journey twice as long as it needs to be. So yes, our organization is practically in the business of demonstrating through a pilot project, as well as potentially in the position to disseminate information across the province.
Mr Ted Arnott (Wellington): My first question, I guess, deals with the key point I think you made with respect to accessibility and simplicity of the program, such as that there's sufficient takeup. We hear from small businesses, repeatedly, existing small businesses, that one of the biggest problems that they feel are obstacles in their way is excessive government paperwork. They spend so much time trying to keep up to the demands of what the government expects them to report that they don't have as much time as they would like to sell their goods or service and keep their business afloat.
I completely agree with you. You didn't quite take it to the next step. Do you think there's going to be a problem in terms of the takeup of this program as a direct result of the accessibility issue as well as the lack of simplicity which is inherent in this bill?
Mr Hayday: The bill doesn't address the mechanisms for takeup, and I think the parliamentary assistant spoke to that, that the implementation is different from the legislation. I'm not sure the legislation anticipates a rollout of the program which would be sufficiently widely accessible. We have offices in every community, we have community information centres, we have child and family service agencies, employment counselling agencies, a number of generic provincial agencies --
Mr Arnott: MPP's offices.
Mr Hayday: -- which could be stopping points for this if there was sufficient authority for them to do that. I don't know whether or not there's sufficient authority vested in those offices by this legislation, and that's my concern.
Mr Arnott: I think one of the things I would prefer the government to address is the issue of business regulation, if there were steps taken to streamline those regulations as best they could, or at least if there was a massive study of the existing regulatory framework to see which ones were no longer applicable, perhaps, or outdated.
In Wellington county, we have two offices, actually, that service the Ministry of Economic Development and Trade, and they provide advice to small businesses, and I think that's a really important function. I'm not sure if the government intends to give some of the responsibility for this program to those offices. You're talking about the general-purpose offices, but the Owen Sound office, which serves the north part of the county, I received a memo from the individual who operates that office indicating that he was told by his superior that he should not respond to inquiries from very small businesses, under 10 employees, that he should concentrate his efforts on the larger number. That was something I raised in the Legislature, actually with the Treasurer, but I really feel that the government has to take steps to try and simplify things. If the government thinks it's going to assist in the creation of small business, it has to be very, very simple in terms of its program.
Mr Hayday: I don't know that we have structures that allow us to take risks quickly and limit our losses quickly. I think we feel that once we've taken the step on venture capital or risk management, having taken one step, we have to go down a whole path, and I don't know whether or not we've got a mechanism for a quick response, a quick rollout and with sufficient early indicators that if the thing doesn't feel viable, we feel sufficient permission to stop. But small business is about windows of opportunity, and those windows of opportunity are not windows of application forms.
Mr David Johnson (Don Mills): I guess my interpretation is that you think this fund should be a little more proactive, that it seems as if it's set up to assist those who have an idea, who have a business in mind, who have a plan, but perhaps is not geared to those who are developing and need that kind of assistance. I wonder if you could be any more specific as to how you could see that working.
Mr Hayday: If I can go back to my figures of 20% of the population dependent upon some form of government cheque as a their principal source of income, we've never had a province where one in five are dependent upon either a federal or provincial cheque as their sole source of household income. We've just never had that. We've never had the level of structural change in the economy that we've got now. You know that and I know that.
But we don't have any models for what to do about that, and we tend to be behaving I think in the rear-view mirror as though we do have models of what to do. We think that community economic development makes good sense. We hear that most of the job creation is coming out of small and medium-sized business. We're trying to imagine what the role should be for the public sector in that. Is this sufficiently proactive? Have we vested authority, for instance, for nominal small business development or business planning expertise in welfare offices? That's a specific recommendation.
At the moment, you couldn't do that without stepping on ministerial toes and bureaucratic jurisdiction and contractual obligations, yet the public, it seems to me, very much wants that kind of integration of function. It doesn't make sense that we should have administration of a support system with one hand and the helping hand from someone else, and they're not available in the same office or from the same person, or that there would be constraints on that.
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Mr David Johnson: I just want to make sure I understand you. You're suggesting that some of the administration for this program should be somehow linked in with the welfare system?
