Thursday 4 November 1993

Annual report, Provincial Auditor, 1992: Ministry of Housing


*Chair / Président: Cordiano, Joseph (Lawrence L)

*Vice-Chair / Vice-Présidente: Poole, Dianne (Eglinton L)

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

*Callahan, Robert V. (Brampton South/-Sud L)

*Duignan, Noel (Halton North/-Nord ND)

*Frankford, Robert (Scarborough East/-Est ND)

*Marland, Margaret (Mississauga South/-Sud PC)

Murphy, Tim (St George-St David L)

*O'Connor, Larry (Durham-York ND)

Owens, Stephen (Scarborough Centre ND)

Perruzza, Anthony (Downsview ND)

Tilson, David (Dufferin-Peel PC)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Mathyssen, Irene (Middlesex ND) for Mr Perruzza

Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND) for Mr Perruzza

Also taking part / Autres participants et participantes:

Office of the Provincial Auditor:

Peters, Erik, Provincial Auditor

Peall, Gary, director, ministry and agency audit branches

Clerk / Greffier: Decker, Todd

Staff / Personnel: McLellan, Ray, research officer, Legislative Research Service

The committee met at 1024 in room 151.


The Vice-Chair (Ms Dianne Poole): Good morning. I'd like to open this session of the public accounts committee. I apologize for the delay. We have been waiting for a Conservative member to join us but, since we've now been delayed by 25 minutes, I'm going to recognize a quorum and proceed.

I would suggest, since we are starting off with the non-profit housing report, that what we would do is divide the time evenly among the three caucuses and we will start, I guess, with the official opposition. We will divide the time 10 minutes for each caucus and at the end of the 30 minutes we will take a vote on any suggested amendments to the report and the report in its entirety. Does that meet with the approval of the committee? Okay. Let us proceed. I'll recognize Mr Cordiano of the official opposition.

Mr Joseph Cordiano (Lawrence): Madam Chair, I would like to get back to the two areas -- I think essentially this is where we seem to have some difference of opinion, around filing a final report on this matter -- one dealing with the question of a buffer and the other matter dealing with the question of the operating agreements, which I think in some ways we addressed last time we met, over a couple of weeks ago. We had some discussion around that.

However, there were some matters that were still outstanding with respect to the operating agreements. I'm not fully satisfied that we've covered those so that we could reasonably say that the ministry is moving forward with enough progress to cover all the concerns we've outlined over this matter. Therefore, I would have to say on operating agreements and the implementation of those, if our researcher could just once again help me out with respect to the operating agreements, where we left off last week, it was my understanding that not all of the operating agreements had been implemented but that quite a number of them had. Is that correct? I heard the figure that somewhere in the neighbourhood of 75% of the operating agreements were now in place. Maybe the auditor can answer this.

Mr Gary Peall: I think it's something less than that, because they said they were working with the cooperatives first and the cooperatives are less than 50% of the total. So it's something less than 50%.

Mr Cordiano: I see. So that's the clarification.

Mr Peall: The rest of the private non-profit and municipal non-profit agreements may take up to 14 months, which is the end of 1994, to complete.

Mr Cordiano: Okay. That clarifies it, because I think originally we understood there was something less than 50% of the total that had operating agreements in place. I think the last time we met, there was some confusion around the actual number. The ministry somehow suggested that more of those were in place now than we had first assumed. So in fact, there is not a satisfactory level of implementation with respect to operating agreements.

That is a major concern, and quite frankly, on the basis of that information, I don't believe there's enough progress that has been made in getting operating agreements in place.

I don't want to rehash all the details of that, because I think we've had quite a bit of discussion around why that's necessary with respect to tenant placement and the requirements to meet objectives that have been stated by the ministry, by those operators. I think that by operating without operating agreements, we have some real gaping holes in the administration of those operators. So I leave it at that. I think we've made the point repeatedly.

The other question has to do with the establishment and creation of a buffer. Once again, I've been trying to pinpoint what the ministry has said, but quite frankly it amounts to the same thing. On the one hand, they've indicated that they're sensitive to the fact that demand-need analysis has to take place in order to establish just what allocations will be made in various regions of the province. That speaks to the whole question of determining what real needs exist out there and that in fact the ministry is attempting to establish a new model for determining that. Correct me if I'm wrong, but we heard from the ministry on that basis.

I would turn to the auditor again to just elaborate a little bit on what it was that they've established and are now willing to work with in terms of need analysis and demand analysis, just to verify what I'm saying, that there is in place now, or at least that the ministry is moving towards the establishment or the creation of, a need analysis model.


Mr Erik Peters: There was a presentation made, and I don't recollect the exact date, by the ministry that it has a new system in place for needs analysis in connection with Jobs Ontario Homes. What is unanswered, I believe, is the question as to how that new model impacts on the buffer that is being built.

