Thursday 7 April 1994

School board value-for-money audits

Non-profit 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)

*Crozier, Bruce (Essex South/-Sud L)

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

*Marchese, Rosario (Fort York ND)

Marland, Margaret (Mississauga South/-Sud PC)

*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:

Carter, Jenny (Peterborough ND) for Mr Perruzza

Wilson, Jim, (Kingston and The Islands/Kingston et Les Îles ND) for Mr Owens and Mr Marchese

Also taking part / Autres participants et participantes:

Burns, Daniel, deputy minister, Ministry of Housing

Peters, Erik, Provincial Auditor

Clerk / Greffier: Decker, Todd

Staff / Personnel: Anderson, Anne, research officer, Legislative Research Service

The committee met at 1007 in committee room 2.


The Chair (Mr Joseph Cordiano): Good morning, members of the standing committee on public accounts. On today's agenda we have a notice by Mr Callahan, and we will deal with Mr Callahan's motion as the first item on the agenda. Following that, we will have appearing before us Deputy Minister Dan Burns, and that will commence at approximately 10:30, when he is to arrive.

Notice was given to the committee of Mr Callahan's motion last week, so we will deal with that motion at this time.

Mr Robert V. Callahan (Brampton South): I move that the committee recommend that the Minister of Education and Training implement the necessary steps to require that school boards conduct value-for-money audits relating to the expenditure of funds transferred from the province.

In particular, the committee recommends that the minister prescribe regulations pursuant to section 234 of the Education Act requiring board auditors to conduct audits of a value-for-money nature and to report to the minister on the results of such audits; or, that the minister consider making grants to school boards conditional on boards agreeing to permit the Provincial Auditor to conduct such audits as the standing committee on public accounts directs.

It's fairly straightforward and it seems to me -- I may be wrong -- that it reflects, at least in one particular area, education, what the auditor was looking for: something in advance of the Audit Act itself being amended to provide for an overall scheme of auditing in that way, value-for-money audits.

I suppose the second part of it is to have the minister do what the minister indicated they would do: provide criteria on which basis you could actually determine whether it's a value-for-money audit. As one of my constituency assistants indicated to me, only about 17% of school board budgets come from the province, so it's not a significant amount, but it's an effort to try to get the ministry, if it hasn't already started or if it hasn't completed what it promised it would do, to carry that out.

Also, perhaps it's an effort to have the particular ministry that's involved with the amendments to the Audit Act moving on with these things and getting them established so that we do have the ability, through public accounts, to use the auditor's good services to determine whether we are getting value for the very scarce taxpayers' dollars we have today.

I don't think there's anything more I really want to say on it.

Mr Rosario Marchese (Fort York): I have a question to clarify what isn't quite clear to me. The way it's worded, it appears as if the board could refuse to go through this audit. That's why you've worded it in such a way as to say, "The minister consider making grants to boards conditional on boards agreeing to permit." This leads me to understand that if they disagree with the audit, they wouldn't be doing it, and therefore you've added the second part to it. Is that what it is?

Mr Callahan: That's right, it's an either/or. Maybe Mr Peters can --

Mr Erik Peters: There are two issues. First, at the present time, school boards are generally only subject to so-called financial stewardship audits. In other words, they get an opinion from an outside auditor of whether their financial statements present fairly their particular situation. They may in fact object to a value-for-money audit.

If I can expand my answer in that particular area, there are two things. The source of the audit -- in other words, the resources required to conduct these audits and who funds those audits -- becomes a secondary question. You may want to consider some very minor amendments to the motion in terms of just broadening the judgement that can be exercised by the minister in determining what funds should be expended on these kinds of audits.

Specifically, I would go with that point to the second paragraph, where it says "requiring board auditors to conduct audits," to potentially leave it broader, "requiring the conduct of audits of a value-for-money nature," so that there's an openness given to the minister as to whom he wants to conduct those audits. If they were to be conducted by the auditors of the boards right now, there would be a fee problem, because those audits would be very expensive. If the committee directed that it be those auditors, there would be immediate resistance, because it requires additional funds. Taking it out gives the minister the option to either use internal audit or other audit resources, ministry staff or whatever.

Mr Callahan: What part are you suggesting come out? I just want to find out. I'm prepared to agree to that amendment if it's --

Mr Peters: In the second paragraph of the motion, at the end of the second line and beginning of the third line, take out "board auditors to" and replace it with the word "the." It would read, "requiring the conduct of audits of a value-for-money nature."

Ms Dianne Poole (Eglinton): Would it not be "conduction"?

Mr Peters: Or "the conducting."

Ms Poole: Yes, "the conducting of audits."

Mr Peters: That's fine, "conducting of audits." That would leave it at the minister's or ministry's judgement as to which auditor would do it, rather than forcing them into accepting an independent audit.

The other part, if I may expand on the first paragraph --

The Chair: Before you do that, Anne wants to point out something with regard to section 234 not being applicable after we do this.