Mr Hayday: If that's where 10% of the population is and we're talking about an economic development fund, I would ask, why not? Why couldn't we imagine that?
Mr David Johnson: You've referred to Calmeadow. They made quite an extensive brief to us. One of the points they did raise, and I'd ask you to comment on it, was that they have not been able to be sustainable. That's the word they use; they have not been able to be sustainable. I think one of the points they made was that the administration costs per dollar that is lent are simply too high. I thought that would be the case with the loan fund in particular, and consequently that the loan fund would not be sustainable. Do you have any comments? I think what they're saying is the way it's set up today, it's perhaps a good first step but it won't work in the long run.
Mr Hayday: I think, based on my familiarity with Calmeadow's experiences, and I'm clearly not speaking for them, we're both speaking about them, they have tried to operate in this province and/or in this country without the full, active participation of the public sector. The public sector has a long history of income transfer and dollars transfer and funds transfer to municipalities, to organizations and to individuals. So it seems to me there is an existing infrastructure which is available for purposes of funds transfer and accountability.
Could another layer of skill be added to some of those jurisdictions, to some of those bureaucratic functions, that now also looks at economic development? In the private sector, we talk about vertical job-loading. We talk about flattening the system and adding in other functions to existing departments. We have departments that do funds transfer and audit and accountability and taxation and revenue. Are there mechanisms there to add other skills and a friendlier customer service face for communities? I think that would be addressing part of the nub of Calmeadow's question. If sustainability is when you have to create a whole new system, can you tailor an existing system? It may mean structural reorganization, but the system we've got now isn't working. What do we lose by trying something different?
Mr Jim Wiseman (Durham West): Just to pick up on that point, and you answered the first part of my question with that response, one of the difficulties people do have -- I've encountered this in my own office, because I've run seminars on how to start your own small business and what's available -- generally, people do come in with a very low level of understanding in terms of what has to be done in terms of starting their own business. The Ontario Development Corp does have books and pamphlets and people to talk and to run seminars and so on.
My question is -- I guess there are two things here. One is the amount of time it would take to create this kind of access awareness in one area, and the second one is, the people who are currently doing some of these things, wouldn't we have to bring them up to speed and wouldn't that take time as well? Having asked those two questions, the third one is, isn't time of the essence?
Mr Hayday: In presentations to other committees I've made the point that the province should not be treated like a single entity and that in rolling out a program we need to figure out what shape cookie cutter to use and to use the same cookie cutter across the province. A concern I'd have is that while time is of the essence, we could call for pilots. We could set out a set of six principles and say, "I'd like to see a proposal for a jurisdiction." Maybe it's Owen Sound, maybe it's Guelph, maybe it's Kenora.
Mr Wiseman: Maybe it's Ajax.
Mr White: No, not Ajax.
Mr Wiseman: Or Pickering.
Mr Hayday: Maybe it's each of your ridings. Are we happier? We could say, "I want to see a limited-risk, six- to nine-month pilot that addresses principles of high accessibility, microentrepreneurship, involvement of the disfranchised, specific hard product, rollout to the customer, and I want to see a business plan for doing that that could get started two weeks after my constituency office calls you and says, `We're ready to go,'" and in effect have a request for proposals of that nature and not feel as though you had to find one in each of the regions of the province that was exactly the same or sufficiently equitably balanced.
The economy doesn't behave like that. The economy doesn't mirror politics. So when politics gets involved in the economy, it seems to me that we have to take our lessons from the economy. This needs to imitate life more, and that means being much more responsive, much more proactive. I'm not sure if you could -- let me say this more positively. If you could make a recommendation to call for that kind of proposal with that kind of political will, shared political will to do something differently, you would surprise a lot of people and you would get some good responses, I think.
Mr Wiseman: I don't want to debate that. I will ask this question, though, and that is that basically the person who would have to be in the office administering and doing what you're asking for would have to be a multifaceted person who has holistic thinking and can follow the strains of thought in a lot of different directions at the same time in order to access the programs and to do what you're saying. It's my experience that we have mostly linear thinkers and people who can only go in one direction at one time and that this creates a huge problem.