Mr Cordiano: Right, and that's the next point I'm making, that it's not clear at all. In fact there seems to be a dichotomy between relating need and demand analysis to the whole question of creating a buffer and the determination of what allocations are made in what regions. So if you have a need analysis model and you meet the demand characteristics of that region, or the demand that's out there in a particular region -- on the other hand, you ignore that because you're about to build in a buffer for that region. How does that speak to the efficiency by which you're going to build housing where it's needed?

I don't think there are enough resources or, quite frankly, enough dollars to build in a buffer when that buffer is going to simply sit there for an untold number of years. I don't understand how the two things are compatible. Either you're building and allocating non-profit units on the basis of real need and you're matching those needs out there with those allocations, or you're simply going to not only match needs or not really estimate what the real need is. Or if you're doing that, then on the other hand you're building in additional units for some other eventual use or some need that's going to exist some time down the road.

As far as I'm concerned, that really is not an efficient use of our taxpayers' dollars, and I don't believe you can even be that precise in determining what that buffer is going to be, because, quite frankly, the ministry has not been able to even assess need and demand in regional communities as it exists right now. Over the past number of years, the ministry has been operating largely with what appears to be a quota system in terms of allocations. A minister makes an announcement, the Treasurer sanctions a number of units in his budget and on we go. We build x number of units and they're allocated wherever the allocations can be found throughout the province. That seems to be the modus operandi of the ministry and of the budgetary process involved with that. Quite frankly, I don't think there's any way you can reasonably say that that mirrors or matches the real need that exists out there, because no one really bothered to measure what that need or demand would be. So the question of the buffer really ties into the whole demand-need analysis process, and I don't see that there's a clear understanding of how those two things would work and that in fact the need analysis is going to match the real demand out there, the real need that exists, and that this is an efficient, workable model.

Anyway, I leave my remarks at those two areas of concern. I simply say this to the members opposite: I could not support or I would not be favourable to suggesting in the report that the ministry has met those concerns and that we therefore are comfortable with the way in which the ministry will proceed on those two items.

I think we have general consensus around all other items. There's been somewhat a satisfactory recognition on the part of the ministry that there is progress that needs to be made on a number of other issues in the report. We're happy and satisfied with those areas, but on these two items I cannot say that, and I think these two are fundamental matters of concern. I would therefore be unable to support a report that suggested that the ministry was making progress and that it was moving in the direction that we felt appropriate.

I would just direct the researcher to that and draw attention to the fact that I would not support that kind of approach. Rather, I would hope we could build in a consensus around the fact that those two items have not been satisfactorily answered with respect to our concerns.

The Vice-Chair: Thank you, Mr Cordiano. A Conservative representative has now arrived. Just to bring Mrs Marland up to date, we have decided, as a committee, that we would allow 10 minutes per caucus. Mrs Marland, would you like to take your 10 minutes now?

Mrs Margaret Marland (Mississauga South): I'd like to take it in a few minutes, after the government members, perhaps.

The Vice-Chair: We will then proceed to the government caucus. I believe Mr Duignan and Mr Wilson both have comments, and, if time permits, Mr O'Connor.

Mr Noel Duignan (Halton North): The government side or the government caucus will indeed be supporting the draft annual report and the recommendations contained in that report today. However, on a couple of issues raised by the Chair of the committee, for example around the whole question of operating agreements, I was involved in this industry before getting elected and I could be very aggressively partisan if I wanted to be in relation to how the previous government handled the whole question of housing, but I'll choose not to go that direction today.

However, I will be somewhat partisan in that when the Homes Now program came into operation in 1986-87, from that period right to the time we took office there were no operation agreements in place, whether with the ILM program or with the Homes Now program or indeed between the operators of co-ops and non-profits and the local housing authorities. What we've done is move on that, and we have put a number of operating agreements in place, and 75% to 80% now are in place. I think that's one hell of an improvement when you consider that none existed before we came to office.

What we've been basically doing is cleaning a mess that existed --

Mrs Marland: Did you say you "could be" partisan?

Mr Duignan: No, aggressively partisan. What we've done is clean up a mess that has existed before we took office.

Mr Gilles Bisson (Cochrane South): He's mild, Margaret.

Mr Cordiano: He's just getting started.

Mr Duignan: Also, on the question of the real needs, when you look at the fact that there are 60,000 names on a waiting list for people to get into co-ops and non-profit homes across this province and also look at the fact that 30% of the population of Ontario pays more than 25% of their income on housing, you know there is a real need out there for supported housing. What this ministry is doing as well is building a permanent stock of housing, which is an important aspect to bear in mind as well.

I do have a question for the auditor. I notice the Chair of the committee has made reference to the risks that the Minister of Housing faces by not having a number of operating agreements between the ministry and the non-profit groups signed yet. I notice you've also expressed some similar concerns in your report on this issue. Could you please clarify precisely which aspects of the ongoing administrative monitoring relationship between the Ministry of Housing and the non-profit sponsors are absent, or even deal with, in a less substantive way, when an operating agreement has not been signed?