Ms Anne Anderson: Section 234 in the Education Act applies to the board's auditors, and if you take out those words in the motion, I'm not sure whether it's then applicable to refer to section 234, if you're trying to broaden the powers to the minister, or whether it should be done in a different way within the motion.

Mr Peters: We may have to face that resource question, so I'll leave that to debate.

The Chair: Do you want to deal with the first paragraph?

Mr Peters: In the first part, where we talk about "audits relating to the expenditure of funds transferred from the province," there is a difficulty this office has run into in this situation. This requires direct identification of the use of the funds transferred by the province and the board, and if the board then organizes itself in setting up separate funds, all of a sudden those funds are outside the purview of this kind of audit.

From the point of view of accountability -- and we're dealing with overall accountability, and I know this will cause some discomfort in your minds because of points that were made at the last meeting -- it would be broader to relate value-for-money audits to the expenditures of all their funds in the school board setting so there would be no limitation.

If I really had my druthers, to be blunt with you, I would like to expand that to all school boards, regardless of where the funding is from, but this committee is limited to those whose funds are transferred from the province. For those which receive funds from the province, this Legislature may want to consider installing value-for-money audits on all the funds spent by boards that receive any funds from the province.

The Chair: That would almost by definition include every board, because there are capital expenditures made that are moneys that have been directed to those boards by the province. I think every board relies on capital funds from the province.

Mr Callahan: Not any more.

The Chair: Well, to a point they still do.

Mr Peters: Well, some do, or some don't. The case I'm referring to in particular is the Ottawa board. When I arrived here, my office was deluged by phone calls from the press as well as the public. After having gone through labour negotiations of incredible proportions, disrupting the school year and everything else, those were barely over when they went into an $18-million expansion of the administrative building for the school board itself. Everybody was in an uproar. We looked into it, and there was no way: The entire $18 million was to be funded strictly on the local taxpayers basis; there was no provincial money.

The Chair: I have Ms Poole and then Mr Marchese and Mr Tilson, and we have 10 minutes left to deal with this.


Ms Poole: I'll be very brief. I had planned to raise the issue the auditor just referred to, so I just want clarification. The first section of paragraph 2, when it refers to section 234 of the Education Act, could that apply to boards such as Ottawa and Metropolitan Toronto, which are in a negative grant situation? I understand that the second part of that, where it refers to the standing committee on public accounts, could only apply to those boards where there is public funding from the province of Ontario.

But for the first part of that paragraph, referring to section 234, could the minister require "the conducting of audits of a value-for-money nature" in Metro Toronto, in Ottawa, notwithstanding the fact that they don't receive moneys from the province?

Mr Peters: I don't have the answer to that question. Paul would have to inquire, because I don't know.

Mr Marchese: My sense is that the answer to that question would be yes. Whether or not the boards are in a negative grant situation should not or cannot preclude the province from doing this if that's what it wants to do, given that we have jurisdictional powers over boards.

Ms Poole: That's how I would read it too, because in the rest of the Education Act, notwithstanding the fact that the provincial government does not fund those two boards, they still have to fulfil the requirements of the Education Act.

Mr Marchese: Absolutely, of course.

Ms Poole: That's my reading, that this would give the minister the authority if he prescribed those regulations, but I just wondered if that was accurate.

Mr Marchese: I agree with that. I want to ask you some quick questions. Oh, Mr Tilson, you were on the list.

Mr David Tilson (Dufferin-Peel): All these were areas I wanted to speak on. It seems to me that there need to be two amendments to the resolution. In the first paragraph, there would have to be an amendment that we're requesting the ministry to conduct value-for-money audits for all boards, and it's not up to us to try to figure out how; we're just requesting that they do it. One way is holding back funds, but these boards are creations under the Education Act, and that's that. It may well be some amendments to some legislation or regulations, I don't know.

But I think that first paragraph needs to be amended, perhaps deleting the words "relating to the expenditure of funds transferred from the province." The intent of the motion, as I understand it, is that we're recommending that the ministry request value-for-money audits across this province for all boards, as simple as that. I would think that those words would have to be deleted.

Also, I would like to hear more on addressing the legal issue of section 234. It seems to me we don't know what authority the minister has -- I don't know whether we're talking about requests or demands -- to do those things.

The Chair: Anne pointed out that in subsection 234(3), the minister does in fact -- would you like her to read that subsection?

Ms Anderson: In the Education Act, subsection 234(3) reads: "An auditor of a board shall perform such duties as are prescribed by the minister and by the Minister of Intergovernmental Affairs and also such duties as may be required by the board that do not conflict with the duties prescribed by the minister and by the Minister of Intergovernmental Affairs."

Mr Tilson: I am wondering if Mr Callahan would agree to stand this matter down to perhaps redraft the resolution, reword it. I am in favour of supporting the intent; it's just that I think we need to tidy it up.

Mr Callahan: The auditor's concern and the reason he wanted to change this was because the cost of the audit is borne by the school boards. It seems to me that if we're not getting value for money in our school boards, the ministry, in the long run -- preparatory to there being amendments to the Audit Act, which have been in the mill for a long time now, under two administrations -- would probably save as much money in terms of paying for those auditors to do what we're asking to be done. I'm quite prepared to reword it in some way, as the auditor has suggested, but I am wondering if the auditor would agree that we leave it as is.