Mr Hayday: In which case many organizations have assembled small task forces where the skills that are required in that single individual are at least vested in the task force and the task force has sufficient authority to make a decision about a recommendation. I think there are organizational models to address that. I will concur with you that we tend to come at a kind of linear block with a linear solution, and it's not going to work.
Mrs Karen Haslam (Perth): I look at this legislation and I see this as having very good benefit to my communities. I come from a rural riding and small communities and I think this is very beneficial. I already know of projects and of groups that are eagerly awaiting this type of tool to help them help themselves in their community. I know of committees that are already formed in the rural areas that say, "This could help us put a more rural context into what we're doing."
Now, you're -- and this is in all fairness -- interested in the social aspects of the welfare reform and people in the transition time. Do you not see that in communities that can still be done with this vehicle because it's done at a local level? The decisions and the funding for the education aspect is there and the commitment is there to continue to work with the groups that come forward to the CISCs and to the loan funds. The whole idea was that they aren't just saying: "Where's your business plan? See you in six months." The whole idea was that they would be continually working with these people, they would be continually working with the groups or with an individual.
I mean, I like this legislation. I understand where you're coming from. I'm just saying you can't solve everybody's problem and all the problems in the transition time in the welfare. This isn't coming from that aspect; this is coming from a more community development aspect from an MMA source. Can you not see this as being a vehicle that would still answer some of your social questions?
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Mr Hayday: We agree that the province is not a homogeneous entity, absolutely. I'm not looking for a single solution rolled out in every jurisdiction, whether it be an inner city neighbourhood or a rural community that has a stronger sense of infrastructure and mutual support. I support going forward with this. I'm asking that it be thought of now.
In those communities where the community development has not occurred yet, where the infrastructure is not present yet, where the state of community readiness is not present, what will the takeup be like? In a neighbourhood that has a very high percentage of recent arrivals to Ontario or individuals who have been involved in a large-scale manufacturing venture and have not been involved in a rural exchange of skills and the mindset that comes with that kind of neighbourhood, will there be sufficient takeup and support for those individuals and does the legislation enable that sufficiently? That's my question.
The Chair: We have completed your time, Mr Hayday. We appreciate you coming this morning. For your information, the committee will commence its clause-by-clause study of this bill tomorrow morning.
ONTARIO FEDERATION OF AGRICULTURE
The Chair: Our next presentation will come from the Ontario Federation of Agriculture, if you'd like to come forward. Good morning, gentlemen. You have the privilege of batting cleanup. You are the last presentation on this bill during the public hearings stage. We appreciate you coming this morning and look forward to you introducing yourself for the purposes of Hansard and then commencing your presentation.
Mr Roger George: My name is Roger George. I'm the president of the Ontario Federation of Agriculture. I have with me today Carl Sulliman, who is our chief executive officer, and Ed Ketchabaw, who is one of our research specialists of the OFA. We do appreciate the opportunity to be here this morning. We don't have a prepared text. We are going to give a short verbal presentation and then attempt to answer your questions.
The OFA, as many of you know, represents over 20,000 farm families across the province and, as such, we have a very real interest in renewed economic activity, particularly in the rural areas. In that light, rural economic development is something that we have been bringing to various governments and cabinets of this province for probably the last eight or nine years. We are somewhat heartened to see, in the last year or two anyway, a renewed attempt by government to finally get something started. I think we've for too long in this province been talking of rural economic development and talking smoke and mirrors, and I think finally we see a little bit of action.
We believe Bill 40 to be a good start. Certainly some of the funding in the programs that have been already announced is clearly limited. I think we recognize that. However, I think they will serve a useful purpose and hopefully go on to be a big part of an economic resurgence in Ontario.
What I want to talk about this morning is I think the big picture. Maybe we can tackle some specifics of the bill in question period, but from our point of view it's the big picture that we're concerned about.
