Legislative Assembly of Ontario

CONTENTS

Wednesday 4 February 1998

Subcommittee reports

Intended appointments

Mr Michael Caruso

STANDING COMMITTEE ON GOVERNMENT AGENCIES

Chair / Président

Mr Floyd Laughren (Nickel Belt ND)

Vice-Chair / Vice-Président

Mr Tony Silipo (Dovercourt ND)

Mr Alex Cullen (Ottawa West / -Ouest L)

Mr Michael Gravelle (Port Arthur L)

Mr Bill Grimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)

Mr Bert Johnson (Perth PC)

Mr Floyd Laughren (Nickel Belt ND)

Mr Dan Newman (Scarborough Centre / -Centre PC)

Mr Tony Silipo (Dovercourt ND)

Mr Joseph Spina (Brampton North / -Nord PC)

Mr R. Gary Stewart (Peterborough PC)

Substitutions / Membres remplaçants

Mr Carl DeFaria (Mississauga East / -Est PC)

Mrs Brenda Elliott (Guelph PC)

Mr Peter Kormos (Welland-Thorold ND)

Clerk / Greffier

Mr Douglas Arnott

Staff / Personnel

Mr David Pond, research officer, Legislative Research Service

The committee met at 1008 in room 228.

SUBCOMMITTEE REPORTS

The Vice-Chair (Mr Tony Silipo): I'd like to call this meeting of the standing committee on government agencies to order and ask us to please first go through the various reports from the subcommittee that we have. They're listed on the agenda, reports 1 through 5, if we could deal with those.

I'd appreciate a motion either taking them all in one motion or individually, as you prefer -- sorry, 1 through 4, because number 5 is actually what we're here to do following from one of those reports. Is there a motion to adopt the subcommittee reports?

Mr Alex Cullen (Ottawa West): Yes.

The Vice-Chair: Thank you. Any discussion?

All those in favour? Opposed? Carried.

INTENDED APPOINTMENTS
MICHAEL CARUSO

Review of intended appointment, selected by official opposition party: Michael Caruso, intended appointee as member, Ontario Casino Corp board of directors.

The Vice-Chair: Item 5 is a half-hour review of the intended appointment of Michael Caruso, intended appointee to the Ontario Casino Corp board of directors.

Mr Bill Grimmett (Muskoka-Georgian Bay): Mr Chair, on a point of order: As a member of the committee, I'd like to request a deferral of this matter. I believe standing order 105(g)6 allows me to do that.

The Vice-Chair: Can you just give me a second to confer with the clerk.

Mr Grimmett, that was my understanding as well, but the clerk has just confirmed you certainly can, if you wish, defer the decision on whether or not to concur with the appointment, but you cannot defer the whole item. In other words, we do need to go through with having the presentation from Mr Caruso, having any questions that may be asked. When we come to dealing with whether or not we have concurrence, at that point you or any other member of the committee, if you so wish, has the option under the rules to ask that the matter be deferred for up to seven days, I believe it is. So we can deal with that at that point.

Mr Grimmett: So that's the clarification on standing order 105(g)6, that when it says "the consideration of one or more of the intended appointees," we would just defer the decision?

The Vice-Chair: That's right. I can tell you that's certainly the way in which it's been applied here before. I remember one instance where as a member of the committee I made that request, and it was done at the time we were actually discussing whether or not to concur with the intended appointee.

Mr Grimmett: Very well. Thank you.

The Vice-Chair: Can we then proceed? Mr Caruso, welcome to the committee. The procedure, as you may know, will give you an opportunity to make any opening comments you may wish, and then we'll give the representatives of the three parties an opportunity to ask you some questions. We have half an hour in total to do that.

Mr Michael Caruso: Thank you, Mr Chairman. First I'll deal with a little bit of my personal background. Then I'll deal with my background within the community in which I live, then my professional background, and then lastly what I feel I could contribute to the Ontario Casino Corp.

I'm 62 years old, married for 33 years, and have five grown children. I've lived in the Markham-Thornhill area for 30 years. Within the community I've been involved in minor hockey and minor baseball both as executive and as coach for many years, approximately 20 years. I've been involved in community operations, with setting up residences for deaf-blind persons in Ontario, first in the Brantford area in the early 1980s and then later on in the York region area in the last eight to 10 years.

