CONTENTS
Wednesday 12 December 1990
Management Board of Cabinet
Adjournment
STANDING COMMITTEE ON GOVERNMENT AGENCIES
Chair: Runciman, Robert W. (Leeds-Grenville PC)
Vice-Chair: McLean, Allan K. (Simcoe East PC)
Acting Chair: Silipo, Tony (Dovercourt NDP)
Bradley, James J. (St. Catharines L)
Frankford, Robert (Scarborough East NDP)
Grandmaître, Bernard (Ottawa East L)
Haslam, Karen (Perth NDP)
Hayes, Pat (Essex-Kent NDP)
McGuinty, Dalton (Ottawa South L)
Stockwell, Chris (Etobicoke West PC)
Waters, Daniel (Muskoka-Georgian Bay NDP)
Wiseman, Jim (Durham West NDP)
Substitutions: Daigeler, Hans (Nepean L) for Mr Grandmaître
Murdock, Sharon (Sudbury NDP) for Mr Hayes
Clerk: Arnott, Douglas
Staff: Pond, David, Research Officer, Legislative Research Service
The committee met at 1014 in room 228.
The Acting Chair (Mr Silipo): It has been suggested that I take the chair temporarily, with the agreement of the committee, until the Chair or the Vice-Chair arrives. They are both delayed, I gather, at other meetings.
The clerk has also suggested that until the other members of the committee are here, the Chair and the Vice-Chair particularly, we go to item 2 on the agenda, which is the overview of agencies, boards and commissions. We have some guests here to assist with that. Again, if that is agreeable to the committee, I suggest we proceed to that item.
MANAGEMENT BOARD OF CABINET
The Acting Chair: We have Michael Jordan and Karen Tilford. I guess you will proceed with the presentation. We have a copy of some notes on our desks.
Mr Jordan: As you indicated, we brought with us some material which the clerk has distributed. With your permission, we intend to use that as a guide to help us through the overview.
I should say at the outset that a great deal could be said about agencies, boards and commissions, and the focus of our comments this morning will be on the role of Management Board and the establishment of agencies, boards and commissions under the policies prescribed and promulgated by Management Board of Cabinet.
I would like to begin by just introducing you to the first page, which is a table of contents of the areas we propose to discuss with you this morning. As you can see, it is set out in six sections: the first dealing with a definition of agencies, always a good place to begin; second, the establishment of agencies within the policy framework that the board has established; third, the board responsibilities with respect to government appointees; fourth, the administration of agencies -- that deals with the expectations that policy prescribes with respect to ministries and how they deal with agencies; fifth, we have information on the numbers of agencies, their functions and schedules, and last, with your permission, we would like to talk about a recent report that was prepared by Robert Macaulay that dealt with regulatory agencies.
If you deem it appropriate, we will talk about that report. If that is acceptable, what I propose to do is then talk a bit at the outset about the role of Management Board of Cabinet and then turn it over to Karen, who will then lead you through the balance of the presentation.
As the slide on page 2 sets out, Management Board is best considered as the general manager of the Ontario government. Management Board is a committee of cabinet. It is a statutory committee and it has four primary functions, as set out.
First of all, ensuring that the government's programs are managed appropriately: It does that through a variety of ways and means, most primarily the promulgation of directives on program management. Second is the controlling of government expenditures. That is a process which is managed through the estimates and allocation process which Management Board has authority for. Third is the role of the employer, which is an important and necessary function that Management Board fulfils. The Human Resources Secretariat, which is the staff arm of Management Board, provides assistance to the board in this role. Last is the overall management through administrative policies. It is the policy on agencies, boards and commissions which we are going to be discussing today, but it is one of many policies that the board has within the Ontario government to set direction and to ensure accountability of line ministries for government policy.
With that as an introduction, I would ask Karen to then go into the definition of an agency from the perspective of Management Board.
Ms Tilford: All of our policies are set out in books that we call Directives and Guidelines, the Guidelines supporting the best practices for how to put the policies into place for ministries. The Directives define an agency at this point as an organization with ongoing responsibilities that is formally established through some statute, legislative base, or it could be through an order in council that is pursuant to some legislation. Also, it stipulates that there should be a majority of the appointments to any of the agency boards that are government appointees and they would be through order in council also.
There are sometimes committees struck that are shorter term. They would not be scheduled agencies, for the most part. Our sawoff at this point is often about a year to two years. If there is a longer-term prospect that a group would be ongoing for more than a year or two years, then it would come through to Management Board to be scheduled as an agency of government.
A corporation is also where we define an agency where the government holds more than 50% of the shares and appoints 50% of the members.
An agency would have prime functions of advisory, operational and regulatory. The advisory in this case would provide information to a minister in putting together policy and developing programs. Usually these agencies are created through an order in council as opposed to a legislative base. They are often more time-limited. For a new program being considered, an agency would be put into place in an advisory function to ensure that the policy was being put properly into place. Members of the public would be asked to consider this and to feed back to the minister how things are actually happening. They would be concerned very often with a specific issue and would not require a large expenditure of funds.
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Operational agencies are usually the larger agencies that we would have. They would be providing direct goods and services, often in competition with the private sector. Something like Ontario Hydro would be an agency like that, where it is competing with other services in that field; regulatory agencies or control, licence review and appeal bodies, functions that are very often authorized through legislation.
Management Board controls agencies and how they are scheduled. Approval is required to establish any new agency or any subsidiaries to agencies. They consider them and assign them to three functions -- sorry, the functions as well as the schedules. We will go into that afterwards. The scheduling allows the board to assist where the minister has decided the direction he would like to take. They come forward to the board and say, "For financial and administrative purposes, we would like to assign this agency to a particular schedule." In most cases, for advisory agencies there would be a sunset review date, often three to five years in the future, when the agency would be reviewed by the ministry responsible to consider whether it should be proceeding or not.