The Vice-Chair: Mr Duignan, my understanding is that you have a question for the auditor?

Mr Duignan: Yes.

The Vice-Chair: Auditor, would you like to respond?

Mr Peters: Gary, would you respond to that?

Mr Peall: I'll try.

Mr Duignan: Within 10 minutes.

Mr Peall: I'll do it in much less than that.

One of the primary issues we raised is control over tenant placement and equity of access, things like that. One of the key provisions of any operating agreement would be what would be required of one of the projects in terms of how they access the waiting list and allowing equitable access to the units that are available and that the government has paid for. That is certainly one of the key provisions, that an operating agreement would hopefully protect the government and give it the right to enforce, through compliance, adherence to that kind of policy.

There was also some question about the ownership issue and making sure that the government did have some ultimate control over the conversion of that at the end. All the financial conditions in terms of when reports are due and complying with those requirements, the kinds of statistical and operating information that have to be provided about the kinds of tenants who are in the units, all of those kinds of details should be specified in order that there is some basis for enforcing compliance. That's our main concern.


Mr Duignan: I'll pass; Gary may want to make a few comments. But again I want to emphasize the fact that upon taking office in 1990 there were no agreements in place. There was a whole mess in relation to the Ministry of Housing. This Ministry of Housing has moved to clean up an administrative mess and put in place a number of operating agreements. It's not 100% there yet. In fact, we're three quarters of the way or better there. I look forward to the day when we have reached that 100% level, and I have confidence in the minister that this will be achieved.

Mr Gary Wilson (Kingston and The Islands): As you mentioned before the meeting began, Ms Poole, I am newly arrived at the Housing ministry, so I haven't got complete grasp of all the issues that were raised. But I am very pleased to have this report that the committee has put together, because it will be a very good introduction to this area of the Housing ministry's responsibility. I'm pleased too to hear that there's a large measure of agreement on what the report says and to know that the ministry has under way to comply with several of the recommendations and has a framework worked out for those remaining. I just hope this report can be accepted today and that the ministry can move on the recommendations and its other responsibilities.

The Vice-Chair: Thank you, Mr Wilson. There are actually a couple of minutes left, Mr O'Connor, if you would like to make a comment or question.

Mr Larry O'Connor (Durham-York): Just to say that I'm in support of the draft report. We've gone through this many times over. To my colleague across the room, when he talked about the need and the ministry deciding what the need is, I think that's what is changing; that's a whole attitude that's changing now. The Ministry of Housing isn't trying to decide what's got to be allocated on the basis of what it perceives is need.

It's going through a process of planning together, going to the community and getting the community to see exactly what the needs are. I don't think the ministry could possibly give a snapshot of the need right across the entire province, because the needs change, change drastically, for a number of different reasons. As we get down to community-based decision-making about what the needs are and then bringing them towards the ministry, I think we're going to get better decisions. There's always going to be greater need than can ever possibly be met.

My colleague mentioned the number of people on the waiting list. It would probably exceed that if you were to mention all the people who haven't even considered them as options. If we move forward in areas such as accessory apartments, we may see some safer accommodations come about in future. All these things have to be considered when we take a look at housing needs.

I support the draft report as it is. I know there are concerns by committee members, but as we go through and get a more community-balanced perspective on the needs of the communities, I think we're actually making a huge step forward, and that's got to be recognized and supported as well.

The Vice-Chair: Mrs Marland, you have 10 minutes.

Mrs Marland: Thank you, Madam Chair. Could you tell me why Robert was in here taking photographs?

The Vice-Chair: Actually, that was announced a little earlier to the committee. The committee clerks are preparing a flyer to talk about committee work, and they asked if they could come in and take some pictures of the public accounts committee at work.

Mrs Marland: Thank you. The areas I've discussed before I still have difficulty with, with this report going from this committee, so unfortunately I'm not going to be in a position to be part of a unanimous decision by this committee to support this report.

It's really interesting when the government members, particularly Mr Duignan, mentioned 60,000 people on a waiting list in this province. I know there are 10,000 in the region of Peel alone on a waiting list for affordable housing. Mr Duignan said 60,000 on the waiting list for non-profit and co-op, was I think how he expressed it. If there's one thing that confirms, it's that the current system of the government building, owning and operating -- not owning on paper but owning by investment -- this so-called non-profit housing program isn't working.

If you're using the figure of 60,000, it must be 60,000 families, because we know there are close to a quarter of a million people in this province who can't afford their rent. If we have a system that is costing the taxpayers in this province, by the beginning of 1995, $1.2 billion and we're still not housing the people who need help with their housing, there must be a better system.