I've also been involved with an organization that's connected with Villa Charities, known as Vita Community Services. Vita Community Services serves approximately 98 disabled residents and has day programs for approximately 130. My CV that is in front of you is a little bit behind in that area, which I have spelled out on page 3. That CV is about a year old, and since that time the homes in Vita have risen from seven to 13.

With respect to my professional background, I was called to the Ontario bar in 1964 and have practised in the Ontario area, specifically in the York region and north Toronto areas, since that date. I have worked as a trial lawyer basically 90% of the time, and a great deal of that time has been in construction area law. I have also been a member of the Canadian Bar Association and the Metropolitan Toronto Lawyers Association, with membership in other community operations. I believe I could be of assistance as a director of the casino corporation because of my background in those various areas.

I am familiar to some degree with the Ontario Casino Corporation Act, I have a passing knowledge of the Gaming Act, and I am used to dealing with CEOs and managers in my dealings with the various community organizations that I've been involved with for a number of years. Also I believe I am familiar with budgets, policies and procedures being set up in order to run organizations. I'm not familiar with the policies and procedures of the Ontario Corporations Act, but if I was appointed to that board, I would know what they are and then I could give you a little further explanation as to what I would think were pitfalls with that. I haven't seen those documents, so I couldn't tell you. But I have that experience, and I think that because of that background, I could be of assistance to this corporation. I'm aware of the mandate and the objects of the Ontario Casino Corp.

Those are generally my comments. If you have any questions, I'll try to answer them.

Mr Cullen: Mr Caruso, I want to compliment you on your CV. Anyone who survives 20 years of hockey league politics has been in real politics as far as I'm concerned.

I'm interested in gaining an appreciation of your understanding of the future of this corporation. What is your understanding in terms of what future this corporation has in terms of expanding services and expanding locations?

Mr Caruso: When I look at a casino operation, and from what I understand and what I've read in the press -- and I had some information pulled up from the various Web sites before coming here -- there are some really good benefits, I think, to the province in, firstly, raising revenue, generating revenue for the province of Ontario and in creating jobs.

From my understanding, and I could be wrong on these figures, I think employment in the Windsor area has always been a problem for this province. I had gone to school there for three years and I know what problems they faced. From what I can see, I think they employ some 3,000 people in the Windsor casino operation.

In the Rama area, I've been to that casino and I know they employ about 3,000 or 2,500 people there. The casino also, I think, has contributed towards building residences for seniors and building an arena and a water sewage plant.

I'm not too familiar with whatever has come out of the Niagara casino, what local benefits have been raised there, but I would assume, having been to that casino and seen how busy it is, that it employs a lot of people who live in that area. I think those are the benefits. That's the plus side of having these casinos.

Mr Cullen: Do I take it from your comments that you would see the future expansion of casinos?

Mr Caruso: I don't know whether that's the mandate of the board. I don't think it's the mandate of this board. I think it would be the mandate of the government to decide that. Looking at the structural setup in the Ontario Casino Corporation Act, I don't think that's up to the board of directors. I think they just basically oversee it and see that it is run properly with whoever their contracts are with. That's my understanding of it.

Mr Cullen: I'm from Ottawa-Carleton and we're familiar with the casino in Hull. The casino in Hull, because of the clientele that's attracted to casinos, the disproportionate number that come from low-income situations and the disproportionate number of pathological gamblers, has set up not only codes of access but a registry, the equivalent of a Gamblers Anonymous, so they can turn away people who have indicated voluntarily that they suffer from a gambling disorder or those people who have caused problems either to themselves or to their families. Do you believe this would be a sensible thing to do to ensure that we aren't dealing with people or attracting people who cannot control their compulsion to gamble?

Mr Caruso: I don't know whether that's the mandate of the board of a casino operation. I haven't seen their policies and procedures. I haven't seen their bylaws. That is a very good question. I think the Ontario Racing Commission at one time had some kind of policy dealing with people entering racetracks, of people's backgrounds who shouldn't be in there. I don't know what policies and procedures they have for the operation of the four casinos in Ontario. I'm not familiar with that.

Mr Cullen: If these policies aren't there, do you believe that they should be there?

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Mr Caruso: I would like to review it.

