SAVINGS AND RESTRUCTURING ACT, 1995 / LOI DE 1995 SUR LES ÉCONOMIES ET LA RESTRUCTURATION

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 210

MICHEL LABELLE

IROQUOIS FALLS HERITAGE COALITION

ONTARIO PROSPECTORS ASSOCIATION

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 369

ONTARIO SECONDARY SCHOOL TEACHERS' FEDERATION, PORCUPINE DIVISION

TOWNSHIP OF DYMOND

TIMMINS WOMEN TEACHERS' ASSOCIATION

TOWNSHIP OF BLACK RIVER-MATHESON
CITY OF TIMMINS

TIMMINS CHAMBER OF COMMERCE

CONTENTS

Monday 15 January 1996

Savings and Restructuring Act, 1995, Bill 26, Mr Eves / Loi de 1995 sur les économies

et la restructuration, projet de loi 26, M. Eves

Canadian Union of Public Employees, Local 210

Gerry Philion, secretary

Leonard Lemieux, president

Michel Labelle

Iroquois Falls Heritage Coalition

Ben Lefebvre, representative

Ontario Prospectors Association

Bruce Jeffery, chairman

Canadian Union of Public Employees, Local 369

Iain MacKenzie, president

Jim Croteau, recording secretary

Ontario Secondary School Teachers' Federation, Porcupine division

Jack McLaughlin, president

Pat Bamford, president, district 55

Township of Dymond

Carman Kidd, reeve

Timmins Women Teachers' Association

Sherri Jones, president

Township of Black River-Matheson; city of Timmins

Pierrette Blok, reeve of Black River-Matheson

Victor Power, mayor of Timmins

Timmins Chamber of Commerce

John Bragagnolo, president

EVIDENCE SUBCOMMITTEE

STANDING COMMITTEE ON GENERAL GOVERNMENT

Chair / Président: Maves, Bart (Niagara Falls PC)

Vice-Chair / Vice-Président: Tascona, Joseph N. (Simcoe Centre / -Centre PC)

Flaherty, Jim (Durham Centre / -Centre PC)

Grandmaître, Bernard (Ottawa East / -Est L)

Hardeman, Ernie (Oxford PC)

*Maves, Bart (Niagara Falls PC)

Pupatello, Sandra (Windsor-Sandwich L)

*Tascona, Joseph N. (Simcoe Centre / -Centre PC)

*Wood, Len (Cochrane North / -Nord ND)

*Young, Terence H. (Halton Centre / -Centre PC)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Klees, Frank (York-Mackenzie PC) for Mr Hardeman

Gerretsen, John (Kingston and The Islands / Kingston et Les Îles L) for Mrs Pupatello

Phillips, Gerry (Scarborough-Agincourt L) for Mr Grandmaître

Sampson, Rob (Mississauga West / -Ouest PC) for Mr Flaherty

Silipo, Tony (Dovercourt ND) for Mr Wood

Also taking part / Autre participants et participantes:

Bisson, Gilles, (Cochrane South / -Sud ND)

Brown, Michael A. (Algoma-Manitoulin L)

Clerk / Greffière: Mellor, Lynn

Staff / Personnel: Richmond, Jerry, research officer, Legislative Research Service

The subcommittee met at 0859 in the Senator Hotel, Timmins.

SAVINGS AND RESTRUCTURING ACT, 1995 / LOI DE 1995 SUR LES ÉCONOMIES ET LA RESTRUCTURATION

Consideration of Bill 26, An Act to achieve Fiscal Savings and to promote Economic Prosperity through Public Sector Restructuring, Streamlining and Efficiency and to implement other aspects of the Government's Economic Agenda / Projet de loi 26, Loi visant à réaliser des économies budgétaires et à favoriser la prospérité économique par la restructuration, la rationalisation et l'efficience du secteur public et visant à mettre en oeuvre d'autres aspects du programme économique du gouvernement.

The Chair (Mr Bart Maves): Good morning, committee members. Welcome to Timmins. Before we call on our first witness, we have some motions to deal with. The first thing I want to deal with is a request regarding computers at the table by members. There has been a ruling on electronic equipment in the House, and the Speaker has ruled that electronic equipment, phones and notebooks would not be used in the House. No one has yet brought forth a ruling on notebooks at desks and so forth. I've had several discussions with the clerk here and Deborah Deller and some members of the House. I think it's a reasonable request to be able to have a notebook. I think maybe we should come kicking and screaming on committee work into the 1990s. So I think I'm going to allow the notebook to be used.

I do want to express some words of caution at the beginning, though. I don't think --

Mr Gilles Bisson (Cochrane South): No video games.

The Chair: This is a process where people come forward to the committee and spend a lot of time preparing their briefs. They're sometimes a little bit nervous, as is obvious, just as members sometimes are when they get up and speak in the House. I think for people to be distracted by the use of such things is unfair, and so I would like to read into the record that I would appreciate it if members were conscious of that fact at all times.

I would also like to read into the record that it should be set up beforehand so that we don't have people scrambling under the table with cords and so on while presenters are getting ready.

Mr Young has done all that today, of which I'm appreciative, and he sort of sets the standard for people who will use those in the future. If they are bothersome to the presenter or the witnesses, I think it would be appropriate for the Chairman at that point in time to ask the member to close the book. But we'll come into the 1990s as of today, I guess, on committee work. That's the ruling I'd like to put forward on that.

Now I'd like to entertain a motion from Mr Phillips.

Mr Gerry Phillips (Scarborough-Agincourt): It's becoming increasingly clear, I think to virtually everyone certainly on the committee, but I think virtually everyone in Ontario, that this bill, Bill 26, will in a very major way impact everyone in Ontario. So I'd like to move that:

Whereas Bill 26 will have a major impact on every individual in Ontario; and

Whereas Bill 26 requires broad input before being passed into law; and

Whereas there are 23 groups in Timmins that want to provide input on the bill but only 10 will be heard,

I move that the committee recommend to the government House leader that when the House returns on January 29, 1996, the order with respect to Bill 26 be amended such that the portions of the bill that do not require urgent passage for fiscal reasons be returned to the standing committee on general government so that further hearings can be arranged across the province, including the community of Timmins.

If I might just speak on the motion, it's clear -- we've now had two weeks of hearings on the bill -- that there is an enormous interest in the bill. It's also clear that groups, as they examine the bill, bring forward new perspectives to the committee on the bill. It's also clear that if the bill passes as it's currently structured, it is going to have, I think, some devastating impact on a lot of groups in the province. It's clear to us that trying to pass a bill of this magnitude -- and I think everybody in the province realizes it was introduced November 29 and originally was going to be the law on December 14. It's clear that it requires more study.

What we're saying in the motion is, if the government can identify the things that it needs to urgently deal with to deal with its fiscal matters, we're quite prepared to look at that and to pass that on January 29. There's much in the bill that is not time-sensitive from a fiscal point of view. The rest, we think, should be referred back to the committee for further hearings. People like the firefighters are not on today.I think the local conservation authority is not on today, along with a number of other important groups. It's clear that we should be hearing from them.

That's the intent of the motion, which I think is a responsible motion. It deals with the fiscal concerns of the government to make certain that we have input from the people of Timmins and elsewhere.

Mr Bisson: I just want to speak in favour of the motion. It's similar to a motion that we were going to put forward this morning and I think much for the same reasons. I just want to bring to the attention of the members, and it's probably something they've already recognized, having sat on this committee for now going on two weeks, the beginning of the second week, that the more we start to hear people present, the more we're starting to really understand that there is a vast amount of information in this bill that people are just now starting to come to terms with in regard to being able to understand what the real implications of the bill are.

I think it's a friendly motion and the sense is that we're saying we understand that the government has the right to govern, we understand that the government wants to get on with its fiscal agenda. We may not agree with parts of it, but we recognize they do have a majority in the House and we recognize that they should have the ability to do that. I think for that reason the motion reads that those parts that the government feels are really necessary, as we might say to you some of the language of the government, the tools that they need to move forward with their fiscal agenda, that we allow that to go forward on the 29th through the House and to be passed into law so that the government can have the tools that they're talking about when it comes to the fiscal side.

I would just want to say for the record, there are a number of parts within that to which obviously my party would be opposed, as the Liberal Party would be opposed, as far as some of those tools are concerned. But we agree that the government has the right to govern, and if they want to move forward that way, that is their right. But there are a number of other things within this bill that need to be brought to light in regard to what it really means, and some of this stuff has nothing to do with the fiscal side. In fact, there is one particular part of this bill that talks about preventing the use of bands from being able to assemble to play music in public areas. I don't know what that has to do with the fiscal agenda. There are obviously parts that are much more detailed than that, but the point I think is well taken that we need to be able to give people a chance.

The other thing I want to say is that I've had a chance now for about a month to talk to people in our community here of Cochrane South, to the mayors, to the hospital administrators, the hospital board chairs, interested parties at all levels. Just as early as yesterday, I had Mayor Power on our open-line television program and even he, who is a learned mayor, who has been involved in municipal politics for over 20 years, admitted to me and said: "Listen, I don't disagree with everything that's in the bill, but quite frankly I don't understand it. There is so much information in this, to ask me to come to terms with understanding what's in 44 different pieces of legislation is asking a bit much. We need the time to be able to really understand what the implications are for the community."

He raised some concerns, not that he was totally opposed to the bill, but raised some concerns in regard to what that was all about. So I would hope that the members would see that as a friendly motion. It is not meant to be one of obstruction. It's one that we would allow the government to go forward with those parts of the bill that are fiscal in nature, and those parts that are non-fiscal in nature would be held back so that the committee can further deal with it and give deputants such as the ones we have here today the opportunity -- the balloons are falling. See, they agree. Did you see that? So I would ask that the members support that part of the motion, as it's meant to be one that's complementary.

Mr Rob Sampson (Mississauga West): I appreciate the opportunity to speak to this friendly motion again. I think there are a few facts we should get on the record today, certainly as it relates to the procedure that set up the happenings of this committee, if I can say it that way.

It's normal practice, whether we're in government or another party is in government, that House leaders get together after legislation is introduced and determine how much time a certain piece of legislation is going to spend in committee. That's a to-ing and fro-ing negotiation process that starts with perhaps an offer from the government side or an offer from the opposition side.

I think it's important to know that, contrary to what I heard from the table this morning, one of the offers on the table was to have us go to the Friday before Christmas with respect to this legislation in committee time. That was rejected. That would have included committee time hearings, a significant cumulative time of committee hearings.

One of the other ones on the table was not too dissimilar from what we're currently doing. In addition to having a week of layover time between the time at which the committee stopped its public hearings and the time at which it started the process of clause-by-clause review, the concept being offered by our House leader at that time was we wanted to give some time for some thought as to what the amendments would be, and of course that was rejected by the opposition. So I think it's clear, and I want to put on the record, that that process started and that negotiation process was part of what got us here.

The other thing that's important to note is that this particular committee will be looking at this piece of legislation, and the cumulative time we'll spend on looking at this legislation is more than any other piece of legislation in the past two sessions of government in this province. That clearly indicates that yes, we agree that this piece of legislation does need committee hearing time to review its content and respond to the concerns of the public.

We're prepared to receive written submissions from those who have not had the opportunity to speak to us. We've said that in the past. We've gotten now a total of five, if I'm not mistaken. Our side of the table has read those. We're prepared to deal with those items and those concerns when it comes time for the clause-by-clause review and we're prepared to receive further submissions, even if they come to us on Friday night at 9 o'clock, being the last time slot for us in our public hearings this week.

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It's also important to note, by the way, that I think more than twice we've had the same person at the committee table in two different cities. I would encourage those who are presenting over this week that they should give consideration to that fact and perhaps yield to those who have not had the opportunity to speak to us at the committee table.

I think it's also important to notice that this government side is not responsible for determining who gets a chance to speak to us at the committee table. It's determined via a process that was agreed to by all the members of this committee. They've all agreed to it and it's the process that we're following and it's the process that I believe we should continue to follow, the fairest one of all.

We are listening. I want to make sure that the people Timmins realize that we are listening, that we are giving consideration to their input and their concerns. Frankly, we want to hear from the rest of Ontario, certainly northern Ontario, before we sketch out the depth and breadth of future amendments.

I think it's important that your word be heard before we start to give the details as to where we feel the amendments should be placed and, as I say, what the depth and breadth of those amendments are.

I think it's important for us to move ahead and hear those issues and concerns. I will say that we will be voting against the particular motion and I look forward to hearing the presentations in Timmins today.

The Chair: Before we vote on this motion, I would like to welcome Mr Klees from York-Mackenzie, Mr Bisson from Cochrane South, Mr Wood from Cochrane North and Mr Brown from Algoma-Manitoulin to the committee.

Voting members this morning are Mr Silipo, Mr Phillips, Mr Gerretsen, Mr Tascona, Mr Sampson, Mr Klees and Mr Young.

I'd like to put the motion.

Mr Tony Silipo (Dovercourt): Recorded vote.

Ayes

Gerretsen, Phillips, Silipo.

Nays

Klees, Sampson, Tascona, Young.

The Chair: I declare the motion lost.

We have a similar motion, moved by Mr Silipo, which I'll rule out of order because it's very similar and would entail the same debate as Mr Phillips's. We have a third motion, by Mr Silipo, which is in order, Mr Silipo, if you'd like to move that motion.

Mr Silipo: Whereas there are only five days remaining for public scrutiny on Bill 26; and

Whereas public interest in this bill has been overwhelming; and

Whereas the vast majority of presenters to the standing committee on general government have recommended major changes be made to the bill;

I move that this committee recommend to the government House leader that the 40 individuals and groups that requested to appear before the standing committee on general government in Timmins be given the opportunity today to see the government amendments to Bill 26.

The Chair: Would you like to speak to the motion?

Mr Silipo: I would. Just briefly, in addition to the issue of the time for the hearings, which has been dealt with through the previous motion, and I won't belabour that point, there clearly have been, as our motion indicates, already from the presenters we've had in the first two weeks of hearings in Toronto and throughout the southern part of the province, a number of suggestions made for amendments which reflect the overwhelming opposition that there is to the bill and the overwhelming concern that there is about many of the provisions.

We've begun to ask, certainly, the members of this committee from the government side to give us some inkling of what it is that they're prepared to do by way of amendments. So far, that hasn't happened. I understand that the standing order that created this committee and this process has a particular time line in terms of officially tabling with the committee the government amendments. I believe that's later this week, and this motion doesn't attempt to change that.

But what this motion attempts to do is to suggest that it would be useful for the members of the government to indicate to the presenters what amendments they're prepared to make, because in doing so it seems to me we will know whether they are prepared to go far enough to appease a number of the concerns that we've heard throughout and which I assume we will continue to hear in Timmins today. If not, I think that people ought to know that.

I think it's clear, certainly from what I'm aware is happening, that the government has already considered some amendments. We know that discussions have taken place in the inner cabinet at least, presumably in cabinet as well, so there have been some indications given of some amendments.

We think it would be useful for those amendments to be out in the public arena as soon as possible so we all know what it is we are dealing with in terms of the government's willingness to make changes to this draconian bill and know, once and for all, whether they really have listened to the presenters before us who have, in community after community, made it clear that the provisions of this bill go far beyond what is necessary to deal with the fiscal problems in this province; that the unilateral claiming of powers by ministers away from the Legislature is undemocratic and unnecessary; that the enormous powers being given to municipalities to tax by way of user fees and by way of any number of direct taxes go far beyond what even municipalities themselves are saying they want, as we've heard so far, let alone what the general public would want and let alone the commitment that the Tory government made to the concept of one taxpayer and lowering taxes, not raising them or not shuffling to someone else the responsibility; and many, many other issues that I won't list at this point, but simply to make the point that if the government members have really listened, if the government has listened, it's incumbent upon them also to start responding.

The earlier they do that the better, because then it will make the rest of the committee process, I believe, much more meaningful than if we simply have to wait until the end of this week or next week to know exactly what the government is prepared to do by way of amendments.

Mr Sampson: I think I spoke to the item of listening to the deputants in northern Ontario. I'm new in this House since June of last year, and many times I've sat listening to the debates of the members from the northern ridings that told me, and I firmly believe, that northern Ontario has a different perspective. I want to hear that different perspective before I, as part of this committee, start to sketch out the depth and breadth of the amendments that are necessary to respond to the concerns raised by Ontarians, including Ontarians from northern Ontario.

We will deal with the issues and concerns that are raised. We are indeed listening. No decisions have been made with respect to the depth and breadth of amendments to this point in time and, as I said, we're not crafting those until we've had the opportunity to hear from all of Ontario. I think that's fair to the voters across this province, from the north to the south and the east to the west. I'm prepared to bring those amendments forward when the deputants have made the deputations and had their air time with us.

Mr Phillips: We're going to support Mr Silipo's motion. I just say to the government members who say, "We're going to wait till we hear from everybody before we propose amendments," that Al Leach, the Minister of Municipal Affairs, came in the very, very first day, December 18, and five minutes into his presentation he said, "I intend to introduce an amendment providing that a commission will only be appointed by the province when it's requested." Then he went on to say, "I'm going to make amendments in another area around personal liability."

It's hogwash to say that the government is waiting until 9 o'clock this week before it considers the amendments. Al Leach said, on December 18, he had the amendments already drafted. The reality is that you don't want to show us the amendments because you want to minimize the debate around them and you'll hold out hope for everybody in the province that: "Don't worry. This bill will be amended the way you want it. What's the big rush and hurry?" The fact is that on Monday morning, a week today, at probably just about this time, we're going to see all these amendments and the government will ram them through.

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I think a far better process -- as a matter of fact, that day we asked Mr Leach if he would table those amendments, and that was back on December 18 -- to me, a far more orderly process is -- because he's already got the amendments written; he had them written a month ago -- to table them, let people when they come and present know this is the government's intention. But no, it's part of this process to just keep the opposition away from the debate, keep the public away from the debate and ram the bill through.

Mr Silipo's motion is the right one. The government is preparing these amendments, and they've been preparing them, believe me, since before December 18. Let's see them so we are debating what the government's intentions are and not wait until the last moment to table them all and then have very little debate over them.

The Chair: Thank you, Mr Phillips. I'd like to put the motion now.

Mr Phillips: Recorded vote.

Ayes

Gerretsen, Phillips, Silipo.

Nays

Klees, Sampson, Tascona, Young.

The Chair: I declare the motion lost.

We'd like to begin proceedings this morning now. Can I have representatives of CUPE Local 210 please come forward.

Mr Joseph N. Tascona (Simcoe Centre): Excuse me, Mr Chairman, I have a written submission that I would just like to table with the members of committee. It's from the corporation of the township of Springwater on Bill 26, and I would just give that to the clerk at this time.

The Chair: Thank you, Mr Tascona.

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 210

The Chair: Good morning, gentlemen, and welcome to the standing committee on general government. You have a half-hour this morning to make your presentation. You may use that time as you see fit. You may wish to leave some time at the end of your presentation to receive response and questions from the three caucuses. I'd appreciate it, for the benefit of Hansard and committee members, if you'd introduce yourselves before you begin your presentation.

Mr Gerry Philion: Good morning. My name is Gerry Philion and my colleague is Lenny Lemieux. We are members of the Canadian Union of Public Employees and we are very concerned about the possible effects of Bill 26. Because of the numerous aspects of this bill, I will speak on only a few of them.

The basis of the restructuring of municipalities is to change, first, the way in which services provided; second, how services are paid for and by whom; and third, how decisions are made regarding provision of services.

A critical implication of schedule M will be the retreat of the provincial government from its responsibility to ensure that services are accessible, affordable and equitable. It is clear that this government wants less government involvement and less spending on services. This is obvious from the recent financial statement in which it announced that it would cut total municipal spending by 47.9% or $657 million over the next two years.

Put simply, essentially the provincial government will be offloading its responsibility to provide services onto the municipalities. Municipalities will have no choice but to either increase taxes or expand and increase user fees and other levies -- most will probably do both. This will only fuel the push towards the contracting out and privatization of services.

The intent of this part of Bill 26 is to provide the Minister of Municipal Affairs, and any restructuring commission appointed by him, with wide-ranging powers. It is particularly abhorrent that the regulations pertaining to Bill 26 are not yet set and that so many of the powers of the minister and the restructuring committee will be set by regulation. Therefore, the full impact of the bill will be even worse than it currently appears.

An overriding feature of Bill 26 is the creation of significant new ministerial powers to jurisdictionally restructure local communities. Bill 26 will force the annexation, amalgamation, separation, joining, dissolution or incorporation of municipalities if it is deemed appropriate or necessary by the minister.

Restructuring can be initiated either by the minister alone or upon receiving a restructuring proposal from a municipality, a local board or a commission established by the minister. Any such restructuring proposal must fit within the definition laid down by the minister.

If one municipality or local board in a locality does not want amalgamation but another does, the minister will initiate a restructuring commission inquiry based on a proposal from one municipal body, despite the wishes of others in the same locality.

Once a restructuring proposal is accepted by the minister, then the decision is binding on all parties involved. The regulations pertaining to the restructuring must be accepted by all levels of municipal government, from the upper-tier to the lowest board.

The Ontario Unconditional Grants Act is being replaced with the Ontario Municipal Support Grants Act. Bill 26 will give the Minister of Municipal Affairs and Housing the power to decide what standards of service municipalities must meet as a condition of receiving provincial grants. Clearly, municipalities and boards would be forced to comply with standards imposed by the minister if they are to continue to receive such grants.

If a municipality fails to comply, the minister may also have the municipality repay the grant and a municipality which does not meet these standards can be cut off from further provincial funding. Bill 26 will give the minister free rein to exercise this authority with no scrutiny by the Legislature.

If a lower tier of municipal government opposes the contracting out or privatization of a particular service when it has been deemed appropriate or necessary by the minister, the municipality could be penalized or forced to conform to the minister's wishes. Such measures will obviously deter municipalities from implementing progressive changes that do not fit the regulations or criteria established by the minister.

The bill, if passed, will effectively muzzle municipal politicians who may oppose a proposed restructuring in their community. Contravention of a regulation by municipal representatives could result in their being held personally liable if the municipality is deemed to be adversely affected financially by their refusal to comply with the regulations. This will serve as a further deterrent contravening the regulations set out by the minister.

This implication is especially odious since the capacity of local public officials and councils to protect vital public sector jobs and services according to local needs will be virtually abolished. Municipal councillors will either be forced to swim with the right-wing current or have a heavy price exacted on themselves and the constituencies they represent.

This muzzling of elected officials will mean that CUPE locals may no longer really be negotiating changes with their direct employers. The province, through either the minister or the restructuring commission, will set the agenda for change and municipalities will be obligated to implement the changes. The province will be the ghost behind the bargaining table. Normal labour relations will be effectively stymied. Unions will lose.

Perhaps the most alarming feature of the omnibus bill for municipalities is that they will be encouraged to, and in many cases coerced into, contracting out and privatizing services now provided by unionized municipal sector employees. In the name of efficiency and cost reduction, many municipal workers will face direct threats to their job security.

Furthermore, unions and collective agreements will be threatened by the bill's potential to override successor rights provisions and other protections in collective agreements. Any restructuring regulation imposed by the minister would prevail over such labour relations provisions as long as they comply with the Municipal Act. This potential to override other legislation also applies to the minister's power to exempt a municipality from other legislation during any form of restructuring, including amalgamations. This would include school boards, library boards and public utility commissions among others. Without successor rights, the damage that such regulations could do to workers and their unions is incalculable. Long-time unionized employees would lose their seniority, wages and their jobs without successor rights protection.

"Lastman said last night that he will slap user fees on `just about everything that moves' after the bill becomes law."

Bill 26 will push municipalities to increasingly provide services on a cost-recovery basis. By cutting provincial financial assistance, municipalities are forced either to cut costs by reducing or eliminating services or to raise more revenue.

Bill 26 provides them with greater power to raise revenue through licensing fees, user fees and taxation. Less obvious ways of raising revenue from users of the services include provisions to encourage contracting out and privatization of municipal services. In both cases individual Ontarians will find ourselves paying directly for many services previously supported by our local and provincial taxes.

When we consider the total effect of such a shift on average and low-income taxpayers, the regressive implications of user fees become very clear. Income taxes collected by the provincial government are largely determined by a progressive, graduated system which draws more revenue from wealthy taxpayers who can afford it. In stark contrast, user fees apply as a flat tax on all users, regardless of their income or ability to pay. Of course, the result will be that such fees will make important public services completely inaccessible to Ontarians with modest or low incomes.

0930

In particular, user fees and licence fees will become a primary means of raising municipal revenue. For example, the conservation authorities have been slashed by 70%, and their levies on municipalities are limited. Therefore, those that survive will be required to introduce or increase user fees.

Municipalities and local boards, with the exception of school boards and health boards, are given wide-ranging powers to pass bylaws imposing fees or charges on any class of persons. Furthermore, there is no process by which fees can be appealed.

Direct taxes could include road tolls, income taxes or even a poll tax. The poll tax, or head tax, is a flat rate tax in which every person or household pays the same amount regardless of income or property value. Municipal poll taxes have not been seen in Canada for over a century. So far, the Minister of Municipal Affairs and Housing has been unable to clarify the intention of this part of Bill 26.

Citizens will have no avenue for appealing charges and fees which they consider unfair or unjust. Bill 26 will change the Municipal Act to prohibit applications to the Ontario Municipal Board to review fees charged by the municipality.

Municipalities have also been given much broader powers in licensing and regulation. Bill 26 will give municipalities a general power to license and regulate any activities other than certain manufacturing. This replaces sections of the Municipal Act which spelled out the specific activities which could be licensed.

As well as potentially broadening the range of activities for which a municipality requires a licence, Bill 26 will remove any limitation on the amount that can be charged for a licence fee. It also makes clear that licence fees can be charged as a means of raising revenue, not simply to offset the administrative cost of providing the licence.

Public services should be universal and accessible. User fees and other charges would only place barriers between the services and the most disadvantaged in our communities. The quality of life within the community is bound to suffer and the disparity in services across Ontario communities will grow even deeper.