Mr O'Connor: Accessory apartments are --

Mrs Marland: I was going to come to the second comment by the second member of the government who referred to accessory apartments. If accessory apartments are such a priority, it's interesting that you haven't called Bill 90 for second reading even. I can hardly wait for you to bring Bill 90 forward because I can hardly wait to tell you what the people in this province really think about basement apartments as a solution to housing people who can't afford housing in this province. Our vision for housing people in this province isn't a view from a basement window.

I won't take the time of the committee to discuss accessory apartments as that's not really what's before us at this moment, because there will be a time and a place to discuss that when Bill 90 gets back as a priority for your government. It's not on the list of business that your House leader has identified he needs to deal with before Christmas.

In any case, the concerns I addressed before with this report still stand. For that reason, I won't be able to support this report as it's drafted. There are parts of this report that are fairly mundane housekeeping matters, and certainly there are other parts of this report where the Ministry of Housing is listening to the public accounts committee's recommendations, and obviously those parts I'm quite happy to lend my support to.

But there are still outstanding parts of this report that I will have to address independently, as we seem unable to convince the government members of the concern that at least the Progressive Conservative caucus has.

I appreciate the fact that you deferred this report from last week when I was attending the funeral in Sault Ste Marie. I wanted to mention that. I was sorry that I gave you such little notice about that, that I couldn't be here.

The Vice-Chair: Both the auditor and our researcher Ray McLellan do have some brief comments they'd like to make. Prior to going to that, I have a suggestion in terms of how to deal with this report. I think both the opposition parties have made it fairly clear that there are two parts to the report they have outstanding concerns with. One is in the area of operating agreements, and the second is in the area of the buffer.

Our researcher Ray McLellan has offered to attempt to draft recommendations in these two areas for the committee, and in an attempt to get all-party consensus, we would then have the steering committee, the subcommittee, meet to consider these two draft recommendations. If there is unanimous consent by all members of that subcommittee, including one from each party, that these are acceptable, then they could be adopted into the report.

What I would recommend we do today is to take a vote on this report as it exists, with the proviso that if the subcommittee is able to come up with a satisfactory consensus concerning these other two recommendations, they be added to the report.


Mr Cordiano: Point of order.

The Vice-Chair: Just one moment, Mr Cordiano, and then I will entertain your comments.

The reason I suggest this is because we are basically running out of time. The committee does not meet for two more weeks, because next week is constituency week. We're at the stage where we have to finalize the health care report and this report. If anybody has a better idea of how to deal with this, I'm certainly willing to entertain that. Mr Cordiano.

Mr Cordiano: I don't know if it's better, but I think it's very clear -- this was sort of the purpose of this meeting, to flesh out where we disagree. I have no difficulty in disagreeing, and I think that one last effort which goes to the subcommittee is not really appropriate or fair to the other members on the committee.

I think there are fundamental differences with respect to those two areas. My direction to the researcher, if he would accommodate this, is to write that section which definitely shows fundamental disagreement so that there isn't an effort to find consensus around that, because there really isn't consensus around here.

I would not want to have another effort, which seems to me to be what would happen by going to the subcommittee, at finding a consensus, when in fact I believe there is not a consensus. To try and find a consensus around fundamental disagreements is not really appropriate, so I would not wish to have that undertaken by the researcher.

In terms of drafting something that would accommodate all of those concerns, there really isn't that kind of consensus. I don't think that would capture the real spirit of what we're saying here.

The Vice-Chair: Of all committees, the public accounts committee has traditionally been the most non-partisan, as much as is possible and --

Mr Cordiano: This is not a partisan question. I beg to differ with you because this is not really a partisan question. This is a question around fundamental differences of principle. It has nothing to do with a partisan issue; it has everything to do with the fundamental principle not being understood. There's a lack of consensus around those principles. I don't have a problem with that.

The Vice-Chair: Perhaps we could entertain a comment from the government as to whether you think there is common ground, and also Mrs Marland. Mr O'Connor.

Mr O'Connor: This committee has certainly had a good round of debate on this. I agree with Mr Cordiano: We don't agree. I think one of the benefits of this committee is that we can agree to disagree. Part of the process we have is that there can be a minority report, and I think this is going to be one of those occasions when unfortunately that does happen.

I would be more accepting if we could come up with a majority report that everyone accepted, that we got consensus on, but if that's not the case, then let's not hold this up for ever. Let's deal with it, accept that there are some differences of opinion. There always are going to be, on some matters, some differences of opinion. I suggest we move on.

Mr Duignan: I was about to say the same thing, except that if we had consensus that we could include those two recommendations in the report -- there's obviously going to be a minority and a majority report, and we would have a look at the draft of those two recommendations, and what you don't agree with us on, you can put in your minority report.

The Vice-Chair: That was actually the suggestion: that Ray would draft the two recommendations, and if we couldn't have consensus on it, then the opposition parties would obviously be free to use whatever part of that they wanted to. But at least it was one last opportunity to see if there are areas in which we can agree.