Mr Cullen: We'd like something a little more encouraging. I know the community is very concerned. I'm sure you're aware that throughout Ontario there is quite a debate about the role of gambling. In the communities that held referendums over charity gambling clubs, there was very, very strong opposition, notably from two sectors. There was certainly strong support from those who saw the dollar signs of economic activity which you have outlined, but there was also strong opposition from the charities that would see their money being siphoned off -- mainly it goes to the government, but it's less money for them -- and also from the agencies that serve the poor and the vulnerable, because it is their clientele that provides the disproportionate share of the clientele that goes to gambling casinos. That's why it's an important issue, about expansion and about the role the casino would play in terms of what kind of clientele it would attract.That is an important issue. I am interested in hearing more of your views about this.

Mr Caruso: First of all, I understand the area you're talking about is not within the purview of this corporation; I think that's under the Gaming Control Act. I understand that the way these mini-casinos operate now, there have been problems with them. I read that in the paper some time ago.

I can drive up Bayview on my way home from work and I can see two, three of those at various arenas and various little places. I don't know who the operators are. I would hope that by having another setup they've got better controls over who's operating and running those mini-casinos.

As far as making people vulnerable to these and depriving charities of that funding is concerned, I can tell you right now, from my personal experience in negotiating funding for the disabled, that any time I've had to go to any of the governments for funding, we've never been turned down. I can tell you that under your government, under Mr Sweeney, where we originally set up these homes and where we were at times running very close to budget lines, when we were running deficits we were always covered. That happened with all three governments.

Mr Cullen: We're talking about over $1 billion.

Mr Caruso: I can tell you right now that money, the way it was before, wasn't very satisfactory because they ran casinos and it was like 10% of the take went to the charity, which I don't think is satisfactory. My understanding is that, as it now stands, whoever is running the local casinos take 90%. I may be wrong on that.

Mr Cullen: There's a problem about $1 billion worth of money that the government is taking and of course giving back in terms of income tax cuts, but that's a story for another day.

Mr Caruso: I don't know that.

Mr Cullen: I am very concerned. You're talking about simply managing a corporation, so you don't really see the decision for expansion or a recommendation coming from the corporation for expansion; you're not aware if there are any roles in terms of dealing with the clientele who come but you think it would be important to review that, certainly to meet community concerns about the appropriateness of, say, people receiving family assistance spending it at a casino. There is a major concern about that.

Mr Caruso: Sir, I understand that the four casinos that are presently operated are in areas where approval was received from those areas. That's my understanding, and that's the board that I would be serving on.

Mr Cullen: In other words, you would not support expansion into a community that would not want it.

Mr Caruso: Of the large casinos. The mini-casinos, I don't know how they're being operated at the present time. From my experience, which is limited, in organizations that have drawn off of these casinos, to receive only 10% of what was coming in and 90% going to the operator I didn't think was satisfactory.

Mr Cullen: I would agree with you.

Mr Caruso: I don't know the new setup on this.

Mr Cullen: That's right.

Mr Caruso: You're asking me an area I don't know about.

The Vice-Chair: Mr Cullen, you have a minute left.

Mr Cullen: Okay. I think I'll pass at this point. Thank you.

Mr Peter Kormos (Welland-Thorold): Thank you, Mr Caruso. I've got to tell you, I read the CV and I note that Al Palladini is the minister who referred you to the committee. Basically, he's recommending your appointment. I anticipated coming here and, as from time to time I do, simply indicating that the CV in itself displays all the credentials and God bless.

You may or may not know that I'm no fan of casinos. I don't believe they are effective economic development tools, but that's a different issue and not for you and me to debate here.

Your understanding when you came here today was that you were going to be interviewed by the committee today.

Mr Caruso: Yes.

Mr Kormos: And that there was going to be a decision on the part of the committee about approving Mr Palladini's recommendation.

Mr Caruso: Yes.

Mr Kormos: These are the government members here.

Mr Caruso: I understand that, yes.

Mr Kormos: I'm with the third party; I'm with the New Democrats.

Mr Caruso: I understand.

Mr Kormos: There's only one of us on the committee; there's a whole lot of them. The Liberal members and the New Democrats -- well, Mr Silipo, but he's the Chair, so he can't vote.