It also avoids the prickly problem that the boards are going to say to us, "Butt out, because you only give us 17% of the money and the rest of it's raised from the ratepayers of the area." I think the ministry should be telling them, "The moneys you spend are going to be valuable, and if they're not, it's going to be brought to the attention of the public." I don't know whether the auditor has any comment on that, but I am quite prepared to reword it if necessary.

The Chair: It's probably more appropriate if we do that, as time is running out: take back the motion and reword it and perhaps seek some additional advice from Paul Murray, our legal counsel, who has done the work on this, and then come back with some other motion.

I have Ms Poole on the list first and then Mr Marchese.

Ms Poole: Mr Marchese was just responding to my comment, and he actually didn't get a chance to speak.

Mr Marchese: I abandoned the floor, so to speak.

The Chair: You gave up the floor to Mr Tilson and then we moved on. I apologize. Go ahead.

Mr Marchese: I agree with referring it back. Yes, they would say as boards that this would be yet another downloading at a time when they have had difficult times, that to require the auditors to do this is a great deal of expenditure for them, a great deal of time and money. It's a big concern that we should be reflecting into the mix. However you word it, I think we should come back to discuss it, because I have additional concerns I wanted to raise, but I think sending it off this way would create a problem. Can we bring it back and have a few more minutes to discuss this?

The Chair: I think that would be fine.

Mr Callahan: Do you want to leave it as it is, Mr Chair, and let the committee discuss it as it is? Maybe we can get input as to what the committee could support in terms of a motion. I don't want to waste the time of the staff and so on in trying to come up with a motion and coming back here and again finding that it's not supportable.

The Chair: Might I suggest that we have Paul Murray here at the next meeting and we deal with it at that point? We could work on it at that next meeting.

Mr Callahan: I'll move that it be tabled to the next meeting of the public accounts or the next meeting that Paul's going to be here.

The Chair: Great. Thank you very much.

I saw Mr Burns in the hallway, and we will await his arrival with great anticipation, I am sure. Ms Poole, would you like to take the chair, please?



The Vice-Chair (Ms Dianne Poole): I'd like to call members of the committee to order, as the deputy minister has arrived.

As members of the committee are aware, a matter was brought to the attention of the public accounts committee relating to a report or publication by the Ontario Non-Profit Housing Association that had a covering letter from the Minister of Housing that, in the opinion of a number of members of the committee, cast aspersions on the material provided by the auditor in the auditor's report on non-profit housing.

Before we go to the deputy minister, I'm going to ask the auditor to make a few opening comments and to briefly describe the current situation.

Mr Callahan: Madam Chair, before you do that, just to take the heat off the auditor, I want to say that I picked this up and sent it to the auditor, because it didn't seem to me that what they were saying was correct, that there are a number of things that were incorrect. To take the heat off the auditor, it wasn't him going on a witchhunt; I saw it. And it wasn't a witchhunt either.

Mr Larry O'Connor (Durham-York): Peel Non-Profit Housing Corp had started it too. Wasn't Peel Non-Profit part of that group?

Mr Callahan: Look, inaccuracies printed by whatever body are inaccuracies.

The Vice-Chair: Thank you, Mr Callahan. We'll be sure to give you credit or blame, whichever is due.

Mr Callahan: I don't want credit; I just want to take the heat off the auditor.

The Vice-Chair: I understand Peel Non-Profit also contacted the auditor, so he learned of this matter from several different sources.

Mr Peters: I just wanted to refer to the package, under date of March 2, that I sent to the Chair of the committee, and I'm going to refer to items in that package.

The first item I would like to refer to is the very last page of that document, which is the letter by the minister. To the best of our knowledge, about 2,000 copies of this letter have been distributed, including various media outlets. I just want to quote directly, read into the record the beginning of that document.

"Dear Sir/Madam:

"In recent months, non-profit and co-op housing has been the subject of public debate.

"Some critics have attempted to discredit Ontario's highly successful non-profit housing program, calling instead for a massively expanded -- and expensive -- shelter allowance program.

"Unfortunately during this...debate, a lot of the facts about non-profit housing have been distorted and the many benefits have been ignored.

"In an effort to set the record straight, this information package was prepared. It includes," among other publications, "a pamphlet prepared by the Ontario Non-Profit Housing Association entitled Ontario Needs Non-Profit Housing."

Our concern with that document, which is also part of your package, relates to -- the number's at the top of this document; it begins on 2c-7. There is in the middle a line that says, "Is non-profit housing efficient?" In there, in heavy ink, is a paragraph that says: "The findings of the auditor's report have since been challenged by the public accounts committee -- a committee comprised of Conservative, NDP and Liberal MPPs. The auditor has admitted that his methodology was flawed, and the Ministry of Housing is now collecting data to allow the auditor to review his findings."