For instance, the operating agreements: I think there is some consensus that there has been an outstanding problem and the minister is making efforts to deal with it --

Mr Cordiano: But it's not satisfactory.

The Vice-Chair: -- but it's not satisfactory to certain members of the committee.

Mrs Marland: I think part of the problem is that our discussion has been going on over quite a long period of time, and over that period of time, even the minister has changed position. The thing is that we were told in the spring that the operating agreements would be completed essentially by the end of the summer. We are now in November and we're told they're not going to completed for another 14 months. That's absurd.

It's kind of ironic. If we had dealt with it all in three weeks and believed everything the minister or the deputy had said -- in that case it was the deputy, Mr Burns, who told us that, and in another committee we were told something that was almost the same. Actually, it even sounded better in estimates because it was in sort of three weeks, I think.

In any case, the story changes, the picture changes and it's just where we are now on that subject of operating agreements that is totally unsatisfactory for me, representing the taxpayers. Obviously, when I hear the auditor, who is looking at it from the overall responsibility of where the dollar flows and the auditor says, "There is some risk," I think were the words the auditor -- am I correct? The words were, "There is some risk where there are no operating agreements in existence." So that is a very important aspect of this report.

However, I do agree with the Chair that it is possible, because Mr McLellan can write far better than a lot of us can speak, to tell you the truth, that he may be able to draft two recommendations that address our concerns about operating agreements and address our concerns about the philosophy of a buffer when we can't even afford the existing program. He will have to be some kind of a Houdini to come up with it, but I'm quite willing to try that.

Mr Cordiano: I think that could only be attempted if there's agreement from the other side that there would be some consensus around the fact that a buffer is not appropriate in this circumstance. Let's not try to disguise that. There really is a complete disagreement around that. I think that needs to be fleshed out clearly.

I don't think there can be that kind of consensus around fundamental principles that we disagree with. My concern is that if you try to compromise that by suggesting that while we have concerns around the buffer, because it's the intent of the ministry to build one, and the government members can go along with that, that's fine -- that would be what I would want to see in that recommendation, but I don't think that's what the members want and I don't want to go through a whole series of other meetings to flesh that out. I think it's pretty clear from what you've said already that you're not going to be in agreement with our concerns around the buffer.

The Vice-Chair: One of the interesting things about this report is that we actually do not have a recommendation regarding either the operating agreement or the buffers in this report. We didn't in our original report and yet they are the two outstanding areas of concern. Normally, when opposition parties file a minority report, it's because they disagree with the recommendation in the report. I get the impression that the two opposition parties agree with a lot of the things in this report, but they don't think it deals with those two issues substantively.

Mr Cordiano: I don't see that.

Mrs Marland: There is a statement in there --

Mr Cordiano: Need and demand studies and the fair share model: It alludes to that in our report. There are certainly other references made to it. It may not come under that particular heading. There's nothing in our report that specifically refers to a "buffer," but that stemmed or flowed from the auditor's first report and the response we got back from the ministry around the question of a buffer. They clearly used the word "buffer" which we then subsequently carried on with, because they were the ones who reported it to us by using the word "buffer." There is clearly that understanding or that recognition of the fact that the ministry is building a buffer, and that was their explanation for not meeting with certain aspects of the report which they felt were less than satisfactory in terms of the answer they gave to the auditor.


The Vice-Chair: From several comments by government members, I think, if I'm not misinterpreting what you said, there is a consensus by the government members that you don't feel that we can come to agreement on those two areas and that we may just have to agree to disagree as a committee and appropriate minority reports be filed. Am I correct in interpreting that?

Mr Duignan: That appears to be the direction we're heading in at this point.

Mr Cordiano: Just to make one last thing clear, we're talking about dissenting opinions around two items. We're not talking about an entire minority report. I just want to make that clear. I think we can accomplish that by disagreeing on those two sections.

Mr O'Connor: If we might just go back to your original comments as we started to open up this dialogue, as this committee has been able to work throughout many differences and come to some consensus, in that element of non-partisanship that does show itself here more than anywhere else, maybe we could take a look at those recommendations and maybe there is some agreement there. I don't know. Maybe then the subcommittee should meet and discuss that. Up to this point, I think there are some areas there is some disagreement in, but maybe we should see those recommendations as they will be drafted on the wishes of my opposition colleagues. Perhaps there is some area of agreement there and maybe the subcommittee should meet on it.

Mr Cordiano: There seems to be some movement on that side, so we can move forward with that.

The Vice-Chair: Okay. Just before we call the vote, the auditor has a comment, and also Ray McLellan.

Interjection: There's a member over here with a comment.

The Vice-Chair: Oh, sorry. Mr Duignan?

Mr Duignan: That's what I was alluding to earlier. Let's have a look at the recommendations and let's see if there is some common ground that we can agree on, and if we can't, then we know what direction each of us will be headed in.