What is missing on there is also that the board establishes rates of remuneration for any of the appointees to the boards of these particular agencies.
Mr Bradley: Like the British empire, the sun never sets on any of these agencies.
Ms Tilford: There have been some.
Mr Bradley: Very few.
Ms Tilford: The Management Board Directives, the policy that is set out there, establishes a very broad framework within which the establishment and administration of agencies would take place, and assigns them to the schedules. A schedule 1 could be any one of those functions -- the advisory, operational or regulatory -- having the following characteristics: They would for the most part be funded through the consolidated revenue fund, although they may collect moneys from the public through levies, from fees at the door for some of the attractions we might have -- the Royal Ontario Museum, the Ontario Science Centre, for example -- or parking or fees for participation in an appeal.
The staff would be appointed under the Public Service Act. There are some anomalous groups to that, but for the most part all the staff would be appointed under public service. They would have to adhere to all of Management Board's policies. One of the examples of this would be that schedule 1 agencies would have to abide by the delegated authority that has been given to the ministries. For any consulting services contract below $25,000, for example, they could go out and single-source that or go through some tender process. In excess of $25,000 they would always have to go out into the marketplace competitively, and over $250,000, they would, the same as a ministry, have to seek approval to award contracts like that. Support services for schedule 1 agencies are almost always provided by the responsible ministry for such things as personnel, audit and finance.
The schedule 2 agencies are larger, usually known more as crown corporations. They are all operational and they have a business or commercial orientation to them. For the most part they are self-funding or they have to show that they will achieve self-funding in the future, with revenues generated by their service or program. They may receive, in the initial stages, some startup funds. They are administratively independent and appoint staff under the authority of their own legislation. They would usually seek staff to support their functions who would have entrepreneurial skills so that they could compete in the marketplace.
The Acting Chair: I just wonder whether you might prefer to have a break at the end of each section to deal with questions.
Mr Wiseman: I think we ought to do that. I just have a short question. On this self-funding, can you give me any kind of statistical analysis of how many are actually self-funding and how many are still receiving money from the government?
Mr Jordan: To the best of my knowledge, the schedule 2 operational agencies are all self-funding. You have one qualification to that. For example, Ontario Hydro utilizes the credit rating of the Ontario government when it goes to the marketplace to put its bonds, so it is receiving an indirect subsidy or a hidden subsidy through the premium that our credit rating as a province provides to it. But there are no subsidies, grants or contributions provided by the Ministry of Energy to Ontario Hydro. It is self-funding in that respect.
Similarly with the other schedule 2 agencies. One exception might be capital. For example, I believe the Ontario Northland Transportation Commission does receive, on occasion, capital assistance when it is acquiring freight cars or passenger cars or things like that. Part of what an operational agency must do, and Karen will get into that, is submit to the government a corporate plan which is brought before Management Board and approved. They may at that time request special consideration to a major project that they are initiating or undertaking of a capital nature.
But for the most part the schedule 2 operational agencies -- GO Transit, Hydro, the Liquor Control Board of Ontario -- those types of commercial agencies are self-funding, if not initially, at least in the long run.
Mr Frankford: Is the Workers' Compensation Board schedule 2?
Mr Jordan: No, it is a schedule 1.
Ms Tilford: Actually it is a schedule 3. The Workers' Compensation Board is a schedule 3 agency. That leads into, what is a schedule 3 agency? They are all operational with a social-cultural nonprofit outlook. They receive some funding through the consolidated revenue, although most of their moneys are received from the public or through the services that they provide. Administratively, though, they are also independent, appointing staff under the authority of their own legislation. Again, they would have a specialized expertise for their staff that would not normally be found in the Ontario public service.
Mr Jordan: An example of that would be the Royal Ontario Museum or the Art Gallery of Ontario.
Ms Tilford: The directive principles: Rationale for agency structures is that less government involvement or greater operational flexibility is required to carry out a function on behalf of a ministry. Ministries must demonstrate to Management Board of Cabinet justifiable need for an agency status. They would most likely fall into one of the categories in their requirements.
The need for independence in decision-making: Again, that is very much like the regulatory bodies, that there is a need for some sense of control. That would be like the Ontario Securities Commission licence review, the Liquor Licence Board of Ontario or hearing appeals such as the Social Assistance Review Board at the Ministry of Community and Social Services. They may require operational flexibility. That would be something like the Ontario Lottery Corp or the Ontario Development Corp; or involvement of public interest groups. That would be something like the multiculturalism groups that have been put together through the Ministry of Citizenship.
Also, they would have to show that there is still a need for an element of control by government, as we are ultimately responsible. We do this through ownership as well, as a majority of the appointments on the board of directors would have to be through the government.
At the bottom there is a note that funding alone does not affect the status of an agency. There are many transfer payment agencies that are in addition to agencies. The primary responsibility for the function of a transfer payment agency does not lie with the government, it is with a community group.
Mr Jordan: An example would be children's aid societies.
Ms Tilford: They receive 100% funding from government but it is a community board that is established and we put this into place in the community.
The Directives set out a number of mandatory requirements. The first one is, to use the agency form, there must be a statutory authority. Again, that is through direct legislation, regulation pursuant to legislation or an order in council. A mandate must be clearly established setting out the roles, responsibilities, powers and duties of the agency. Any subsidiaries within a parent mandate must be clearly laid out and the corporate form, to actually incorporate, must only be used when it is justified. That would be when the legal powers of corporation are legitimately required for any commercial or quasi-commercial activity. I do not have the statistics on that, but there are not many of the agencies; it would for the most part be the schedule 2 agencies, those larger corporations, that would use that form.