It carries on, on the next page, with four misleading statements from the auditor's report. From this, without wanting to go into the detail or spend much time with the detail, I just want to highlight a little bit of our response that we sent to Ms Robin Campbell, the executive director of the Ontario Non-Profit Housing Association, who are the authors of this document.

The first one we brought to her attention -- and later on you'll get a copy of her response, and she appreciated that response -- was that the auditor's report did not contain criticisms of non-profit housing as such, per se. Rather, then, they were concerns with the cost-effectiveness of the administration of the non-profit housing program by the Ministry of Housing. The former is a policy issue, whereas our report addresses the administration of the program. So this is one of the arguments that we wanted to set straight.

The second was our concern that where an organization such as this -- and this is not responded to by the Ontario Non-Profit Housing Association -- is using information from our report, we would greatly appreciate, and many organizations do this, that they contact us and say, "Are we getting the right context and are we reproducing this correctly?" Many organizations send us drafts before they do send these things out, the same as we send drafts to them before we make our report.

The third item was that it was the Ministry of Housing that actually challenged our methodology; it was not this committee.

Then we go in the letter into the individual facts, and there I just want to leave a brief comment with you. The comment is that our principal concern is that if you take individual sentences out of a long report -- like, you grab one from page 130 and the next one from page 132 and put them together into a package -- you end up citing the report totally out of context, and that is in effect what happened here. That was the number one problem with the facts that they were relating and that they attributed to us and this is what we truly resented: that our report was labelled as being misleading and discrediting the credibility of our office in this way by taking our statements out of context.

The second part of concern is that very often the quotes were not exact. In other words, we had very carefully attributed the ministry or the source of the information we were relating, and by attributing it directly to us and by omitting our citing another source, it gives a totally different flavour. It actually represents, therefore, a misstatement of what we have said indeed. Those two are the major concerns that we had with the facts that were presented in this particular document.

You will see that there is also distributed this morning -- and I apologize for the lateness of the distribution; I'd actually hoped to do it in the formal subcommittee, but it arrived just after we met in the subcommittee -- a letter responding from the Ontario Non-Profit Housing Association. It is in a way a fairly mild response inasmuch as they're saying, "We regret your feelings that we misrepresented your report."

The point I would like to make on that response is that we have carefully gone over the documents that were produced by the other side in what turns out to be a propaganda war between various organizations, and all the documentation we have thus far is that it was only this organization, ONPHA, that cited us out of context. The others cited us verbatim and in the proper order. So I'd agree that it was probably in the context of a propaganda war, but it was only this organization that chose to put our comments together in this manner.

Those are my comments.


The Vice-Chair: Thank you, Auditor. Just before we go into questions, we will ask for an opening statement from the deputy minister, if he wishes to give one.

I would emphasize that members of the committee are well aware that the ministry is not responsible for publications of the Ontario Non-Profit Housing Association. Our concern is focused on the fact that the minister attached a letter to this publication which made it appear that the minister gave credence to the association's attack on the auditor and the auditor's findings. I would just like to emphasize again that the focus is the minister's letter, not whatever the Ontario Non-Profit Housing Association may have published.

Mr Burns, if you'd like to make some opening comments, we'd be happy to hear them. We would also like to express our appreciation for you coming on such short notice.

Mr Daniel Burns: I'm sorry I couldn't come last week, but I'm not entirely the master of my own schedules. You undoubtedly know that we're all caught in a machine of meetings.

I don't think I need to make any long opening statement. I think I'd just reflect back briefly what you, Madam Chair, have just said, which is that the Ontario Non-Profit Housing Association is an independent organization that prepares its own material and, as the auditor has just said, they've had an exchange of correspondence about this particular publication.

On the second subject that you raised, the question of the minister's covering letter to the package of materials that was sent out: I'm not sure quite how we're going to handle this in the discussion, but you'll appreciate that a minister's letter is a minister's letter and if the members of the committee need to have a dialogue with her about that, then they'll have to find a venue where that's appropriate.

Of course, I'm here to explain and discuss and answer any question you wish about the administration of the ministry and the administration of the non-profit housing program, and I guess we'll see in the dialogue what happens in relation to that question, but I thought we should just be a little bit clear about that as we started.

The Vice-Chair: Thank you, Mr Burns. I'm going to suggest 15-minute rotations by caucus, starting with the official opposition. We have Mr Cordiano and Mr Callahan.

Mr Joseph Cordiano (Lawrence): Thank you, Mr Burns, for being here this morning. I think we'll shed some light on this matter. As I see it, it is rather a difficult one for the ministry and for this committee because, quite frankly, I think it puts this committee in an awkward position, it puts the auditor in a very difficult position, and one that I think is not a tenable one, either for the auditor or for this committee. I believe this committee is mandated to deal with matters that come before it of an administrative nature with due regard for achieving value for money and efficiency cost savings -- administrative matters.

Certainly, the auditor never deals with policy matters and this committee has always attempted to stay away from those kinds of discussions because this is not the place for those debates; the Legislature or other committees are, perhaps.