No one can calculate how much Ontarians will pay in new charges, user fees and local taxes. These costs will be determined in part by provincial regulations which have not yet been set and in part by the decisions of individual municipalities and local boards. However, it is clear that Bill 26 is a green light for municipal politicians who, like Mel Lastman, intend to slap fees on just about everything that moves.

The demand in the bill for audits and efficiency reports will become instruments to move municipalities along the road to contracting out and privatization. Depending on the methods of accounting and bases for comparison required by the minister, these inspections could be framed to disadvantage publicly provided services and make them appear inefficient.

The enormous cuts in provincial funding will strengthen the hand of corporations seeking to find new markets by taking over publicly provided services. Many municipalities will see privatization of services as an attractive option for reducing costs. However, privatization does not mean that the costs go away. It simply means that individual citizens pay for these services privately instead of through their tax bill.

Municipalities will be increasingly pressured to tender bids for services provided by municipal employees. At the same time, decent-paying municipal sector jobs will be replaced with low-wage, non-unionized jobs. Under such circumstances, service quality can only suffer.

Because revenues to municipalities has been severely reduced by recent government transfer cuts, municipalities will be tempted or coerced to sell off utilities or services as a means of quickly obtaining revenues. Under such circumstances, all forms of contracting out and privatization are likely to increase, resulting in the longer-term deterioration of the quality of life of our communities.

In particular, Bill 26 contains several provisions which specifically target the boards and commissions currently governing our local public utility infrastructure. For example, under section 33 of schedule M, the bill proposes the waiving of the electoral assent which is currently required for a municipality to exercise a power -- such as the dissolution or elimination of a local public utility -- under the Public Utilities Act. This amendment is matched by an identical waiver of such rights under section 223 of the Municipal Act, which specifically identifies sewage works.

Both of these changes would operate in conjunction with broad new powers given to municipal councils to alter or eliminate local boards simply by passing a resolution. Taken together, this set of amendments has one clear purpose: They would enable municipal councils to proceed with contracting out and outright privatization of indispensable public utilities without first gaining the agreement of local citizens.

The first and most obvious objection to this amendment is that it has stripped Ontario citizens of one small but vital role in the democratic management of their community. As it stands, there are already very few opportunities for local voters to exercise control over local government between elections. Moreover, enacting such a significant change as the dissolution or privatization of a public utility should require more public scrutiny and review, not less. The privatization of a public utility, whether it is electricity, water, sewage or any other, would involve long-term changes with potentially disastrous consequences for consumers. Surely such a decision is precisely the type which should require demonstrated public support. None the less, this government has made it clear that it is ideologically committed to the goal of privatization and seems indifferent to the potential costs.

For example, there is overwhelming evidence that when public utilities are privatized, consumers lose significantly as narrow private interests gain monopoly control over a captive market. The most thoroughgoing example of utility privatization to date has been in the United Kingdom, where privatized water and sewer utilities resulted in massive increases in rates. Water bills increased by 74% in the first five years alone.

Under the headline, "Britain is no longer a Model Case," the International Herald Tribune, May 16, 1995, reports that privatization of electrical utilities has been a disaster: "Fat bonuses and paycheques for the executives, large-scale layoffs in the industry, increasing bills, and what is perceived as a deteriorating level of service have combined to swell public anger against the companies and the government."

In the electricity sector, profits for the private firms rose 108% in privatization between 1990 and 1994. This bill has made such a scenario that many private firms are hungering for control of these services.

Advocates of utility privatization try to focus on the cost saving supposedly available to revenue-strapped municipalities, but the fact is that local utilities are usually important sources of revenue for local governments. They provide net financial gains, which are then used to help provide a broad range of local services to citizens. After considering privatization of its water, sewage and electrical utilities earlier this year, the city of Calgary rejected the plan. They found out that, put together, the three utilities earned over $1 million each year, which the city then allocated to other public purposes.

For Ontario municipalities, losing these revenues would only serve to leave them even further starved of cash, forcing them to cut still more vital services. Taxpayers will be unable to help, as their costs will be escalating rapidly when user fees begin to multiply as they did in Britain. It would be a clear financial loss for consumers and municipalities. The only winners would be the tiny minority able to pocket the profits.

Finally, the privatization of key public utilities introduces another serious risk: the loss of public accountability, perhaps permanently. Utilities such as electricity, water and sewage play a critical role in our communities and they are managed such that prices will remain reasonable, management can be pursued in the public interest and voters can have input if the quality of the service declines. All of these roles will be eliminated if their utilities are sold off.

Moreover, in those cases where private operators are bankrupt, which has happened in other jurisdictions, the costs are borne yet again by taxpayers and consumers, as the local government is forced to clean up the mess. In this context, these provisions of Bill 26 would eliminate one small element of public input in local governance and, in doing so, make it very likely that citizens will lose further when their democratic role in the management of local utilities is handed over to profit-seeking private firms. What is worse, it appears that this was the explicit intention of the government in proposing these changes.

We, like all members of the Canadian Union of Public Employees, say scrap this bill. Otherwise, public services, programs and infrastructure will be irrevocably dismantled, democratic institutions and standards will be destroyed and Ontarians will suffer incalculable harm. This is anti-democratic legislation which turns a blind eye to the traditions, values and institutions of our province.

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The Chair: We have just less than three minutes per caucus for questions. We'll start with Mr Bisson.

Mr Bisson: Thank you very much for your presentation. We don't have a lot of time, so I'll jump right to it. I looked at your presentation and listened intently and at the same time I also looked at the Common Sense Revolution, issue whatever. That was the fourth printing, out last year.

There are a number of parts in this Common Sense Revolution that, if I was a member of CUPE Local 210 and going into the last provincial election, I would have looked at that and said, "Jeez, you know, I think there's some good stuff here for my members." It said, "Historically, municipalities have responded to provincial funding limits by simply increasing local property taxes." On the same hand, in a government document here, the Minister of Municipal Affairs and Housing is agreeing that municipalities will have to raise municipal taxes by 4.8%, which I'll get to a little bit later, but here's the interesting part: "There may be numerous levels of government in this province, but there's only one taxpayer, and that's you. We will work closely with municipalities to ensure that any action we take will not result in raising local property taxes." They go on to say, "With your help, we are ready to listen, to learn and to work with anyone who wants to join us and who can show us a more creative and efficient way." The question I'd have for you is, has anybody contacted you from the government about Bill 26 in order to solicit your views about how we can do things smarter?

Mr Leonard Lemieux: No, they haven't.

Mr Bisson: Did you expect that they may contact you at some time?

Mr Lemieux: No, I never expected it.

Mr Bisson: One of the things you talked about is again in the Common Sense Revolution: the whole question of the downloading of responsibility. I wonder if you can maybe expand on that, because the point you make in that presentation I think is a good one: that what this basically does is to force municipal governments to follow the Conservative agenda. Do you want to expand on that a bit?

Mr Lemieux: I think our biggest fear is that if municipal governments do follow the Conservative government, they will not raise taxes. That was the bottom line when this municipal government was elected. If they don't raise taxes, then they're going to have to reduce services, and the only way they're going to reduce services is by eliminating jobs. There is no other way to do it. We're cut to the bone already as far as the workforce goes.

Mr Bisson: On the privatization, I guess the membership in your local must have a certain amount of fear that in the document, Bill 26, there are a number of sections that make it a lot easier for the municipal government to privatize certain parts of a municipal government. Are your members looking at any of this in regard to how they plan on dealing with it?

Mr Lemieux: It's a very real fear with us. They haven't privatized anything yet, but we can see it coming. There are new environmental green boxes. What they do now is, that's been contracted out. It wasn't even offered to our members. They just went ahead and got an outside contractor to pick up all the recyclable materials from the city.

The Chair: Sorry, Mr Bisson. We've come to the end of the time. To Mr Klees for the government caucus.

Mr Frank Klees (York-Mackenzie): Thank you, Mr Philion, for your presentation -- very thoughtful, and some very good points made. I want to deal with your comments specifically relating to the restructuring issue that you expressed some concerns about regarding municipalities. As Mr Phillips indicated at the opening of this hearing today, the Minister of Municipal Affairs in his presentation to this committee stated that he would be introducing an amendment that would provide that a commission will only be established if it's requested by one of the local municipalities or by petition from the local municipality.

You're concerned that restructuring may be imposed by the province without local input. Given that amendment, how would you like to see us position this so that there might be an assurance of even more local input?

Mr Lemieux: I'm not sure I understand the question.

Mr Klees: You expressed concern that the restructuring of a local municipality would be top-down, would be driven by the province. What would you like to see happen with regard to this bill to ensure more local input?

Mr Lemieux: I'd like to see especially the municipal locals get involved. Some of our input might help, especially if it came to working together with the municipality -- I think that would be the key -- instead of always being told what to do, if we had some input even in the lower levels. Then the municipality and us could do maybe a joint presentation to the government, and whatever's best for the community, that way.

Mr Klees: Your concern is more that you have input at the local level and that there's more dialogue at the municipal level with groups such as yours so the province would have that feedback.

Mr Lemieux: Exactly.

Mr Klees: You're pleased that there will be an amendment introduced that the initiation for restructuring will have to come from the local level?

Mr Lemieux: I'd have to be pleased with any amendment that would give us any input at all.

Mr Phillips: This is a very fine presentation, I must say. It in one document encapsulates many of the concerns we've heard around the province, and I commend your organization for doing it, particularly around what's called schedule M.

My question is to try and get from you a feeling of how you see things unfolding in the future. The government has said it's going to cut support to municipalities. That support comes from province-wide taxing, province-wide revenue sources. They're going to cut the funding to municipalities, then they're saying to municipalities: "You're going to have to make it up some way or other. You can cut services, you can deliver them more efficiently, or you can charge fees, licences and taxes."

Tomorrow in Metro Toronto, a report called the Golden report will be issued calling for a municipal gas tax to fund services. As you look down the road, realizing this government is intent on more of the services being funded locally from things like municipal gas taxes, municipal sales taxes and fees, what do you think that's going to do to services in areas that may not have as strong a tax base as other areas of this province? In the Metro Toronto area they've got a pretty good local tax base; it could raise a lot of money through a local gas tax. But what's the implication for areas that have less access to those sorts of taxes? What do you see happening to municipal services?

Mr Lemieux: With a small community like ours, there really is no great tax base, as you said. Already the municipality has started with tipping fees at the garbage dump. Depending on the size of the load brought in, you have to pay for that. They also have added a sewer tax since 1992 which we never had before. We pay user fees for ball diamonds, which there aren't enough of. For the arenas, prices are $100 an hour for ice rentals. We live up north and we don't have any museums or anything like that. Well, we have one museum, but we have no opera, no cultural facts. If you don't get involved in sports or outdoor activities, there's not much to do up here.

Mr Phillips: Your brief does a fine job of painting the future for us. By the way, I think you're right on privatization. The idea is to get a fee on something, start that fee coming in, and then, to use the financial jargon, you sell off that stream of revenue to someone. When Mr Leach presented --

The Chair: Mr Phillips, can I leave that as a statement. We've come to the end of the time; I apologize for having to jump in. Thank you, gentlemen, for coming forward and making your presentation to the committee today.

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MICHEL LABELLE

The Chair: May I please have a representative from the CAW come forward. Welcome. You have half an hour to make your presentation, which you may use as you see fit. You may wish to leave time for questions from the three caucuses. I'd appreciate it if you'd introduce yourself.

Mr Michel Labelle: I'd like to welcome the committee to Timmins. My name is Michel Labelle, and I'm a CAW organizer. My presentation will touch briefly on what it means to labour in the province with the passing of Bill 26. We've tried to take a look at all the legislation and break it down and bring up the important points, and we've listed points we have particular objection to. My presentation will mainly be generalized, because 36 amended acts, some of which are complex and have repetitive content, would take weeks, if not months, to study for the purpose of analysis.

The breakneck speed the government is moving at leaves me reacting, unfortunately, to what I don't like about the jumbo bill. I know there must be some positive aspects in the new legislation, but how can I be positive when there's no time to look at what can be good in its content? The time restriction in passing this legislation is an especially strong objection. This cannot be emphasized enough. Anywhere you see an asterisk in the presentation is where we have a strong objection. I didn't look at all the schedules, for time reasons, and I want to hit the things we really object to.

Schedule J is the amendments to the Pay Equity Act. Interpretation: The nine amendments we have listed make serious changes to the Pay Equity Act. Women who were previously left out of the original Pay Equity Act prior to 1994 were covered under the proxy and proportional provision amendments. These have been abolished.

Pay equity means that wage levels for female-dominated job classes and male-dominated job classes were compared for the purpose of establishing equal value in the same workplace and under the same employer. In short, the proxy provision was a way of determining the level of pay for women who work in areas with no male-dominated job classes of equal value. This means that the many women in the areas of day care, nursing homes and the like, already in low-paying jobs, will lose the right to fair pay.

By removing the proportional provision, women will also lose the right to compare their wage levels with male-dominated jobs in the same workplaces. This provision looked at jobs performed by men and, for the purpose of pay equity, at levels of skill, effort and working conditions to establish fair wage levels for women. This is the "common sense" spirit in this bill: to cut child care and health care expenditures, and do it on the backs of working women.

Schedule K amends the Freedom of Information and Protection of Privacy Act and the Municipal Freedom of Information and Protection of Privacy Act. These amendments put certain roadblocks for citizens to access documents. The head of an institution will have the right to deny access to information on the grounds that he "is of the opinion" that the request is "frivolous or vexatious." The act does not define these terms.

This act will also make it easier to dismiss any appeal when access is denied. If access to information is granted, it will have a pricetag attached. There will be new user fees, such as labour costs to search, the preparation of records, "computer and other costs," "shipping costs" and "any other costs...in responding to a request for access to a record." These new fees will be set by regulations not yet disclosed.

These amendments threaten the freedom of information rights of citizens and access to information about the government and its activities. Access to information will be out of reach for impoverished and low-income Ontarians, effectively taking away their rights and freedom to information. Fees will act as a deterrent for those who can pay. This is not the "more for less" commitment in the CSR, but is less for more.

Schedule L amends the Public Service Pension Act and the Ontario Public Service Employees' Union Pension Act. These amendments effectively exempt these two acts from the law that applies to other plans, provisions requiring that pension plans be wound up in whole or in part when a significant number of people with the plan are terminated. The amendments nullify the rights of the superintendent of pensions or a court to order the windup of the public service pension plan or the OPSEU plan. These powers are unilaterally transferred to the Lieutenant Governor in Council, with no legal recourse. The bill provides handsomely for all government officials' legal protection. This government has the audacity to try to do this with prior knowledge of significantly reducing public sector jobs.

These changes make it very easy for the government to downsize or privatize with total disregard of public service employees. This is done by stripping them of pension rights they normally held under the law. These actions also will prevent employees who are short of a full pension to grow in to an unreduced pension. Winding up pensions is expensive, so a nickel-and-dime government is doing what it knows best: hurting those who serve, and implementing new laws to do it.

Schedule M amends the Municipal Act and various other statutes related to municipalities, conservation authorities and transportation. I would like to remind you of the opening statement that this schedule is complex and extensive, so I will comment only on important parts.

Schedule M makes a total of 70 amendments to the 12 statutes relating to municipalities, conservation authorities, transportation, the Municipal Act, and even the Bread Sales Act. Some of these amendments give the Minister of Municipal Affairs new powers to facilitate the restructuring of municipalities. It also can be said that it clears obstructions to privatize our municipal utilities and -- you guessed it -- position municipalities to introduce new user fees.

Though contracting out municipal services is currently allowed, it is not done without referendum. Schedule M changes this. It also allows for privatization of our public services and selling of our assets without referendum. This is unprecedented in our province. Municipal restructuring will be legislated and bypass public involvement. All is fair game under this new bill, and there is danger that restructuring of cities, towns and the like could lead to increases in property taxes, the reduction of services and the quality of those services. The restructuring would be done or developed through a commission directed by the Minister of Municipal Affairs. Unanimity of municipality boards will no longer be required. Public meetings will no longer be required under this new Municipal Act.

This bill allows user fees, cuts to levies for conservation authorities, and restricts them to charging municipalities an amount equal only to provincial contributions. The conservation authorities have been slashed by 70%. Funding for our parks will be at the mercy of voluntary municipal contributions. The long and short of these implications is simple. The government wants to give us a tax cut on one hand and download to municipalities the unpopular decisions of charging fees for all kinds of services. Harris will look good, and our mayors will be the fall guys. They even provide, through subsection 220.1(2), for municipalities, the right to "fees and surcharges that are in the nature of a direct tax for the purpose of raising revenue." Talk about giving it out of one hand -- and here's a twist -- and municipalities taking it out of the hand it's just been given to.

The CSR, page 5, says: "We will work closely with municipalities to ensure that any actions we take will not result in increases to local property taxes" -- another Tory lie.

There are other crucial matters in this bill that time restriction does not allow us to address, but I will in my summary.

Schedule O amends the Mining Act. This is also a very extensive schedule, lengthy and in parts very obscure. It should be studied carefully, bearing in mind the power it affords to those it should regulate, with emphasis on past and present performance and historical records.

There are 39 amendments to the Mining Act. The act changes the closure plan review and approval process and allows mining companies to self-regulate when it comes to closing mines. Mining companies only need a professional engineer, a company financial official and the company board of directors to sign off. Ministry approval is no longer needed. Companies that propose new mining projects are currently bound to file mine closure plans to be reviewed and approved by the Ministry of Mines. Financial responsibility is an important factor to the closing of mines. The law allows for a combination of cash and letters of credit set aside to deal with the aftermath of environmental problems should any arise. Under Bill 26, companies won't have to put up actual cash.

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Companies at 90% of production capacity would be on a system of self-assurance. We've seen what happens when we do that. In the area of Timmins, we have a hole right now that was supposedly to be cleaned up in an experimental mining project, and I invite you guys to go take a look at that. It's behind a green fence; out of sight, out of mind. Mining companies can, at their option, request the ministry for a fee-for-service approval process for mine closure plans. Companies that may be trying to avoid future liabilities might use this service, but what about the fly-by-night operators? I guess they will download the cost of cleaning up their messes to Ontarians. This is irresponsible of a government that shouts about fiscal crisis. How will the ministry or Ontarians know if environmental provisions are properly dealt with if there is no scrutiny or analysis of mine closure plans?

Changes to the freedom of information act are being made to exempt the form of financial assurance and financial information submitted by mining companies relating to the establishment of financial assurances. Now we're being left out of the scrutiny process. We have health concerns such as contamination of drinking water, lakes and rivers. Our forests and crown lands should not be trusted to people who care more about profits than resources without being accountable to those we have elected and by extension to Ontarians.

Schedule P, amendments to the Ministry of Correctional Services Act: These amendments change the quorum on a parole board from three to two. If they cannot agree on a matter, question or thing that they have examined, the board shall re-examine the matter, question or thing. There is no mention of a third board member being required to break a tie. Hypothetically, the board of two could rehear the matter over and over without reaching consensus. It is somewhat idiotic to bring this up, but nevertheless the possibilities of what is implied are real. It shows that when you rush, you make mistakes in a very simple and straightforward example. It shows how little thought was put into many segments of this bill.

This is but a cost-cutting measure with no assurance that the moneys will be reinvested in correctional services. This flies in the face of an excerpt from the CSR, page 8, which states, "Again, any savings we find in our justice system through greater efficiencies will be reinvested to ensure public safety in our streets and in our homes." Bill 26 is about savings and restructuring; therefore we can assume that the savings are going towards deficit reduction.

Schedule Q, amendments to various statutes with regard to interest arbitration, and you know the acts that are being amended there: The interpretation of this is, this schedule is very significant because it requires arbitrators to consider the employer's ability to pay. That's in arbitrated cases for wages. The perception is that in relation to bargaining wages, the employer declares the amount he is willing to pay in lieu of the amount he is able to pay and does not honestly engage in collective bargaining, and he knows full well that the arbitrator will tend to favour the employer's position because of the law. Again, we see a door opened by the provincial government, hoping that the blame will be shouldered by municipalities for the reduction of wages to women and men employed in the public sector. This happens with the ink of the CSR still not quite dry: "We will sit down with municipalities to discuss ways of reducing government entanglement...as well as unfair downloading by the province." What happened to the promised discussion? I guess they forgot the clause about the fact that they would have to be forced to do this. We need to say it again: The downloading promise was not kept. These changes are anti-union and anti-people. This is where the government and its ideology are at their best.

Summary: Pay equity was established because of a deficiency in women's wage scales. Today, under the best that democracy may offer, women are still subject to being dominated by a man's world. It is a socially accepted injustice. This injustice permeates every facet of our society, even in seemingly innocent ways, like the need to compare women's wages to men's to formulate legislation, instead of letting women stand on their own merits. Bill 26 says pay equity legislation is regressive. It leaves a subtle but strong impression that government believes women are still second-class citizens and that it's time they be put back in their place.

We strongly urge that the municipal freedom of information and privacy act be kept whole, unmarred, unfettered and accessible to all Ontarians.

The amendments to the Public Service Pension Act and the Ontario Public Service Employees' Union Pension Act are totally unacceptable. They fly in the face of terms used when bargaining, like "good faith," "decency" and "fair pay." How can you do this to your own employees who have entrusted you with their future and their pension rights? If you do, then all our pension rights are potentially at risk in the near future.

Now we address the "pass the buck act," the municipal section of the bill. Massive restructuring and amalgamation of municipalities in rural and remote areas of Ontario are definite possibilities. This threatens the amount and quality of services and will further isolate areas already experiencing isolation. Another important consideration is the dictatorial aspect of decision-making, taking the right to decide out of the hands of local people who have an understanding of the needs of their communities and giving these rights to the Minister of Municipal Affairs. Let's not forget new taxes, spelled U-S-E-R F-E-E-S, from our government that believes a promise is a promise is a lie.

I must mention the people bills: the Fire Departments Act, the Hospital Labour Disputes Arbitration Act, the Police Services Act, and the School Boards and Teachers Collective Negotiations Act. This, along with the assault on pension legislation previously mentioned, shows blatant disregard for the rights of organized labour throughout this province. In like manner you did it to the private sector through Bill 7 and now Bill 26 will do it to the public sector unions. I will predict that the next thing on the agenda for labour will be the introduction of workfare and learnfare to continue your undeclared war on labour. We know that workfare puts a downward pressure on the standard of living and creates an atmosphere of dog-eat-dog among people. I lay the responsibility squarely on your shoulders for the labour unrest happening in Ontario.

All Ontarians will soon know that when Mike Harris says, "Ontario is open for business," he really means, "Big business, come and join us in the exploitation of Ontario."

In closing, I recommit myself to continue the battle for social justice and democracy. When we all unite rather than divide we expose the kind of spirit best expressed by C.S. Lewis:

"I live in a managerial age in a world of admin. The greatest evil is not now done in those sordid dens of crime that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried and minuted) in clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaved cheeks who do not need to raise their voice. Hence, naturally enough, my symbol for hell is something like the bureaucracy of a police state or the offices of a thoroughly nasty business concern."

Considering some recent disclosures about the world of politics, can anyone disagree with Lewis's choice of symbols? Thank you for your consideration.

The Chair: Thank you for your presentation. We have three minutes per caucus, starting with the government caucus.

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Mr Tascona: Thank you for your presentation. We heard from other CAW locals throughout these hearings. I'd just like to deal with schedule Q, if I may.

As you know, there are mandatory criteria in other provinces which deals with interest arbitration, and to this date, in terms of bringing fiscal reality to the interest arbitration process, we've heard strong support from municipalities, school boards, police services boards, and in fact they not only fully support it, they're hoping that we strengthen them and to ensure that there are no tax increases that result out of any arbitration award.

We've also heard from such groups as the police association, as recently as Friday, who have very clearly indicated their view on schedule Q, their preference. If they could, they'd like to see it deleted, but they also suggested, as an alternative, they would like to see other factors, as an amendment, all relevant criteria, including such factors as cost-of-living, private-sector settlement, comparable police settlements, historical relationships, for an example, if this is going to proceed.

I would just like to get your opinion on that, whether you think that's a fair approach in terms of dealing with interest arbitration as set forth by the police.

Mr Labelle: Surely, from what I'm hearing, what you're saying is that the employer favours it, and the workers have apprehensions towards it. To me, it should be between those associations and particular unions to come up with a formula that works for them. As a CAW member, of course I'm not involved in the public sector. But surely --

Mr Tascona: Just that particular proposal.

Mr Labelle: Any amendments, again, if they're gained through bargaining with the unions that you're affecting with the legislation, have to be acceptable if they're accepting it. Surely that's the democratic process.

Mr Tascona: I'd just like to comment also. We dealt with the CAW representative and he made the remark saying: "You're saying that there are fiscal problems. We recognize the government has tough choices and priorities to make, but" he says, "when we are faced that with a company, in my bargaining experience," he basically said, "why don't you do such things as productivity bargaining, make decisions on saving cost, try to save the employment that's with the workers in that organization and focus on that with your own unions?" He put that question to me.

I would just like to ask whether you would share that in your experience, when you're dealing with an employer that says, "Well, we can't pay; we've got tough choices," do you want to do such things as productivity bargaining and try to find out the best solution? What do you think about that?

Mr Labelle: It's really not related to Bill 26, but you're talking about the philosophy in bargaining, and I can tell you right now that as a member here, I'm a committee member who's trying to organize the workplace so am not really as versed in negotiating with companies. I would have to say again that if a company was in trouble or an employer was in trouble financially, of course the union and the employer should sit down and be reasonable about what they're facing.

But in this case here, I believe that you're taking a slash-and-cut-and-burn approach to everything that's on the table, and that means all of Ontario's services are on the table. How can you say that with little or no study from the private sector of these bills and what it means to them, you can come to a conclusion that sets arbitration or bargaining rights for unions in days to come? We'd have to --

The Chair: I'm sorry to interrupt, Mr Tascona, but let's move into opposition time.