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Ministerial justification must form part of the report that a ministry will bring forward to Management Board. It would set out the rationale for the mandate, why the ministry cannot do this and justify to the board the explanation for that; set out the administrative and financial arrangements, put the agency to a schedule, how close or how distant it might be from government; the staffing, whether it would be through public service or under its own legislation, and the numbers and the dollars that might be involved with that; the auditing arrangements, whether they would be using the Provincial Auditor, internal audit of the government, as well as going outside to the private sector; accountability relationships, setting out the responsibilities and the reporting relationships -- we will go into that a little bit further -- and agency managing board, the size, the composition, the appointment process that will take place, and the remuneration of all the appointees to the managing board would be laid out in that first submission that comes through to the board.
We have included a portion on government appointees. Not all government appointees are assigned to an agency, although the vast majority of them are, so the directive we have at this point is broader in scope, but for agencies it is important to keep in mind that they are headed up by appointees of government. It is any individual who would be appointed to undertake a function on behalf of government, appointed through an order in council or it may be through a ministerial letter. That would mostly be for others brought in on an advisory function for a short term as opposed to the groups appointed to agencies. They are almost all without exception through order in council. Most would be appointed to government agencies or ad hoc bodies, royal commissions and other groups that are put together under an Ontario statute.
The principles that have been laid out in the policy for appointees: Appointments are at pleasure. They could be terminated at any point. In most cases they are up to three years, with another three years possible for renewal. They are not to be considered pubic servants. It used to be that a fair portion of the appointments to an agency were civil servants, and we have seen a dramatic decrease in that since about 1985. I am not sure of the numbers right now, but there are very few who would be civil servants at this stage. There is supposed to be fair and equitable representation -- regional representation, women, visible minorities and francophones -- to the appointments.
Remuneration: In any of the appointments that are made by government, there is an element of public service. They are not to be competitive with the marketplace. So if you are bringing on a lawyer to do a job for you, you are not paying his normal per diem that he might get in the marketplace for doing very similar work. There is supposed to be an element of public service to this. The task is what is remunerated, not the individual. Per diems are for the most part on a part-time basis for the part-times, and we also have some full-time people who would be on an annual salary. Rates are a matter of public record and can be disclosed.
Conflict of interest: Our guidelines are a little bit skimpy at this point on conflict of interest. At this stage they just state that there would be no information by an appointee used for any personal benefit and that any conflicts would have to be declared at the outset of a meeting, a board meeting or any hearings that are under way so that everyone is clear and there is clear communication, aboveboard.
Remuneration is applicable to all government appointees, whether it be to an agency or to another smaller group. For the part-time appointments, Management Board actually sets three ranges of rates of remuneration at this point. The level 1 group, $150 up to $225 for members, vice-chair and chair, would be for the most part to the advisory groups and smaller operational groups that we have. The level 2 is where there would be some decision-making taking place, and larger corporations that they are looking at would receive up to $350 for the chairman. The level 3 at this point has been considered only for the labour relations groups. It is a much more difficult group to attract appointees to come in and provide a service on a short-term basis. We have had to increase the amounts for that group.
Did you want to ask a question now?
Ms Haslam: I just wondered what that was for. Was that a year, a week?
Ms Tilford: That is per meeting, and usually that would be at the same base as the seven and a quarter hours per day.
Mr Bradley: Plus expenses.
Ms Tilford: Plus expenses, if there are any related to travel, hotel.
Interjection: Out-of-pocket expenses.
Ms Tilford: Out-of-pocket expenses that would normally be provided, and there could be a half-day per diem. Usually the order in council for an appointee would stipulate what that would be, but it usually is just half of what the going rate is.
Mr Wiseman: You said that labour relations groups are a little more difficult to define.
Ms Tilford: At this point, to attract the calibre and the expertise.
Mr Wiseman: Are you referring to the people who are doing arbitration, conciliation and things like that in labour relations?
Mr Jordan: The tribunals that Karen is referring to are primarily the Ministry of Labour tribunals that have a quasi-judicial orientation: the Pay Equity Tribunal, the Ontario Labour Relations Board, the Workers' Compensation Appeals Tribunal. The decisions that are taken there are usually by a three-member panel, where the vice-chair is not the representative of labour or the employer. The decisions that are taken there are often held up for other judicial review, and you need a very specialized expertise to ensure that the jurisprudence of the tribunal is appropriate and withstands challenges. It is quite a unique role.
Ms S. Murdock: Are you saying that level 3 would be the WCAT panel?
Mr Jordan: Yes.
Ms S. Murdock: They would not be full-time?
Mr Jordan: There are full-time vice-chairs at WCAT. There are also part-time as well. The rates that you see on page l0 are the part-time rates for level 3 agencies. Full-time members would be paid an annual remuneration. At the present time they are assigned to a classification within the executive compensation plan within the Ontario public service. For example, the chair of WCAT, Ron Ellis, is at the rank of an assistant deputy minister for purposes of annual salary.
Mr Bradley: Could you explain to the committee what happens when the government wants somebody badly enough and they will not work for these rates?
Mr Jordan: The minister may, in that circumstance, come before the board and seek an exemption to the prescribed rate. The board will deliberate on that request, make a decision, and that decision will stand unless cabinet chooses not to ratify it.
Mr Bradley: Has this committee ever reviewed those in the past? Has this committee, as part of its mandate, ever reviewed those people who believe that their services are so much valued that they must have above the generous rate that is paid here? Has that ever come to this committee in the past to review?
The Chair: We can refer that to the clerk. My understanding is it has not. I do not recall it in my brief tenure on the committee.