When we receive this kind of document that deals with what amounts to a defence of a position taken by the minister of the day or the government of the day and uses this committee in a way that I think is most inappropriate and uses the auditor in a way that discredits the objectivity that is always uppermost in any auditor's mind and the public accounts committee, and drags those two bodies into a propaganda war, I think it is completely unacceptable.

Having said that, I would ask this, first of all: The Ontario Non-Profit Housing Association is mandated by the Ministry of Housing, or at least it's funded by the Ministry of Housing, is it not?

Mr Burns: Perhaps it might be worth spending a couple of minutes on that particular question. The Ontario Non-Profit Housing Association is an organization with a membership. It's made up of somewhere between 500 and 600 community housing organizations, either private non-profits or municipalities.

It operates with a fairly broad mandate given to it by that membership. It runs a conference, training programs; it advocates on behalf of that particular community of interest with the ministry on administrative issues and on policy issues. In that sense, I guess it has a fairly typical mandate and profile for an organization of non-profit institutions of the sort that we see in a number of areas of provincial life.

It does receive some funding from the ministry, both a general grant in support of the sector organization and some contract funding to participate in particular activities that we think are important or to deliver training programs. They also receive, of course, considerable funding from their own membership base and their education and conference activities. So that's a fairly typical profile, I think, for an association of non-profit organizations in the province.

Mr Cordiano: Okay, I can appreciate that. None the less, the views of the non-profit housing association, having been expressed through this document which they sent out to their members, were in effect supported when the minister attached her letter with her letterhead to that document as it was sent out.

It therefore gives credence to the views expressed by the non-profit association in supporting the comments made by the document, to the effect that the auditor misrepresented the facts and that the committee, by and large, was taking a very partisan approach dealing with the matter that came before it, and that -- well, the various matters that were raised in the document we can go over a little further.

But, quite frankly, I think that there's a clear case here that the minister or the ministry needs to address with respect to those comments. It's unacceptable to me that the minister, with her name attached to a letter, endorses the views that were put forward, not on the policy matters but with respect to statements made by the association, that the auditor's report was misleading, intentionally or otherwise. The tone of the document suggests that the committee was fighting a propaganda war with the proponents of non-profit housing.

Let me just cite one passage on page 2c-7: "The findings of the auditor's report have since been challenged by the public accounts committee." It suggests that we're in contradiction with the auditor, which is also an error. "The Provincial Auditor's 1992 report also reported troubling findings, making adverse comparisons between the non-profit sector and the private sector."

It goes on, as the auditor pointed out, on the next page with "Four misleading statements from the Auditor's Report." Then, in the letter that I just received this morning, March 7, on the second page of that document in the middle of the page it goes on to say: "It was good to learn that your office," referring to Mr Peters's, the auditor's, office, "was not criticizing non-profit housing per se. However, you must be aware that the opponents of non-profit housing were not very careful in their use of your report." It goes on to say that the language --

Mr Callahan: Does Mr Burns have a copy of that letter? It might be helpful to put one before him. Do you have a copy of it?

Mr Burns: Yes, I do. Thank you, Mr Callahan.


Mr Cordiano: -- chastising the press, the press has used the report in an ineffective way. Obviously, they're mounting a propaganda campaign and they're saying, "Given the sharp nature of the debate at the time, and the fact that, to the best of our knowledge, your office" -- referring to the auditor again -- "had not publicly and forcefully dissociated itself from the attacks on the program per se, we believed we had to mount an effective defence of non-profit housing."

It's immaterial what they had to do, but to suggest that the auditor now should have been engaged in the debate, in mounting a defence of the program, that he is either an enemy or a friend, is ridiculous. This letter is totally absurd when you're writing to an auditor who has no interest whatsoever in engaging in a matter that is a policy item or one that speaks to the partisan nature of this debate. After all, we are in politics and of course these kinds of debates will ensue, but to drag the auditor in -- this is where we draw the line, as far as I'm concerned. To drag the auditor in, or the committee, in its report, not individual members -- we are, after all, politicians and outside of this place we can say what we like; when we're on this committee we attempt to deal with administrative matters. But to drag the committee as a whole with its report, and the auditor with his findings, and to suggest that they're not supportive of one side of this policy debate, or this partisan debate -- propaganda warfare, as it has been described -- is to threaten the integrity of the office of the auditor, making him partisan, and making this committee less effective in dealing with simply administrative matters that it has always dealt with. That's the concern here.

When the minister's letter was attached to this document it gave a clear impression that the minister is endorsing the criticisms of the non-profit housing association, the criticisms levelled against the auditor and levelled against the committee. That simply cannot go without being addressed. If the minister wants to leave it at that, that is unacceptable to this committee, and perhaps it wouldn't be a bad idea to have the minister come before the committee if that's what Mr Burns feels is necessary, to get the minister's views.

The Vice-Chair: Before we go on to Mr Callahan, would you like to respond, Mr Burns?

Mr Burns: I'm not sure there was a question specifically that I could be clear on.