Mr Phillips: I appreciate the presentation of the CAW. I'd first off make a comment that you've characterized the bill in certain ways. Where we've been around the province, people call it the bully bill, and the amazing thing is, as we travel around, we're finding that, just like any bully, this bill has no friends. Even the chambers of commerce -- we'll hear from the chamber later today -- even they express major reservations because, as they look at it, it truly is a bully bill.

I hope I've got time for a couple of questions. One is on the arbitration that they've just raised. What the firefighters have told us and what the teachers have told us and what the police have told us -- the police in very strong language on Friday said they've been betrayed by the government. They were promised that they would not be attacked through arbitration and now have been betrayed, and the fire group are saying this is a wage control bill. This is the Harris wage control bill. Actually, the police call it the wage rollback bill.

You've now looked a little bit at the arbitration process, and I realize it's in the public sector, but if a private sector employer ever tried to impose these kinds of conditions on your organization, what would that do for the climate of bargaining? The government is just ready to enter bargaining with the public unions, but February will be a key month. What do you think this does to the climate when they try and push a bill through that does this to arbitration?

Mr Labelle: First off, I really do believe that when you're faced with these kinds of measures through any employer, the first thing that comes to mind to those who are being manipulated or dealt with in this way, it brings the connotation that there is no fair play or no good faith. The actions are definitely there to reduce people in the workplace as well as their wages.

As for the police, I've talked to some of them and what they're worried about is that their service -- they said that they would never reduce law enforcement. What these actions may do is reduce their backup service. Instead of being out there doing the job they have been hired to do, they'll be stuck behind desks and doing paper and administrative work as opposed to being right out there and doing community work. We hope that we don't see a deterioration in our police services.

Those are the types of things. After talking to other unions, they're losing bumping rights as they know them. They've changed the rights. In other words, a man who has been there for 20 years may have the right to bump somebody who has been there for 10 years, but the person he has bumped loses his bumping rights. It's kind of putting worker against worker and you know when you make a decision like that, you've effectively taken away the livelihood of the person you've affected.

It's not fair. It brings up all kinds of issues on morality and conscience. It would bother me, certainly, if I had to do that to another worker. It's a union-busting tactic. It's subliminal, but unions know about it and they're going to deal with it, I'm sure. As far as I'm concerned, what's going to happen is you're going to see a rise in worker-employer confrontations, and that doesn't help anybody in Ontario.

Mr Silipo: Thank you, Mr Labelle, for a fairly thorough presentation. I'm sure the government members must be cringing a little bit to think what other gems you would have discovered had you had a bit more time to look at the bill.

In the short time that we have, I want to focus on a couple of points, the first being the one around arbitra

tion. We've heard, as it has been characterized, that this really has been seen as a wage control bill. I think it's important to underscore that. Although the police and the firefighters are the two main groups that are affected by this -- there are others, as you mentioned -- directly it seems at first, we heard that in those cases only about 10% to 15% of situations are where we end up in arbitration. The other 85% to 90% are always settled. So one asks legitimately, why the need for this legislation when most situations get resolved at bargaining? Why this kind of sledgehammer approach?

The important thing there is to remember that what the government is interested in doing, it seems to me, is controlling wages through the arbitration process, not just for those employee groups but indeed for the public sector as a whole, because then those become the benchmarks for public sector salaries.

If a municipality goes to arbitration, as you correctly point out, they have no reason to negotiate. They can go to arbitration and have the arbitrator do their work for them. They say: "This is what we can afford or not afford. Arbitrate and make the decision." Then they turn around to their secretarial workers, to their outside workers and say, "The firefighters only got this or got rolled back so much, so the same thing should apply to you," and that becomes the benchmark. In a certain way there's an implication not just for the groups that are directly affected but indeed for other public sector workers, as I think you pointed out in your brief.

Mr Labelle: Yes. The biggest thing I see there is exactly right. They are going to prefer the settling of contracts or negotiations through the arbitration process to actually having to negotiate in good faith, because they know that their position would be favoured through that on the ability to pay. What it does, it puts a downward pressure on the wages of our public sector employees.

Therefore, in turn, the private sector may come to us and say, "Now that we've realized that there are fiscal problems and for us to remain competitive" -- and you know the whole line -- "we may have to follow the public sector employees in wage negotiations also." It's an all-out attempt -- to me, it's a corporate agenda and it's very simple: it's to reduce the standard of living so that they can make gains, whether it be in the private or public service.

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The Chair: I apologize for interrupting. I want to thank you for coming forward today and making your presentation to the committee.

Gentlemen, members of the committee, quite often we have some lengthy submissions and we're left with a particularly short time for questions and I hate to cut people off when they're answering those questions. We might, in those areas where we only have two or three minutes per caucus, keep the preamble a little shorter to be able to hear those questions for witnesses. It makes my job a little friendlier.

Mr Len Wood (Cochrane North): Extend the hearings.

Mr Bisson: Why don't you extend the hearings?

IROQUOIS FALLS HERITAGE COALITION

The Chair: Can I please have representatives from the Iroquois Falls Heritage Coalition come forward. Good morning and welcome to the standing committee on general government. You have half an hour this morning to make your presentation. You may use that time as you see fit. You may wish to leave some time at the end of your presentation to receive response questions from committee members. I'd appreciate it if you'd introduce yourself at the beginning of your presentation for the benefit of both Hansard and committee members.

Mr Ben Lefebvre: Good morning. Thank you. My name is Ben Lefebvre and I represent the Iroquois Falls Heritage Coalition. I have specifically asked that my brief not be distributed to the committee members until I have finished my presentation. I'd prefer to get your undivided attention. There are only a few points that I wish to cover, and if you're really interested in my presentation, I'm sure you'll read it afterwards.

Members of the media, fellow northerners and committee members, I have decided to appear before you this morning out of my concern for the previously announced and still impending cuts by the new Conservative government in Ontario. Many of these are a direct result of the changes being proposed through the omnibus Bill 26. I have only three topics I wish to speak on.

As an aside, it's quite interesting to note that the Conservative members of this committee are sitting on the left-hand side of the room. Perhaps there is hope for Ontario after all.

As I said, I am here representing the Iroquois Falls Heritage Coalition. Our group was formed on March 30 of this past year as a result of the threatened loss of rail passenger services at Porquis Junction. The Ontario Northland Transportation Commission had also just announced that the 55-year-old Porquis station was facing demolition.

Although our group was successful at securing an eight-month delay, the September 30 deadline that was granted us by the commission to find a viable alternative for the doomed structure came faster than we could secure the required support. Instead of the anticipated public and municipal backing, our group met with resistance and negativity from both local politicians and Ontario Northland management.

The new government had made good on its promise to cancel the Jobs Ontario program we were counting on to help us renovate the old station. Unfortunately, the new government has also failed to follow through on its promise to, and I quote the Common Sense Revolution on page 22, work "with communities and the private sector to find new ideas for destination attractions and to take full advantage of existing sites and activities."

The same paragraph also states that the "plan will recognize the importance of volunteer and community-based industries such as snowmobiling and crafts as tourism attractions." Much of our planning for the old Porquis station included snowmobiling and local crafts among other tourist-related elements to help create long-term employment.

I have been the chairperson of the steering committee for the Iroquois Falls tourism development strategic plan for the past two years. I have yet to hear of any new tourism initiatives from the existing government since its election last June. In the meantime, a perfectly good building that could have served our emerging tourism industry is soon going to meet the wrecker's ball. This building could still provide an excellent opportunity to create a workable partnership between the ONTC and our coalition. It strikes me as absurd that such a solidly constructed, publicly funded structure should be demolished before all alternative uses had been explored.

I am here to ask your committee to recommend to the new government that the ONTC not be allowed to follow through with the proposed demolition of the Porquis station at this time. The Iroquois Falls Heritage Coalition will anxiously await your reply to this request. Please note that the tender to demolition may have already been let, so this matter is urgent.

The second topic I wish to discuss is regarding volunteers. I am a very active volunteer in the Iroquois Falls area and, as such, I sit on numerous committees and boards. I understand what it means to give of my time and I feel that volunteers contribute a great deal to the economic wellbeing of the community, this province and the country as a whole.

When the new government suggested that volunteer organizations could pick up the delivery of some of the traditional services it had provided in the past, I must admit that I became rather sceptical of the plan. For one thing, volunteer organizations are stretched to the limit as it is. There are already too few people trying to cover too many areas of legitimate need. The government's assumption that there will be a miraculous increase in the number of volunteers due to increased need or through forced volunteerism from welfare recipients is not only presumptuous, it is an insult to the intelligence of those who give freely of their time now.

Most people realize that you cannot force someone to be a good volunteer. Volunteers are a very precious commodity, the most effective of whom give their time and effort freely to causes of their choice. Expecting nothing in return, these selfless individuals often help fill the gaps left by various government programs. As these gaps get wider due to changes affected by issues such as unemployment levels, government fiscal restraint and general social degradation, the mounting pressure on our volunteers threatens to crush their will to continue. Volunteer burnout has become a real issue, the need is so great.

More government support is needed for volunteer organizations, not less.

One program that comes to mind is the one that was delivered by the Ministry of Transportation to support specialized transit services to the physically disabled. The program paid up to 50% of the capital costs to purchase the required vehicle and then between 50% and 75% of the operating costs to maintain and administer the system, depending on usage. The other 50% would be provided by the affected municipality through the existing tax base or, more often than not, with funds raised by a volunteer community organization and through user fees.

Iroquois Falls is one of only two municipalities in the Cochrane district that has not yet taken advantage of this program. In the spring of 1995, after five years of organizational meetings, the Iroquois Falls Access Transit Committee finally received the reluctant blessing of council to apply for the program, along with a $6,000 annual commitment. Since July, the committee has been able to raise $10,000 and has promised to continue their efforts for a minimum of three years. The estimated cost to maintain the proposed program in Iroquois Falls is only $30,000 annually, with a one-time capital investment of $50,000 to purchase the vehicle. The Minister of Transportation recently announced that the funding for this program would be frozen and that no new projects would be approved, including the one in Iroquois Falls.

I'd like to know what kind of message the new government expects that the disabled and elderly in this province are to take from such an announcement. Worse still, what message does this send to the volunteers who really believed in what they were trying to achieve? I hope this committee will recommend to the minister's office that this project be given special consideration in the light of the amount of work and commitment that has already gone into this project being championed by the Iroquois Falls Access Transit Committee.

The last item I would like to speak about is economic development. I have been a member of the Iroquois Falls Economic Development Committee for the past four years. I have served as its vice-chairperson for the past three.

The Ministry of Northern Development and Mines has been an extremely effective community partner in economic development for the past eight years through MEDA, an acronym for the municipal economic development agency. The first five years of funding provided small northern communities with the resources required to initiate and facilitate development activities that would help diversify their local economies.

The second five-year block of funding was set up with the understanding that government subsidies would decrease year after year until when, in the 11th year, municipalities would have realized the benefits of economic development and would adopt it as a new department.

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In small, resource-based northern communities such as Iroquois Falls, it is often difficult to sell the concept of a long-term planning process. Political leaders need to see immediate return on their investments. Administrators' time is used up in the performance of normal day-to-day activities. Traditional department heads are busy doing more with less financial and human resources. The addition of an economic development department to the existing municipal structure is not even considered as a remote possibility.

Lack of understanding has resulted in the closing of several northern economic development offices already. Instead of recognizing economic development as an investment, it is often seen as a liability and an unnecessary luxury.

I propose that community economic development should be mandated for all northern municipalities having a population level over 5,000. Financial resources must be provided by the government to support such initiatives on a partnership basis. More effort must be made to emphasize the need for and benefits of such programs.

I recognize that the Conservative government has promised less interference in municipal affairs. In this case, however, government must show the required leadership. For a very minimal amount, the existing MEDA program could be maintained at present funding levels. Serious consideration should even be given to increasing that amount.

A good community economic development program can work. Although its main employer, Abitibi-Price, has continuously reduced its manpower requirements over the past couple of decades, Iroquois Falls has actually managed to experience growth in other sectors. This is totally contrary to the trend in northern Ontario, as you know, especially with the fact that we have one of the highest unemployment levels in the country.

Through the direct efforts of our economic development office, we have managed to help secure employment opportunities in new industries such as Malette Granite, Lakeland Peat and two gas-fired cogeneration stations. New commercial and retail ventures are springing up throughout the community. A fledgling tourism industry is being nurtured to help offset future Abitibi layoffs and to further diversify the town's tax base. Other opportunities in value-added products for our resource-based industries are presently being explored and we are very optimistic with the preliminary findings.

A few words, if I may, on strategic planning and the process that we went through. By the fall of 1992, Iroquois Falls saw the need for a new strategic plan which would help reduce its dependency on its single industry, pulp and paper, while empowering its residents to determine their own destiny. The town's volunteer economic development committee had previously commissioned a consulting team to create a strategic plan for the town back in 1988. This plan lies gathering dust in the basement of town hall because local buy-in had not been assured through its implementation strategies.

With funding from the Ministry of Northern Development and Mines, the Iroquois Falls EDC accepted proposals from various consultants to help create a plan that would recognize the need to harness local human resources and energies in determining common interests, priorities and coordinated actions. The consultants would serve as independent and neutral facilitators to gather relevant information, do the required research, offer technical advice and produce a final report.

A series of community workshops were set up that were both inspirational and enthusiastically attended. As the process gained momentum, local political support waned due to the perceived fear that the EDC might undermine council's authority. While council still controlled the EDC, it did not buy into the process or fully recognize the value of what was being accomplished. Out of it all emerged subcommittees with representation from various stakeholders and the general community. Four sectors with the best potential for economic growth were identified as: (1) tourism and recreation, (2) industry and commerce, (3) health and social services, and (4) education and training. The subcommittees helped the consultants prepare a report entitled Sectoral Strategic Objectives and Options, which was used by the EDC in preparing a sectoral-based community economic development plan.

A few words on why we found that this was a very important exercise. There was the fact that it provided an opportunity for the community to better understand the changing nature of the economy while focusing on actions that are proactive and community-based in determining its own future. The process was instrumental in clarifying the interconnectedness of the four identified sectors. Partnerships and consensus decisions were seen as an important means to attain the community's goals and objectives. The process was a catalyst for ideas and opinions, but underscored the need for building and maintaining good lines of communication.

There were conflicts of personality and political interference, as well as scheduling, budgeting and committee structure concerns. Well-entrenched interest groups needed to learn to loosen up on their demands and preconceived positions.

Small communities often lack the depth of expertise required to complete such an exercise. Time must be allowed to educate participants, to allow the community to build its capacity to comprehend the subtleties of such a process. The importance of ownership and necessity of commitment is a critical initial step. Economic development initiatives normally take time to bear fruit.

The economic development committee in Iroquois Falls is very proud of their efforts at creating their strategic plan in a very new and innovative manner. In fact, the plan was so well thought of that it was featured in Plan Canada, a well-respected periodical for municipal planners and economic development practitioners. There now appears to be more confidence in the future of Iroquois Falls than at any time in recent memory. The momentum that has been created must be maintained.

At year's end, town council announced that the economic development office would be closed at the end of January. As a direct result of the reduction in transfer payments from the province, council is reacting without considering the impact of their decisions. Because town council could not understand these economic development issues, the EDC has become one of the first casualties of the Common Sense Revolution in Iroquois Falls.

There is one last message I would like to leave with your committee: Please ask the new government to fully consider the impact of their cost-cutting decisions as they make them. As you no doubt are becoming aware of in your travels and in listening to those who bother making presentations to this and the other travelling committees, there are far-ranging considerations that need to be addressed. Deficit reduction is a priority, and most taxpayers agree. Wholesale changes in our society, however, are not necessary to accomplish this. The Mike Harris Conservative government was elected because they promised a "common sense" approach. That mandate did not include the complete destruction of the social system that has taken more than 50 years to create and has made Ontario the province of choice for most Canadians.

I care deeply about Ontario and the way of life we have all become accustomed to. We know that change is needed and that we have to learn to live within our means.

I also care about the process this committee and this government have entered into through these public hearings. I have taken the day off to be here and would like to know that my time was well spent. I hate to think that my comments will simply fall on deaf ears.

I trust that you will get back to me and I offer the government my experience and energy at making this province the economic engine of this country once gain. Let's prove to the world that this economy can be turned around without sacrificing the wellbeing of the less fortunate in our society.

The Chair: Thank you, Mr Lefebvre. We have three minutes per caucus for questions. We'll begin with the opposition caucus.

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Mr John Gerretsen (Kingston and The Islands): Thank you very much, sir, for your excellent presentation. I come from Kingston. We all realize that tourism and heritage should not be regarded as something just of a cultural nature, but it's an economic development. Until a community and the province realize that, I'm afraid we won't get too far. In my own community, we started realizing that a few years ago and it's now a $100-million-a-year industry.

Your comments with respect to volunteers, I totally agree with. Sometimes with this government we get the impression that it's something they have just created, or they found something new. I know, having been involved in my own community for many years, that one of the things that makes Ontario strong is the number of volunteers who work in our communities, and these people are really at the burnout stage.

Of course, you realize that what drives this whole thing is not so much deficit reduction. That's part of it, and I agree with that part of it. But it's really the 30% tax cut, which really means instead of having to find a total of about a $10-billion difference between revenues and expenditures, we'll be looking at about a $15-billion difference there. That's what's driving this whole thing.

I think one of the best areas that can be shown in this whole notion of giving grants to businesses -- it's popular to say, "Let's not give any money to businesses," but on the other hand, there are times and occasions when a little bit of a seed fund, and you've a mentioned a number of different things where it could be applied, could really get something locally off the ground to function well and make it grow. What are your comments on that?

Mr Lefebvre: Number one, I totally agree with you. Tourism is an unrecognized and untapped resource, particularly here in northeastern Ontario. We're just beginning to realize it, particularly with the advent of snowmobiling and its popularity of late. It has created one heck of a lot of money in investment not only by the local entrepreneurs but by people who enjoy the sport. As you know, a lot of these machines run $8,000 or $10,000, and when they travel, people travel very light. There was a poker run, one of these almost weekly affairs, here in northern Ontario held in Iroquois Falls on Saturday. There were over 600 machines that were in that poker run. That brings a ton of money into a small community like Iroquois Falls.

Unfortunately, even the municipal leaders don't understand what net benefit that creates for the economy. That's why it's incumbent on a community-driven committee such as the economic development committee, for example, to be able to explain to them and to be able to facilitate just what this type of development would mean for a local economy.

Just a note. You mentioned the $100-million industry that has worked for Kingston in tourism. An interesting aside is that tourism is the world's number one industry. Very few people are aware of those facts. There's no reason we can't take advantage of that.

Mr Gerretsen: And every part of Ontario can play its part.

The Chair: Thank you. I apologize for coming into your time.

Mr Silipo: Thank you very much, Mr Lefebvre. Just very briefly, as the critic for Economic Development, Trade and Tourism for our party, I appreciate particularly your presentation and your emphasis on the need for partnerships and consensus-building as the way to have that happen at a community level.

One of the unfortunate things that we've seen from this government is, in our view, its abandonment of that approach and its abandonment of the role that the provincial government needs to play in creating that atmosphere. As you say, what results when that happens is not only a situation where towns then decide to close down the local economic development office, but also jobs directly and indirectly leaving the province. We've seen instance after instance where companies have decided to relocate outside of Ontario instead of locating here exactly because other governments continue to see that they have a role to play and this government believes that it need just wash its hands of any responsibility.

I know my colleague Mr Wood wants to pursue some points with you, but I just wanted to make that point.

Mr Len Wood: Thank you very much for the presentation. I know there are relatives who live in my riding as well as in Gilles Bisson's riding, so it's nice to see you here.

I'm saddened when you point out that the economic development office is going to be shut down, because it seems to be a trend since June 8, 1995, when the Mike Harris government was elected, that they're attempting to shut down everything in northern Ontario. I'm talking about the Ontario Northland airline; they're shutting it down. The Ontario Northland train is threatened. Economic development is threatened. Now a lot of presentations that we've had made are that it's going to throw thousands of people out of work in the public sector throughout northern Ontario.

My question really would be brief. Do you see anything in Bill 26 that would either keep the northern Ontario status quo or create some jobs in the long run, or are we just faced with thousands of people being thrown out of work with no caring for the elderly, the disabled, the seniors, the working men and women?

Mr Lefebvre: As was mentioned in some previous presentations, and I know you're probably hearing it right across the province, Bill 26 so large that it's been very difficult to dissect and be able to study to any great measure over the short period of time we've had to actually look at it.

But I did notice that in the Common Sense Revolution it spoke very strongly about northern issues; in fact, it was another paper that accompanied the Common Sense Revolution that was titled Northern Focus, if I'm not mistaken. It spoke very strongly about the support, particularly in transportation, for northern communities through the Ontario Northland Transportation Commission in particular, and it strikes me as very odd how a $10-million cut in subsidies to the ONTC could be construed as help. I'm hoping there will be a revisitation of that. Cutting off air service, as you mentioned, through NorOntair no longer -- I believe it's 17 communities that are going to be directly affected --

Mr Len Wood: One hundred and fifty employees.

Mr Lefebvre: About 150 employees in a time when, as I mentioned before, northern Ontario being one of the highest unemployment levels in the country, it just strikes me as very odd. I'm hoping there will be some revisitation of many of the directions that the government has taken so far.

Mr Klees: Mr Lefebvre, thank you for your presentation. Before I get to my question to you, I'd like to just clarify some misinformation that was tabled here by Mr Wood. I think it's important that we deal with the facts in these hearings.

First of all, with regard to NorOntair, that has not been cut off and in fact there were some reports in the media that were not correct. Discussions --

Mr Len Wood: Better check with Chris Hodgson or Mike Harris. They said it was going to be shut down at the end of January.

The Chair: Order. You've had your opportunity.

Mr Len Wood: He's calling me a liar.

The Chair: You've had your opportunity, Mr Wood. He hasn't said that.

Mr Len Wood: He called me a liar and I'm challenging him --

The Chair: He hasn't called you a liar at all, Mr Wood. Order, please, Mr Wood.

Mr Len Wood: He has no right to call me a liar.

The Chair: He hasn't, Mr Wood. Order.

Mr Len Wood: He has, and --

The Chair: Mr Klees.

Mr Klees: Thank you, Mr Chairman. Mr Wood, I won't apologize because the fact of the matter is that your comments were -- in fact, I'll speak to Mr Lefebvre. The comments were that air service would be cut off for these northern communities and it will not. Discussions are ongoing right now with a number of parties within NorOntair as to how service can be continued and we're confident that service will be continued. It will not be on the same structure that it is today, but we have --

Mr Silipo: Service, but no planes.

Mr Bisson: Oh, no planes.

The Chair: Order, gentlemen.

Mr Klees: I'm surprised that the members from northern Ontario are carrying on as they are, because this is a very serious message. The fact is that the government --

Interjections.

The Chair: Order, Mr Bisson, Mr Wood, please.

Mr Terence H. Young (Halton Centre): Mr Chair, on a point of order: We have a limitation on the amount of time we have to use. I wonder if we could have Mr Klees's time now.

The Chair: Mr Klees, continue, please. I've got you on the clock still.

Mr Klees: Thank you. The fact is that the province of Ontario is very committed to northern Ontario and will be doing what it can possibly do to ensure that services are continued in northern Ontario. That's why I make the point that with regard to norOntair service, we believe we can work something out through the discussions that are going on right now to ensure that this service will be continued. We happen to believe that this service can be most effectively delivered through the private sector and that's why discussions are going on around that now. Service will not be discontinued, contrary to what Mr Wood has indicated.

I also want, for the record, to make it very clear that this government remains committed and has indicated in the throne speech that the Ministry of Northern Development and Mines will become the senior ministry for northern Ontario. We are committed to ensuring that there is a diversification and that there is continued support for northern Ontario.

The Chair: I'm sorry. At this point -- it's a lengthy preamble -- I'm going to have to interrupt; you've come to the end of your time.

Mr Lefebvre: You mean I can't reply to the non-question?

The Chair: I'd like to thank you for coming forward and making your presentation to the committee today.

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ONTARIO PROSPECTORS ASSOCIATION

The Chair: Could I please have the representative from the Ontario Prospectors Association come forward. Good morning and welcome to the committee.

Committee members, I'd appreciate it, in deference to the presenters who have taken time to come forward and make these presentations, if you'd keep the arguments across the floor to a minimum so that we might be able to hear all deputants.

Mr Bruce Jeffery: Good morning. I'm the chairman of the Ontario Prospectors Association and have been so for the past year. I wanted to take this opportunity, to add to things you've already heard.

The Ontario Prospectors Association is a lobby group and it's our objective to represent and further the interests of the exploration industry and the individual prospector. We're an umbrella group. We represent a wide variety of membership, including prospectors, geologists, mining company executives, service companies and mining companies, both junior and senior, from individual associations that exist in Timmins, Kirkland Lake, Sault Ste Marie, Sudbury and Thunder Bay. As such, we are a collection of the executives of those associations, but we don't have a lot of working committees. We count on the groups themselves to do much of the work.

Over the last 10 years, you may or may not know, the Ontario mining industry has lost over 10,000 direct jobs and these jobs have been lost mainly due to depletion of ore reserves and the closing of mines. Ontario's reserves of gold, copper, zinc and nickel are continuing to decline and a dramatic increase in exploration spending is required to reverse this declining reserve trend.

Mineral exploration is really the R&D of the mining industry and, without a strong exploration industry, reserves will not be discovered to replace the ones presently mined. Exploration is a very risky business. Statistics now show it can cost up to $150 million just to find one mine and it can take as much as 10 years to actually get into production.

Our job is to attract this risk capital into Ontario. To do so, investors have got to have security of title, access to land and an understandable, efficient and reasonable regulatory environment. This is where the Mining Act comes in. It plays a critical role in providing these requirements.

Also with respect to liability, the committee must realize that one of the best places to explore for a new mine is adjacent to an old abandoned mine. It just works that way. If the systems were working to produce one, there's a good chance there's another. If the rules for acquiring old mining liabilities are not reasonable, the exploration community will stay away from these areas and the people of Ontario will be the long-term losers.