I think we all realize that this province needs new economic development. I think we all realize that we are going through a period, especially in the farming community and the rural communities, of extreme challenges and change, and I think we also realize that life is not ever going to be the same as it was in the 1970s and the 1980s. As we gear up for the next century, we are going to be posed with doing business in the farm community in different ways, and that's fine with us. I think as I travel around the province, I certainly get the sense from my members of a new sense of excitement and entrepreneurship that is starting to come to life. I think it's very important that we keep that flame fanned and that we give rural entrepreneurs, in fact all entrepreneurs in this province, the opportunity to use their creativity to get on and start new businesses, to reinvest in others, to get into diversification, because very clearly we need to create some new wealth in this province, some new forms of wealth. Some of the old ideas are not working, but I believe that the people of Ontario are the ones to get us out of the economic plight that we're in. In fact the people of Canada will do that too.
It's so important, I think, that we find ways to encourage people to free up some of their savings and reinvest them in their local communities. If the figures that our minister, Minister Buchanan, gives us are to be believed, there's approximately $62 billion in the hands of rural people, $62 billion of savings. If we could just manage to get a small fraction of that and reinvest it in local communities instead of being invested on Bay Street and offshore and in Mexico and in mutual funds, get some of that in the rural communities, it would have a tremendous impact on the economy and on the way of life, on the jobs. I think that's where this whole issue has to come from. It has to be the people.
The government by itself is not going to create new wealth. I think the role of government is to create the infrastructure, make sure we've got the roads and the communications systems etc, that we've got the right energy prices, the right business climate, the right tax regimes, and I think government is going to have to maybe find some tax angles to encourage some of these rural people to reinvest their money into their own communities. I think that's important, but it will be the local people who have the ideas.
I think it then becomes very important that if any of these initiatives that we are talking about and that Bill 40 will make possible are actually going to come into fruition, we have to coordinate all the multiministries, all the multistakeholders out there. At the moment I think there is a frustration that when an individual or a group of individuals attempts to do something different, they find themselves in short order up against a roadblock of red tape and that just strangles a good many ideas. The regulatory system strangles ideas, and there can be nothing worse.
We had an example of a farmer who wished to build a small on-farm abattoir, and it took him six months before he ever got a brick laid because he was dealing with four or five different ministries and every one of them had what they thought was a technical reason why he couldn't proceed. That's very frustrating.
We can't be strangling these entrepreneurs with this massive red tape, and somehow government and ministries and bureaucracies and various tiers of municipal government have got to come to grips with sorting out their various regulations and working to coordinate their activities or else none of these things that we're anticipating to happen, in part aided by Bill 40, will happen because frustration will take over.
But there is going to be a need for venture capital. As farmers, we're looking, as I said before, at some major shifts. We've got trading agreements that are going to have a profound impact on the way we do business, and for many of our farmers, undoubtedly they will not be farming in the same way as they were 5 or 10 years ago. They will be looking for ways to have value added to their product. Venture capital is going to be very necessary. We've got many, many projects being considered across the province for ethanol, these ethanol plants which would use Ontario grains and turn them into an environmentally friendly fuel. They're exciting projects, but they're going to need vast amounts of capital.
Where are we going to find the venture capital to do these sorts of things? Certainly we're hoping that Bill 40 and the proposed programs will be a good start in getting us off on this, but we also are going to have to be looking to the bankers. There's going to be no one-stop shopping when it comes to finding capital and working capital to get all these projects going and to get the rural economy going. We in turn will be looking to our Ministry of Agriculture, and Mr Buchanan has indeed put together three or four components of an agricultural investment program, some innovative ideas which in some ways parallel some of the initiatives of the Minister of Municipal Affairs, but also the federal Farm Credit Corp is going to have a major role, and indeed the banks.
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This morning, Mr Chairman, I just left a meeting to come here, and it was a meeting of the Premier's Round Table on Environment and Economy. The chairman of the round table, Jon Grant, asked me to convey to you the importance of involving the round tables in discussions as we work to build sustainable communities across this province.
Again, it comes back I think in large part to clearing some of the regulatory nightmares out there, streamlining government, getting far better cooperation with ministers, interministerial staff -- and that is a real challenge for the bureaucrats in my mind. We're in a new partnership; I believe we're in a brand new partnership for the rest of this decade and it will lead us into the next century.