The Vice-Chair: I'm neutral.

Mr Kormos: That's right, Mr Silipo. So, you see, what happens is that government members approve appointments, inevitably. As I say, in your case, I was prepared to vote with the government members. I can't speak for Mr Cullen, but I suspect he might have as well. So I'm surprised that Mr Grimmett -- see, he's with the government.

Mr Caruso: I understand that.

Mr Kormos: I'm surprised that he didn't want to interview you this morning. Were you surprised by that?

Mr Caruso: I just found out about that now.

Mr Kormos: When Mr Grimmett made that suggestion to the Chair?

Mr Caruso: Two minutes before that; I was advised when I was sitting back here.

Mr Kormos: You were told it was going to be a wash?

Mr Caruso: I don't know what the expression "wash" means, but I was told it might be deferred.

Mr Kormos: Did that surprise you?

Mr Caruso: Yes, it did.

Mr Kormos: It's a very rare thing for that to happen. I hope you understand that. I haven't sat on the committee for a few months now, but, gosh, I was on this committee for well over a year. It's very rare that that happens. Do you have any idea why Mr Grimmett wouldn't want to discuss your appointment today?

Mr Caruso: I don't know.

Mr Kormos: On the times when opposition members have made that request -- because we have; I think some Liberals have made that request, because it's as-of-right -- we've done it because we thought the applicant was reprehensible and not worthy of appointment.

Mr Caruso: I'm sure they don't think that of me. I would hope they don't think that of me. I mean, I don't know any of them.

Mr Kormos: Yes, I know. I don't think that of you.

Mr Caruso: I don't know you. I don't know anyone.

Mr Kormos: I know.

Mr Caruso: I have met Mr Silipo once, when he was running MCSS.

Mr Kormos: That's right. But what I'm saying is that the only time we've done that is when we've wanted to raise a red flag and prevail upon government members. I remember they had a Mr Seabrook. I remember his appointment to the Niagara Escarpment Commission. We raised red flags. Now, mind you, Mr Seabrook jumped on his own sword in short order.

How is it you came upon the Ontario Casino Corp? Was that something of specific interest to you?

Mr Caruso: No. As you know, I know Mr Palladini, and I was interested in some government work. I picked up a copy of the --

Mr Kormos: The bible.

Mr Caruso: Yes. I looked through that, and I saw two or three boards that I liked in there, that interested me. One was this; another dealt with the review of persons who were incapable of standing trial. There's some committee that deals with that.

I kind of backed off on that because from time to time in my position on Vita I'm called upon by the executive director to deal with issues of residents who get into trouble in the area. She calls me and we talk to the crown or whatever we do. Their decision whether to try that person or whether they're capable of being tried I would think might come before that committee, and I would have a problem with that.

Mr Kormos: A quasi-conflict.

Mr Caruso: I would have liked that. Then I told Mr Palladini I would like this one.

Mr Kormos: Okay. Were there any others you were interested in?

Mr Caruso: No. Those were the basic two.

Mr Kormos: How long ago was it that you initiated this process of applying for this position? How long has this whole process taken?

Mr Caruso: It was before Christmas some time.

Mr Kormos: Of 1997?

Mr Caruso: Yes.

Mr Kormos: So it was November or December of 1997?

Mr Caruso: Around then.

Mr Kormos: I don't think Mr Palladini is your MPP; I'm not sure who is.

Mr Caruso: No. I'm in Thornhill. It's Mr Tsubouchi.

Mr Kormos: Quite right. Quite frankly, I trust -- I was going to say I trust Al's judgement -- I have some high regard for his judgement. That's why, as I say, my first response -- and I still have no quarrel. Mr Palladini, as an MPP, is perfectly entitled to be, and should be, assisting you in processing the application. Did he in fact do that for you?

Mr Caruso: Yes. I asked him to do it.

Mr Kormos: Okay. With respect to the Ontario Casino Corp?

Mr Caruso: Yes.

Mr Kormos: There shouldn't have been any problem.

Mr Caruso: I don't think there should be either. Quite frankly, not to sound vain, I don't even know why -- you know, these things go through without hearings quite often, right?