In general, the OPA is very supportive of the Harris government's intentions to take quick action to reduce administrative costs, reduce red tape, allow expanded self-regulation of the industry and provide renewed confidence to risk capital investors. We would, however, caution the committee that schedule O contains many significant changes to the Mining Act, some of which we don't believe will serve the mining industry well or achieve government objectives.

As I started to mention before, our group is an umbrella group. On exploration issues relating to the Ontario Mining Act, we generally rely on the expertise and experience of the minister's Mining Act advisory committee, on which the OPA is represented. Both the MMAAC and the Prospectors and Developers Associations of Canada submitted briefs and made presentations to this committee on December 21 -- detailed submissions I gather. For issues relating to part VII of the act, which is the rehabilitation of mining lands, we generally rely on the expertise of the OMA which represents the producing mines in the province.

The OMA also appeared before this committee on December 19. Generally, the OPA endorses the suggested changes made by these groups and would refer the committee to those briefs for the real details and recommendations, because they were sort of blow by blow right through schedule O. Our purpose here today is to reinforce several specific changes being recommended by the mining industry and to remind the committee of the importance of mining to the province of Ontario.

On October 20 the MMAAC committee was presented with a list of the original items to be included in this omnibus bill, Bill 26. These items had been discussed and modified through consultation with MNDM. However, when schedule O was finally released, there were many more items in this than the original October document, which we had felt included many housecleaning items. In fact, many of those housecleaning items had been on the books for a year and there was a previous omnibus bill that didn't go through, but that was going to be done at that time. We were under the understanding that was primarily what was going through. The schedule established for the passing of Bill 26 has left very little time for continued consultation with MNDM, and our own groups, for that matter, to ensure that the changes put forward in schedule O don't have the unwanted result of reducing exploration spending in the province.

Our group, the OPA, supports the following principles: the freedom to explore and the right to mine; the principle that you cannot stake a pre-existing liability that was not yours; the principle of self-assurance and self-regulation; the principle of polluter pays, not just the user or holder pays, but the polluter pays; protection of the environment; and as much as possible, a principle of a level playing field for both our junior prospector and our senior mining company.

Just a few specific issues to schedule O that I would like to emphasize, some things we hadn't realized were there: Many of these, I believe, may be being taken care of with continued consultation, and I hope they are. I haven't been involved in some of the most recent consultation, but I didn't want to let the opportunity here in Timmins go by without coming in. What I've listed are a few things.

The word "mine": The government has introduced a new phrase, "preliminary exploration," in the definition of the word "mine," and we must have that defined. It's an undefined word in the act right now. We want to know what that is from a prospector's point of view.

"Mine hazard": There's a phrase in there called "any disturbance of the ground," and we're very concerned what that could be, how far that could be carried.

Under "owner": Changes to this definition indicate that a secured lender could be considered an owner. This would have a very negative impact on raising risk capital in Ontario if potential financiers could end up being held responsible for mine hazards. In addition, the removal of the words "owner of surface rights only" means a potential does exist for innocent surface rights holders to get stuck with liabilities of pre-existing mine hazards.

I don't know this personally, but I'm under the understanding that the MOE has reached an agreement with financiers in making sure that financiers don't take liability, but the Mining Act still indicates they could be. What we need to do is get the Mining Act in tune with the MOE agreement.

The right to inspect documents: By adding the words "and recorded," it's implying that filed only documents would not be available for inspection. Our group wants to ensure that all documents that are filed in the recorder's office are open for inspection.

The only part VII issue I would touch on, because we represent the exploration prospectors and not the miners but this one affects prospectors, is voluntary surrender and abandonment. This section is required to change and fix an unfair situation that's arisen in the transition between the old Mining Act and the new Mining Act that came into effect in June 1991.

Under the old act, holders of unpatented claims had to take their claims to lease after holding them for no more than 10 years. At that point you had to bring them to lease or forfeit your ground. So a lot of people brought claims to lease. But under the new act, a leaseholder is considered to be liable for all past mine hazards and all hazards on the property whether or not they created them. The proposed wording that the MNDM has put forward is not satisfactory as it includes the words "for at least 10 years, the holder of an unpatented claim."

What happens in this case is that if a prospector has optioned out his ground or anything during those years, he's not considered the holder. He could be a beneficial holder, but he's not the holder of the ground. This problem has been done to fix some of the prospectors who have got themselves in this position, and we recommend that it just say "if an owner of an unpatented claim," because this matches the intent of our discussions with the MNDM. We've been working for some time to try to correct this problem. This would really allow all leaseholders under the old act who have not created any hazards to have the opportunity to surrender their leases back to the crown or convert their leases back to unpatented mining claims, which means they have to start doing assessment work and everything again.

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In summary, we appreciate the opportunity to have this brief address with the committee and put forth our views on schedule O. I want to emphasize that exploration is the lifeblood of Ontario's mining industry. It's imperative that exploration spending levels double in size in this province from the current $100 million or we're not going to find the mines we need. This is a tall order, because even though things are starting to turn around, we still don't have the levels achieved yet that we need.

So it's very important that the Mining Act changes be amended in a way to attract risk capital and not act as another level of uncertainty to potential investors. So I would ask the committee again to please look seriously at the recommended changes and amendments provided by MMAAC, the PDAC and the OMA in their detailed presentations in Toronto before Christmas. That's really all I have to say at this time.

Mr Len Wood: First of all, thank you for coming forward with your presentation. There are a lot of points in here. As the critic for the NDP for Northern Development and Mines, I attended a function the first week of December in Toronto; the junior prospectors were there to promote the industry. They were very much concerned that a lot of funding was being reduced for them to do their duty out there and find new mines and about how this bill was going to affect them. The impression I got was that a lot of them would not be able to carry on the work that they were doing because of not having the funding that was there. I understand that any mines that are developed, they start off with the junior prospectors and they don't necessarily start with the large mining companies.

I just wanted to get a comment on how you think the junior prospectors are feeling, now that they've had a chance to analyse the bill. When it first came forward, they seemed to be very unhappy. There were 100 or more people at that particular function that I attended, and they were very much concerned about their future. I know Mr Bisson has a question afterwards that he wants to ask.

Mr Jeffery: First of all, with respect to schedule O, many of the prospectors haven't had an opportunity to look at it at all. All of us have qualified these presentations, including the ones given in Toronto, by saying that there has not been time to go through whole groups. Many of these are being done with just executive groups getting together, people who can get together in a hurry and look at it.

Some of the things you may have been implying were some of the budget cuts to the MNDM, I believe, with the OMIP and OPAP grants being cut and that sort of thing. The OMIP grants were primarily to more senior companies, but the OPAP grants were $10,000 grants to prospectors.

There's a general feeling in the industry, certainly, that prospectors make a lot of the discoveries; that's been shown recently and in the past. Prospectors are very important because they actually get out and really do the high-risk, initial work. Many of us who work for senior companies really count on the prospecting community to bring us in properties and ideas. Quite often, prospectors are not hampered by deposit models and things. You know, a lot of companies have specific ideas of how to look for things, what commodities they're looking for and everything else. A prospector doesn't have that behind him. He goes out and looks anywhere. If he sees some ground that looks good, he goes in and looks at it. A lot of times he does a really good job.

Mr Bisson: I just want to say, in our working together, Bruce, we've worked a long time, myself and Shelley, with your organization and individuals. I agree with your assertion that we learned one thing in bringing the Mining Act forward in 1991, first of all done by the Liberal Party, enacted, and then we as a government and you as an industry had to work with it. We found if you rush that kind of stuff through, you can get into a lot of trouble. I agree with you that one thing I wish the members of the committee would hear, this is a good example of how you can hold back a particular piece of legislation that has nothing to do with your budget and we can do a good job to do what actually is intended. I think you should take the comments directly to task.

The question that I would have for you is that the act has a couple of other things that I think are dangerous for the mining industry, especially the operators. For example, under section M, there's a section that says: "Despite any act, a municipality and a local board may pass bylaws imposing fees or charges on any class of persons....A bylaw under this section may provide for fees and charges that are in the nature of a direct tax for the purpose of raising revenue," which means to say, if the municipality of the city of Timmins is losing a lot of transfer dollars, and they find themselves with their backs against the walls, they can go to the deep pockets of Dome and Kidd Creek and Pamour Mines in order to offset their revenue problem. I just wonder, would you support that kind of move in this bill?

Mr Jeffery: I wasn't really here to comment on that, Gilles. I would hope that any municipal council that's dealing with a mining community such as Timmins would very carefully review anything they would do to tax any mine. I think the real point here is that the community of Timmins has survived recessions and a lot of hard times because of the good work that's been done by Kidd Creek and Dome.

Mr Bisson: Do you support that clause in the bill? It also gives licensing power, for example, where the municipality can regulate, through regulations, licences in regard to how trades operate. and that could probably be expanded into a lot of operations within the mining industry. Do you think that's a good thing to put in this bill that the mining industry and PDAC would support?

Mr Jeffery: I can't comment with respect to the PDAC. Really, with respect to our group, I would need to go back and discuss that further. None of the group has discussed any of these issues beyond the real significant schedule O section.

Mr Sampson: Thank you very much for your presentation. I very much appreciate your comment with respect to financier liability. It's a topic that I guess I'm moderately aware of from my background. I would put to you, though, that regardless of what's in any piece of legislation with respect to financier liability, you're probably going to find the financiers somewhat concerned with respect to any liability, since in all the equations they're the ones who typically have the deeper pockets and those are the ones who typically get access via court claims or whatever claims, almost regardless of what's written in the legislation. There are examples of how that has happened south of the border; there are examples of how that has happened north of the border, in this country and in this province as well.

I think the fundamental question, though, is, how do we attract the risk capital at the various levels that is necessary to encourage the initial prospecting, to encourage the development, to encourage the production of the mine, to encourage the shutdown of the mine, as it eventually will be shut down, and, as we've heard from other presenters, all within an environment where we have to respect the environmental impact of any development? How do we do that, in your mind?

Mr Jeffery: It's really a big question. Exploration dollars into the province are made up of junior company dollars, companies that need to raise money quite often, usually on the stock exchange. We have senior companies that are investing profits, which they're making now, so we hope that will also increase exploration dollars in the province. Individual prospectors are basically needing to sell the properties that they stake and work to try to raise funds, and they generally sell them to both seniors and juniors.

I think it's a question that, over time, regulations, taxes, particularly land issues have been a problem with some of the the native problems; uncertainty whether, if you get a property, you will get a work permit, whether you will be able to follow through to production. No one wants to start an exploration project without knowing that the right will be there to actually mine something that they find.

I think all ministries have to really work together in that respect, the MNR, the MNDM. We were quite hopeful that that would be one of the positive things of having a single minister handling both the MNR and MNDM in this case as well, that it would bring some more understanding between the two ministries and fix up land use problems. Multiple land use, which we have always tried to support, really hasn't been there and in fact isn't even a topic people want to discuss, in most cases. We feel that as soon as you have single-land-use users, you just create problems.

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What I try to explain is, mines can be anywhere in the province. We don't know where they are. They're not trees; we can't count them, we can't see them. I think if the government can open up land access and have reasonable taxation, and the environmental rules -- none of the mining industry wants to repeat any of past history. That's history; we're trying to do what we can to correct that. I think Canadians have high environmental standards now, and we're taking those standards out of the country, as well as inside the county.

I think the main thing now is we really need to show that the province wants mining. Quite often we don't even feel that the province really wants the industry, but if we really know that the industry's important to Ontario and that we have the access to explore on all land possible and that liabilities around old mines -- like I mentioned to you, you can't expect someone to come in and stake a property around an old mine and be responsible for old mine liabilities. Those mines were mined under the laws of the day, the benefits went to the people of Ontario of the day and I'm afraid the people of Ontario are going to have to accept some of those liabilities from past use.

But it's a big question to attract investment and it encompasses all parts of the industry. What it really functions on is, does Ontario want a strong mining industry, and then work together to fix all the pieces that attract capital in because --

The Chair: Thank you. Mr Sampson, we've unfortunately come to the end of the time for the government members. It's time for opposition members. Mr Brown.

Mr Michael A. Brown (Algoma-Manitoulin): I come to this committee as a northerner from the mining community of Elliot Lake, representing the Algoma-Manitoulin constituency, and also with the experience of at one time being the parliamentary assistant to the Minister of Mines. It seems like ancient history now, but back in 1989 when the Mining Act was changed, I remember being here in Timmins and talking to the prospectors about what was, at the time, the culmination of a very long period of discussion with all parts of the industry about this very important industry. I think northerners know, more than anybody else, that around 25,000 people work in the industry here in the province. It creates huge amounts of wealth and it all starts with the prospectors.

I, as a northerner, am pretty insulted that we're seeing the Mining Act stuck in here, in 211 pages, with health concerns and municipal concerns and just about every concern you can find, without the opportunity to carefully look at what the government intends in these amendments.

I have been to the minister's office and had briefings about what they intend. Frankly, I was there probably about the same time your organization was having some input, and this looks different from what they suggested to us would be in any changes to the Mining Act. Would you say there's widespread concern in your organization, more at the information level of your membership and the amount of input you may have over the next few days? This is going to be the law January 29. These guys are passing it. This is under closure. There's no question of what's happening here. Are you comfortable? Is your organization comfortable with the level of input that northerners and people in the prospecting industry in general are having?

Mr Jeffery: I don't think we are comfortable with it. Because it came out much different than what we had originally negotiated and consulted with, it became basically a surprise to us. It caused a lot of groups, especially, like I said, just the executive portions of those groups, to react very quickly to try to present to the committee.

We feel that if it went through with none of the changes and amendments that have been put forward by the MMAAC committee, the PDAC and the OMA, it would not be good for the industry. But if we can get some of the wording changes, definition changes, some of the clarifications required, which we're very hopeful can be done, even in this short time period -- because I think the MNDM also recognizes some of the concerns of the industry that have been going on for some time. I think if these things were corrected, and it would be nice to see a new version of the wording, we'd probably find that we could live with these changes. I mean, some of these changes we want. It's unfortunate that the ones we thought were going through were enhanced by so many others and that there are some changes to them that we really can't go along with without amendments and changes to them.

Mr Michael Brown: The other part of this, of course, is that one of the most important parts of the legislation, and I think the history of the changes to the Mining Act show that, is that it took almost two years for it to be proclaimed after it was passed. That was not because anybody wanted to delay it; it was because the regulations are probably the most important part of your membership's relationship to prospecting. They define more the nitty-gritty of what you can and cannot do and how you do it.

Has your organization seen any draft regulations that would be implementing this bill?

Mr Jeffery: No. We certainly haven't in the OPA, and I have not been down to Toronto within the last couple of weeks or anything to take part in any discussions, if there have been some going on. I know there have been attempts to get together and have some consultations with the MNDM, but I have not been part of them. I'm really not in a position to comment on that right now.

The Chair: Thank you, Mr Jeffery, for coming forward and making your presentation to the committee.

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 369

The Chair: May I please have a representative from CUPE Local 369 come forward. Good morning, gentlemen, and welcome to the committee.

Mr Iain MacKenzie: Good morning. My name is Iain MacKenzie. My colleague is Jim Croteau. We're members of the Canadian Union of Public Employees. Earlier today you heard a few CUPE members speak on some aspects of this bill. I will now speak on some aspects of this bill which are of concern to us as well.

Bill 26 would give the minister and municipalities the power to change or dissolve local boards such as public utility boards, library boards or transportation commissions. Forced amalgamation of boards could be dictated by the minister on the recommendation of a local body or restructuring commission.

Most importantly for CUPE members, the legislation also gives the minister power to alter the structure and delivery of services overseen by a local board, including the contracting out and privatization of services.

If a local board attempts to resist contracting out, privatization or elimination of a service that the minister has deemed appropriate or necessary, the will of the minister could be imposed or the board would face an externally designed restructuring or complete dissolution.

Any regulations established under this bill would take precedence over all other legislation. Collective agreement provisions such as successor rights clauses will be subordinated to Bill 26 and its regulations. The alteration or elimination of services or local boards which oversee them, which have been mandated or permitted by other legislation, is another especially repugnant aspect of this legislation.

As a result, soon we will certainly pay for numerous services which are currently supported by local and provincial taxes. North York mayor Mel Lastman's list includes charges for using the public library, charges for city reports and charges for some firefighting services. Other municipalities are sure to look at charges for use of city parks, for snow removal, for garbage pickup and increased water and sewer charges.

Currently, the Public Libraries Act prohibits charges for borrowing books from public libraries. However, Bill 26 may override this prohibition. It gives municipalities the power to impose user fees despite any act -- schedule M, section 220.1. It remains to be seen how sweeping this legislative override is.

In order to ensure the predominance of this bill, it also contains provisions which restrict access to information on municipal spending. The head of a local institution could refuse a request for information on the grounds that he or she considers it "frivolous or vexatious." The cost of information requests and the cost of appealing the denial of a request will also be increased.

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For example, new application and appeal charges will be introduced, and applicants will have to pay for every minute spent compiling the requested information, even when that information is personal information about the applicant. This is clearly an effort to discourage applicants as much as being a revenue grab. This feature of the bill as much as any other reflects the undemocratic nature of this legislation.

Certain sections of this bill appear to give municipalities the power to restructure school boards. Section 210.4 of the bill will give municipalities the power to pass a bylaw to dissolve or make changes to a local board, using the definition of a local board provided in the Municipal Affairs Act, which includes school boards. Such a power would not only be contrary to the Education Act, it would also conflict with the direction the government is currently pursuing regarding amalgamation of school boards. There needs to be clarification of this matter in order to avoid massive confusion for municipalities, school boards, employees and their unions.

We are strongly opposed to Bill 26's proposed amendments to the interest arbitration process. Schedule Q amends legislation with respect to collective agreement disputes resolution for employees in the hospital, police, public service and school board sectors. The proposed legislation forces arbitrators to consider specific criteria when making their decision. It will result in collective agreements skewed to the interests of employers, not employees.

CUPE has consistently taken the position that the most appropriate way to settle collective agreements is by allowing the parties to test their strength with the option of resorting to strike and lockout mechanisms. Even in its current form, interest arbitration is a poor substitute to free collective bargaining. The delays under interest arbitration and the conservative nature of the process with respect to new or innovative collective agreement provisions have disadvantaged our members, who are denied the right to strike.

Our first position is that legislation which forces compulsory arbitration on certain groups of employees should be repealed and these employees should be granted the right to strike. If the Ontario government were to grant our position, the issue of what criteria should be considered by arbitration boards would be moot.

Interest arbitration is a process which has been established to resolve collective agreement disputes without recourse to strike and lockout mechanisms. The legislation being amended under schedule Q primarily governs services which are deemed essential to the public. The employees covered under this legislation, with some exceptions, do not have the right to strike but are subject to compulsory arbitration.

The board of arbitration, containing one union representative, one employer representative and a neutral chairperson, is charged with the responsibility of settling all of the issues which require settlement in order to achieve a collective agreement. Essentially, interest arbitration replaces a bipartite process -- ie, labour-management -- with a tripartite process -- labour, management and a neutral arbitrator.

There is a common acceptance among arbitrators and labour relations experts that arbitration boards must be independent of pressures or guidelines which could skew their reasoning in favour of one party or the other. The award should result in something both parties to the collective agreement feel represents a balancing of their interests. The process must be open to both sides -- the employer and the union -- to persuade the arbitrator on what ought to be considered in reaching an award. It is up to the board of arbitration to weigh independently the evidence presented by the union and the employer and come to a decision.

The provisions under schedule Q constitute a significant interference with the independence and integrity of the arbitration process. Under Bill 26, arbitrators would have to consider the following factors when they make a decision:

-- the employer's ability to pay in light of its fiscal situation;

-- the extent to which services may have to be reduced if the current funding levels are not increased;

-- the economic situation in Ontario and in the municipality where the hospital is located;

-- a comparison, as between the employees and other comparable employees in the broader public sector, of the terms and conditions of employment and the nature of the work performed;

-- the employer's need for qualified employees.

CUPE strongly objects to the proposal forcing arbitrators to consider ability to pay in determining their awards. Over the past four decades, interest arbitration boards have rejected placing much weight on ability to pay when determining awards covering public sector employees and employers. Funding in the public sector is determined by government spending decisions. Thus, if ability to pay were a criterion in interest arbitration, governments could determine wages and benefits simply by allocating a fixed or reduced amount for employee compensation. The tripartite process of interest arbitration, although ostensibly intact, would in reality be directed by the unilateral decisions the government.

As arbitrator Harry Arthurs wrote in a 1965 award between the Building Service Employees and the Welland County General Hospital, consideration of ability to pay would make the interest arbitration process a sham. At that point in time, the Ontario Hospital Services Commission controlled the annual budget of hospitals. Mr Arthurs commented:

"The level of wages would then in fact be determined by the commission in approving the hospital's budget. Since the union is not privy to budget discussions between the hospital and the commission, it would be in the unenviable position of being unable to make representations regarding wage levels to the very body whose decision is effective -- the commission.

"On the other hand, the arbitration board would be left with the simple, almost arithmetical, tasks of applying the percentage increase remitted by the commission to existing wage rates."

In 1974, the Ontario government established a Hospital Inquiry Commission. One of its objectives was to recommend criteria for arbitrators under the Hospital Labour Disputes Arbitration Act. The commission, chaired by Mr. D. L. Johnston, provided a detailed examination of wages, working conditions and collective bargaining in the sector. It is one of the few government studies which looks extensively at compulsory interest arbitration. The report of the commission was emphatic in its rejection of ability to pay as a criterion for interest arbitration.

"In our view, `government guidelines' or `ability to pay' have no place as criteria for settling hospital compensation. Supporters of such criteria argue that as ability to pay is a factor in private sector bargaining, it is also relevant in the (quasi) public sector. We consider the comparison invalid because the absence of `product' market forces of supply and demand in the public hospital sector and of the strike and lockout sanctions strips the ability-to-pay concept of any meaning it may have in the private sector.

"We do not deny that public hospital expenditures in Ontario are subject to some upper limit. Furthermore, it is quite appropriate for the Ministry of Health to inform hospitals and their contract negotiators of estimated total government expenditures on public hospitals. However, such estimates should not be made public, should not be admissible as evidence to an arbitration tribunal and in no way should influence any settlement made by such a tribunal. Clearly such influence might undermine application of the `external comparability' criterion. Further, as long as employees have no access to the strike weapon to `test' ability-to-pay pressures, ceilings should not be imposed on them."

The ability-to-pay criterion also leaves the door open to employers to unilaterally budget for wage freezes and/or reductions. If employers can unilaterally fix and/or reduce the budget for employee compensation and then argue that arbitrators are bound by the employer's budgetary decision, the process of collective bargaining itself would be undermined. There would be little incentive for employers to reach an agreement when it is clear that arbitrators will have no choice at the end of the day other than to award the employer's position.

CUPE also has major concerns with the requirement that arbitrators consider the extent to which services may have to be reduced if current funding levels are not increased. This criterion could result in arbitration boards forcing employees to subsidize a poorly funded operation by accepting substandard wages and working conditions. Instead of funding cuts falling equally on all members of the public, public employees would, under the proposed changes, be expected to absorb the brunt of funding constraints.

Further, we believe this criterion could open the door for arbitrators to look at all aspects of operation of the employer and determine where spending priorities and service cuts should fall. Boards of arbitration would be required to consider whether, for example, the costs of a wage increase could be better absorbed through a cut in management than a cut in front-line staff. Indeed, the purview of the board would be broadened to a considerable extent, far beyond the scope of the collective agreement.

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The proposed amendments to interest arbitration will skew an independent process in favour of employers and force arbitration boards into applying policy at the bargaining table. The right of employees in essential services to bargain collectively would be severely restrained by the proposed Bill 26. Arbitration boards must be free to weigh the evidence presented by both parties without the interference of the government. Accordingly, CUPE urges this government to withdraw all of schedule Q amendments.

The omnibus bill will effectively eliminate the proxy pay equity method of comparison on January 1, 1997. The proxy provisions were added to accomplish pay equity for female workers in the broader public sector who were effectively denied pay equity because they had no male job classes in their workplace. The proxy provisions meant that workers in child care centres, nursing homes, children's aid societies and women's shelters would obtain pay equity. Bill 26 will eliminate these provisions.

The main features in schedule J of Bill 26 are:

The only proxy pay equity obligation of employers who use the proxy method is to spend 3% of their total 1993 Ontario payroll, or such lesser amount as is required to achieve pay equity, between the period of January 1, 1994, and December 31, 1996. Once that 3% of 1993 payroll is paid out to the employees in the form of pay equity adjustments, the employer's proxy pay equity obligations cease.

Schedule J supersedes previously negotiated proxy pay equity plans and adjustment schedules. It states, "An employer who has posted a pay equity plan before this subsection comes into force is not bound by a schedule of compensation adjustments for achieving pay equity set out in the plan or in any other document."

Schedule J, amending part III.1 of the act, allows the employer to change the pay equity adjustment schedule unilaterally, so for the purpose of amending the adjustment schedule, the omnibus bill also overrides subsection 14(4) of the Pay Equity Act requiring the employer and the bargaining agent to agree on the pay equity plan, and 15(7), permitting employees to take complaints to the Pay Equity Commission.

Schedule J where it amends part III.2 of the act requires the employer to give written notice of amendments to the adjustment schedules to the affected employees and to the bargaining agent, if any. This will be crushing news to CUPE locals who depended on the proxy method to achieve pay equity. Hundreds of CUPE locals negotiated plans which promised to yield 20%, 30% and even 50% increases to many female job classes. The fact that their hard work in negotiating a proxy pay equity plan will be reduced largely to a 3% increase is a serious blow.

Pay equity will never be realized for members of locals who work in traditionally female job ghettos. This is discrimination against workers who are in the greatest need of pay equity. The proxy provisions will still apply to the private sector.