Mr Peters: My comments really relate to recommendations 2 and 4. I just wanted to raise with the committee the problems that I technically have with being instructed to do a follow-up audit. The prerogative of this committee is to order up an audit by the Provincial Auditor under section 17 of the Audit Act.

There is some difficulty in my interpreting the instructions to conduct a follow-up audit, whether this is interpreted by this committee to mean a special audit under section 17 or whether the committee would permit me to suggest to delete your recommendation for a follow-up, under the understanding that we will incorporate the recommendations of the committee in the next audit that we are doing in rotation on the Ministry of Housing. That, we indicated, would be by 1994, and that is predicated by the timetable provided to us by the ministry as to when it would have certain things in place. We don't want to interfere with the processes they have outlined to this committee of taking corrective action.

Mr Cordiano: That's fair.

Mr Peters: I'm particularly concerned with recommendation 2, which still says that they should develop cost figures for 1989 to 1991. As I've recommended to the committee before, we should let them get on with it rather than making a lot of effort. They indicated in a separate report that they're looking at up to 90 people-weeks to reconstruct numbers for that period back. I think that would just not be a good use of time by the ministry. I would prefer to have them go forward.

The Vice-Chair: Briefly, Mrs Marland?

Mrs Marland: Yes, very briefly. Mr Peters, does that mean then that we'll never know what the cost of those units was between 1989 and 1991?

Mr Peters: What we won't know is to what extent they have adjusted the cost of their construction to the falling market prices in that particular period of time; that's true.

Mr Cordiano: But we would know the actual cost, because those are recorded costs anyway; in some form, they would exist. Make a distinction for me.

Mr Peters: That's true. The distinction is really the correlating at the ministry level, because they're done in regions, they're in individual files all over the place, and it's just that 90-person-week effort to pull them together.

The thought had crossed my mind, though, rather than leave that section open, to suggest to the researcher to put in possibly a recommendation that the committee urges the ministry to develop a costing mechanism that allows it to develop actual costs and monitor them at the head office on a more timely basis than what is currently being done.

Mr Duignan: Very briefly, because I know time is getting on, I concur with the Provincial Auditor and I move the adoption of the report.

Mrs Marland: I need to be clear. Certainly I can accept Mr Peters asking that there not be a special audit, that it be part of their normal rotation which is coming up in 1994 anyway. I know it's 19 person-weeks to find out the information we asked for, 1989 to 1991, but that's four years, isn't it? If you count the inclusive years, it's four years we're talking about. What I need to know is, will we ever know what non-profit housing costs the taxpayers in this province for that four-year period?

Mr Cordiano: Can I just say, Madam Chair, that --

Mrs Marland: Excuse me, I'm asking the question.

Mr Cordiano: I'm going to give my comments with respect to that analysis. If you are finished, I would like to get on the record with respect to that.

Mrs Marland: Well, you can, but I'm asking a question.

The Vice-Chair: If you can do it in several sentences, because we are already five minutes over time on this.

Mr Cordiano: That's really the point, that we're running out of time. I would simply like to say that, on that basis, we have a very fair and I think reasonable suggestion by the auditor. I think as well in our report, under recommendation 3, we suggest to the ministry that it develop a comparative model of the non-profit in assisting management to do future audits. That's very clear. In terms of cost analysis, we've recommended to the ministry that it develop a model for cost analysis which takes into consideration all we've been discussing here.

It is very clear what the auditor has said. It will cost a considerable amount of money to establish what those costs were in relation to falling construction prices. The fact is very clear to us. Construction prices were falling; the costs for those units were higher than the construction costs. To get more specific about that is rather useless at this point. I think the point has been made and was made by the auditor originally in his report, that the costs weren't being reduced as a result of construction costs and market costs falling, that the ministry didn't take that into account. I think that was the point the auditor made in his report. To go back and to have 90 person-weeks to collate the actuals with what was happening in the marketplace is a complete waste of time at this point and it's a waste of taxpayers' dollars.

Mrs Marland: Can I clarify what I was asking before Mr Cordiano interrupted?

The Vice-Chair: We do have totals for what it cost, because obviously that information was available through the treasury, as to what non-profit housing cost. What we don't have at this stage is actuals as to what every unit cost in the specific categories.

I'm going to suggest that the auditor and Ray collaborate on the wording of those particular recommendations. They will then bring that recommendation back to the subcommittee, along with the report in its entirety and, if Ray is able to do a Houdini trick, bring back two recommendations on the operating agreements and the buffer.

Today, what this committee will do is authorize the subcommittee to finalize the report and, depending on whether consensus can be reached in the committee, either this report will be tabled in the House or an amended report as agreed with the unanimity of the subcommittee.

Mrs Marland: Madam Chair, the auditor was addressing two recommendations and he only got as far as addressing the second one when we started asking him some questions.

The Vice-Chair: I think he said recommendations 2 and 4.