Clerk of the Committee: I do not believe the committee has approached issues in that way, as issues apart from its review of specific agencies. They have certainly asked for salary information when the heads of agencies have appeared before the committee. I believe there have been questions like that at times.
Mr Bradley: Would there be, within the framework of this committee, the opportunity to do that? Perhaps that is an unfair question to you, but would we be breaking new ground or going outside the jurisdiction of this committee to do that?
The Chair: In my view as chairman I would not see any difficulty with that sort of questioning of an agency before us. I would have no difficulty with it. Perhaps I can direct it in a supplementary to the witnesses. How frequently has this sort of thing occurred in the past few years?
Mr Jordan: It is not a frequent phenomenon. It does happen from time to time where an individual with a particular expertise is sought by the ministry. They feel that in order to forgo the remuneration they would earn in their regular profession, they insist there are precedents where the board has heard appeals from ministers for exemptions to the prescribed rates of remuneration.
The Chair: Do you ever reject one?
Mr Jordan: Yes.
The Chair: Are you through on that point? Carry on.
Ms Tilford: Further, under the part-time, for remuneration, any short-term customized would usually not be associated with an agency. This would be other appointments through a minister. It is short-term. The nature of the assignment would require someone with a fair bit of expertise. They would exceed the maximums in almost all cases and they would always come forward to the board for approval.
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We have an annual process where the deputy ministers must report through to the secretariat on the rates of remuneration for all appointees to agencies and we will often take that forward to the board for consideration. Management Board Secretariat also approves any increases that are greater than 10% for any of the per diems per year. So if a vice-chair in a level 1 agency came in at $150 -- these are the maximums and not all of the agencies are paying their appointees at that maximum -- if they wanted to provide an increase up to $175 from $150, they might have to come to the secretariat in order to do that in one year and ask our authorization to proceed.
Full-times, as Michael has already said, are established annually by Management Board and so the executive positions are tied into the executive compensation plan of the government.
The next page just outlines again what Management Board approval is required for: any rates in excess of the Directives -- we have just gone through that -- rates for all short-term assignments for appointees; rates of all full- time appointees, again placed in a comparable Ontario public service classification; allocation of newly appointed agencies to a level of remuneration -- the board is responsible for setting the rates of remuneration that will be allowed for appointees to a particular agency; any rates that are not being paid on a per diem basis.
There a few exceptions to that where some appointees are being paid an annual lump sum as opposed to a per diem. In most of those cases, the ministries provide us with adequate data to show that there will be sufficient numbers of meetings to show that we are in fact getting a better buy for our dollars by giving a lump sum, but they also might pay a smaller lump sum almost like an honorarium, such as maybe $3,000 to $5,000 plus a per diem to some chairs to entice them to come in.
Mr Wiseman: Almost an honorarium?
Ms Tilford: It seems to be a word that we do not like to use, honorarium, but it is a lump sum consideration that would be paid up front and then the per diem would be paid afterwards, but there is no one being paid more than $5,000 as a lump sum.
Mr Wiseman: Is it taxable?
Ms Tilford: Yes, it is.
Ms S. Murdock: Do all of these applicants for exceptions or increases only go to you? Do they ever come to this committee?
Ms Tilford: No. They would only come to Management Board.
Mr Jordan: That is before the order in council, so under the reforms announced by the Premier, if I understand them correctly, you would see the order in council with any exception after the reforms were implemented.
Ms Tilford: Under the administration of agencies, Management Board approval is required for all memorandums of understanding and any exceptions that would be required to this -- we will be going into some detail about what a memorandum of understanding is -- corporate plans in some cases if there are particular financial implications that the board needs to consider, and also all sunset reviews and exemptions from that process.
Under the administration directive principles, an agency should conduct itself in accordance with the government's management principles that are established: high-quality service to the public; accountability for board as well as the staff -- actions must live up to the scrutiny of the public -- excellence in management -- the focus there is on results, accountability and responsive decision-making -- wise use of public funds; and fairness in the marketplace -- fair access and treatment of all of those who would have business with it.
Any specific financial and administrative arrangements should be established for all agencies, and a successful ministry-agency relationship is dependent on a clear understanding of the responsibilities of all parties.
It is fundamental to ensure that there are open lines of communications. In most cases it would be for an agency between a minister and the chair of an agency.
The memorandum of understanding is the key document in which agency and ministry lay out the roles, responsibilities and relationships. They specify also the administrative procedures that will be part and parcel of how the agency will function.
Most of the memorandums of understanding are established for a five-year period. They would be entered into by the minister and a chair. They would be designed by both of them in co-operation. Very often staff of the ministry would put a draft together and it would go over to the chair and other board members for review, and then discussion would take place between them. All memorandums of understanding must be approved by Management Board.
All of the operational agencies and other agencies that are advisory and regulatory not adhering to all of our Management Board directives must complete a memorandum of understanding. For the most part, this would be done within six months of the date that they are established.
The memo includes information, again, on the roles and responsibilities not only for the chair and the minister but for the staff, the chief executive officer if there be one, the deputy minister, and sets out financial and administrative arrangements, particularly the funding arrangements if there be any, any grants that might be provided and application of Management Board directives.
All schedule 1 agencies must adhere to Management Board directives unless they receive particular exemptions. Schedule 2 and schedule 3 agencies have in their memorandum of understanding a phrase similar to they would "live within the spirit of the guidelines and directives set out by Management Board."
Reporting and review requirements would be laid out in the MOU as well as any audit arrangements that are going to take place.
Should an agency in its constituting instruments have it fairly well structured who reports to whom, when and what is actually going to occur -- there are very few of those──then a memorandum of understanding is not required and the board would exempt that group from having to complete one.