Schedule J requires employers to use 3% of their 1993 Ontario payroll on proxy pay equity adjustments by December 31, 1996. However, subsection 9(2) repeals the proxy method on January 1, 1997, including the enforcement and compliance sections of the Pay Equity Act pertaining to proxy provisions. The means employees who do not receive the 3% by December 31, 1996, will have no legal recourse to complain about the employer's non-compliance. This is an absolute outrage. Not only has the government effectively reduced the employers' total pay equity entitlement to a paltry 3%, but this bill also offers them a red flag not to comply with this amendment because there is no penalty for non-compliance.

Unless this section is amended, schedule J makes a mockery of what is left of proxy pay equity. It does not even guarantee women that employers who have received proxy orders from the Pay Equity Commission will have to pay out the 3%.

As the government is well aware, subsection 37(1) of the Pay Equity Act calls for a comprehensive review of the act in 1995. Not only has the government failed to live up to its legislative obligation to conduct this review, but it has unilaterally tabled legislation to stop in midstream hundreds of thousands of Ontario women from achieving pay equity.

To say the least, it is entirely premature to eliminate the only pay equity method to which women in predominantly female workplaces are entitled, without any discussion as to its impact on this sector of working women.

We urge this committee to withdraw this schedule J of the Savings and Restructuring Act, 1995, and ask the committee to recommend that all decisions on the Pay Equity Act be postponed until such time as the Pay Equity Act review is conducted and public hearings are convened to allow the women of Ontario to respond to proposed changes to the act.

In conclusion, as members of the Canadian Union of Public employees, we say scrap this bill. Otherwise, public services, programs and infrastructure will be irrevocably dismantled, democratic institutions and standards will be destroyed and Ontarians will suffer incalculable harm. This is anti-democratic legislation which turns a blind eye to the traditions, values and institutions of our province.

Mr Tascona: Thanks very much for your presentation. It's very thorough. I certainly understand what direction you're coming from; I'd just like to make a comment on a couple of areas.

With pay equity, proxy comparison doesn't exist in any other province, and in Ontario it only applied to the public sector; it never did apply to the private sector. I just want to clarify that, and also that the government has still committed over $500 million to achieving pay equity in the proxy area.

With respect to the right to strike, that's the first time we've heard -- we haven't heard from the firefighters and the police about wishing to be given the right to strike. They've pointed out that they accept the process they're under, and public safety is paramount to their approach in wishing to stay under the arbitration provision. What they object to is schedule Q in the way you've approached it also. But we have received presentations from the firefighters recently in Niagara Falls that ability to pay is a factor now being considered by arbitrators in coming to grips with the fiscal reality they're facing.

With respect to independence, I think you've put it correctly. Arbitrators are being asked to consider only, and that's in other jurisdictions of the public sector where they have mandatory criteria. We have heard from the Solicitor General that these provisions that must be considered are not exhaustive, and submissions and evidence can be put into the process for an arbitrator to simply consider. Since they're only being asked to consider, that doesn't take away their independence, as any judge would have the independence to consider a statute in making a decision. I don't believe anyone has said a judge isn't neutral or independent because they have to consider a statute, which an arbitrator has to do.

But I'd just like to put to you the fiscal reality we face. We can't look at a situation where an arbitrator just awards a wage increase and then expects it to be passed on to the taxpayers. From what we're hearing, the taxpayers don't want to hear anything more about tax increases. What would you think of a process where we try to get savings by reworking the process in terms of compensation, work together at the municipal level, in the hospital area, which you represent so capably, in terms of saying, "Productivity bargaining is the way we have to go to try to save our members' jobs and try to come up with a fair compensation package"?

Mr MacKenzie: You have to look at the fact that when you're going on simple ability to pay, it's a redundant clause because you can come up with anything, you can make numbers sing and dance if you put effort into it. You can budget a certain amount and say: "This is all you're going to get, and that's it. That's all we have play with." When you're going into arbitration, my ability to pay my bills at home isn't a factor; it has nothing to do with anything else. Why should the ability to pay, when they're the ones making the budget? It makes no sense.

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Mr Gerretsen: I'd like to congratulate you on an excellent brief. You've put the ability-to-pay argument and what the historical notions have been about that in better form than anyone else before this.

What my friend is saying is totally incorrect. The police and firefighters have not been in favour of the ability to pay. They have said that the general finances in an area obviously are going to be a factor.

What you've put better than anybody else is the historical aspect that ability to pay really means a willingness to pay. The governments in the past have set up commission after commission -- I served on one in the early 1980s -- where they brought association heads together, AMO, which I represented at the time, to deal with this whole notion of ability to pay. They darn well knew that this was like a red flag they were waving at people. I can tell you that the police, the fire, just about every organization that's come to us, have been dead set against this provision, so the notion or the suggestion that they agree to it is absolute absurdity.

I'd like to congratulate you on your excellent brief and putting the ability-to-pay argument in its historical perspective. It's not something you can just quickly throw into an act. If they want to talk about it, fine. Get everybody around the table and let's talk about it. But it cannot be done within the month or month and a half we've got.

Mr MacKenzie: I agree with you 100%. It's not a matter of whether they can pay; it's a matter of the willingness and where they're going to distribute the funds. As long as they're in control of where the funds go, they're going to come up with their numbers arbitrarily. Whatever they decide they're willing to spend is what will be spent. That's not the way the system's supposed to work.

Mr Gerretsen: You say it best in your first line on page 9 where you say it leaves the door open to employers to unilaterally budget for wage freezes or reductions. As a former mayor, I know that municipalities, school boards and everybody else who deals with the public service thinks about it in exactly that way, and don't ever let anybody dissuade you from that.

Mr MacKenzie: No one will.

Mr Len Wood: Thank you very much for coming forward. It's good to see people from Kapuskasing after the rough times you went through with restructuring about four years ago.

I know you're talking from experience on the ability to pay. In your conclusion, you're saying Bill 26 should be scrapped because it's leaving the door wide open, that the mayor and town council will use arbitration as a way of eliminating whole departments or whole workforces and eliminating the collective bargaining process. We saw what Mayor Piché was trying to do in Kapuskasing before the five town councillors finally took control and took power away from him and went back to the collective bargaining process and settled with the firemen, CUPE and the policemen. It had to happen.

It's an excellent presentation. We can see what happens when we have a dictatorship, through the ability of arbitration to take control.

Mr Jim Croteau: That's the key word: dictatorship.

Mr Silipo: When I was Chair of Management Board, one of my responsibilities was to try to bring about a solution to the pay equity problem, particularly the proxy pay equity issue. We were able to find a way to put in place the proxy pay equity provisions, against the prevailing view in the bureaucracy of government at the item which said it couldn't be done. We worked with CUPE, we worked with many organizations to arrive at that exactly for the point you've made: that some 100,000 women, among the lowest-paid women, who were not covered by pay equity now are covered. What this government is doing is taking that right away from them.

The absurd result will be, for example, that a school secretary will continue to be covered by pay equity but somebody who works in a child care centre will not. That's the craziness of what they're doing, the sledgehammer approach of coming in and making changes holus-bolus without thinking them through. As you said, in this instance there's a provision to do a review, so we certainly agree that we should withdraw this schedule from the legislation and look at it carefully. If changes need to be made to pay equity to improve it, let's look at that, but let's take our time and do that.

Mr Bisson: Another point with regard to arbitration: Over the past five to seven years, my understanding is that the increases you've had in the municipal sector haven't been very large. Is that true?

Mr MacKenzie: "Not large" would be the wrong phrase. "Non-existent" would be the perfect phrase for what we've got in any kind of remuneration.

Mr Bisson: So why does the government need to do this if already free collective bargaining, even before the social contract, did not get you the kinds of increases they're worried you may get and force municipal taxes up? What is this really all about?

Mr MacKenzie: On our individual local we had considerable reductions in our staff; we had wage freezes for three years prior to this time coming. We've had the boots put to us several times and then they're going to come in and lay the boots to us again? That's not the way things operate. It's just not fair.

Mr Croteau: I used to work in the paper mill in Kapuskasing. They closed down Kimberly-Clark over 11 years ago. At this time I am finally, being with the town of Kapuskasing for 10 years, making the same wage I was when I left the mill.

The Chair: Thank you, gentlemen, for coming forward and making your presentation to the committee.

ONTARIO SECONDARY SCHOOL TEACHERS' FEDERATION, PORCUPINE DIVISION

The Chair: May I please have representatives of the Ontario Secondary School Teachers' Federation come forward. Good morning, gentlemen. Welcome to the committee on general government. I'd appreciate it if you'd introduce yourselves for the benefit of both Hansard and committee members.

Mr Jack McLaughlin: Thank you very much. My name is Jack McLaughlin. I'm the president of the Porcupine division of the Ontario Secondary School Teachers' Federation.

Mr Pat Bamford: Good morning. My name is Pat Bamford. I am district president of OSSTF, district 55, otherwise known as the Arctic watershed.

Mr McLaughlin: Before I begin, I just want to give you some idea that perhaps you will find that this presentation is not so much aimed at practical matters, although there are some discussions of some of the schedules. But my own personal bias happens to be that I graduated in history and philosophy, so I tend to look at things in that direction.

Mr Bisson: I can attest to that.

Mr McLaughlin: Thank you, Gilles.

At the outset, as a representative of the members of the Porcupine division of OSSTF, I want to thank the committee for the opportunity to make this presentation. However, it brings us no satisfaction to have to be involved in this matter for a number of reasons, and indeed some of what I may say may appear harsh.

In the first place, that we should be here today discussing what's been called by Maclean's the "Bully Bill," and that the only reason we're able to do so is that an opposition member had to break parliamentary rules and now suffer the consequence of parliamentary discipline is deeply disturbing.

Secondly, nobody should really take any solace in the fact that we are supposedly involved in the democratic process. In fact, the suspicion lurks that nothing said here, or anywhere else for that matter, will have any effect on this government and its revolution.

Thirdly, the democratic process, which involves not only elections but consultation and checks and balances on the power of the legislators, has been severely curtailed already by the Common Sense Revolutionaries with measures like Bill 7. Should this Bill 26 pass unrevised, the gap between revolution and dictatorship will have been bridged in one easy step.

Historians have often observed that those who know no history are doomed to repeat its mistakes. Our fear is that we are being governed by those who not only have no knowledge of history but have no respect for it either. Business criteria now form the basis of success. The humanities, including history, are frills that have no intrinsic value.

That anyone should think it acceptable to change 47 pieces of legislation with one massive, essentially undebatable bill makes Lord Acton's dictum about absolute power corrupting absolutely sound self-evident.

We do well to be reminded that unless power is accompanied with humility, the result is tyranny. Our forefathers recognized this, with the result that they built checks and balances into our political system. They knew only too well that human nature, being what it is, is readily corruptible by the power of a majority. What they did not wish and what we do not need is a tyranny produced by political ideology fired by the unexpected success of winning a majority government.

Many 20th-century dictatorships began with an exercise of democratic will in an election and ended with the death of democracy and the iron fist of dictatorship. We need to understand that democracy is a delicate plant which is remarkably resilient up to a point, but it is not beyond destruction. Hitler did not storm the doors of the German Parliament in the 1930s. He was duly elected, but once elected, he set about to ensure that all of the democratic rights and protections belonging to the German people were destroyed.

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Governing in a democracy requires not only election but also that legislation be brought before the Legislature for analysis, debate and democratic approval. The plant of democracy may be pruned with care, but it is in danger of being bludgeoned by a blunt instrument in the form of Bill 26. Mussolini is said to have made the trains run on time. The obvious question is, however: Yes, but at what cost?

This government, which is neither, in my view, progressive nor conservative, is bent upon the ideological view of fiscal efficiency. The trains will run on time, no matter what the human cost. The commonsense commitment to a bottom-line efficiency is clear -- nothing else matters. The end justifies the means, whether that means be the big lie, devious strategies or the manipulation of a trusting electorate. Who among us can really believe that our government leaders would actually mislead and manipulate us on so crucial an issue as the debt and the deficit?

For example, this government has consistently stated that Ontario spends more per pupil in education than anywhere else in Canada, or words to that effect. In fact, if well-meaning taxpayers, never referred to as citizens, understand the claim to be that Ontario outspends every other jurisdiction in the world, so much the better. The end -- slashing funding to public education -- is worthy of any sleight of hand or word.

Notwithstanding the fact that Statistics Canada does not support this claim about Ontario being the largest education spender in Canada, this government persists in saying so. Notwithstanding the fact that Ontario ranks sixth in the level of per-pupil expenditure after the territories and three provinces, this government persists in making the claim that Ontario spends more.

Notwithstanding the fact that Ontario ranks 29th compared to US states in education spending, and Ontario's per-pupil expenditure is US$300 below the American average and below all the New England, mideastern and midwestern states, this government persists in misleading the Ontario population about education costs.

Finally, notwithstanding the fact that these education costs have been reduced in the years of the social contract by some 20%, this government persists in the claim that education funding must be cut. In fact, Minister of Education and Training Snobelen exposed the Harris government strategy in its early days when he talked cynically about inventing a crisis -- a strategy, by the way, that worked very well in New Zealand a few years ago. Certainly this Minister of Education has appeared to be on the cutting edge of invention since he took over the Education portfolio.

The facts do not support the claim that Ontario's education expenditure is excessive. The Treasurer along with the Minister of Education are somewhat dangerous myth-makers who are manipulating the electorate to make them believe that slash-and-burn budget-cutting measures are necessary and that Bill 26 is the instrument to bring about the needed restructuring -- a softer word, no doubt, than "demolition," but, as it turns out, in the mythology a perfect synonym.

I want to draw your attention to a number of schedules in the bill. Schedule Q, Amendments to Various Statutes with Regard to Interest Arbitration, instructs arbitrators that they must take into account the employers' ability to pay in any arbitration award. In other words, since there are no criteria by which an arbitrator can judge ability to pay apart from the employer making the claim of inability to pay, the arbitrators have been left in effect with instructions to take into account unwillingness to pay when they make their arbitration decisions.

This instruction amounts to encouraging an absolute bias towards employers and against the employees. It encourages the equivalent of arbitrary wage controls under the guise of inability to pay and justified by the mythology of excessive education expenditure.

Certainly, we who live in Timmins can offer evidence that education expenditure is not excessive. In effect, our wages have been frozen for the past three years. In the secondary system of the Timmins Board of Education, Rae Days have reduced salary. Staffing has been reduced by 6.25% over the past three years to meet social contract obligations. Not only that, but the average salary has been reduced significantly as a result of senior teachers retiring and either being replaced by junior teachers or not replaced at all.

The Toronto Star columnist Tom Walkom, whom we proudly claim as a product of the Porcupine, made the point recently that Ontario was already at the point of lean before the Harris revolution began its course. Now, if further cuts are made, or if excessive spending is used to justify asking arbitrators to put the Common Sense Revolution ahead of fairness, equity and justice, then the long-term results in education specifically will be disastrous. Cutting fat may be one thing, but we are now at the point of sinew and bone.

It is frequently argued that education is expensive. No doubt it is. After all, most of the things that last a lifetime and are major investments in the future are expensive. Not surprisingly, so is education. If, however, anyone thinks that education is too expensive, he or she should stop for a few seconds and consider the cost of ignorance. In education, as in any other worthwhile investment of time, money and energy, you get what you pay for.

Schedule J, Amendments to the Pay Equity Act, is another example of manipulation of public opinion. Wages paid to women are not excessive. The proxy method of redressing discriminatory wage practices is not the enemy. Since women are now shouldering the major share of the cuts in public service spending, they should not now be expected to accept being deprived of equitable pay for the remaining jobs. But once again the spokespersons for this government paint the picture for the public that taxpayers can no longer afford this pay equity. They suggest that such a concept is a Utopian dream which is placing an unnecessary drag on Ontario's economy. I suggest to you that the phrase "we can no longer afford" reflects not so much an ability to afford as it does an unwillingness to pay.

A government that is ideologically driven, that cares little for the past and that faces all decisions on a narrow-minded view of the bottom line certainly has no difficulty in opposing meaningful pay equity for women. Bill 26 is the instrument, and unless schedule J is deleted from this bill, women in Ontario -- our mothers, our wives, our sisters, our daughters -- will continue to experience life as it was lived in the 19th century.

Well-meaning people in the meantime will be convinced by the mythmakers that no alternative was possible. In the Darwinian world of the survival of the fittest, there are winners and losers. In this view, too bad that women can't compete, and if they cannot, then they lose. By the way, never level the playing field when you talk about competition. They just might win if you do.

This winners-and-losers notion permeates the thinking of much of the Common Sense Revolution. It surfaces from the land of the subconscious every once in a while, especially in questions about consultation. The revolutionaries are under the impression that: "We won the election, and that's all the consultation necessary. You, on the other hand, lost. Too bad. That's life in the Darwinian dog-eat-dog universe."

Schedule J is a violation of all that is fair and just. Women are not the enemy. Equity in the larger society is a fundamental value, not an impediment to economic progress.

Schedule M, Amendments to the Municipal Act and Various Other Statutes Related to Municipalities, Conservation Authorities and Transportation, is a further indication of a totalitarian mindset. Section 8 of this schedule amends the Municipal Act to allow municipalities to make changes to local boards. They may do so in accordance with regulations to be made by the minister. In other words, power is being taken from the citizens and concentrated in the hands of a cabinet minister and from there to a municipality.

Since local boards could now be changed by ministerial decree, under Bill 26 it follows that a municipal council could do away with boards of education. In the words of the provincial OSSTF brief to the standing committee on general government:

"One can only question the wisdom of these reforms. Unenlightened municipal councils, impatient at the fiscal autonomy of school boards and the obligation that municipal councils have to pass on unamended the local board's mill rate, might be very tempted to dissolve a board and place it under the wing of a committee of council. This would be a grievous error."

None the less, the architects of this mountain of legislative change saw fit to allow such a possibility to occur. They tell us that this government is dedicated to the concept of smaller government -- some would say no government -- but unless government concentrated in the hands of the few is equated with smaller government, then what we have is not less governmental interference in our lives but the spectre of a totalitarian state.

It would appear that the real purpose of Bill 26 is not to take government out of our faces but to remove the checks and balances in the system that ensure that the ship of state sails in the direction desired by the people. Oligarchy, or rule by the few, has a long tradition, but it has not been seen in Ontario since the 19th-century Family Compact and the rebellions in Upper and Lower Canada. Apparently, it's about to be revived. Democracy is irritatingly slow when a revolution is a desired result. Why is it, then, that we are surprised to find democracy fatally diminished in the hands of those who cast themselves in the role of revolutionaries?

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Schedule L, amendments to the Public Service Pension Act and the Ontario Public Service Employees' Union Pension Act, 1994, is a prime example of the totalitarian mindset at work. It is mean-spirited and irresponsible at the very best, and the whole schedule ought to be removed in its entirety.

Apart from the essential mean-spiritedness of this schedule, its abuse of power -- "absolute power corrupts absolutely" -- is most readily seen in that in insidious aspect of the bill in which the government grants itself immunity from the rule of law itself. The bill exempts the government from proceedings "for an action taken or not taken...for the breach of fiduciary or other duty in connection with the windup or failure to wind up...for damages for the breach of an agreement...."

We need to focus on what is being said here. While doing so, keep in mind that the supporters of this bill feel strongly that meetings such as these are essentially unnecessary impediments to their program. What is really being said is that once a law is made by this government, if that law breaks the law, then it can make another granting itself impunity for doing so. With these provisions, we have gone in one, easy step from democracy to dictatorship.

The suspicion remains that even those who framed these provisions knew that they were democratically unacceptable. How else can one explain the deliberate attempt to sneak this legislation past our elected representatives on the day when most of us would be preoccupied with the financial statement announcement made by Mr Eves?

Members of a democratically elected Legislature should be horrified at this blatant disregard of the rule of law. They should, on behalf of the citizens of Ontario, absolutely refuse to endorse any provision of Bill 26 that places the government, cabinet or individual ministers above the law. To do otherwise is to miss the very real danger that this bill poses for all Ontarians, present and future.

Time does not allow for a complete analysis of this omnibus bill. It truly is a dangerous blunt instrument which cannot be justified on the basis of expediency, political or economic. There are some things that are more important than speed: civil rights, democratic traditions and the rule of law, to name but three.

That 47 pieces of legislation were included in this bill; that it had to be split into medical and non-medical segments in order for these hearings to have any semblance of significance; that it contains, on examination, aspects that can only be described as dictatorial or totalitarian, leads me to say on behalf of the members of the Porcupine division of OSSTF that these hearings are inadequate, that this bill is repugnant to the democratic process and that those who framed it and promoted it to their political masters are unworthy of the trust placed in them to advise wisely.

As I stated at the outset, my words might appear harsh. There is little use, however, plastering over fatal flaws with a veneer of euphemism. As citizens of ontario, not clients or consumers of government services, our elected representatives owe it to us to frame their arguments for legislation in open and honest ways. This is particularly so of those few who are chosen to be ministers. It is to them that the ultimate responsibility lies. As the servants of the crown, which in a constitutional monarchy is the people, they especially owe us integrity of leadership.

Creating crises where non exist, manipulating facts, figures and information because the end justifies the means and utilizing clever political strategy to outwit the opposition ought to be below the dignity of a democratically elected government. People who practise the art of government in this way do us no service, because they mock the rule of law, they devalue the democratic process and in the end they contribute to the cynically held view that no politician can be trusted. Small wonder then that there is a sense among so many of alienation from the process of government. This alienation is particularly seen among the young, whom one would expect to be idealistic rather than jaded.

Life in Ontario ought not to be a win-lose proposition. There is enough wealth, industry and goodwill in this province to produce a win-win scenario. Winning and losing ought only to be found in the playing of games, and life should never be cast in the mould of a game like Monopoly.

If every individual and every corporation resident in Ontario paid his, her or its fair share and if the government of this province applied itself to overseeing that this was the case, then there would be more than enough money to pay for adequate social programs, including education and health care, and more than enough work to keep a government gainfully occupied.

However, as long as the prevailing philosophy is governed by a 19th century, robber baron, Darwinian greed, then there will be winners and there will be losers. Bill 26 goes a long way to ensuring that winners will be few and very privileged and losers will be many and desperate. Those on the winning side, however, will comfort themselves with the notion that this state of affairs is natural and presumably therefore right. Those on the other side will understand just what Thomas Hobbes meant when he said that life in the state of nature would be "nasty, brutish and short."

I trust that the Hobbesian vision of life is not the one that Mike Harris and his government have in mind. If they don't, then they should be well advised to take into account the law of unintended consequence. Bill 26 needs to be split up, examined, rewritten and debated in the Legislature over a period of weeks. Apart from that, the consequence, intended or otherwise, may well be the end of true democratic decision-making for decades to come.

Applause.

The Chair: Order, please. Questions from Mr Phillips.

Mr Phillips: I don't think you've overstated the case.

Mr Young: Oh, come on.

Mr Phillips: "Come on," he says.

Mr Young: Mussolini, Hitler, totalitarianism: You don't think that's too much?

Mr Phillips: They provoke me.

The Chair: Order, please. Mr Phillips has the floor.

Mr Phillips: This is a government that tried to pass this bill in two weeks. In this bill they attack pensions, which they couldn't do legally, so they want to pass a law that takes $250 million of pensions from the public servants. They essentially render arbitration useless; that's what they've done. They cut funding so that they provoke public servants. They gut pay equity. All of these things, I think one could argue, are designed to provoke our public sector at a time when you're heading into negotiations. And I'm responding as much to the member across the way as I am to you.

I guess I'd like to get a sense of the environment we're going to face over the next few months in Ontario as we get into bargaining with our public sector. With the government having done all of these things, what is the feeling by the OSSTF, and I guess teachers generally, about the climate that our school boards are going to face as they head into negotiations as a result of the combination of these two things? This fiscal document -- and this is the hammer that lets them do that, make no mistake about that. What should we expect just in terms of the bargaining climate and the relationship between teachers and their school boards?

Mr McLaughlin: I'm really hoping, although the environment for collective bargaining has been very badly poisoned, that somehow or other at the local level there will be a way of dealing with this. But quite frankly, from where I sit, it seems as though the possibility of any kind of real, amicable collective bargaining has been drastically diminished.

Mr Phillips: You mentioned the pension thing. I think you're aware the government tried to do this by regulation. Behind closed doors at the cabinet table they tried to take $250 million out of the public sector pension. But they were caught. The public sector unions took them to court. The court said: "You can't do this. You are acting illegally. You are violating the Pension Benefits Act designed to protect pensioners." Now we find that they're trying to do it by passing a law exempting themselves from the Pension Benefits Act, which is the act designed to protect all pensioners in the province. So they are excluding themselves from that protection.

I guess I'm asking the teachers' group, because you too are involved, not in this bill but in future pension negotiations, is there any concern by the teacher organizations that the government might at some stage try an attack on your pension this way?

Mr McLaughlin: It seems to me that we live in a society that deals with problems frequently on the basis of precedent. Once a precedent is set and it's done once, then it's an awful lot easier to do it a second and third time. That disturbs me greatly, that in fact there is in the tradition that we have lived in this idea of rule of law and that nobody, whether the smallest person or the highest person, whether the Prime Minister or an ordinary citizen, is above the rule of law. Yet what I see here is something that looks suspiciously like a government attempting to place itself above the rule of law.

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Mr Bisson: I want to thank you very much for your presentation, because I think that really you strike the core of what this is all about, which is a move on the part of the government to diminish the role of the citizens in a democracy and the role the citizens can play in bettering themselves and bettering the plight of other people within our communities.

I'm quite concerned, as you are, that what this really is is a direct attempt and a plan in order to consolidate power away from the people who need it, those people in society who are least able to defend themselves, into the hands of those people who have the most of it. I think you see that, as Mr Phillips says, through the various portions of this bill, everything dealing with the wage arbitration act changes, the Pay Equity Act changes, section M of the act, just repetitively, and not only in Bill 26 but in other pieces of legislation that this government has already passed and is in the process of putting in.

I wonder where that leaves us, because it always has been the attempt of any democratic society to better itself over a period of time. What you try to do is make the conditions for your citizens better. We're always building in order to make a more caring and compassionate society, and I wonder where they're going.