The OFA firmly believes that the farmers of Ontario will have a major role to play in this economic revitalization. We will be happy to continue to advise government on how to structure these programs. We will be critical of some of the aspects of the programs. We see the announced $30-million programs as pilot projects. Hopefully they can be refined to be more useful in the future because we're not just talking here of tens of millions of dollars. What it's going to take is billions of dollars of new investment in infrastructure and in capital to get the economy going and to get it geared up for the turn of the century.
With that, unless my colleague has any specific remarks, I'm done with my opening remarks. Carl?
Mr Carl Sulliman: Thank you, Roger. I guess from the agricultural point of view -- Mr Chairman and members of the committee, thanks for the opportunity to be here -- it's of course a very confusing morass of regulation. The statute that you have even before you for consideration is basically an omnibus bill that touches on a variety of ministries of government, a variety of existing statutes of the Legislative Assembly and in, order for us to work our way through that, it takes some effort.
The concern we have is, how is it that the layperson, Mr and Mrs Ontario Resident, who has a good idea -- on lot 4 in some concession in some township -- is going to be able to translate this morass of programming into the reality of creating a job and creating an economic opportunity for Ontario. That's a very specific question as to how you translate such an enormous enterprise, such an enormous amount of omnibus activity at the provincial level; how do you translate that into a lot and concession number somewhere in a township in the province of Ontario back in one of your ridings, one of your constituencies? That's an issue for us.
From the agricultural point of view, just to underscore Roger George's comments as president of the OFA, if the minister of the crown's statistics are reliable and if in fact we have in excess of $60 billion in savings and investment instruments currently in rural Ontario by Ontario residents, it seems to us that the government itself has a tremendous responsibility for creating a climate of confidence in which people will actually go out and take some risk with that money and put that money into ventures along with the funds that you, as member of the Legislative Assembly, are looking at here in this committee today by reviewing this legislation.
It's a partnership, but you can't seriously, on the one hand, talk of partnership through such a bold legislated initiative and on the other hand have a Premier and a Minister of Finance and others constantly talking doom and gloom about how difficult the situation is and the fact that even government services have to be curtailed on Fridays and people can't even access their own government because there's this cloud over all of us in terms of the economy. It's not a consistent message.
That's a lot of money out there -- $60 billion -- that men and women have saved and worked hard to accumulate and they've got it because they haven't been frivolous about the ventures and the risks and the adventures they get involved in. So there's a tremendous responsibility, it seems to us from the agricultural point of view, for the government to be very clear that this in fact is not a misadventure. This is a very sincere and concerted policy initiative that is attempting, as the ministers of the crown have said and the government has said -- if 70% of these monies are earmarked for rural Ontario, what precisely does that mean?
There are a lot of amendments here to existing statutes to allow public corporations to do new things, but where do Mr and Mrs Lot 4, Concession 6, in your township, in your riding, access this and where do they fit in? That's a major challenge for us. Certainly as a partner in rural prosperity, the Ontario Federation of Agriculture is willing to work with all members of the House, all parties of the House, to ensure that kind of prosperity and that opportunity for Ontario because we live in those communities. We live or die in those communities.
You only need to talk to groups like the Ontario Retail Farm Equipment Dealers' Association to understand the rationalization that's taken place there; the fact that some of our farmers now are driving 100, 150 kilometres to access the kind of farm dealer they need. Those are very basic infrastructure questions for people who are entrepreneurs at the primary agricultural level. Rural child care, the kind of patterns of work that people on the farm have and the patterns of work that people have in rural Ontario, providing the infrastructure for child care in rural Ontario -- that's a part of economic development. You either put that in place to allow the prosperity to take place or you don't and if you don't, it's smoke and mirrors. There will be no prosperity, people will continue to salt away their hard-earned money and the venture doesn't work then, the partnership doesn't work. A great idea will not succeed then because of it.
So we are most anxious to see it succeed, we are most anxious to work with men and women of the House of all parties to ensure that your constituency, our members, our neighbours, our friends, have an opportunity. I might say that the Ontario Federation of Agriculture, representing a farm population, is the cornerstone of the agribusiness economy. That's $50 billion a year in the province of Ontario alone, the second-largest sector of the economy after transportation. So it's a serious matter. How does this statute translate to lot, concession and township?