A corporate plan is basically a financial plan in light of the strategic directions that would be taking place for the agency. It is a rolling plan of three to five years prepared annually by the agency. Any major capital and operating expenditures, commitments that will be upcoming in that year, would be laid out in this corporate plan. Any financing that is required or any structural changes to the group would have to be included in that for consideration by the minister.
Again, the corporate plan is required by all schedule 2 operational agencies. There are some additional schedule 1 and 3 agencies where ministers have found this to be a very useful tool and have requested that the chairs of the agencies provide them with them with this annually.
The minister is the one who would have the authority to approve the corporate plan, and a copy is actually just sent to Management Board and to the Treasurer for their consideration. Unless there are particular capital concerns, as Michael was saying earlier, that would be reviewed by the board for the financial consideration.
Sunset review is a process that actually began about 1980 for advisory agencies, initially, and some of the other agencies have been included within this process. For advisory agencies it would stipulate that they have to have a review take place every three to five years as a minimum.
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The review would be undertaken at the minister's responsibility and the ministry would make recommendations on whether the agency's functions should be continued. Any changes to their mandate structure, the way that they are operating, they would have to bring forward to Management Board for approval.
In some cases, agencies have been reviewed and parts of their functions have been moved over and amalgamated into a ministry or privatized, such as the child abuse centre at the Ministry of Community and Social Services several years ago. It was set up as an agency of government and after its first couple of years moved out into the community with a non-profit board now established and set up as that group. So it is no longer an agency of government. It went through that sunset review process.
All advisory agencies and operational agencies that are not completing corporate plans should complete a sunset review. Only at the time of legislative change would regulatory agencies come forward and consider whether there is any change to the mandates of the group and whether it is time to look at taking it back into the ministry or moving it further out.
In 1987-88 there were 26 reviews that were completed and brought forward to Management Board for consideration. Of those, 20 were continued with some modifications to them, five were actually sunsetted and one was privatized. In 1988-89 there were 24 reviews, of which 20 again were continued, three sunsetted and one amalgamated into a ministry. Some have been sunsetted but the majority are continued.
Other administrative arrangements concerning audit: All agencies must have an annual audit performed. Schedule 1 agencies for internal audit would have the ministry complete that function. Schedule 2s and 3s could have the ministry responsible do their own audit, should they be large enough to do it internally, or they could go out to the private sector and contract for that.
The Provincial Auditor currently acts as the auditor in many, many of these cases. I am not sure if there is some concern with that at this point in time with the Provincial Auditor's part in --
Mr Jordan: You may be aware that Doug Archer, the Provincial Auditor, has, I believe, talked to the Chairman of the public accounts committee, and he is at this time preparing amendments to the Audit Act which will see the Provincial Auditor discontinue the auditing of a number of agencies and permit the agency the authority to go to external auditors in the private sector to fulfil what are called test audits or financial audits where essentially they are looking at the balance sheet and other financial statements of the agency.
It is the Provincial Auditor's intention to broaden his mandate or scope and undertake more value-for-money audits in these agencies. He has to readjust his workload and his resource base in order to perform that, but that is a matter for another committee.
Ms Tilford: Reporting requirements, as laid out in the Directives: There is an annual report that is required by every agency as there are with the ministries. They may be incorporated within the overall ministry annual report that is prepared and tabled in the Legislature or they may be tabled themselves.
Financial reports from those that receive direct funding from government are required. In that case, the ministries would establish with each of the agencies the kinds of reports that are required and how frequently.
Page 19 provides a list by ministry of the number of agencies by both the function and the scheduling. At this point, there are 233 agencies of government.
Ms S. Murdock: There are 233 agencies?
Ms Tilford: Yes.
Ms S. Murdock: And only 27 a year are reviewed?
Ms Tilford: Under that sunset review process where not all of the agencies would have to have that provided.
Ms S. Murdock: No, every three to five years, I understand.
Ms Tilford: Yes.
Ms S. Murdock: Even if you were doing it every year, you have 27 reviews a year?
Ms Tilford: Approximately, yes.
Mr Jordan: Bear in mind that 90 of the agencies of the 233 are regulatory agencies that are not obligated to undergo a sunset review other than when the amendments are put forward in the legislation. That does not occur frequently. The operational agencies that have corporate plans are not obligated to go through the sunsetting process. So the number of advisory agencies is less than 233.
Ms S. Murdock: Ah, that makes a big difference.
Mr Jordan: It is 194, according to this number.
Ms Tilford: There are 75 advisory agencies at this point. Up at the top there, where it says agencies by type, AOR, that is, advisory, operational, regulatory.
Ms S. Murdock: Okay.
Ms Tilford: So there are 75 advisory agencies.
Mr Silipo: Perhaps we could comment on the relationship between the sunset review that happens through the ministries and the kind of review that this committee would do if it decided to review a particular agency. For example, do the results of the review from the ministry come to this committee? What is the link between them, if any?
Ms Tilford: I do not believe at this point that there would be a direct correlation. The ministries are responsible for bringing forward the sunset reviews as they are being completed for Management Board approval, whether to continue the agency.
Perhaps the Chair or the clerk could provide you with some input on how you might want to link up with that, if it is appropriate.
The Chair: I am going to have to leave to go and do my private bill. Mr Silipo, you can handle it from the chair. I just want to leave one comment with you. Perhaps you can respond to this too. The Macaulay report identified about 580 agencies, boards and commissions in the province and you have only indicated 233 here. So perhaps you can expand on that as well.
Mr Jordan: Yes.
Ms Tilford: Okay.
The Chair: I shall be back shortly.
The Acting Chair (Mr Silipo): I think Mr Runciman left us with the question of the 233 versus the 580.
Mr Jordan: The answer to that question -- and it is the question I used to ask Bob Macaulay when he was preparing this report, "Why are you putting that number in there?" -- bear in mind that government agencies deal with those where the government appoints a majority of the members. So we list, according to our schedules, those where the majority of members are government appointees.