It leads me to this question: There are a number of people -- and it happened just yesterday. I run my cable show once a week where people call in. Somebody raised the point, and it's a point that's been raised before, that we in opposition shouldn't oppose this, because, after all, we had our opportunity when we were in government, be it the Liberals or the New Democrats. We should fall in line and we should follow the Conservative government agenda, because, after all, they have won a majority in our democratic system. People are saying in some cases that we shouldn't oppose; we should just follow this.

The first question I would have is in regard to that, if you can respond to that. The second thing is, what the heck does this government have to gain by moving forward with a dog-eat-dog agenda? If you can respond to the second point as well.

Mr McLaughlin: Just briefly remind me of the first question.

Mr Bisson: The first question is, should the opposition oppose?

Mr McLaughlin: Very much so. It seems to me that the opposition has a role in the parliamentary system that's every bit as important as the government and is known as Her Majesty's loyal opposition.

Mr Bisson: Somehow we are disloyal in all of this, and that's the question.

Mr McLaughlin: Whether it's the NDP or the Progressive Conservatives winning a majority, that's not the end of the issue. In fact winning a majority is simply the first step in governing. There are a whole host of other things that have to be done in order to make sure that all these checks and balances that have been placed there for a reason -- our forefathers understood human nature as well as, if not better than, we do. They very quickly built into this something that said that the opposition has a role to play. A majority does not entitle one to act --

The Chair: I thank you for your response. I apologize for having to interrupt, but we've gone beyond the third party's time. Let's move to the government's time.

Mr Young: I'd just like to comment on some of your comments in the interest of getting the information correct. The government did not try to sneak the bill in. There's never debate on first reading of a bill, and it's important to have that on the record.

Second, when the negotiations between the House leaders broke down, there was an offer on the table for 360 hours of hearings regarding Bill 26 --

Mr Gerretsen: All in Toronto.

Mr Young: -- which the opposition turned down. I want you to know that. That's very important because of some of the things you said too.

As well, a key plank in our election platform, and we distributed a million copies of the Common Sense Revolution across Ontario, was that we were going to get rid of Bill 40, so I don't know how you can say people were not consulted and they were not given a choice about that proven job killer --

Mr Gerretsen: They may have voted for you, Terry.

Mr Young: I want to assure you that this is a very real process. We will have heard from over 300 and perhaps as many as 360 different delegations. That will include 12 teachers' unions and a total of 49 representative groups from labour. We are listening, and I don't think it goes too far to say that there will be changes to the bill. I want to assure you about that too.

I was disappointed in your presentation, that I didn't hear --

Interruption.

The Chair: Excuse me. The standing orders of the Legislature are not to have demonstrations in a room. If you continue the demonstration, I'll be forced to recess. We'd like to hear from our presenters, please, and you're just taking time from the presenters. I'd appreciate if you'd please lower the sign.

Interruption.

The Chair: I'm going to call a recess until 1 o'clock.

The subcommittee recessed from 1216 to 1302.

TOWNSHIP OF DYMOND

The Chair: Good afternoon and welcome back to the standing committee on general government.

May I please have representatives from the township of Dymond come forward. Good afternoon, gentlemen. Thank you for being here today to appear before the standing committee on general government. You have half an hour this afternoon to make your presentation. You may use that time as you see fit. You may wish to leave some time at the end of your presentation for questions from the three caucuses. I'd appreciate it if at the beginning of your presentation, for the benefit of the committee members and Hansard, you'd both take a little bit of time to introduce yourselves.

Mr Carman Kidd: Thank you, ladies and gentlemen. My name is Carman Kidd. I'm the reeve of the township of Dymond. This is John Telfer. He's our clerk-treasurer.

Dymond township is located just to the north of the Tri-town area, being Hillary, New Liskeard and Cobalt. It's a small, mainly rural township, just over 1,200 people, and it has a fairly substantial commercial base, some industrial, a fairly large residential area, as well as a majority being in the rural agricultural land base there. We'll basically run through our presentation here.

I would like to firstly thank the committee for allowing me to speak on behalf of the township of Dymond.

Bill 26 has put the fear of God into most every municipality in Ontario because of the long-term ramifications of such a large and diverse bill. However, I will focus and address my comments and concerns to schedule M.

Schedule M has many dangerous loopholes that could cripple and destroy a municipality at the stroke of a pen. Let's not hide the fact that restructuring has two avenues, financial and boundary realignment. The latter is the focus of our concerns.

Our concerns are related to the fact that any larger centre will attempt to annex or amalgamate surrounding municipalities as a means of generating additional and needed revenues to help with their own existence. No extra efforts will occur from within to restructure their own current operations, but rather to find a cash cow to help address the immediate and not necessarily the long term. Population will win most every proposal submitted to the ministry, as the terms of the schedule address majority as population and support of 51% of any participating group of municipalities. Rural Ontario will become the victim of all urban municipalities that want to increase their land mass.

Our council feels strongly about the terms of annexation and amalgamation, as we were victims of an attempt in 1979. At that time, our neighbouring municipality wanted the areas of high assessment in our municipality, with no real regard for the rest of our municipality. What avenues have changed today? It's strictly a cash grab with no evidence of concern to ensure services to our rural community.

We also wonder if a fiscally responsible municipality that is able to provide services even with the provincial cuts in 1996 and 1997 needs to be a prime candidate for amalgamation. If we are able to provide and are not a burden to the province, then what makes a provincial solution the right solution? The status quo should be a real option to such a municipality. Nowhere in this Bill 26 is there any mention of a municipality remaining status quo if a proposal is submitted.

Realistically, most northern municipalities could not control large land masses as a single municipality because of the sparse population and the services required. This would probably be supported by a commission for the simple fact that it relieves a major problem for the province dealing with several municipal councils, but in reality the financial burden would be far too great for the newly formed municipality.

Let us consider if a long-term liability within any municipality is enough reason to seek additional assessment from another municipality. Dealing with the here and now is an easier step for municipalities than securing long-term fiscal restraint and efficiency from within.

Our concerns are not without recommendations to the standing committee on the above considerations. We understand the fact that changes are inevitable, and we are not opposed to change, but rather to the uncertainty that a municipality may lose control of its own destiny, regardless of its ability to offset recent cuts.

We would like to also point out the fact that initiation of an amalgamation under these terms can have negative effects for municipalities that are more financially responsible than others, in the sense that the easiest way to amalgamate is to cry poor and expect the commission to react to the plea rather than the ramifications to the municipality that has been fiscally responsible and thus better able to cope with restraint. Any attempt to amalgamate municipalities must be done on a level playing field, with no reference to majority population dictates over small rural communities, and the true answer must come from a local decision by the municipalities involved.

We also disagree with the power given to the minister and his appointed commissioners to decide the fate of certain municipalities. We have seen the benefits of the OMB hearings during an annexation attempt. It allows for public input as well as sound discovery through the legal system. In our case, 1979 was a prime example of democracy at work, with full attendance by residents at each day's hearing. It is important not to confuse the importance of the public being able to input into this type of process. There could also be confusion over the proposal process, as I suspect that several different scenarios will surface in our area that involve our municipality. There needs to be a clear plan of local discussion that is not interrupted by pressures of other proposals awaiting review.

We might also recommend that financial restructuring be the only avenue for the next few years, thus allowing municipalities the opportunity to review, reduce and study options of services, facilities, and where there could be sharing of services. Many smaller municipalities such as Dymond are already sharing services, sharing purchasing power and administration and preparation of road and street concerns that affect all the municipalities. If this opportunity was allowed to proceed without interference of annexations or amalgamations, a more productive picture could be painted and exercised in the fact of doing more with less. If the government feels it is clearing dead wood to make local governments more efficient, then it is going to hurt the most streamlined operations, those being the small townships. If the government is intending to reduce the number of municipalities in Ontario, then it should not be at the expense of efficient rural townships.

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We know that reducing the number of local governments is on the agenda of the provincial government. We are sure that rushing this Bill 26 through is a clear indication that not all areas of concern have been addressed; rather, it's a mandate to impose its will on the municipalities. There is support among certain groups such as AMO, but there is a real threat to the future of several municipalities in Ontario.

We question certain areas of this bill in particular for clarification, the first one being clause 25.1(a), clarification of the term "timely and efficient manner," how that pertains to proposals; the second one being from subclause 25.2(2)(b)(i), clarification of "prescribed degree of support." When you've got two or three municipalities putting in proposals, just how is the degree of support from each municipality tied into this whole process? The other one is the "prescribed criteria." What is required in these proposals? In section 25.4, we'd like clarification of "restructuring principles." These are some of the things that we'd like to see clarified.

In closing, our municipality has displayed controlled delivery of services with limited staff in all of our departments. We provide an adequate delivery of services at a reasonable tax level, with limited assistance from the provincial and federal governments. Our municipality has a strong base of volunteers that help to keep our costs down, and we feel that it is the volunteers over the years that have made the township of Dymond what it is today: basically a success story in the Tri-towns.

Unfortunately, Bill 26 opens the door for forced annexation and forced amalgamation that will destroy the efforts of a municipality that strived for and prided itself on independence. This Bill 26 is a slap in the face to volunteers who give of their time to the community they love. If ever there was a mistake in the making, this is it.

I urge you to take a moment to review what really makes a municipality, and then ask these same people to give up all they've worked for. Bill 26 has some strong attributes that apply in certain cases and probably could benefit certain situations, but to impose it on the whole province is unfounded.

I thank you for this opportunity to present this document.

Mr Bisson: I'd like to thank you for your presentation and also your willingness to drive a fairly long distance. I was through the town of Dymond yesterday, as I am many weeks driving up and down to Toronto. There's been a lot of work done in that community, and I would congratulate you on the new look that the community is getting in regard to everything that's happened along the highway. It's quite commendable.

I just want to ask you a couple of questions as the Municipal Affairs and Housing critic for our party on this whole approach that the government is taking in regard to annexation. I fear that your fears are true. I've had a number of larger communities where the first question they've asked me as critic is, "Does that mean to say I get to annex the small community next to me or the local board?"

I guess that troubles me in the sense that it flies in the face of everything that's been done by communities across not only northern Ontario but I would argue the bigger part of Ontario in trying to find ways to be able to share services, to be able to share the way that we do things so that we're able to reduce the cost to our taxpayers, such as what you've done in your community but also, I would argue, as has been done other places.

I wonder if you'd want to expand on that, because I think that's something the government needs to hear. I know in the sector of health care as well as municipalities, the government argues that it needs these tools in order to make all of this happen. The reality, though, is that a lot of this has happened, is happening, because you're responsible to your taxpayers and you go out and do the job that needs to be done, and if that means to say you give up a bit of power by working together with another community, you're prepared to do it. Maybe you can expand on that and give that message, because I think that's something they need to hear.

Mr Kidd: Yes. Dymond, over the past, has shared services. We've joined in with the town of Haileybury for our garbage collection. We've worked with them. We've worked with the town of New Liskeard with our sewage proposals. Our public works has worked with a number of rural townships, as well as the towns of New Liskeard and Haileybury, for their public works. Almost all our purchasing is done jointly for public works.

The biggest problem we have with any type of annexation is, what happens to the rural part of our township? I'm a dairy farmer myself. I live in rural Dymond. I've got to look after the commercial base, I've got to look after the residential base, but I've also got to look at the majority of our land base, which is still rural, still farming. If you look at any type of restructuring, annexation, whatever, they're not interested in the rural part. They're interested in the high assessment base and that's the only thing they're interested in. So I've got to do something to protect and look at the infrastructure in the rural townships. They've got to still maintain the roads; they've still got to keep the snowplowing.

Mr Bisson: Let me ask another question before it goes to my friend Mr Wood. Knowing that this bill is going to give larger municipalities the ability to annex smaller communities without their say, why should any of the smaller communities try to work towards efficiency after this bill? Do you think that it will prevent those municipalities from doing what they've already been doing?

Mr Kidd: This is why we wanted to see the bill be amended to the point where it's maybe got to hold off on the annexations or amalgamations for at least three or four years to allow everybody a chance to downsize, cut their costs, take a look at their administration and that, and see where they can save money. That's something that's got to be done for the next three or four or five years and see where the cost savings can be.

Mr Len Wood: I also appreciate being able to see Dymond as I drive through there.

I'm curious. You're saying that you think Bill 26 is going to do the reverse of what the Mike Harris Tory government is talking about: getting volunteers more involved. You're saying that this is going to destroy the volunteer system that is already out there to deliver the services to these small communities. I've had a large number of calls from small communities saying, "What happens now that Mike Harris is just going to say, `All of you small communities, you're all going to be taken over by this one municipality in the middle'?" I just wanted to know if you want to comment further on a system that's working well. Why destroy it?

The second part is, was there any consultation with any of you people prior to this bill being introduced?

Mr Kidd: No, there wasn't any consultation with us.

We really pride ourselves in having a large base of volunteers. All our sports are run by volunteers. They really get involved in the municipality. They feel they can come in and ask us for a little bit of funding to get things started. They can start up new proposals, new sports and that. We can work with them and they feel really comfortable setting up and doing things as volunteers, whereas in a large municipality they don't feel comfortable doing that.

Mr Klees: I thank you for your presentation. I just want to again, for the record, before I ask my question, clarify the intent of Bill 26. Contrary to what Mr Bisson has just said, this bill will not allow a large municipality to annex a smaller municipality without its say; this bill clearly provides for a process for appeal of a request from a local municipality to initiate a restructuring proposal. You make reference in your presentation to the fact that the OMB hearings, for example, worked very well in that it was a democratic process where representations could be made. The minister, in speaking to this section of the bill, has in fact drawn that parallel. He's saying the commission, once appointed, would effectively play a similar role in structure so that we have a commission to which appeals could be made and to which representations could be made regarding that.

The intent clearly is that any initiation for restructuring would be at the local level. Now, what we want to do is to ensure that you've got the appropriate input into a structure like that. In addition to the fact that we have clearly stated that the initiative for amalgamation would have to come from the local level, is there anything else you'd like to pass on to us that you'd like to see included in that process to ensure that you have your adequate input?

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Mr Kidd: Just reading through the bill there, we're very concerned about the prescribed degree of support. If we've got, say, three municipalities -- two that are in favour, one that's not in favour -- how much discussion has to take place in order for the municipality that's not in favour of it to be drawn into the proposal?

With your bill you say you need 51% of the majority of municipalities in support of this proposal, so if we have two municipalities out of three in favour of a restructuring proposal, the third municipality may get a phone call, saying, "Gee, we've named you in our proposal," and that may be all the consultation that we're looking at and it may be the only input that we have into the whole proposal.

Mr Klees: Okay, you understand that request from the local municipalities is for the purpose of initiating the proposal, the discussion for a restructuring proposal. Do you have a problem with at least participating in a discussion as to what the advantages would be or the disadvantages would be so that a logical conclusion could be reached?

Mr Kidd: No, I don't have a problem. The only problem we have is that we may be named in maybe two or three proposals at the same time. Which one do we work with? How is the time frame laid out as to which plan we work with? Probably in that area you've got four or five municipalities plus enough numbers of other townships. Maybe there will be three or four different proposals.

Mr Klees: Okay, so you don't have a problem with participating in a restructuring proposal.

Mr Kidd: No. We've always looked at ways of trying to cut our costs.

Mr Klees: I just want to clarify briefly. Contrary to what I heard from the other side of the table here, it is not a fact. I can assure you it is not a fact that any restructuring would take place without your input and without your having had an opportunity to provide factual information and have extensive discussions. It is categorically not true.

Mr Len Wood: Big fish eat all the small fish, Frank.

Mr Klees: So I would like again just to clarify that the process here is what we're talking about. You have no problem in participating with an orderly process as long as you have adequate input and as long as, as you say, you're not asked to participate in four or five different restructuring proposals if someone has the right to make a decision which restructuring proposal you would be participating in.

Mr Kidd: No, we have no problem being involved in the process providing the details, being involved in the discussion of that, as long as we have a final say in whether we see benefits from being involved in the whole process. If we don't see any benefits, then we want the option of staying the way we are, status quo. We should have the option of staying as status quo as long as we can provide services to our constituency, even tying in the cutbacks.

Mr Gerretsen: Well, let's get it straight: Mr Klees is not the parliamentary assistant for the Minister of Municipal Affairs. Not that that makes any difference, but let's just listen to the minister himself by what he told us on Monday, December 18. Your correction, by the way, in your presentation is correct, that right now a larger municipality could do it to you. But I'll just quote you exactly what the minister said.

Mr Bisson: Who said this?

Mr Gerretsen: Minister Leach: "With Bill 26, whenever a decision-making process stalls locally and a decision can't be reached or whenever it's obvious that restructuring would benefit municipalities refusing to take action, it will be possible to appoint a restructuring commission. This commission will have the power to develop and implement its own restructuring proposal," meaning no appeal to anybody, not the minister, not to cabinet, not to the OMB.

It goes on to say -- I'm getting to your point: "In order to ensure that restructuring is locally driven, I intend to introduce an amendment providing that a commission will only be appointed by the province when it's requested, either by at least one of the affected municipalities or by petition from the residents."

So it's not there yet. He intends to bring an amendment forward. Whatever Mr Klees is telling you may very well be with respect to an amendment that none of us has seen, but the minister himself realizes exactly the predicament that you're talking about in your letter, which you've taken, I guess, from the plain reading of the act the way it's presented here. Is that correct, sir?

Mr Kidd: That's our main concern. Yes, and we're really concerned that there's no public input in this at all.

Mr Gerretsen: You've had no public input into the amendments either. We have a vague thing here that says amendments will be coming forward, but that's it.

Then he also goes on to say, which is very interesting, "I'm pleased to announce that last week I met with the regional chairs and representatives of the Association of Municipalities of Ontario," and he did this, that and the other thing. Now, are you a member of AMO? You are a member of AMO. But does AMO speak for your local concerns in each and every case, sir?

Mr Kidd: No, AMO speaks for the majority of the municipalities. We're actually involved with ROMA as well in the rural municipalities but we're not getting any say in this whole proposal.

Mr Gerretsen: Right. Would you agree that the biggest problem with the restructuring and with the Municipal Affairs amendments themselves in the act is the fact that the public and the public hearing process have been left out completely?

Mr Kidd: I know, unless we had gotten involved ourselves, we wouldn't have known anything about this whole process at all. The normal person on the street doesn't have a clue what's going on. I just came back from an annual meeting of the dairy producers of Ontario -- three days -- I talked to the people down there. They didn't have a clue what was going on with this Bill 26. I brought it up to the Minister of Agriculture, Food and Rural Affairs. He was not concerned about this bill. I don't think he even really understood the ramifications of what's in this bill.

Mr Michael Brown: Just because I represent many townships which would be somewhat similar to yours. I represent the riding of Algoma-Manitoulin. We have quite a number of small municipalities. One of the things that bothers me is that we also have the issue, and I'm not sure if it applies to you, of unorganized townships in the area and how this restructuring may work when you start to involve unorganized townships.

When we start to talk about amalgamation it seems quite frightening to those people in the unorganized townships because they have no government at all, essentially, and the people who are in the organized townships may have some real worries about being involved. Do you have any thoughts about how we might deal with those kinds of problems? It could be another huge downloading of responsibilities to the adjacent municipalities.

Mr Kidd: They probably feel they have about as much say as we feel we've got in this proposal. With the larger municipalities being able to dictate what goes on there, they probably feel the same as Dymond feels: that they're not going to have any say or any input into the whole process.

Mr Phillips: I think I clearly understand it, and that is if a larger municipality near you wants to annex you, as long as they follow the regulations and as long as there's more than 50% of the total electors voting in favour of it, not only will they recommend it to the minister but the minister has to approve it. There isn't even ministerial discretion. So there is no doubt in this bill that a larger municipality can annex a smaller municipality, there is no appeal, and once that restructuring proposal goes forward it has to be done.

Furthermore, the minister has said, in terms of its being locally initiated, as long as one municipality requests a restructuring commission, the commission shall be appointed. So the thought of its being local initiative is nonsense; it's just if the larger municipality wants it, it shall be done.

My question really is, have I captured the essence of your understanding of the bill?

Mr Kidd: Yes, you have.

The Chair: Thank you, gentlemen, for coming forward to make your presentation to the committee today.

TIMMINS WOMEN TEACHERS' ASSOCIATION

The Chair: May I please have representatives from the Timmins Women Teachers' Association come forward.

Good afternoon. Welcome to the standing committee on general government.

Ms Sherri Jones: Bonjour and good afternoon.

The Chair: You will have half an hour today to make your presentation and you may use that time as you see fit. You may wish to leave some time at the end of your presentation for questions or response from the three caucuses. I'd appreciate it if, for the benefit of committee members and Hansard, you'd take some time at the beginning of your presentation to introduce yourself and your organization.

Ms Jones: Merci and thank you. I am here today as the president of the Timmins Women Teachers' Association. I represent 150 public elementary school teachers. With me here today are Mary Faris, President of the Cochrane, Iroquois Falls, Black River-Matheson Women Teachers' Association; Carol Heaslip, president of the Timiskaming Women Teachers' Association; her first vice-president, Barb Burkett; June Wallsten, president of Kirkland Lake Women Teachers' Association. Collectively we represent 350 women elementary school teachers in northeastern Ontario. We are part of the Federation of Women Teachers' Associations of Ontario, representing 41,000 women elementary school teachers across this province.

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As a teacher living in a democratic society with an elected government and a Charter of Rights and Freedoms to protect us, one rather expects things to roll along rather smoothly, and for our elected members of provincial Parliament to debate issues and problems in the Legislature, for there to be a free press, and for people to have some say in how our future here in a democratic Ontario will unfold.

The word "democracy" means government by the people, promoting the interests of the people, persuaded of, and practising social equality. The reference to that definition is from a Canadian dictionary; you'll see it at the bottom of that page.

Although this government has indeed been elected by the people, it is neither promoting the interests of the people nor practising social equality. It is therefore shocking to realize that if it hadn't been for the actions of one MPP, Alvin Curling, who understood the intrinsic values of democratic principles and his determination to fight for democratic rights, we all would not be here today. It was appropriate that this government recant its decision not to hold these hearings. Historically, decisions are made in the Legislature, not in cabinet except perhaps in time of war.

We are not at war. We are in financial crisis. It is not necessary for the government to make arbitrary decisions to destroy the democratic process.

With the introduction of Bill 26, this government will move the decision-making power from the Legislature to the cabinet for many key issues. When debate occurs in the cabinet, it occurs behind closed doors.

Pay Equity: For many years the Federation of Women Teachers' Associations of Ontario and its local women teachers' associations have been fighting to achieve equality of pay for women in the workplace. In the last few years, we have made great strides in moving towards that equality.

Schedule J of the bill will end that march towards equality of pay by discontinuing the use of the proxy method of comparison, and as a result, vast numbers of women will be stuck in female-dominated workplaces doing valuable work for society and yet receiving the lowest salaries.

By attacking women and also the children who are often in the work these women do, this government is neither promoting the interests of women and children -- who, by the way, gentlemen, collectively make up half of the population -- nor is it practising social equality. By preventing these women's salaries to rise, the government will not benefit in any significant way, nor will the government pay off any significant portion of the deficit by continuing to oppress them. These women will be condemned to live at a subsistence level that is morally unjustified and economically unnecessary.

User Fees: It is necessary to examine two distinct methods of taxation which a government can use. First, there is progressive taxation, which taxes individuals who earn differing amounts of money at different rates. Thus a person earning $15,000 would be taxed at, say, 8%, while someone who earn $25,000 would be taxed at 20%. Anyone who earns more than this could be taxed at a rate of 35%.

A progressive tax is said to divide the burden of the cost of running a society or government more equally, because it allows those who are financially more well equipped to pay a larger share of the cost, and those people who do not earn large salaries consequently pay a much smaller share. The reason this is done is because it costs everyone relatively the same amount of money to feed, clothe and house their families at a basic level and if we overtax the poor, then we deny them the essentials of life.

The second method of taxation is regressive taxation. This method levels an equal amount of tax on each person no matter how much they earn. This tax benefits the rich because it does not dip very deeply into their wealth. However, it cripples the poor because for every extra dollar that is stripped out of their pockets for a service, there is one dollar less for the essential food, clothing and housing that is required for them as people to survive. We as teachers already see in our classrooms children whose basic needs are not being met. This government plans on cutting back on these basic needs even more.

The most insidious form of regressive taxation is the user fee. To quote from my federation's response to Bill 26: "User fees will hurt those who can least afford the services that our municipalities and other bodies provide. User fees are the most regressive form of taxation, since those who earn the least will pay proportionately the most for the same service. A user fee would be the same for a mother on welfare and for the president of a large corporation."

User fees will create a class system in Ontario like no one has ever seen before. The haves will be able to have their garbage picked up and to have their children go to the private-public libraries and to have a visit to the private-public parks and rinks and tennis courts.

It is the lack of these social experiences in life that will create an underclass of children. The lack of social experiences will impact negatively on their very education and will also limit their vision for a career as well as their future contributions to this society.

No government in the history of Ontario has ever decided to attack the poor people of Ontario the way this government is intending to do with its regressive taxation in the form of user fees.

This government says it is not raising taxes. However, it doesn't take much to figure out that the cuts in the provincial transfer of taxes to municipalities will have to be replaced by the more unequal user fees.

Why is this government choosing to attack those who are least able to pay?

But even more of an abomination to us is the threat to the very health and safety of our citizens. Essential services such as police and fire departments may be subject to user fees. What impact will this have on the poor?

What will happen to the one in four women and children who are victims of violence in an abusive situation? In times of economic stress we all know that violence increases. What will happen to those women and children? What will happen?

If you ask yourself whether you favour a progressive income tax which impacts fairly on every citizen's ability to pay for a service versus the regressive tax of user fees which steals food and clothing from the poor, the answer is easy. It is common sense to protect the interests of all the members of society, whether rich or poor, to make sure that people are fed and clothed and housed as well as educated and trained. This is how a democratic, fair and equitable society functions.