Mr Arnott: Thank you very much for your presentation. Thanks for coming in. You're the most important voice for rural Ontario, not just farmers, and you've spoken to that today. Farmers are increasingly business people as well, they have to be to survive. The Canadian Federation of Independent Business recently did a study, a survey, and it indicated that the second most difficult problem facing small business people was excessive regulatory burden. I want to ask you, how often do you hear from farmers complaints about that particular problem?
Mr George: There's no question that it's prevalent. I think we in agriculture have not been without guilt when it comes to putting regulations in place. I think some of the regulations we have in agriculture are now anachronisms and they are being changed. We are going through quite a deregulatory process, certainly at the federal level. I think I gave one example.
But we have had far too many people in there to attempt to regulate progress. It's going to become very frustrating if a farmer, as an example, wishing to diversify and maybe put up a small processing plant or a welding shop or whatever, is going to employ 15 or 20 of his neighbours, only to find that (a) the local municipality says, "Well, sorry, this isn't zoned for this," and (b) you've got the Ministry of Labour and the Ministry of Environment and Energy and the ministry of everybody else on his doorstep with 1,001 petty regulations -- and I say "petty" regulations; clearly there will be the need for regulations to safeguard the environment and whatever and we must make sure that what we do is compatible with the environment, but at the same time, we have to get that better understanding between ministers. I've had a number of examples, too lengthy to mention, where there's very clearly no understanding between a particular ministry and the work that farmers do and that becomes a fundamental issue, I think, for government and bureaucrats to sort out.
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Mr Arnott: There are obstacles to economic development. Clearly, one of them is difficulty in getting capital financing, and this is what this bill purports to address. Clearly, one of the major obstacles is excessive regulatory burden. I think that's something the government has to address, which this bill doesn't touch at all. In fact, we heard earlier this morning that it may be very complex for a lot of people and the takeup to the program may suffer as a result.
You talk about the amount of money that's stuffed in mattresses in rural Ontario. It's a significant figure if that estimate's correct. I don't know how that estimate was generated, but I'm sure there is a significant amount of money in those very safe, small-c conservative investments.
If this program goes through, I anticipate within the next year or two I'll start getting calls from retired farmers, say a retired farmer who maybe has $500,000 in liquid assets as a result of the sale of his farm, for example. He may come to me and say, "I've got $250,000, half my nest-egg, to invest in this program." Because this is an alternative financing mechanism, there's a possibility that the banks wouldn't touch it, private investors wouldn't touch it, venture capital wouldn't touch it, so the concern sets up this corporation and it may be a risky proposition. What do I say to that retired farmer who is asking my advice as to whether he should invest a significant portion of his nest-egg in one of these enterprises?
Mr George: I don't think you should suggest that he dump the whole lot in there, that's for sure. I think risk goes with the individual. What I consider to be a risk and what you may consider to be a risk are probably two different things.
Mr Arnott: But there are relative degrees of risk. A guaranteed investment certificate is fairly safe.
Mr George: Absolutely. I think you made a comment about capital being difficult to get. Well, credit is a coward. It is always going to seek the safest haven, especially commercial credit. We're going to need those government guarantees such as are proposed in this legislation. We're also, I think, going to need some tax incentives. We in the farm community for years have spoken about an agribond, where we saw some incentives for retiring farmers to lend their money back into the industry.
I'm not a technical expert, but I really believe there are some options that can be explored to make your constituent feel a lot happier, starting off with a relatively small investment to see how it goes. Once the rural community started to get the sense of investing money in their local community rather than GICs on Bay Street or wherever, then I think they would get some pride in that. I think the management of these projects would be better and hopefully we would get a new type of commitment back to our communities.
Mr Norm Jamison (Norfolk): Thank you, Roger. It's always good to see you and certainly good to hear your presentation. I thought you made some very valid points. One is that the farm community as we know it really is going to change whether we like that or not. You have to look at value added, and when you look at value added you have to look at investment in that avenue.