The government does appoint members to other municipal and other agencies, the Metropolitan Toronto Police Commission, for example. We are not the majority shareholder, so to speak, and therefore, when Mr Macaulay undertook his broad review, he looked at the total environment or total of all agencies, boards and commissions in the province. So many of those would be municipal.
The Acting Chair: The clerk has just shown me the reference in the standing orders where it indicates that as far as the terms of reference for this committee are concerned, it does cover the ability to review agencies, boards or commissions where some or all of the members are appointed by the government. So we would have that additional number that we could also review, if we chose to. I think that maybe explains the discrepancy or the two ways of looking at it.
Mr Frankford: Can those other ones be broken down in the same sort of way or are they completely separate?
The Acting Chair: I think they are not, but I believe they could. I think we actually did receive in one of the packages that we got a breakdown of all of the -- I think it is a complete list, Mr Clerk, is it?
Ms Tilford: Those would actually have been --
The Acting Chair: This is your list?
Ms Tilford: Yes, from Management Board.
The Acting Chair: I thought we had received that from a similar list, had we not, in the first package of information that we received?
Ms Tilford: We do not maintain that.
The Acting Chair: Maybe not.
Interjection: It was a legislative file.
Mr Frankford: I think there is a list. For instance, the police commission and hospital boards I am sure are listed somewhere.
Ms Tilford: The office of appointments would have that.
Mr Pond: Yes. There is a complete list in the legislative library of all 580. Under the previous government, that is where the official list was deposited, in the legislative library. It is three thick, black binders.
The Acting Chair: The famous three binders?
Mr Jordan: Yes. That list is maintained and updated by the office of appointments in the Premier's office. Carol Phillips is the keeper of that list.
The Acting Chair: I gather that -- based upon the Premier's announcement, certainly that list will be updated and made more widely available in all sorts of public places. Hopefully that will also include the members of this committee.
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Ms Tilford: Page 19 is something that you may want to keep handy. It just provides a breakout of the schedules and the characteristics of the groups that are included within each one of those. It is just a handy tool to have around. It is a quick summary of where everyone falls into that.
Mr Jordan: As I said at the outset I would speak to Macaulay's report, which was released in the fall of 1989, Mr Macaulay's terms of reference were narrow in the sense that he was asked to look at regulatory agencies, boards and commissions authorized under Ontario statutes. It is best to think of those quasi-judicial, appellant-based tribunals as the regulatory ones. Karen has provided a list of them, but we are basically talking about regulatory agencies such as the ones I mentioned for the Ministry of Labour, the Rent Review Hearings Board, the Social Assistance Review Board. These are boards that make decisions and are independent in their decision-making from government.
The major issues that were identified to Mr Macaulay when he undertook his review are set out on page 20.
Essentially there was a concern with respect to a lack of consensus around agencies and why they had been created, what powers they ought to have, what powers they should exercise and how these powers should be used. The issue there, of course, is the administrative law concerns around the authority of these tribunals to make law, as opposed to making policy.
There were concerns also expressed around lack of standards to measure the performance of agencies. The appointments process was seen as an important consideration for Mr Macaulay and he did provide recommendations to the government of the day on what he thought was an appropriate approach to that issue: the relationship of agencies to ministries, the matter of memoranda of understanding on how they could be made more appropriate, the independence of agencies and, last but not least, the training of board members and how to maintain that.
On page 21 there are three more in terms of the mandating legislation, the lack of consistency in how the Legislature has established these agencies in terms of their powers and authorities, lack of co-ordination of regulatory agencies, and the judicialization of their practice and procedures. Bearing in mind that these are not intended to be courts but quasi-judicial bodies, there were concerns expressed by various people that they were becoming too court-like.
So Macaulay's task was to take these issues, take a year and bring forward a report to the government on what he thought were appropriate measures or approaches to addressing these.
What Mr Macaulay identified were what he called the four cornerstones. The first is the co-ordination of agency performance. Essentially what Mr Macaulay was addressing here was that there needed to be a greater level playing ground in terms of the consistency or the approach that agencies took to their business.
He also addressed the appointments process, basically arguing that major efforts were needed at the pre-appointment stage to give a sense to the public that these appointments were based on the qualifications of the individuals, as opposed to any considerations otherwise. He suggested that the process be open through publication, advertising. Many of the steps that have been talked about in the last few weeks are consistent with the recommendations of the Macaulay report.
Another important area in terms of appointments was the promotion in Mr Macaulay's report of an administrative council, a council of administrative agencies, which would be a governing body for all regulatory agencies that would assist chairs and the appointments secretary in the Premier's office in finding or locating qualified individuals who would be considered for appointment to regulatory agencies.
The report also addressed a sound training regime. Mr Macaulay, who is a past chairman of the Ontario Energy Board, felt very strongly that training of board members was an area that needed to be addressed in a more coherent and consistent way across government.
He felt that a good deal of work could be done in terms of establishing a curriculum of courses under the auspices of a Council for Administrative Agencies which would train new members in administrative law, in how to hold hearings, how to write decisions, how to conduct themselves in hearings. He felt that was an area that needed attention.
Last but not least he addressed the whole matter of powers of agencies and recommended major amendments to the Statutory Powers Procedures Act. Page 21 sets out the two major recommendations. I have taken some liberty with Mr Macaulay's report in terms of characterizing it this way. I think he would be supportive, however.
Essentially the creation of a central council, the Ontario Council for Administrative Agencies, which was this co-ordinating management authority, would provide needed structural change to the system and, as I mentioned earlier, amendments to the Statutory Powers Procedures Act were a major facet of his report as well.