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Mr Kormos: Yes, and in this instance your impression, and again not inappropriately, was that this was done. Mr Palladini signed the appropriate paper because he's the fellow who makes the recommendations. So in so far as you were aware, this was going to be the mere formality today of going through the committee.

Mr Caruso: I was hoping so.

Mr Kormos: Is Mr Palladini in town at the moment? I'd get on the phone to Mr Palladini and find out what the hell is going on. I mean, he's in the cabinet and he made a commitment to you about an appointment to this corporation and you've got some Tory backbenchers trying to kibosh it. Wait a minute.

Mr Caruso: I don't know whether they're trying to kibosh it. I don't know whether that's accurate. I don't know, Mr Kormos.

Mr Kormos: Maybe they've got another appointment in mind, something with a little bit of a --

Mr Grimmett: Maybe we've got another NDP we want to appoint.

The Vice-Chair: Let's carry on.

Mr Kormos: The chair of Ontario Energy Board, that's gone. That one's a wash in its own right.

I would get on the phone to Al promptly to find out what the heck is going on, because somebody's tinkering here. The fact that you only found out about it mere moments before they move a deferral is quite frankly of concern to me. I would get on the phone to Al promptly and find out what the heck is going on, because he made a commitment to you. He should be able to deliver.

Thank you, and again, subject to what the Tories might reveal during their questioning, I think you're a suitable person for this position.

Mr Caruso: Thank you.

Mr Morley Kells (Etobicoke-Lakeshore): Mr Caruso, I was wondering if you could elaborate and give us some detail on your involvement with Vita Community Services. As it mentions here, it's affiliated with Villa Charities. I'd just like to have a better understanding of what that involves.

Mr Caruso: Villa Charities is the umbrella organization under which Villa Colombo, Columbus Centre, Carrier Art Gallery, a whole number of those charitable organizations operate, and one of them that operates under there is Vita Community Services of Toronto. It was started in 1985-86, in there somewhere. It started out operating residences for physically and mentally disabled persons -- "developmentally delayed" is the catchword -- and it now operates 13 residences. Some of them are in apartment settings. They're lower to very high functioning persons with physical and mental disabilities, permanent residents. There are also two day centres. One is on Tycos Drive in the city of York and one is in York region. They service on a daily basis about 135 young men and women, and some older men and women. They're fully funded through MCSS.

Mr Kells: So the funding comes through the ministry?

Mr Caruso: Yes.

Mr Kells: Are there any other sources of funding?

Mr Caruso: Villa has some big charitable events every year. Last year they raised quite a bit of money; they had a big grand ball. Every year they have a Venetian ball and then they have various different fund-raising activities. It's a very expensive --

Mr Kells: I realize they're a high-profile organization. I'm just wondering, do they receive any kind of income through charity gambling or any of these per diem, one-time operations?

Mr Caruso: I think they've received some money through the casino that operated at the Exhibition. Other than that, I'm not aware of them receiving any other funding. They do get private donations, and people make donations because they are fairly well-known now.

Mr Kells: I guess it's obvious, the reason for my question. I'm just wondering if there's any kind of connection with their operation, on any kind of annual or even more frequent than annual basis, in regard to money that they get through some connection with previous gambling enterprises.

Mr Caruso: No. They're fully funded through MCSS. Sometimes there's been fund-raising through Villa Charities to raise extra money and for capital projects, but the ongoing funding is fully funded 100% by MCSS.

The Vice-Chair: Other questions?

Mr Grimmett: Yes. Thank you, Mr Caruso. I too am impressed by your curriculum vitae and the information you have on the number of organizations you've provided advice to. My math tells me that you're in your 34th year of practice. Is that right?

Mr Caruso: That's correct, yes.

Mr Grimmett: You indicate that about 90% of your practice has been in commercial litigation and 10% in commercial law.

Mr Caruso: Yes.

Mr Grimmett: So you've probably had the opportunity, I assume, over your career to give a lot of advice on commercial contracts.

Mr Caruso: I have extensive experience in that area of law. I have been involved in many projects in the downtown area, buildings that were constructed by clients of ours who have had problems with them. I have also had, I would say, experience on both sides, in acting for owners and acting for general contractors and for trades in construction projects.