Some people have come before this committee, Roger, and basically complained that this bill is more beneficial to rural Ontario than it is to urban Ontario. I had to really chuckle inwardly, when both of us realize that job losses in rural Ontario are felt much more severely than in major centres, in smaller job losses, that is.
This bill really allows, in my opinion, the input or the local decision-making to take place by people within the community. I believe that's an important aspect to rural development. For eons now, decision-making has come from here on economic thrust. When we talk about developing a climate of confidence, I think that plays a part in it, having people who are known and respected locally making decisions. People will be confident to know that their community is being strengthened and that their community is being strengthened in that light.
I know that Mr Arnott has just mentioned about the paperwork. We take that very seriously. We're well into the process called clearing the path, which will affect small business tremendously in a positive way in reducing paper burden. I think that will have its spinoff to the rural setting as well.
Having said what I've said, I think we can say that anyone can find flaws within a bill, and it's not going to be a perfect kickoff. I don't think there's been a perfect program presented at any level of government, and it's certainly part of the responsibility of the opposition to point those things out. But I believe personally that this is, as you said, a very good beginning to allowing that untapped wealth in rural Ontario to show itself in a meaningful way.
Mr George: My only comment would be again to say that you cannot do these particular projects that have been announced so far in isolation from everything else that's going on around you. There has to be a good understanding of this concept of rural economic development, and I think that's going to take an awful lot of communication. We were struggling this morning around the round table with what type of communication strategy we might want to get out there, because I don't think some of these concepts are well understood by people, and I think we've got probably a lot of little groups that are working away in isolation of what might be available to them. I think that becomes a role for all us, including the general farm organizations like the OFA.
The Chair: Ms Haslam, briefly.
Mrs Haslam: I was brief the last time.
The Chair: You always are, you tell me.
Mrs Haslam: I'm in a particular spot here. I disagree with some of your concerns. As you know, I come from a rural riding and I'm very active in the rural caucus and in rural issues, and I disagree because I see this as being very beneficial. I know it's going to be beneficial because I see the activities in my communities already involving the rural people, involving the farm communities, involving them in coming up with programs to help the farming community, to help the rural community.
What I see this act doing is putting in place the tools to allow those programs to be funded, because when you look at this program, it's going to be looking at those who are traditionally not going to be able to get the money from the banks. We know that, in particular, farm operations often have difficulty going back to the bank for an expansion of the farm or for an expansion of their business of farming. I see this as being beneficial because of the way it's set up on more of a community level.
The other issue you brought forward was relating back to lot 4, concession 3, and how you relate back to where they're going to have an input in this. I see, because it's more community-oriented, because it's made up of the community people, because the corporation is going to be looking at a more local level, that you are going to have that input. You are going to be able to get those funds and the fund-raising done at a local level. It's much easier to access funding of those local programs than it is to say, "Please give money to a provincial program to put back into a local project."
I agree with you that there may not be an understanding of agricultural or rural issues at a Toronto level of ministry, but that's why I'm very pleased to see this type of program, because the decisions are going to be made at the local level and at the community level.
So I question some of your concerns around relating regarding funding, because I really see this as very beneficial, especially in my riding. I'm looking forward to it coming forward. I'm just not sure why you're so adamant that this will be a problem of relating when it's done on a local level.
Mr George: I hope you didn't misunderstand me.
Mrs Haslam: I never misunderstand.
Mr George: I didn't think I was being overly critical of this act. Now, if you want me to get into some specifics, I could get fairly critical. I don't think that the two components announced are going to help production agriculture very much indeed. That's just my reading of the specifics, but I don't really want to get into that today and debate that with you.
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I think, as you say, it is important that we have got things going on at the local level. I'm just suggesting that we've got to get a lot more streamlined in taking those things forward. I just think there is a degree of chaos out there at the moment at the local level, people not knowing where to go to access some of these programs that may be available, either made available through this bill or through other mechanisms, and there are a host of things out there.
Mrs Haslam: So is your suggestion perhaps that it's better communicated?
The Chair: Mr Grandmaître.