Realizing the negative impact that user fees have on a society, we are in favour of a progressive income tax. We stand firmly against user fees which this government intends to introduce. These user fees will damage not only the fabric of society but the very wellbeing of its citizens.

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Environment: Northern Ontario is a somewhat fragile environment. There isn't a great deal of topsoil and the cold months of winter mean that very little natural recycling occurs here. We depend on mines for much of our economy and for our livelihood, but we also have to deal with its chemical poisons and wasted lands that mines generate. We are therefore angry that this government, by instituting some of the sections of schedule O, is condemning northern communities, such as Timmins, to hazardous, unhealthy living conditions.

This community knows first hand what can happen when mines are allowed to self-regulate their closing operations. After ERG Corp leased part of the old McIntyre Park to process the tailings, the company went bankrupt and was unable to clean up. We now have a huge hole in the middle of the city. It is hazardous and unsightly. It will cost the citizens of Timmins thousands of dollars to rectify the situation.

This is the kind of scenario which will be repeated over and over again if we allow mines to self-regulate because private companies are motivated by profit rather than by environmental concerns. We need the mines and they need us.

However: "Measures needed to ensure the protection of the environment must not be frittered away to appease corporations into doing business and ruining Ontario. All of us deserve a healthy place to live and work and raise our children. Our environment is worth protecting."

Equality is served by guaranteeing a clean, healthy environment for everyone in Ontario.

Municipal boundaries: Schedule M of Bill 26 allows for amendments to the Municipal Act and existing statutes to allow for easier amalgamation, separation and annexation of municipalities. It is frightening to think what can ultimately result in fewer services and higher service costs can be done without much consultation. The arbitrary nature of the proposed amendments will also allow manipulation of municipal boundaries for other purposes. This is known as gerrymandering.

Section 8 of schedule M is very disturbing to teachers because it "does not exclude school boards from the list of boards that can be dissolved or fundamentally changed, thereby allowing a school board to be taken over by a municipal council or to be dramatically altered in form and function. The amalgamation of school boards is currently under discussion and FWTAO responded to the report of the Ontario School Board Reduction Task Force with great caution.

"While the amalgamation of school boards may make sense in particular areas, this needs to be a local decision with the input of all parties involved. FWTAO is concerned that the provision in Bill 26 presents a dramatic departure from the options that are currently under discussion. Will it allow changes to education governance to be implemented without full consultation? The government has stated that it will exempt school boards from this section by regulation. If it is not the intent to have school boards be part of this section, they should be explicitly exempted in the legislation and not left to regulations which don't exist yet and can be more easily changed in the future.

"Will the ability to alter municipal boundaries open up the potential for gerrymandering? Will boundaries be altered prior to election time in order to ensure certain results? Let us not import this tradition from the United States.

"What impact will a change in municipal boundaries have on property taxes? Will people suddenly find themselves paying higher taxes or higher user fees simply because of a change in municipal boundaries?"

What does the ability to conduct the business of government in such a way say about democracy and the right to equality in this province?

Restricting arbitration: Under law, Canadians have the right to negotiate contracts. As part of the process, a neutral arbitrator can be appointed to assist in these negotiations. Schedule Q wipes out the freedom and independence of the arbitrator. Negotiators must now view settlements through the eyes of the provincial government. By destroying this neutrality, workers are put at an extreme disadvantage.

Such action isn't democratic, equal or just.

Freedom of Information: Schedule K would make it possible for the government to give personal information to others and yet at the same time prevent individuals from obtaining personal information on the basis that the request is frivolous or vexatious. This means that individuals within the government will have so much power that they can make decisions arbitrarily. The government will be able to make it difficult for individuals to obtain information through charging fees or ultimately refusing access to the information. Insurance companies would be allowed to obtain personal information about individuals and they could refuse life insurance. Future employers could use personal information to discriminate against people with health problems.

The conclusion: Bill 26, if passed, will change our province fundamentally, to our detriment. Power corrupts. Bill 26 is an example of absolute power corrupting absolutely. This government made certain promises before it was elected that it has not kept. Since this government has come to power it has already managed to try to erode our democratic rights and freedoms. Members of this government are attempting to destroy our social safety net. With Bill 26, they may succeed.

This government was elected because the people of Ontario wanted a government to wipe out the deficit. Little did they realize that this government might destroy the whole fabric of our society. What good will being debt-free do for a society which lacks basic rights and freedoms?

We recommend that Bill 26 be scrapped. We recommend that the people of Ontario have input on the payment of the deficit. We recommend that freedom of information never be changed. We recommend that the public have input into statutes which are changed. Thank you. Merci.

Mr Young: I want to start with the families of Ontario, many of whom are working poor, many of whom are middle-class people who can't save any money, no matter how hard they try. They haven't had a real pay increase in seven years. We are with Bill 26 trying to restructure Ontario so that the cost of administering government goes down so people have more money in their hands.

There's certainly a dynamic tension with regard to education between what the taxpayers pay towards education and the cost of education. We're looking to cut costs. We have 168 school boards -- there are probably going to be a lot less when we're finished restructuring the school system etc -- and in many boards, if not most, over 70% of the cost of education is teachers' salaries and benefits. Teachers are, I believe, in the top 7% of our society for salary and benefits, for job security, for vacations, and they have the second-largest pension fund in Canada. I wonder if you could help us find the savings, because we're spending $9 billion a year more than we're taking in. Can you make suggestions to us about where we can find savings to balance our books in this province?

Ms Jones: You have to talk to the people, listen to the people and do what the people suggest. One of the things I'm suggesting is that you use the progressive taxation system so that it hits people who have the money. Banks, I heard, had a 17% profit margin. Laidlaw, I heard, had a 31% profit margin. These people are making huge amounts of money. A CEO for a bank gets $1 million, $2 million, $3 million, $4 million a year. This is a great deal of money. You need to tax the people who have the money.

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Mr Young: But let me point out something to you. The seven big banks in Canada made $5 billion in profit last year. The federal government still has approximately a $30-billion deficit and we have a $9-billion deficit, and even if you took all their profits, which is impossible, illegal and would be wrong, you wouldn't come anywhere near balancing the books. So where can we get the money? We have to cut costs. It's not easy, but we have to do it. Are the teachers willing to give?

Ms Jones: We realize that you have to cut costs. Teachers have had their salaries frozen for three years now. We haven't had a cent increase.

Mr Young: With everyone else in the social contract, yes. Are teachers willing to be part of the ongoing solution, I guess is my question. Why can't you ask arbitrators to look at affordability when regular working people haven't had a raise in seven years and teachers are at the top end of the pay and benefits package? Doesn't that make sense?

Ms Jones: Because you're stacking the cards on the side of the government when you do that.

Mr Young: It's not the government; it's the people who pay taxes, who pay for the education system.

Ms Jones: The government ultimately does the collecting of the taxes. You have to face the reality that children are the greatest resource this province has.

Applause.

Mr Young: I totally agree. I applaud that also.

Ms Jones: You have to realize that those in the teaching profession spend 30 years educating themselves. I myself am undertaking two courses in computers to upgrade. Teachers are constantly upgrading. They are truly valuable.

Mr Phillips: Thank you for your presentation. Let's recognize what this bill is all about. It is designed to allow them to do their Common Sense Revolution, and an absolute cornerstone of the Common Sense Revolution is a huge tax break. They say, "We've got to get this deficit under control," and it's true, but if you look in the Common Sense Revolution, here's how they get it under control. They are going to cut spending, they said in the election, by $6 billion, but they've now taken it up to $8 billion, so they're going to cut spending by $8 billion. Then what are they going to do? What it says here, the direct fiscal implication of the Common Sense Revolution, is that $5 billion of it goes to a tax break. The more you make, the bigger the break. If you make $150,000 in this province, you're going to get a $5,000-a-year tax break. They say this is all about fighting the deficit, but a majority of the cuts go directly into a tax break, and as for the tax break, the more you make, the more the break.

I thought your brief did a good job of pointing out who's going to pay for the tax break, and it is through user fees. I quote what the Minister of Municipal Affairs said, and I personally found it objectionable. He said: "I was encouraged to hear that one of the mayors plans to seek corporate donors to sponsor such activities as library use, ice skating and swimming in public pools for underprivileged children. Statements like this convince me our trust is not misplaced."

Clearly, this is where this group wants to take Ontario: a tax break where the more you make, the bigger the break. And how are we going to fund it? By denying young people an opportunity to use a library and to use recreation facilities unless they can find a corporate donor. So here in Timmins, presumably, somebody's going to have to run around and knock on doors of corporations and say, "Please help young people to use a library." It is a fundamental shift in Ontario. They like it; we don't.

I ask you, as someone who deals every day with young people, what kind of future are we casting for our young people when this is the direction the government wants to head -- a huge tax break the more you make? By the way, I'll also add that they think many of your teachers are going to support this tax break. They think many of your teachers will because we're dividing this Ontario up into Common Sense Revolution winners and losers.

Ms Jones: This province is loaded with teachers who will stand and tell you, man for man, woman for woman, that children are important to us. They will tell you that the kids who are kicked out of their homes in Toronto -- and I just read this weekend that it's happening, that there's an increase of over 17% of people who are losing their accommodation and being thrown out on to the streets. One child of a two-children family is being put with an aunt and one child is being put with a friend. What kind of future do we offer our children? Teachers would stand together and say that children are the most important resource we have. You have to protect them and you have to give them the kinds of things that give them the social experiences which will build their self esteem, because if you don't have self esteem, gentlemen, you have nothing. You've got to believe in yourself in order to create the person you will be.

Mr Silipo: Ms Jones, thank you very much for your presentation. As you pointed out and as has been discussed here, the regressive nature of what the government is doing, both through the shift from provincial taxes to user fees and various other measures, really shows the true face of what this government is all about. Probably no phrase better sums it up than what you said towards the end of your presentation when you said the government was elected to wipe out the deficit, not to destroy the whole fabric of our society. While many people supported the Tories in the last election, the sense I've had and that many people have had is that they were elected on the basis of certain things they said and did during the election, and were they to have put the issues in Bill 26 in front of the electorate, people might have reacted differently.

I appreciate very much your being here and the continuing work you and the other federations are continuing to do to highlight how all this is affecting the poorest among our citizens, including many children, as you pointed out.

Ms Jones: We feel betrayed, quite honestly. But we're here, and this is good. We have this hearing. Everyone can make a mistake. What I want you to do to this bill, with all the information you've gathered from all these reports, is to take it back and talk with the other MPPs, please. Listen to the people of Ontario. You've never had hearings like this before that I can remember, where the people are mad, where there are people behind me who aren't even going to get a chance to sit here and talk to you because there are too many of them. You're not meeting tonight, there's not an open forum tonight, yet there are 10 or 20 more groups that would present to you. Please take it back, and please listen and please act on our suggestions. You are our government. Make a good job of whatever you do.

Mr Bisson: I listened intently as Mr Young questioned you, and I took from his tone that what he was trying to get at is that teachers are doing all right and they maybe aren't doing as much as they should to deal with things. I wouldn't want to put words in the mouth, but it almost sounded to me as if he was attacking teachers for not being part of the solution. How would you respond to something like that?

Ms Jones: We are a part of the solution right now. Our salary has been frozen for three years. We've had all kinds of cuts at the board level, at the school level. We have less paper, we have less pencils. You need to know that. We are doing our share.

The Chair: Thank you very much for coming forward and giving your presentation to the committee.

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TOWNSHIP OF BLACK RIVER-MATHESON
CITY OF TIMMINS

The Chair: Could I please have representatives from the township of Black River-Matheson come forward. Good afternoon and welcome to the standing committee on general government. You have half an hour this afternoon to make your presentation. You may use that time as you see fit. You may wish to leave some time at the end of your presentation for questions. I'd appreciate it if you'd both introduce yourselves for the benefit of Hansard and committee members.

Ms Pierrette Blok: Yes, I will, and I don't think it's going to take me half an hour to tell you what I have to say.

Members of the committee, ladies and gentleman, my name is Pierrette Blok, and I'm the reeve of the township of Black River-Matheson and a very strong advocate for the northeastern Ontario municipalities, especially my own. I would like to thank all of you for coming to the north to listen to our concerns before Bill 26 becomes law, which, under schedules M and Q, will have the most significant impact on the municipalities of this province.

However important this bill is, we must remember the context in which this legislation was introduced. For municipal governments, that context is lost revenue of $700 million announced in the government's recent fiscal and economic statement. This substantial loss of revenue did not come as a surprise. For example, we in Black River-Matheson suffered a 7.8% loss, which translates into over $153,000, not very much for the people of Toronto, Kingston, Windsor, Ottawa, even Timmins, but to a population of 3,300 residents and a low tax base, it is quite a substantial amount.

When I read Metro Toronto complaining about how little the north has been cut as compared to the south, I can't but get frustrated and angry when you see and know where the bulk of our northern Ontario natural resources flow to.

Municipalities are a responsible political body, whereas we have always managed without deficits and accountable for how much gets spent and on what. There are almost 150 pieces of provincial legislation that have a direct impact on municipal operations. This government has committed to reforming legislation and we are encouraged by it, but let us not lose sight that Bill 26 is not without glitches, and amendments will have to be seriously considered before the passage of the said bill.

As partners in government, municipalities are in the best position to determine the tools we need to manage more effectively and more efficiently. Having said this, let us take a look at restructuring.

Restructuring in the municipal sector will be a major step forward for municipal government in Ontario. The proposed amendments to the Municipal Act point to a locally driven process where municipalities come forward with locally endorsed proposals to streamline the organization and operations of municipal government. The diversity of communities across Ontario calls for locally driven solutions to structural reform. Municipalities are prepared to provide a better, more effective and less costly government. I therefore suggest that the intentions be clearer with an addition to section 25.3 of the act indicating that the minister will establish a commission for the development and implementation of a restructuring proposal only at the request of a municipality.

I also recognize that not every municipality is willing to embrace change. Currently, the amendments suggest that the minister will have the power to impose restructuring on municipal governments. I do not believe that that is in anyone's best interests, including the citizens most affected. I would recommend very strongly that the wording of section 25.3 be changed to reflect the government's commitment to locally driven and locally initiated restructuring.

Another point I would like to bring forth is the Ontario municipal support grants. The issue of responsible management leads us to the Ontario Municipal Support Grants Act. Autonomy for expenditures funded under the act is substantial. I believe that that is the intent of the legislation. Block funding, by definition, should come with no strings attached.

Section 3 of the act provides for regulations that can be used to create strings. We recognize that the province has a responsibility to set and monitor provincial standards, and to monitor the performance of its transfer payment partners.

As more municipal funding is collapsed into municipal support grants in the future, there may be an inclination to restrict local decisions on how this money is spent. That would contravene the intent of this legislation as we understand it.

I would also ask the committee to recommend that the Ontario municipal support grants legislation clearly establish the autonomy of municipalities to manage funding in a manner that is consistent with local needs and priorities, mindful of clearly defined provincial interests.

Before I go on to schedule Q, I have a request that I would like to make to this committee to bring back to our government. We in northern Ontario have enjoyed over the years what they call the northern support grant and the equalization resource grant. It has now been collapsed into the block funding. Our fear is that next year, the year after, the northern support grant and the equalization resource grant will disappear. Why? Because it's been collapsed into the Ontario support grant; that is, the block funding. I would ask this committee to bring back to your government that the northern support grant be a standalone grant to the northern communities of this province.

In 1973, before the unconditional grants became law, it was a standalone grant. When the unconditional grant came along and they restructured the grants for the municipalities, the northern support grant and equalization grant were folded in. But we always had knowledge as to how much we were getting from these grants. With this new block funding, it will disappear. We'd recommend to the committee that this be a point that is brought to at least our two MPPs from the north, Mr Eves and our Premier, Mr Harris. Thank you. I go on.

On schedule Q, I would urge the committee to revisit the following five points of the municipalities' ability-to-pay provision:

(1) That the property taxes will not be raised as a result of arbitration awards. In other words, that the arbitrators consider a municipality's ability to pay when the awards are made. In Black River-Matheson, we do not have a local police force, but my neighbour municipalities do have and there are some arbitration costs that have been awarded and been very substantial and very hard to pay for some municipalities. It has just about created a dilemma for some of these municipalities. I would hope that our government would look at this very positively.

(2) That private sector comparisons are appropriate. To explain this point a little bit better, that an amendment respecting wage comparisons be expanded to include comparisons to similar jobs in the private sector rather than in the broader public sector alone.

(3) That management retains the right to attract and retain qualified employees as it sees fit. To explain this point is that the employer's ability to attract and retain qualified employees replace the reference to an employer's need for qualified employees.

(4) That negotiated wage settlements in a municipality provide a ceiling for future awards. And the last one,

(5) That the cabinet retains the right to alter and prescribe criteria for consideration and the issues which may or may not be sent to arbitration. In other words, compensation awards through arbitration that give no consideration to our ability to pay are no longer acceptable.

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This presentation I am making here at the present time is probably much of the same you will hear or have heard already throughout the province. There is no doubt in my mind that after four weeks of public hearings your findings will direct you to amendments of Bill 26 which will give our government a document to ensure that municipalities are partners in government and have the tools we need to manage in the face of substantial funding cuts. Ladies and gentlemen, thank you very much.

Mr Victor Power: Mr Chairman, my name is Vic Power. I'm the mayor of the city of Timmins.

Mr Chairman and members of the provincial Parliament, I wish to thank the members of the standing committee for coming to Timmins to hold this very important hearing on Bill 26. During your short stay here, I'm certain that you have noticed that Timmins is the biggest, the best and the warmest city in Canada.

As you are well aware, the president of the Association of Municipalities of Ontario, Mr Terry Mundell, submitted a brief on behalf of AMO on December 18, 1995. Many of the concerns that municipalities have were, of course, addressed in Mr Mundell's submission. This afternoon I would like to focus very briefly on just three aspects of this legislation.

The first of these matters concerns the authority granted to police services boards. At the annual meeting of AMO in August of this year, I presented a resolution on behalf of the city of Timmins requesting that the government make certain that a majority of members on a police services board be elected officials from the municipality. Only in this way can those who are responsible to the taxpayers have control over police budgets. As you are aware, this resolution was overwhelmingly adopted by AMO, and I trust that full consideration will be given to this request by this standing committee and by cabinet.

Down through the years it has been my opinion that arbitrators have consistently made rulings that affected municipalities adversely. Now, as we enter an era of sharply reduced provincial grants, compensation awards through arbitration that give no consideration to our ability to pay are no longer acceptable. I trust that you will keep this mind as you review schedule Q.

Much has been said about block funding. The theory behind block funding is sound. However, no one should forget that for many different reasons related to climate, topography, terrain, industry and assessment, northern municipalities were provided with what became known as the northern support grant, which was essential to providing a high level of service in our community. This was not a gift but rather a recognition by Premier Davis that something had to be done, because of the many reasons cited above and also in lieu of the situation with respect to taxation of the mining industry and mining revenue payments. In my opinion, that portion of the unconditional grants which represents the northern support grant should be untouchable and in no way affected by across-the-board reductions.

It is an understatement to say that your committee will have much to ponder during the next few days prior to passage of Bill 26. On behalf of the city of Timmins, I wish to thank you for your careful consideration of this brief and all other matters. We look forward to solutions that will be realistic in terms of making it possible for municipalities to provide a high level of service and at the same time be fiscally responsible. In short, we must put price and pride together. Thank you, Mr Chairman.

Mr Gerretsen: Have you read the direct taxation provisions in schedule M, Mayor Power? Are you familiar with them?

Mr Power: I don't have them right in front of me.

Mr Gerretsen: But basically they provide that you can have more taxation powers and powers to impose licences and fees, and as I say, because the tradeoff was that you weren't getting as much in support grants from the provincial government. Is this not a power that you need in order to effectively provide services, a greater taxation power?

Mr Power: It might be, Mr Gerretsen, but if you're talking about poll taxes, we don't want them.

Mr Gerretsen: How about a gas tax?

Mr Power: No, that wouldn't work. To give you an example, if we had a gasoline tax in Timmins and Iroquois Falls or Matheson didn't have one, naturally they would have the edge.

Mr Gerretsen: But don't you feel that municipalities should have that power in order to effectively deal with it? Some municipalities may use it and others may not.

Mr Power: I think if you're talking about gasoline taxes, you're touching a raw nerve, because gasoline prices are way too high in northern Ontario now. Our feeling has always been that if the price of beer can be the same across the province, the price of gas should be the same across the province.

Mr Gerretsen: Okay, what about a sales tax?

Mr Power: No. A sales tax, again I don't think we could handle that. I think it's tough enough on small business now. I think it would be a backward step to impose sales taxes.

Mr Gerretsen: How about a tax on the mines?

Mr Power: Okay, here's the story on mining. There is no way that we can assess the underground workings, and frankly, more and more of the installations are being taken underground. We can, of course, assess and do the aboveground workings. So if we cannot tax the underground workings, that should be reflected in what used to be known as the mining revenue payment and then later the northern support grant.

That's why you'll notice I mentioned, Mr Gerretsen, that the northern support grant or that portion of the unconditional grant known as northern support, should be untouchable, because this was given to us -- I shouldn't say "given." That's not quite the right word. But it was assigned to us by Mr Davis years ago. He had good reason for it. It was a good move, and if ain't broke, don't fix it.

Mr Gerretsen: Mr Phillips has a question, but it's great to be back in Timmins. I can recall some tremendous Federation of Northern Ontario Municipalities conferences in the past that were hosted by you.

Mr Phillips: Give that speech later, not on my time.

Mr Power: Good to have you back in Timmins.

Mr Phillips: I appreciate the gas tax one. I might add that a lot of municipalities in southern Ontario seem to want to do it and they will do it. That may put you at a competitive advantage.

On the restructuring one, what the minister has said on restructuring is this -- because I think there is at least a threat to some municipalities they could get annexed, not wanting to be involved at all, have no interest in it. The minister has said that he will introduce amendments so it's locally requested, that commission.

But the local request can be in one of two forms. It can be the commission will be appointed if one of the affected municipalities requests it or if there's a petition from residents. Then once the commission is rolling, those things will be implemented. I'm just saying that "locally initiated" means the one that wants to do the amalgamation can simply request it, and then it happens, and then the results of that commission will be implemented. There's no appeal, there's no more debate. It's all over. Is that what I understand you're supporting?

Mr Power: Mr Phillips, were you directing your question to me or to Reeve Blok?

Mr Phillips: Perhaps the reeve.

Mr Power: Because as far as Timmins is concerned, we've already gone through consolidation. On January 1, 1973, we became the largest municipality in Canada. We included four formerly organized townships and 31 unorganized townships. So there's nothing left for us to annex unless we want North Bay.

Ms Blok: I hope they bypass Black River-Matheson.

Yes, this is the way I understand it, Mr Phillips, and I am very concerned about this. The reason why is this, and I'm going to give you an example. Let's say that you have a group of municipalities here which want to amalgamate, and you have one within that group that does not want to amalgamate. Where does the commission fit in there? We don't want to amalgamate, but since everybody's in favour of it, there's more for than against, what I understand is that the commission would have the power to go ahead and amalgamate them anyway. That's what my interpretation of it is.

Mr Phillips: Yes.

Ms Blok: And I don't want that.

Mr Bisson: Thank you very much, Mayor Vic and Pierrette. It's always entertaining and a pleasure whenever we have to deal together. I've got to say to members of the committee here, you have two mayors that -- and I'm not saying that to butter them up, because they're not even in the same party as me, for God's sake. The point is that we've worked very well together over the past years. They are responsible municipalities that are trying to do their jobs and live within the limited budgets that they have, so maybe we should listen to them.

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Pierrette, first of all, how do you feel about having a funding system named after you -- block funding?

Ms Blok: I just love it. I wish they would take the "c" out.

Mr Bisson: I'm just wondering, do you get more money for this or what?

Ms Blok: No, I don't, unfortunately. But if they took the "c" out, I would love it. Then, if they used my name, I'd get after them.

Mr Bisson: Let me get to the point, because you're the smaller of the two communities here within Cochrane South, between Timmins and Black River-Matheson. I just want to go through this annexation process, because it disturbs me as well.

Let's say that some other individual takes over from Mayor Vic, because we know Mayor Vic would never want to do anything to annex the municipality of Black River-Matheson. But let's say someone else does. The process, as established under the act, is that Mayor Vic would go to the minister and the minister would, under this act, appoint a commission that could be made up of just one person, because that's the way the act is read, for the sole purpose "to facilitate the municipal restructuring of a significant nature which may include" -- and I'm reading from the act, the purpose here -- "elimination of a level of municipal government, transfer of municipal powers and responsibilities and changes to municipal representation systems."

In your presentation you talked about you were in favour of this as long as it's locally driven. Nowhere in this act does it say that you, as the smaller municipality compared to Timmins, would have the ability to oppose that. Let's say that your municipal council was to try to block this and was to succeed in trying to use this act. Here's the kicker, on page 136: "The members who vote in favour of the act which contravenes the regulation are personally liable for the amount of the adverse financial effect which may be recovered by an action brought by a municipal elector...." In other words, if you're successful in trying to turn this act around to protect your smaller municipality, the money that would have been saved by Timmins amalgamating you, you have to pay for. What do you say to that? Do you have the money to pay that?

Ms Blok: First of all, I hope they never have the intention of trying to annex us, but the smaller municipalities do not have the money to pay for such an annexation. It would be an impossibility for any smaller municipality. You're talking here of Black River-Matheson. You know that within northeastern and northwestern Ontario there are municipalities a lot smaller than Black River-Matheson, and these people would not be able to pay. It would create a hardship, a very hard burden on this particular issue, and we don't want that. I know that the act provides for this, but I'm sure that they will look at some amendments. I'm positive that they're going to --

Mr Len Wood: We haven't seen any amendments yet.

Mr Bisson: I don't want to put words in your mouth, but I want to ask you, because this is an important point: You're not opposed, either one of you, to the question of amalgamation, but what you're asking for is that you, the smaller municipality, have some ability to stop the move by a larger municipality to take you over unilaterally.