Mrs Marland: And I would just like to finish with 2.

The Vice-Chair: I think 4 also relates to the follow-up audit. It refers to number 2. Do you have additional comments, Auditor, on that?


Mr Peters: No. I think the process on which we agreed with Ray would be satisfactory to us. On the question of the cost, if I may just make one additional comment, the ministry agreed on the direction. We both disagreed as to the extent. Our model showed $200 million; theirs showed $20 million. We both know the direction was right. They did not adjust the price. The point was made as to whether we should expend additional effort to prove who was right. We are not really willing to go back to the model, because once we have actual numbers, then we know what the actual result is. They have conceded $20 million. We think it could be as high as $200 million.

Mrs Marland: When will you have those actuals?

Mr Peters: We won't have them.

Mrs Marland: You'll never have them?

Mr Peters: No. I believe the ministry voluntarily is working on them, but we are not sure when and how that is going to happen. They said they had several scenarios.

Mrs Marland: That's my concern. We'll never know what that program cost in real dollars for four years, is that correct?

Mr Peters: Not the entire program. I believe we were looking at a model built on the Metro Toronto area. It was just the Metro Toronto portion of the ministry.

Mrs Marland: So we won't know what the program cost in Metro Toronto for four years.

Mr Peters: That's right.

Mrs Marland: I just want to be very clear so we understand what information we're not going to have, that's all.

The Vice-Chair: Auditor, am I correct, though, that we will know how much money the Ministry of Housing allocated for non-profit housing?

Mr Peters: Yes, for the construction, but the construction is really off the ministry's books. Gary?

Mr Peall: You will know the operating costs of those units. You just will not know the actual cost of constructing each unit and those average costs, but you will know the ongoing operating costs of those units through the public accounts.

Mrs Marland: That's right, but we won't know what it cost to build them. That's a tremendous gap.

Mr O'Connor: The numbers are known; it's just that they're not all collected in one spot.

Mr Peters: That's right.

Mr O'Connor: It would cost a lot of money to gather it all in one spot. We're talking taxpayers' dollars. The money's been audited through the process. It's being watched. What the auditor is suggesting here is that it's going to take a tremendous effort on his part, a tremendous amount of staff time from the Ministry of Housing, to pull all that information together for something that may not necessarily be useful and productive.

I don't think I've heard him say that he's got grave concerns that the ministry is being frivolous with the money; it's just that for him to gather all that information as the ministry goes through its process would be difficult. All this information is audited through the ministry as it goes through the process, though.

Mrs Marland: I'll make one final statement and that's it on this issue.

The Vice-Chair: Very, very briefly, Mrs Marland. We're already 15 minutes overtime because we started so late.

Mrs Marland: Whether it's briefly or not, we have a responsibility to be able to tell the taxpayers in this province where their money is being spent and how. We have four years of a non-profit housing program that, because the details are in regional offices and the ministry under two governments chose not to know what the total picture is, we can't answer that question. I think it's absolutely deplorable that that's where we are, with a gun held to our head that if we insist on asking for that, it's going to cost 19 person-weeks.

Mr Cordiano: On a point of order, Madam Chair: We have, I think, given Mrs Marland great latitude in discussing these matters. I think in the efforts to make things equitable and fair for all members on this committee, we've allowed for that latitude. But if we're going to get into some slinging of partisan barbs and make this the central issue around which this report is stalled, because we want to continue to dwell on that issue, let's put it out in the open. Let's entertain Mrs Marland's suggestion that we have a 90-person-week detailing of those cost analyses. I want the recommendation to show that it's the Conservative Party of Ontario which is requesting that. Then I want a detailed costing of that undertaking to be done by the auditor, and I want that detailed costing to come back before this committee to be analysed by the committee.

Would Mrs Marland then be satisfied that her concerns would be answered fully by this committee? I have no qualms about doing that, but I want to be clear about what we're suggesting here. I want an analysis and a full costing of that analysis to be done before this committee. Then, Mrs Marland, you can have all your questions answered fully by the auditor, by the ministry and by this committee.

Mrs Marland: Are you speaking as Chair or as a member of the committee?

Mr Cordiano: I give up. I thought I was sitting as a member and as the critic for Housing for my party. I thought that latitude would be granted me at least in recognition of the fact.

Mrs Marland: No, but you're trying to say that the committee has granted me something special.

Mr Cordiano: No, I'm saying that I'm granting you that opportunity to make these comments.

Mrs Marland: Well, that's very gracious of you.

Mr Cordiano: But if you're going to continue to make those comments in a partisan sense, then let's make it partisan; let's allow you to do what it is that you want to do.

The Vice-Chair: Mr Cordiano, let's try to resolve this right now. Mrs Marland has the right to a dissenting opinion should she choose to file it, and she is welcome to put in her recommendation of what the auditor does, and we are at any stage welcome to ask the auditor for a costing of that.