Mr Grandmaître: I agree with you that Bill 40 is only a backdrop to a better stage later on. The additional parts to this backdrop are supposed to come through regulations, and we don't have the regulations before us so it's very difficult for us to say, "Look, this is going to be a great program." This is why so many of us have so many questions. Again, we haven't seen the regulations.
Let's talk about rural Ontario and the Planning Act at the present time. I know that you people are adamant about what's going on in rural Ontario as far as official plans are concerned, zoning, and what's permitted, what's not permitted. Do you think that you've been successful in the last three, four or five years to get your dreams, let's say, reflected in the Planning Act, that rural Ontario is permitted to do more today than five or six years ago?
Mr Sulliman: With great respect, I think the member likely knows the answer to the question already.
Interjections.
Mr Sulliman: Nevertheless, we'll help you with it.
The answer is a yes and no, what Sean Conway would call a definite maybe. You participate in these consultations and you do so presumably with some integrity and all that sort of thing in the planning process, and we talked to John Sewell and company. And while we're at the dance having a great time, waltzing around the ballroom, they're at home ransacking the house, grabbing some more farm land and putting it into the city of London, the largest land grab in the history of the province.
Mr Grandmaître: Yes, 94,000 acres.
Mr Sulliman: It's those kinds of issues. It's important to understand that as you're planning for rural Ontario, you can't use a cookie-cutter approach, and when you're planning the economics of it, Ms Haslam's riding, an area of Ontario, may be quite different than Mr Conway's. We've got to allow for that kind of flexibility in planning in the province of Ontario to generate rural prosperity and rural economic development. That's the issue, and when you take that cookie-cutter approach or mentality, it becomes quite troublesome.
Notwithstanding that you've got to have environmental integrity and all that sort of stuff, it's like this bill refers in some of its appendages to ensuring that all the equity groups have access. The operative word in the equity groups for me is not "groups," it's "equity." And what's the equity here? The equity is the opportunity to access economic activity, to prosper in an environment: for all groups to prosper, whatever their concern or their investment or special interest, or whatever it is they want to do. And so the operative word is "equity" again, in planning, in economic development and all those things. We could take flight on this one, Mr Chairman. We have 14 million acres of the finest land in this province represented at the table here.
To put that in perspective, by the way, just as an anecdote, in the recent flooding along the Mississippi, 16 million acres of farm land was under water. In Ontario, if you took every single farm and put it under water, that still would only be 14 million acres. It shows you the level of devastation in the United States that those farmers faced.
The Chair: The time has expired. Thank you very much, gentlemen, for appearing before us. As I mentioned earlier, the clause-by-clause on this bill will commence tomorrow morning. It is the hope of the committee that we will be able to report this bill for the fall session.
Mr George: Thank you, Mr Chairman. We wish you well in your deliberations.
The Chair: Before members leave, I would like to indicate to members that the government has furnished us with copies of the amendments that it intends to present tomorrow morning. I would urge all members who have amendments to make to provide us with copies at the earliest possible moment. I understand also that the government may have some additional amendments that are now being drafted.
Mrs Haslam: Are we the only ones with amendments? Are there any other amendments coming forward that we could look at before tomorrow morning?
The Chair: Ms Haslam, I have asked all members of the committee to furnish us with amendments.
Mrs Haslam: I'm just asking that we come in here for clause-by-clause tomorrow morning, and if there are amendments, it would be beneficial to look at them before we come in tomorrow morning.
The Chair: I'm sure all members of the committee agree with that thought.
Mr Randy R. Hope (Chatham-Kent): Because we're considering clause-by-clause tomorrow and I know I've asked the work of the legislative researcher to find some material, I'm wondering, is that material going to be available?
Clerk of the Committee (Mr Franco Carrozza): It's been given.
Mr Hope: What's been given? I have a document here about an impact.
The Chair: Permit the researcher to answer.
Ms Anne Anderson: The ministry has provided the response to one of your questions, I think, which is one of the documents you have in front of you. The other one, I'll have for you tomorrow morning.
Mr Hope: Okay, thank you.
The Chair: With that, the committee will be adjourned until tomorrow morning, 10 am, for clause-by-clause consideration of this bill.
The committee adjourned at 1136.