Mr Cordiano: It was interrogative, but --

Mr Burns: Perhaps in the way --

The Vice-Chair: Would you like to comment?

Mr Burns: -- of commentary. Thank you, Madam Chair, it's my word precisely. It's certainly my view and the view of the ministry that your characterization of the Office of the Provincial Auditor is a right one. It is an independent office and it's charged with a particular task. It's not our view that anything the auditor has done is part of the policy debate environment that you are describing, and nothing in what we do in our activities should reflect any other perspective.

Mr Cordiano: If I may just follow up on that, the point has to be made that the Minister of Housing did not respect the integrity of the office of the auditor or of this committee by attaching that letter to that document.

I would ask that the minister make it very clear that in no way did she have any intention of chastising or questioning the integrity of the office of the auditor or the integrity of this committee, and I think to do any less, since this document has gone out to 2,000 members of the organization, would be to do a disservice to the office of the auditor. To that extent, I believe it is incumbent upon the ministry to deal with the matter. That's how we intersect on this. So I think to leave it alone, with due respect to the deputy minister, is a question that still has to be resolved, perhaps at the political level.

Mr Callahan: I wasn't aware of the fact that there wasn't a closer connection between the Ministry of Housing and this body, but I notice that the letter of the auditor was sent to the minister as well. Do we have a reply from the minister at all? We don't have a reply. Is it intended that there will be a reply, Mr Burns? I don't want to put you on the spot.

Mr Burns: I don't know the answer to that. I was copied on the material and I did write to the auditor saying that I agreed that the minister's letter was silent on the question of whether it was specifically endorsing any of the material in that distribution package that wasn't ministry material and that in retrospect it would have been a clearer letter had that been addressed. I can't answer for the minister herself in this forum.

Mr Callahan: That's fine. Maybe we do need the minister here, because my own non-profit association, Peel Non-Profit, which is a very successful one in Peel, responded to the Provincial Auditor, and they said, "I should also point out that we just received a package of information from the Minister of Housing, Evelyn Gigantes, which includes the ONPHA pamphlet. The fact that the minister is utilizing the ONPHA material certainly leads me to believe that it's a credible publication." Now what in fact the minister did, and this is why I think we need the minister here -- I think she owes an apology to the Provincial Auditor.

I think we require that the ministry provide the funding to rectify this issue. Just the very fact that she has misled a very credible non-profit organization in my community, leading me to have to write to them and having them say, "We relied on the minister" -- I mean, the minister doesn't have the luxury of being able to pick up a couple of articles without reading them and just throw them into an envelope and send them out to support a cause that she believes in.

I think to do that is irresponsible, and a minister doing something like that should certainly at least apologize to the auditor and to the committee, or in the alternative, should perhaps even consider that if it happened again, she should resign. Because a minister doesn't have that prerogative of being able to act in that willy-nilly fashion where, because she has a particular ideology and she supports a particular cause, she's going to jump in with the propaganda movement and just throw things in there that are totally and factually inaccurate.

In fact, I suggest that is an affront to this committee. We at least deserve an apology. If she did it unintentionally, fine, I can accept that, but she was copied in the letter from the auditor. We've had no response from her whatsoever. I would think we would have at least gotten a letter from her saying, "Sorry," or a letter to the press saying, "Sorry, we goofed." But instead, what does she do? She doesn't reply.

I'm going to be asking that this committee require one of two things: either the minister comes before us, which is probably a waste of time and money because she's got other things to do, but at the very least an apology to the auditor and to this committee, with it being publicly disseminated in the press so that these groups that may still be relying on these factual inaccuracies -- and there probably are. I think Mr Cordiano said 2,000 groups got this information. Somehow we have to get this back out to them.

Finally, Mr Burns, I'd ask you, do you know what the cost of -- you must know, I guess, even though it's an arm's-length group. You must know what the cost of putting that publication out was.

Mr Burns: I don't know what internal resources ONPHA may have devoted to this or what their costs are.

Mr Callahan: Can you find that out for us? I'd like to know what --

Mr O'Connor: Let's find out how much the Fair Rental Policy Organization pays.

Mr Callahan: Look, I would say this if it were whatever political stripe in the driver's seat. I think the public accounts committee has an obligation to ensure that taxpayers' dollars are spent wisely. When information is being disseminated that criticizes an independent officer of the Legislature -- the auditor -- criticizes the public accounts, and the minister doesn't have the good grace to at least send a letter of apology and try to change that misinformation around, then I think there's something wrong.


We are here to call ministers and the government to be accountable for taxpayers' dollars. It's not a question of policy; it's a question that this minister, through either negligence or deliberately -- I would prefer to think it was negligence --

Mr Gary Wilson (Kingston and The Islands): It sounds over here like you're making speeches, too.

Mr Callahan: This is for the benefit of you and all members of the committee. I've often said in public accounts, we should be able to discuss this, but I think for future practice, that if a minister is negligent -- and I hope it's that and not deliberate -- that we at least deserve, and the auditor more importantly deserves, a letter to the effect, and also the people out there who have been misinformed have a right to know through a public dissemination, that the information garnered by taxpayers' dollars -- and we don't know the amount; it must have been big bucks, though -- should know that there were inaccuracies in there -- not just one. The auditor refers to several of them which are very critical errors.