I can see the problems that arose in the Windsor casino, and I almost know what went wrong there without looking at everything. Once you get into an open-ended contract like that, a cost-plus contract, you're asking for trouble. It's a murderous situation. The general contractor will take good care of you in those situations. Once you start asking for changes and the plans and specs aren't up to what they should be, you've got problems. That's why you have cost overruns.

Mr Grimmett: To say that you could give sound business advice on commercial contracts would be an understatement.

Mr Caruso: I have no problem in dealing with that.

The Vice-Chair: Any other questions from the government side? Then that concludes the questions from the representatives of the three parties. Thank you for coming, Mr Caruso.

Mr Caruso: Thank you.

Mr Kormos: Chair, if I may, I move concurrence.

The Vice-Chair: I was just going to get to that. We are at concurrence. Mr Kormos is moving concurrence. Mr Grimmett, you had indicated earlier that you wanted to ask for deferral.

Mr Grimmett: Yes, I would like to ask for a deferral of the decision. I understand that we would then refer that to the subcommittee, would we, for discussion at that time?

The Vice-Chair: I think this is what happens. I ask the clerk to correct me if I'm wrong in this, but my understanding is that first of all, a deferral of the decision can be requested by any one member of the committee. We don't have to vote on that; it's simply that you make the request and that's what happens.

There is a time line we have to take into account, which is that we cannot defer decisions for longer than seven days. That would mean a meeting again of this committee at the very latest by next Wednesday. We have the additional complication in the meantime that because the House is not sitting, I understand that in order for the committee to sit, under the rules of the House we have to seek the permission of the three whips, so we would make that request pursuant to your request of the committee. I'm not sure if that involves a meeting of the subcommittee. We just do that, do we not? Or is there anything else we would need to do?

Mr Kormos: On a point of order, Mr Chair: I am very concerned about that. If this requires concurrence of the whips for this committee to sit within one week, this request for deferral could be seriously jeopardizing Mr Caruso's appointment to the Ontario Casino Corp.

I moved concurrence, for Pete's sake. I am eager. He's taken time out of his day to be here, to participate in this process. He's been responsive to the questions. Perhaps it's not a valid point of order, but I simply want to indicate my concern at the government members putting this excellent candidate's appointment in jeopardy, because if there isn't concurrence by the whips --

The Vice-Chair: Actually, Mr Kormos, you've answered your own question. It isn't a valid point of order. You're right that you have the right to move concurrence as you have, but Mr Grimmett also has the right to request deferral.

Mr Cullen?

Mr Cullen: Just a couple of things. Just to help things along, I know our caucus will be in town next Wednesday, so that may facilitate things, but I'm only speaking on behalf of our caucus.

Second, I have to assume that with a deferral, the discussion over the appointment occurs at that time. Our party particularly asked for this appointee to be interviewed by this committee because we have some grave concerns about what's happening with gambling in Ontario, so I guess I'll just have to save my comments for that time.

The Vice-Chair: Let me tell you what would happen. The request for deferral of concurrence has been made by Mr Grimmett, so automatically we as a committee have to oblige that request. Subject to the approval of the whips, the committee will then meet. Quite frankly, I don't know what happens. That's something we would have to pursue if the whips were not to agree. I'm assuming they would agree upon a request of the committee. If not, then we have an issue that we would ask the subcommittee to get together on and deal with, if that is a problem.

When we come back to this issue we will have before us the motion from Mr Kormos to concur in the appointment of Mr Caruso, and that would be for debate and decision by the committee at that point.

One suggestion I would just make, and I guess we can sort this out through the subcommittee and with the clerk, is, if the committee is going to meet again, it might be easier if we just did it for next Wednesday, unless that's something we need to work out with the subcommittee. Again, I'm happy to be guided by --

Mr Grimmett: I think the subcommittee should work it out, because I don't know the schedules of the members who might have to come. It's okay for me, but I can't speak for everyone else.

The Vice-Chair: I also have a particular problem in terms of next week being the beginning of the finance committee meetings, so one request I would make is that we try and have the meeting perhaps at 9:30, before the 10 o'clock start of the other committee, but that's something we can sort out through the subcommittee.

Mr Caruso, that's essentially what's going to happen. The request to defer the decision has been made and we'll proceed with that.

Having no other business in front of us, this committee stands adjourned.

The committee adjourned at 1042.