At this present time, as the slide indicates, there has been a steering committee of deputy ministers struck. It is comprised of the Secretary of Management Board, the Deputy Attorney General, the Deputy Treasurer, the Deputy Minister of Labour, to oversee the response to recommendations in the report.
That concludes our formal presentation.
The Acting Chair: Are there any other general questions or specific questions of Mr Jordan or Ms Tilford?
Mr Bradley: I think there will be, for further consideration at committee later on.
It is not really applicable to this, but the one item that you may wish to look at that was raised and mentioned in the Macaulay report was the agency set up by government where people appear before it. The great concern Macaulay I think began to see was that if you try to appear before any of these boards now, you need a high-priced lawyer. Since nobody on this committee is a high-priced lawyer, it is safe to say that.
What is happening with those agencies that Macaulay may have seen in that report and would be a concern perhaps to this committee some day is that to appear before it now is almost impossible for the individual. It has now become a judicial process with one lawyer and set of consultants arguing with another lawyer and set of consultants at a great expense in some cases to the taxpayer at large and in some cases to the individuals who are involved.
We have moved away from the old days of the individual making a representation based on "I think" to today where there are what arguments can be marshalled by lawyers. It is difficult because the process is subject to review by the courts in some cases, I take it. Many of these agencies could be subject to a judicial review, a decision could be subject to a judicial review, and therefore people want to be careful.
The other thing Macaulay may have looked at was that one of the problems with appointments is that today, more and more, they want people with some kind of legal background on the committees because the others may find themselves in court or the committee decision may make it to court because there was something judicial wrong with the decision. That perhaps may be something this committee, as well as the government as a whole, may look at. It is a very difficult thing to balance. I think Macaulay certainly began to see what it was for the average citizen to become involved and to access these agencies directly.
Mr Jordan: If I may respond, a good deal of Mr Macaulay's report was dealing with what we call the judicialization of these agencies, which I think is what you are referring to. He saw the role of a council as a mechanism to promote alternatives to that approach, alternative dispute resolution methods, and through training of board members or agency members he felt confident that you would be able to deal with the issue of appointments by bringing in lay people, training them in these methods, and then have an alternative to the judicialization, which he saw as a major problem.
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The Acting Chair: I would like to suggest, then, that we go back to item 1 and deal with the report from the subcommittee, which is attached to the notice of meeting. The subcommittee had a chance to meet yesterday afternoon and has come up with the proposal you see there dealing with the process for reviewing agencies.
It was suggested and agreed to yesterday, subject to the approval of the committee today, that what we should be do as far as the reviews of specific agencies, boards or commissions is concerned is proceed in a way that would have each of the three caucuses determine which particular agencies they want to have the committee review, and start out with one of those. That is probably all we can reasonably expect to do in the break, particularly if this committee is going to be given the additional responsibility of reviewing the appointments, as set out in the Premier's statement.
I certainly know the NDP caucus has not had a chance to talk about which particular agency it might want to review. I do not know if the same holds true for the other two parties. From talking yesterday and talking briefly with the clerk, I think the suggestion we will be making is that we ought to have that agency named by each of the caucuses by next week at the latest, because we need to give the particular agencies a certain time to prepare for the review. Normally, I guess we try to give them about a month's lead time.
That would probably involve the committee having to meet again next week to do that, unless there is another way. If that were the only item, we would be able to work that out through the subcommittee, if you wish, though we could have the committee come together next week to deal with that.
There is also the question of the budget, which we are awaiting copies of. We gave general direction to the clerk to put the budget together, essentially based loosely on the budget for the previous year. Again, the committee may want to look at that in detail. We may not be able to do that today. We can do that next week or we could submit it and deal with it in that way; whatever way the committee feels comfortable with.
The only other comment I would make is on the suggested times for meeting. I was talking with the clerk earlier this morning about it, that is, whether the blocks of times set out there would cause conflicts in terms of other committees we may be on which would be meeting. I gather that that is sort of a typical submission that would be made, and then it is a question of the House leaders sorting out the scheduling.
That is just by way of introduction. Are there any comments or questions on the report?
Mr Grandmaître: I do not know whether this is in order. I would like to go back to the secretariat. Everything is supposed to be in place by May 1991. What do we do in the meantime?
The Acting Chair: Are you referring to the appointments?
Mr Grandmaître: Yes. I am trying to catch up.
The Acting Chair: That is fine. My understanding is that while the secretariat and the whole process will not be put in place, as you say, until May 1991, there will in fact be appointments. Some of them were mentioned in the announcement. There will be appointments between now and then, so that means the process would start, in effect, even before May 1991; how quickly, I do not know. It would depend, I guess, on how quickly some of those appointments are made. That is my understanding, subject to clarification from anyone else.
Mr Grandmaître: Do we have a guarantee that nobody will be appointed before May 1991 ?
Mr Bradley: The horse is already out of the barn.
Mr Stockwell: You have my guarantee.
The Acting Chair: I am certainly not in a position to guarantee that, nor, I think, is anybody else around this table.
Mr Grandmaître: Is this question in order?
The Acting Chair: I do not think so. I gather that there is still to be a clear indication that this committee will in fact have that responsibility. I spoke yesterday with our House leader. I gather that there has been some discussion between the three House leaders, but somehow the communication has maybe not sifted down to everyone yet. I presume it will.
Mr Grandmaître: My last question: Will we be able to review the appointments that will be made between 1 January and 31 May 1991 ?
The Acting Chair: As I said, my understanding is that we will be, but I am certainly not the authority on that. I think that is a legitimate question for us to try to get some clarification on. Quite frankly, I am not sure how we do that. One way might be through the House leaders.