Ms Blok: Exactly. That's exactly what we're saying. But I have a question to ask on mining which really disturbs me. I'm also the president of the Association of Mining Municipalities of Ontario. Would this new direct grant -- and perhaps some of you people could answer this -- give municipalities the authority to assess buildings underground?

The Chair: We'll let that question stand. I have a minute left for Mr Bisson.

Mr Bisson: That was coming to my second part. Mayor Power and yourself expressed discussion around the question of taxation. What the bill provides for you to do is to implement a direct tax, which means to say that if you were to decide to implement a direct tax on the mines, let's say, up around American Barrick or the one next to it, Harker-Holloway, you would be able to do so under this act. It's not a question of municipal assessment; it's a question of being able to put a direct tax on that corporation, or a resource corporation of any type, under the power of this act. Yes, you have the ability to do it.

Mr Power: Does that include underground workings?

Mr Bisson: No, no, it's not an assessment. I'll let them respond to this directly. It is in the form of a direct tax. It gives the municipality the ability to put a direct tax, which is, you can put a head tax of some type or sort of a sales tax or gross revenue tax on that employer.

Mr Sampson: Thank you, Madam Reeve and Mayor, for your presentation and, Madame Reeve, for sharing your time with the mayor. I gather that was something that was put together just recently.

Ms Blok: We do that all the time in northern Ontario.

Mr Bisson: A friendly word: Don't tangle with her.

Mr Sampson: Well, I was going to make two comments. I can tell you, one of the things that probably will not be one of the amendments coming forward is to take the letter "c" out of the word "block."

Ms Blok: Darn it.

Mr Sampson: I was secondly going to ask you whether you're related to someone by the name of McCallion in Mississauga?

Ms Blok: No, but I know her very well.

Mr Sampson: I want to pick up on your discussion, Madam Reeve, on page 3 with regard to the restructuring suggestions. You say you want it to be locally driven, a locally initiated restructuring. I think in response to the question from my colleague across the floor, you indicated that -- I think what you're really after, if I can paraphrase you, is a local veto. Is that correct?

Ms Blok: I don't understand your question.

Mr Sampson: If I understood the questioning beforehand that was put to you, do you want to be able to say yes or no to restructuring proposals --

Ms Blok: That's right. But the act doesn't give us that.

Mr Sampson: Right. Let me just ask you then, how does one democratize this restructuring process, in your view, if there is a dissenting municipality or a dissenting area or a dissenting group of people? Is it your view that they should effectively have a veto then over what the restructuring proposal is, almost regardless of what their size is?

Ms Blok: Yes. If it's working for them, why should they amalgamate, regardless of the size?

Mr Sampson: Okay.

Mr Gerretsen: Have you got an answer for that, Rob?

Mr Sampson: No, I don't. I'm asking her whether or not that's what she's proposing. Indeed, she's a proposing there will be a veto for municipalities regardless of their size. That's fine.

Ms Blok: It's amended? Thank you, Mr Sampson. You're a great guy.

Mr Sampson: I didn't buy your "c" one; I don't know why I would have bought that one either.

The issue about the block funding separation, is that just to ensure that the dollar amount remains constant, remains untouched? Is that the fundamental issue here?

Ms Blok: The northern support grant and the equalization resource grant?

Mr Sampson: Right. You want to know that the dollar is a dollar --

Ms Blok: We want to know what that dollar is and what it means to northern Ontario municipalities, yes.

Mr Sampson: Just so that you know it's a dollar today, it's a dollar tomorrow and it's a dollar for the rest of eternity etc.

Ms Blok: That's right.

Mr Sampson: My colleague here has a question he wants to pose on interest arbitration.

Mr Tascona: Thanks very much. I noted your comments on the interest arbitration, and it would appear that what you're looking for is a strengthening of the provisions that we put forth with respect to the fiscal realities of the day. I'm interested in Mayor Power's comments with respect to this subject. You said that in your experience they've consistently made rulings that affected municipalities adversely and you feel that it's no longer acceptable. I'd just like you to share that experience as best you can.

Mr Power: I'll give you one example, Mr Tascona. I remember one arbitrator putting on his coat as he was leaving for the airport and, the city being one side, he said to the other side: "Now, what did you say you would accept as a final award? Did you say 6.8 or 8.6?" Of course, the fellow said 8.6, and that's where it came in. I'm just saying there have been times when the arbitrators have not been very sympathetic towards the municipal taxpayers. If we're going to try to keep the municipal tax rate increases down to zero, we can't do it if we have our arms tied behind our backs.

Mr Tascona: What groups are subject to interest arbitration?

Mr Power: The police and fire mainly, and then of course we also have arbitration through the senior citizens' home, Golden Manor.

The Chair: I apologize, but we've come to the end of the time. I'd like to thank you both for coming forward today and making your presentations to the committee.

Mr Power: Thank you, Mr Chairman, and again thank all of you for coming to Timmins.

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The Chair: May I please have the representative from the Timmins Chamber of Commerce.

Mr Phillips: You didn't get an answer to your question on the Mining Act.

Ms Blok: That's right. You didn't give me a chance to get an answer.

The Chair: Each presenter gets half an hour. You may want to discuss this with a member in the hall.

Ms Blok: Just --

The Chair: No, I'm sorry, ma'am, we only have half an hour. You may want to discuss that outside. We have another presenter coming in. Each gets equal time.

Mr Bisson: On a point of privilege, Mr Chairman: I request unanimous consent to get the answer for Pierrette Blok. I'm allowed to ask. I'm asking for unanimous consent.

The Chair: Under the standing orders, members aren't under any obligation to answer those types of questions at committee.

Mr Bisson: I'm asking for unanimous consent to get the question responded to. Yes or no. Put the question.

The Chair: Do members want to give unanimous consent to that motion? I don't see unanimous consent. The motion is lost.

Mr Bisson: So the government doesn't want to give the answer. Okay.

TIMMINS CHAMBER OF COMMERCE

Mr John Bragagnolo: Good afternoon, members of the committee. My name is John Bragagnolo and I'm the president of the Timmins Chamber of Commerce. I would like to welcome you to our city of Timmins. Second, I would like to thank you for allowing the Timmins Chamber of Commerce an opportunity to make presentation before you this afternoon.

The Timmins chamber represents 470 small, medium and large businesses within the municipality, with a total voting membership of 655. Our mission statement is: "The Timmins Chamber of Commerce is a non-profit volunteer organization which represents a wide range of business and community interests. We are committed to our community and we will encourage its growth by promoting business opportunities." We have always been proactive in voicing our members' concerns with respect to local, provincial and federal government policy, while actively addressing educational, civic, social and economic issues.

I am pleased to make presentation before this committee today on behalf of the Timmins Chamber of Commerce on Bill 26, the Savings and Restructuring Act. My intention is to give you a brief overview of the position of the Timmins Chamber of Commerce regarding the government's omnibus legislation and allow time afterwards for questions from committee members. I will first discuss the need for fiscal stability and government restructuring, and then I will focus on the proposed changes to the various acts which will have the most impact on our members.

The need for fiscal stability and government restructuring: During the past decade, government has allowed its debt to triple, putting it close to the $100-billion barrier, while at the same time we have seen personal income tax rates increase so many times that Ontario rates are among the highest in North America. One of the most compelling statistics that has been thrown around of late and causes great concern to our members is that the government spends $1 million an hour more than it receives in revenue.

When one reviews the statistics, it becomes very clear that government restructuring is completely necessary and long overdue. It is imperative for the Ontario government to take strong measures to reduce spending and get its financial house in order. The Timmins Chamber of Commerce supports the purpose of Bill 26, which is to achieve fiscal savings and promote economic prosperity through public sector restructuring and streamlining. The government must get to a point where the 3E rule shall be applied: Government must become effective, efficient and economical.

The Timmins Chamber of Commerce believes the role of government in today's economy is to create a climate which will encourage people to go into business, help business grow, and attract new investments and jobs.

In the past, government has attempted to be all things to all people. It becomes very apparent when you see the government's financial fiasco that the government can no longer afford this.

Restructuring government and restoring confidence in the financial strength of Ontario is essential to the future of our provincial economy. The concept of massive restructuring and cost-cutting is one our members have been very familiar with over the past decade. Many of our members have had to restructure their operations to remain competitive in an increasingly difficult marketplace. Those who have adjusted have successfully emerged from the recession of the 1990s; those who haven't adjusted are no longer with us.

The Timmins Chamber of Commerce believes the provincial government must also adjust to the changing times and demands which are being placed upon it by today's modern society. The government must realize that we cannot afford to continue running deficits up to $10 billion without seriously jeopardizing the economic future of my generation, our children's generation and generations to come.

We support Bill 26 because it provides the mechanism for the provincial government and municipalities to commence this restructuring effort, improve the financial strength of the province, and to send a strong message that Ontario wants to work with the private sector to create jobs and foster economic growth.

Since Bill 26 is very broad and proposes amendments to many pieces of legislation affecting our members, I will focus on the proposed changes to the various acts which will have the most impact on our membership.

(1) The proposed amendments to the Corporations Tax Act: The mining industry plays a vital role in the success of our local economy in Timmins. One recent expansion, namely, the Dome $140-million open pit expansion, is a prime example of the bright future that mining will play in the growth of our community. I am pleased to say there are many other projects, like the Kinross development, the development that Royal Oak has just announced of a $3-million open pit project, but it is estimated that this Dome project alone will create $1 billion to our local economy in the next 10 years. The expansion of our local mining economy has occurred in spite of the many obstacles, bureaucracy and government overregulation of that industry.

The Timmins Chamber of Commerce strongly supports the proposed changes contained in schedule B of Bill 26 to the Corporations Tax Act concerning the mining reclamation trust tax credit. This action alone will free up millions of dollars for our local mining companies, which will allow for further expansion of the mining industry in Timmins.

Furthermore, the Timmins Chamber of Commerce supports the creation of the Ontario innovation tax credit for small and medium-sized Canadian-controlled private corporations having permanent establishments in Ontario in respect of scientific research and experimental development in Ontario.

We believe providing incentives for business is a positive role the government can play to encourage the private sector to invest in the province. The proposed amendments to the Corporations Tax Act will assist these sectors to create jobs and contribute to the overall provincial economy.

(2) The proposed changes to the Municipal Act and various other statutes related to municipalities: Schedule M of Bill 26 contains amendments to the Ontario Municipal Act and various other statutes related to municipalities, conservation authorities and transportation. I would like to focus on two specific amendments proposed in the legislation, namely, the proposal to give municipalities and local boards broad new powers to impose fees or charges for any services or activities they provide, and the addition of a new part in the Municipal Act that establishes new general licensing powers to municipalities.

While we support the goal of restructuring and the introduction of fees for service, the Timmins Chamber of Commerce, along with the Ontario Chamber of Commerce, is very concerned about the broad powers Bill 26 gives to municipalities to impose fees or charges for any service or activities provided by them. While the bill gives the Minister of Municipal Affairs the power to make regulations limiting or imposing conditions on the imposition of fees or charges levied by municipalities, we believe greater definition should be given to the types of fees or charges which may be permitted under this amended section. Specifically, subsection 220.1(3) provides that a municipality may by bylaw impose "fees or charges that are in the nature of a direct tax for the purpose of raising revenue."

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The Timmins Chamber of Commerce is concerned this proposed amendment will lead to municipalities imposing fees which do not correspond to the value of the service being provided. Furthermore, we are concerned that fees may be imposed on businesses for the sole purpose of raising municipal revenues and not specifically related to any activity or service provided by that municipal government. This may have a serious impact on the ability of business to create jobs and growth throughout our municipality, as well as the province. We believe this proposed amendment should be improved to limit municipalities to charging fees on a value-for-money basis and not for the sole purpose of raising revenue.

We are also concerned about subsection 220.1(9), which denies people the opportunity to appeal to the Ontario Municipal Board for the imposed fees or charges levied by a municipality or a local board under the act on the grounds that the fees or charges are unfair or unjust. We believe that the government should provide some flexibility in the legislation for people who may have extenuating circumstances and permit at the very least the opportunity for some sort of appeal.

Furthermore, the chamber of commerce is concerned about part XVII.1, a new part added to the Municipal Act giving municipalities general licensing powers. The new part gives municipalities the ability to license and regulate any business carried out in the municipality. The chamber is concerned because, as currently worded, trade and competition may be restricted by municipalities through this section of the act. We do not oppose giving municipalities the power to pass bylaws providing for the licensing and regulation of businesses; however, we believe the proposed amendment needs to be defined and clarified to ensure that municipalities do not unfairly restrict business from operating or impose additional regulatory requirements which will threaten the ability of the private sector to create jobs and growth throughout the province.

(3) The third item we have some concerns about is with regard to health services restructuring amendments to the Independent Health Facilities Act. I know you had separate hearings related to health about two weeks ago, so I will keep my remarks brief.

Part IV of schedule F of Bill 26 contains amendments to the Independent Health Facilities Act concerning the use of personal medical information. The proposed amendments provide the Minister of Health with new powers to collect, use and disclose personal information for specified purposes and to enter into agreements for the exchange of personal information for specified purposes. While the Timmins Chamber of Commerce supports the goal of the provincial government to reduce fraud in the health care system, we believe government's power should be better defined due to the highly sensitive nature of the information involved.

In conclusion, Bill 26 is a very broad and comprehensive bill which contains amendments to the various pieces of legislation necessary to restructure the provincial government and to achieve fiscal savings and improve the operating efficiency of government. The Timmins Chamber of Commerce supports the broad direction being laid out by the government in relation to this legislation. It is our belief that through these actions, the government is sending out the right message to the private sector and investors in Ontario, the United States and abroad that Ontario is open for business and that Ontario is a good place to invest.

I thank you for affording me the opportunity to appear before you this afternoon to share the position of the Timmins Chamber of Commerce concerning Bill 26. This concludes my remarks, and I will be more than pleased to answer any questions you may have with regard to my presentation.

Mr Bisson: Thank you very much, John. I never thought I'd see the day where the Timmins Chamber of Commerce would come to a standing committee of the Legislature and support actions of the New Democratic government, because the changes to the Corporations Tax Act of which you're in favour are things we put in place in our 1993-94 budget. I'm glad to see you agree.

I want to go through a couple of concerns you've raised, and I think they're legitimate: the powers municipalities are being given to increase user fees or implement a direct tax on its citizens or businesses. The government is saying it needs to deal with this bill by January 29 so it can go on with the fiscal side of its agenda. Would you support carving out of the act those parts that are not needed for the government to deal with its own stuff -- for example, the direct tax to municipalities, the licensing powers to municipalities, the annexation of municipalities -- and leave those out so we have a chance as a society to deal with that a little better and work out some of the problems?

Mr Bragagnolo: When you start leaving out those kinds of issues, the broad scope of the whole legislation in part gets lost. Part of the reason these kinds of issues are put into this legislation is that we all believe that the cost cutting is going to happen, we've seen the impact the municipalities are going to have, the school boards. They all realize their revenues are going to decrease dramatically as part of this cost-cutting procedure.

It's imperative that the municipalities continue the same kind of thought throughout their deliberations. We'd like to see the cuts that come down and affect their revenues not only turn into extra taxes at the municipal level, because that defeats the whole purpose. To exclude those sections would really exclude part that is fundamental to the whole principle of this legislation.

Mr Bisson: I'm interested because I think that's going to be part of the problem we're going to be faced with. The municipalities that deal with the cuts are going to have the powers to do that.

I want to come back to something that you said in your brief and ask you a series of very quick questions around it, and that's the question of your triple E: effective, efficient and economic government. Would you say that our hospital is not effective, efficient and economical?

Mr Bragagnolo: I think our local hospital has made excellent strides towards attaining the 3E status. I think they've made some excellent strides, but I think there's probably room for some more strides to be made.

Mr Bisson: There's always, but would you say the hospitals are not efficient, effective or economical?

Mr Bragagnolo: I think they are right now, but any sort of organization can become more effective, more efficient and more economical.

Mr Bisson: Well, you can always do that. The municipalities, are they not efficient, effective and economical?

Mr Bragagnolo: I think there's room, again, in the municipalities to become more effective, more efficient and more economical in those processes.

Mr Bisson: They're not efficient, then.

Mr Bragagnolo: I'm not saying they're not efficient; I just said there's room for improvement.

Mr Bisson: The Roman Catholic separate school board, same question.

Mr Bragagnolo: My same philosophy continues through all rounds of boards and municipal powers in our community. They do an excellent job and we're most supportive of them, but I think there's room, as in any organization, to dig a little deeper, to become more efficient, more economical and more effective.

Mr Bisson: Where I lead with all of this, and I'll leave it to my friend Mr Silipo after, is that I understand the chamber's position in saying that it wants every public institution -- as I want every private institution because I'm the one as a consumer who pays for inefficient management in the private sector -- I too agree that we need to make sure that we're all efficient, but the problem I have is that the tone is as if the municipality, the school boards, the hospitals, are not efficient and therefore we've got to do all of that.

I just want to put on the record that we do have some efficient public institutions out there that do a good job. Workers don't get paid $1 million an hour to work there. As a matter of fact, they're paid quite a bit less than you pay in the private sector up here. They're doing a darned good job in trying to run those agencies. I wouldn't want the chamber to maybe leave a different impression, that they're not efficient and economical.

Mr Bragagnolo: I'm not leaving that impression at all. The message we want to give is that our fiscal house has to get in order. I think government, like business has over the past decade, needs to become more efficient and economical. We and our members feel there's a lot of room for that to happen.

Mr Bisson: What about the private sector?

Mr Bragagnolo: I think the private sector has really led the way in restructuring. The companies that have been able to restructure have done so and are thriving now; those which haven't have either demised or are on their way to demise.

Mr Bisson: That's why I pay a higher price.

Mr Young: According to 1993 Statscan figures, the latest figures available, 87% of Ontarians make under $50,000 a year. Every one of those people is going to get a tax cut. We view this as the largest job creation program in the history of Ontario. We're going to put money back in working people's pockets. We think they'll spend it. I'd like to ask you what difference that's going to make in your community to your local business and your local business tax base.

Mr Bragagnolo: One of our concerns, and I think it's been raised many times by the Ontario Chamber of Commerce and our chamber of commerce, is that our members feel a couple of things concerning government. First of all, we feel that there is too much government and that our members pay far too much tax. We think that if you can get more money into the hands of the small business operator, the medium business operator and the large business operator, that's when you're going to really see the economy start to churn again and really promote true job creation.

Mr Young: On the other side of the coin, with the debt that we have and the $9-billion deficit that is growing $1 million an hour, as you point out in your presentation, what would happen to your community social programs and our health care system and our education system if we don't take the action we have to take to address this debt and deficit?

Mr Bragagnolo: What I referred to in my remarks is I think what we're doing is just unfairly passing on the responsibility to our children and our grandchildren to deal with. I think we're at a point now in our economy where these problems are almost getting to the point where they're going to be unmanageable in the future. If we don't manage them now, I think we're going to ruin it for generations to come, and that's why we feel there's a need to get these issues in order.

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Mr Sampson: One interesting point, following up on my colleague's question: Have you ever calculated what the cumulative amount of the tax cut would be, let's say, to the city of Timmins, how much money it will be in the pockets of the residents of the city after the tax cut is implemented?

Mr Bragagnolo: I haven't done the calculation myself, I'm sorry, but it would be significant. In my day job, I also manage a retail shopping facility and we see that the consumer confidence, because our local economy has been so strong, is starting to pick up. If you can get more dollars into the hands of consumers, we're going to see that trend increase even more.

Mr Sampson: We've had some comment from other deputants in other cities that perhaps it's not wise to try to move the decision-making as far locally as we can get it. I think they felt that would provide too much authority and too much power at that level. But does the group you represent feel they have more ability to influence such decision-making if it's at the local level as opposed to, for instance, at Queens' Park?

Mr Bragagnolo: I think decentralization does put a little more power into the local forces and you're able to make that change. If you look at some of the bigger corporations like IBM, they soon found out that was very necessary, to become a little more local and decentralize a little bit. However, some of the concerns, if the powers are brought down to the local level, we just want to make sure there are not greater barriers caused by the local level upon business and put greater pressure in that regard.

Mr Sampson: But if they do that, clearly you're going to have an opportunity to affect their decision.

Mr Bragagnolo: Yes, we will.

Mr Sampson: Every once in a while they're going to ask you to hire them for the next three years and the electorate is going to say, "Well, no, maybe we'll hire somebody else, because we don't like the decisions you've been making."

Mr Bragagnolo: That's right. That's the fundamental of our democratic process.

Mr Phillips: I appreciate the chamber's presentation, and I just want to follow up on Mr Sampson's comments. In the old days, I used to be in business myself. I had three companies, 300 employees, so I have, as they say, some idea of it.

Here's the way the government plans to run its finances: Right now -- imagine this were a company -- we've got a debt of about $100 billion and we've got a deficit of around $9 billion. We've got to somehow or other manage that. The government is going to cut about $8 billion worth of spending, and then it's going to declare a $5-billion dividend in the form of a tax break. We are trying to get our deficit under control, but to some of the shareholders they're declaring a $5-billion dividend in the form of a tax break.

This is a really strange way to run a company, I think, when you are saying we're bankrupt, all of us have got to lend our shoulder to the wheel, this is a terrible situation. If this were a company and you were going to the bank with this little business plan and you're saying you're bankrupt, but you can afford a $5-billion dividend in the form of a tax break, would the banks here in Timmins want to loan money to this kind of company?

Mr Bragagnolo: A couple of things: I think you raised an interesting point; it's comparing the finances. I think if any company was in the financial shape the Ontario government is, it would be long bankrupt.

Having said that, I think a tax break is necessary because I think what it does is it gets money back into the hands of the private sector. If anybody has proven that they can create jobs and stimulate an economy, I don't think we can look to the public sector to do that. I think it's the private sector's mandate and I think it's up the challenge of being able to do that. There's far too much tax burden on the small, medium and large businesses as we speak right now. If you can get more tax dollars into the hands of these people, I think you're going to see job creation happen and I think you're going to see the economy start to thrive again.

Mr Phillips: Well, we probably have different bankers, I guess. I don't think I'd leave the bank with a loan or I don't think I'd sell the bank on this business plan if I were this much in debt, this big a deficit and I planned a $5-billion dividend to the shareholders. But we just have a different perspective on it.

The licensing provisions here are fascinating. I assume you've read the bill. What it says in the licensing here is that here are the licensing powers, which will require "the payment of licence fees, which may be in the nature of a tax for the privilege conferred...." Then it goes on to say, furthermore, if we give you the licence, we have the power "to inspect places or premises used in the carrying on of the business and the equipment, vehicles and other personal property used or kept for hire in connection with the carrying on of the business."

I'm wondering what the chamber's view is on the meaning of "in the nature of a tax" for a business licence. I might add that we've had some mayors say they're going to take licences from $20 up to $500. What's the chamber's view on what they mean by "may be in the nature of a tax" and how concerned is the chamber about that provision?

Mr Bragagnolo: In my remarks I referred to that concern specifically. We'd like to see this restructuring process carried out right through to the end. I think we've seen it somewhat on the federal level, we're seeing it at the provincial level and we hope to see the same thing on the municipal level. We do not want to use the municipality and we have concerns that some of the powers they might get in relation to the bill would indeed, as you say, become direct taxes to businesses. We have a definite concern about that and we hope this point will be clarified in the bill.

Mr Phillips: The problem you run into, I think, is that this was part of the deal the government struck with the municipalities. They said, "You're going to get the taxing powers, unlimited flexibility on fees and on the licensing power enormous potential for licensing powers." So if you're hoping for a change, good luck, but I'm just telling you what we've heard is that this is something that's been given to the municipalities and the idea of them backing off it -- the challenge I have with the chamber presentation often is -- with all due respect to the chamber -- they are very much in support of the title of the bill because it sounds quite good, an act that achieves fiscal savings and promotes economic prosperity etc.

Frankly, when you get into the detail of the bill, the ones you do support -- I agree with my colleagues here that the NDP old budgets -- the ones you've got big concerns about are fundamental to the bill: that is, the imposition of brand new municipal fees, taxes and licensing power that I think fundamentally changes the way services are financed in this province. Imagine that your amendments that you proposed don't get adopted. What's the chamber's view on the bill then?

Mr Bragagnolo: We think both the Timmins chamber and its members and the Ontario chamber and its 65,000 members really do have some say in that their issues will be taken into consideration. I'm not one to hypothetically judge any situation. If the case is that we do not get clarification and those direct taxes are going to be imposed, then we would carry on our fight to the municipal level.

Mr Bisson: On a point of privilege, Mr Chairman: You say the chamber has some say with who?

The Chair: It's not a point of privilege, Mr Bisson.

Mr Bisson: Hang on a second. There is a point of privilege. If he's saying that the chambers have some with the government and we as members will not accept amendments to this bill, I would like to know an answer to that point.

Mr Bragagnolo: I'm not saying that we have clout with the government. I'm saying we represent 65,000 businesses in the province of Ontario. That unto itself -- people tend to stand up and listen to what we have to say when it affects the province.

The Chair: Thank you for coming forward today and making a presentation on behalf of the chamber.

Mr Silipo: Before we move on, Mr Chair, I appreciate you have some final words before we leave Timmins. I just wanted to say that I wanted, if you will allow, to table a couple of motions for our consideration tomorrow that deal with the issues we've been raising day after day, together with our Liberal colleagues, around both the --

Mr Gerretsen: You didn't like the fact that we got ours in first.

Mr Silipo: No, we can find an accommodation around that, let me assure my Liberal colleagues on this. I think the point I wanted to just make again, Mr Chair, was that in tabling these, once again I regret that we haven't been able to hear more people here, that we only managed to hear 10 or 11 people out of the 24 groups that had requested. I really hope sincerely that the members of the government side think seriously about the implications of that for the process and consider these motions for tomorrow morning.

The Chair: Thank you very much and we will adjourn until tomorrow morning at 9 am.

The subcommittee adjourned at 1501.