I'm going to suggest, Madam Chair -- I'm going to move a motion, in fact -- that we require from the minister at least an apology recognizing that she must -- I'm sure, Mr Burns, you appreciate that these were inaccuracies, do you not, the ones that are referred to by the auditor?

Mr Burns: Sorry, are you asking me whether --

Mr Callahan: The letter that he sent to you, do you concur that the things he said in there were in fact inaccurately recorded in the document that was disseminated as Ontario Needs Non-Profit Housing, by the Ontario Non-Profit Housing Association? Do you accept that those are correct, that they did in fact misrepresent?

Mr Burns: I agree that the ONPHA's summary of events is not completely accurate and doesn't reflect either the auditor's report or the committee's report in a completely accurate way.

Mr Callahan: I'm asking you, Mr Burns, do you agree that the letter from Mr Peters is accurate in every detail?

Mr Burns: That's a very specific question. I'd have to go back and read every sentence to see whether it absolutely accorded with our view of everything that happened. Let me make a general answer, which is that I am personally and we are generally in agreement with the reservations that the auditor expressed about ONPHA's report to ONPHA.

Mr Callahan: You've had this letter since March 1 and surely to God you've looked at it --

The Vice-Chair: I'm sorry, I've tried to give some leeway because you were in the middle of questioning, but we're now a couple of minutes over.

Mr Callahan: All right, I'll come back to it when we go another round. I don't know whether we're going to or not.

Mr Tilson: I'll continue on with it. You have the letter; you've read the letter; you've had it for some time. It was read back to you today, just now, by the auditor. Either you agree with the letter or you don't agree with the letter.

Mr Burns: I just said that I agree with the general points that he's raised.

Mr Tilson: So you agree with the letter.

Mr Burns: Yes, I agree with the letter, but Mr Callahan asked a very specific one, which is whether I agreed with every single word and sentence. That's a very specific question.

Mr Tilson: I'll ask you, what do you disagree with about the letter?

Mr Burns: I don't disagree with the points the letter has made.

Mr Tilson: Did you know this letter was going out?

Mr Burns: Sorry?

Mr Tilson: Did you know this letter was going out?

Mr Burns: Which letter are you referring to?

Mr Tilson: I'm sorry. Did you know that Ms Gigantes's letter of January 28 was going out to the various non-profit housing groups?

Mr Burns: We were obviously aware that the minister wished to send out an information kit, because she obviously asked us to collect some of the material for it, yes.

Mr Tilson: So you knew that, and did you point out to her that what she was doing really didn't properly represent what this committee has said or what the Provincial Auditor has said?

Mr Burns: First, I think I should just go back to the beginning. This is the minister's letter. I think questions about that letter should be put to her.

Mr Tilson: I appreciate that and I always admire you, Mr Burns, for coming into the lion's den and answering questions which are very difficult. I suppose we as members are trying to ask you non-political questions. I'm simply asking you a fact. You're the deputy minister. You know what's going on in the ministry and if you don't, you should. This is a major distribution of information to non-profit housing groups. I assume that the minister or her staff asked you for your input with respect to this letter and this publication going out?

Mr Burns: I think, Mr Tilson, not wanting to be uncooperative in the discussion, that the questions about the minister's letter should be put to the minister.

Mr Tilson: I'm simply asking you because the difficulty -- you may be right, Mr Burns; you didn't write the letter, she wrote the letter -- is that this is now the policy of the province of Ontario. This is a letter written on the letterhead of the Ministry of Housing, signed by the Minister of Housing.

When the Minister of Housing says to the non-profit housing groups around this province, "I believe that if you read this material, you'll come to the same conclusion as I have that non-profit housing is an essential part of a well-balanced housing strategy for Ontario," the difficulty is that the innuendoes that have been left by this letter of Ms Gigantes are that the Ministry of Housing, of which you're the deputy minister, fully supports the statements that have been made in this letter, and this is after we, as a committee, have spent considerable time with you trying to clarify the processes, the spending, the workings of the system of non-profit housing.

Other members of the committee may not agree with me, but I, as a member of this committee, consider this a slap in the face. We'll let the Provincial Auditor speak for himself -- certainly he wouldn't have gone to the trouble of writing this letter -- but certainly he and his staff consider this a slap in the face, particularly after you have sat in the chair that you are in right now and answered questions that we put to you.

I know you want to say, "I didn't have anything to do with it," but you did have something to do with it because you sat before this committee, agreed to cooperate with us, to clarify positions. In fact, as I understand it, there's still more information to come back from your office, and while you're in the works of getting that information, this comes from the minister.

You're right when you say the minister should deal with this letter, but I believe that to show the integrity of your office and to show the integrity of the committee and the Provincial Auditor's office -- I want to know where you sit on this thing, if there have been facts that have gone out to the non-profit housing which you are now saying are incorrect.