The clerk was pointing out to me one of the things, that in order for that whole area to become part of our mandate, there would have to be a formal change to the standing orders. As a new member, I am not 100% clear on how that happens or how quickly that can happen, whether it is something that can be done simply by the government House leader putting a motion in the House. Is that something that is pretty straightforward?
Clerk of the Committee: That kind of change is usually done only after consultation with all parties.
The Acting Chair: Mr Grandmaître, I could certainly speak again to the government House leader. As I said, I spoke to her yesterday about this after our subcommittee meeting. She was going to speak again to her counterparts in the other parties to straighten it out.
Mr Stockwell: I cannot understand why this is difficult. Can you not just walk up and ask him what the hell he meant when they made the announcement?
The Acting Chair: As I understand it, that is not the difficulty. I do not think it is a question of there being any confusion about it. I think there was just some process of discussion among the three House leaders, which I understand happened even prior to the Premier's announcement.
Mr Stockwell: So what I can take away from this meeting is that we are in fact going to review the appointments. These appointments are going to be recommended by your party, sent to the committee, and we are going to review the appointments.
The Acting Chair: That is my understanding. Yes.
Mr Stockwell: That will take place effective 31 May?
The Acting Chair: It would certainly take place effective in May, if in fact that is what happens. Mr Grandmaître was asking if it will take effect prior to that. I presume it will, but I do not know.
Mr Stockwell: Fine. So I feel comfortable in saying that as of 31 May, we are definitely going to be reviewing the appointments.
The Acting Chair: That is a good question, Mr Stockwell. As I said, I am not the authority on whether it will happen. My understanding is that that is likely what is going to happen.
Mr Stockwell: Who is the authority, then?
The Acting Chair: I guess the House leaders are. You may want to speak to your own House leader, because he would be able to tell you whatever conversations have taken place between the three House leaders.
Mr Stockwell: Okay. Maybe the question I would like to ask, and maybe you can help me by asking someone in your caucus, is: When they initially drafted this or came up with the idea, what did they have in mind?
The Acting Chair: I think it is an unfair question of us. They certainly had in mind that it would be one of the standing committees, and if you were to look at all of the standing committees, you could safely conclude that it would make a lot of sense that this be the committee that does that. But I am trying to resist making an announcement for the government, because it is not my role to do that.
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Mr Wiseman: In response to Mr Stockwell's question, from my point of view at least, whether we review all those appointments and so on, that kind of direction would have to be decided by the committee as a whole, because it may well be that there are other things on the order paper that have a more pressing need to see who gets what. Would it not be the committee as a whole that would decide to what degree we are actually going to review all of this?
The Chair: I am walking in in the middle of this. I wonder if it is not premature to be talking about the mechanics of this at this stage. We have not had the responsibilities officially placed upon us, for starters. I would think that the government, in its wisdom, whichever committee is assigned these responsibilities, is going to be reasonably specific on how it shall deal with them. It is probably not in our interests to spend a lot of time today speculating about how we are going to deal with something that may not even be our responsibility. Indeed, if it is our responsibility, I think we will have some pretty clear direction from the government.
Mr Wiseman: You pre-supposed my second question.
The Chair: Okay. Where are we on this? We are dealing with the subcommittee report? You are going to have to help me here, Doug; I am not sure where you are. You all are aware of the recommendations of the subcommittee? Are there any further discussions or comments about them? Do we have a motion to adopt the subcommittee report?
Motion agreed to.
The Chair: I gather you have been advised that the proposed budget is in preparation. It has been completed but has not arrived. It will be circulated to all of you this week for consideration at next week's meeting. It incorporates a number of things which perhaps the whips of the various parties represented on the committee can consider and discuss with the leadership of the parties as well.
One of the items includes a proposal for travel to Ottawa and Washington. There will be more specifics. You may want to spend a few minutes now, five minutes, perhaps, for the clerk to outline that particular proposal, which could be the most controversial element of the budget proposal, so you will have some time to think about it before we make a decision next week.
Clerk of the Committee: The subcommittee is interested in which other jurisdictions do have processes for scrutiny of public appointments and how the committee could look at reviewing those processes in other jurisdictions. A memorandum was distributed to you all today from the research officer indicating a number of other jurisdictions. The proposed budget, which will be coming to you shortly or distributed today, does contain provision for travel to at least Ottawa and Washington. If members wish to expand that, based upon the findings in the memorandum, then that can be discussed at the next meeting also.
Mr Wiseman: Given that 12 or 13 people heading off to Washington and Ottawa seems to be an expensive process, could I add a request that you investigate the possibility of having somebody come here and compare the relative costs so that we have an idea of what the expenses are?
Clerk of the Committee: Yes.
Ms S. Murdock: Actually, the standing committee on the Legislative Assembly went last year. Correct me if I am wrong, Mr Arnott. The cost for that committee was about $32,000 to England, was it not, just transportation? It worked out to about $60,000 or $65,000 total for the whole committee to go. I am not on this committee.
The Chair: I suggest, to all the representatives of the various parties in the House, that is perhaps the most controversial element of the budget. I suggest you talk it over with the leadership of your parties to see if they are going to have any difficulty with that particular proposal. Anything else?
Mr Silipo: Not on the budget, but on something else. We received as part of our packages the last report from the standing committee, which of course had the review of some of the agencies and commissions that were reviewed.
Is it possible to get a list of the various boards or commissions or agencies that have been reviewed by this committee, say, in the last three years, so that we have a sense of which ones --
Mr Pond: It should be in the appendix.
Mr Silipo: That is great, because I thought that would be useful background information to assist us in looking at which ones we might want to review.
The Chair: I guess the understanding was conveyed that all caucuses will come back with at least one, possibly two, recommendations for next week's meeting.
The committee adjourned at 1127.