We started 25 minutes late because not all parties were represented. We are now over 15 minutes late with starting the health care report. I would like to resolve this, and I am now going to ask the committee if you approve that the subcommittee will deal with this report and recommend that a report go back to the House either with or without dissenting opinions, as the case may be.

Mr Cordiano: We're not clear about this matter that I've just put before the committee. This is a matter that I'm putting before the committee. Mrs Marland wants this costing to be done. Is that something that's been resolved? That's still up in the air.

The Vice-Chair: Mr Cordiano, I was not clear that yours was in the form of a motion. I know you said you were willing to bring this forward.

Mr Cordiano: It's not a motion; it's just something I put forward, and obviously we're going to --

Mr Duignan: Maybe we'll deal with the report first and get back to Mr Cordiano's --

The Vice-Chair: Let's deal with the report first. Does the committee approve that the subcommittee will be authorized to deal with this report and prepare it for tabling in the House? Agreed.

Mr Cordiano, would you like to formalize your suggestion that the auditor do a costing of Mrs Marland's recommendation and bring that back to the committee?

Mr Cordiano: Am I to understand that Mrs Marland wants a recommendation in the report that directs the auditor to conduct this analysis, and that's a dissenting opinion?

Mrs Marland: Madam Chair, I do not need Mr Cordiano to speak on my behalf. I will be writing a dissenting report and he will see in that dissenting report what it is that I would like to do on behalf of the taxpayers of Ontario. Thank you very much.

Mr Cordiano: That's fine. I was simply trying to get a better understanding of what it was that you were putting forward, Mrs Marland. In my efforts to understand --

Mrs Marland: We can talk about it if you like.

Mr Cordiano: No, no, I just thought --

The Vice-Chair: The Chair is going to resume the floor at this stage.

We have one last item of business before Mr Cordiano takes the chair over for the health care report. I would like, on behalf of the committee, to commend Ray McLellan, our researcher, for his usual exceptional work and for somehow getting a consensus on an enormous number of issues and preparing a tremendously complicated report for use of the committee. Thank you on behalf of the committee.

Let the record show that great applause ensued. Mr McLellan did have an item of information for us.

Mr Ray McLellan: Just a couple of housekeeping things.

First, I had referred in the draft report number 2 before us today to the appendices submitted by the ministry. In other words, the ministry responded to this report in July and October. They submitted appendix material. Now, the question is whether or not we should append the ministry's appendix material, which is part of their response, to our report, because the responses from the ministry do refer to their appendices 1 through 9. Maybe I could ask the Chair whether or not the appendices should be appended to our report. They are referred to in the responses.

The Chair (Mr Joseph Cordiano): They're referred to, so I think it would be appropriate, unless the members of the subcommittee would like to analyse that further.

Mr Duignan: I think it's appropriate that they're included in the report.

The Chair: Fine.

Mr McLellan: It will get lengthy. One other question. I'll just do a bit of housekeeping with this report if the committee will allow me that latitude. I did notice on page 44, as pointed out by the auditor's staff, that one of the responses, for whatever reason, had been deleted in the computer run, the last copy. So I will correct that on page 44, and that will be addressed.

The last item: The committee, when we met a couple of weeks ago, raised a couple of points with respect to the role of development consultants and, secondly, with respect to turnkey and modified turnkey. I went back to the ministry to get a response on these issues, and I'll read them into the record. The ministry suggested I should do that.

The first item is clarification of competition for development consultants and resource groups. The ministry responded as follows:

Development consultants and resource groups begin working with the non-profit housing sponsors well in advance of application to the ministry for unit allocation. Compensation for service is not received until after unit allocation is granted. Approximately one out of five applications receives an allocation. The competitive process for groups will involve the following: identifying the consultants available, reviewing services provided, fees and past performance, and meeting with consultants and selecting the successful consultant.

To wrap up on the development consultant issue, the ministry did say to me that there isn't an unlimited amount of funds for each consultant, and there is a cap. For example, there are additional expenditures on lengthy planning approvals, so there is ultimately a cap. The ministry was not able to give me that cap. That's the issue of development consultants.

Second, what is the ministry's position on turnkeys and modified turnkeys? The ministry responded as follows: The ministry will not prevent turnkey and modified turnkey proposals under Jobs Ontario Homes.

The ministry has revised its business practices in the following manner: First, negotiations are much tougher on prices, according to the ministry. The ministry is insisting on separate land costing for all projects, including turnkeys and modified turnkeys. Developers on turnkey and modified turnkey proposals will be required to pay for rezoning and servicing costs. Last, the evaluation begins with the quality of the group. The site is considered after the group has been given approval.

That is the response is to those two questions raised by committee.

The Chair: Thank you. We're going to adjourn at this point and we're going to move in camera to deal with the second agenda item, which is the report on the health card question.

The committee continued in closed session at 1123.