We're never going to get an apology from the Minister of Housing. Mr O'Connor on his side has already implied that. There's no way she's going to apologize. Mr Callahan can ask all he likes. What is important, however, is that these groups know what the facts are. You have now admitted that the facts as represented by this group are not correct. As the deputy minister, what do you intend to recommend to the minister that she do to rectify this wrong?

Mr Burns: You've touched on a number of subjects and some of them, as I've indicated, I think need to be put to the minister.

On the question of the ministry's administrative work and our continuing commitment to the undertakings that we gave in this place, I just want to repeat what I've said before, which is that we agree there are significant administrative improvements that need to be made in our program. We are working on those. We went, at your request, to the level of providing you with internal ministry work plans, and as I indicated I think last week in a letter to your Chair, we are reviewing those at fiscal year-end and anticipate that you'll want to have a chance to talk about those things with us again.

I just want to emphasize that the ministry has in no way diverted from those objectives or from any of the important and helpful discussion that we had in this place or the recommendations of the committee itself.

I think the other questions you touched on, though, are ones which need to be put to the minister.

Mr Tilson: I'm sure they will be by the critics in the two opposition parties in some form or other, if not by others.

My concern is that there's a whole raft of information that the minister -- I'm not going to say the minister -- the Ministry of Housing, of which you're the deputy minister, has now said are facts, that these are accurate facts, this document, Ontario Needs Non-Profit Housing, as put out by the Ontario Non-Profit Housing Association, which is funded by the provincial government, the taxpayers of this province.


The fact is that under the Ministry of Housing's letterhead these facts have gone out as the gospel truth. You have now told this committee that the facts in that document are not correct. That's not true, you didn't say that, but some of the facts in that document are not correct. In other words, you've agreed with Mr Peters's letter.

As the deputy minister, how are you going to recommend to the minister that this be rectified?

Mr Burns: We're talking about a publication of an independent organization.

Mr Tilson: They're not quite independent. They're funded by the province of Ontario.

Mr Burns: My general experience of organizations in the province, particularly ones based on a membership, is that they take their autonomy and independence pretty seriously and this particular organization is no different in that respect. They're not a creature of the ministry. I don't approve their work plans.

Mr Tilson: Mr Burns, you're quite right. It would be inappropriate for you to tell this group what to write. The wrong that has been made is that the Minister of Housing, on Ministry of Housing letterhead, has supported this report with her letterhead. If it had just gone out, that's one thing. I suppose you're right, they can say whatever they like, and it's up to opposition groups to play the political game and say whether they're right or wrong.

The difficulty is that this committee is trying to deal with what we feel is a problem with the process of non-profit housing and we have questioned you several times quite rigorously. You've attempted to give answers; you owe us a whole pile more answers. In the middle of that process, we get the Minister of Housing coming out and saying essentially that the Provincial Auditor's full of baloney. Mr Callahan and Mr Cordiano have said -- I don't want to repeat what they've said, but we're greatly offended, or at least some members of this committee are greatly offended.

The problem is that this misinformation is now out there and it's out there because of the Ministry of Housing. What do you intend to recommend to the minister that she do to rectify this misinformation that has been spread around the province of Ontario?

Mr Burns: I think, again, that the question of the minister's communications in her letter are questions that should be put to her.

Mr Tilson: But if you admit that there is misinformation that has been spread around the province of Ontario by the Ministry of Housing, don't you as the deputy minister have an obligation to rectify that misinformation?

Mr Burns: Just to go back to the Chair's opening remarks, ONPHA itself is an independent organization. They've had some correspondence with the auditor and they will reflect in whatever way they think is appropriate on all of that. The part that has to do with the minister's communication, there's no question, it should be put to the minister.

Mr Tilson: So you don't intend to do anything? That's your answer?

Mr Burns: No, that's not my answer. My answer is that if you're dealing with the minister's communication, you should deal with her.

Mr Tilson: The difficulty is, sir, that we're trying to determine what the administrative proceedings are with respect to non-profit housing. Look at those four points. I'm not going to read them. You've got them memorized. You've had this and it's probably before you now. Those now appear to be --

Mr Burns: I certainly have a copy here. I don't --

Mr Tilson: I'm sorry, Mr Burns?

Mr Burns: I certainly have a copy here but I don't pretend to have memorized every piece of all this.

Mr Tilson: Of course. Is that your response to the committee with respect to those four points? Are you saying those four points are correct?

Interjection: He's already answered.

Mr Burns: I've answered that question, I think.

Mr Tilson: So you're saying they're wrong and yet you're simply going to let it stand that the minister has now sent out a letter saying that those points are correct.

Mr Burns: Once again, I think that if you're going to ask a question about the minister's communication, you should put it to her.

Mr Tilson: All right. Let me ask you this: How and why does this group receive funding?

Mr Burns: I think I indicated in a general way in response to a question placed by Mr Cordiano earlier on that they derive revenue from membership fees, from some of their activities, particularly the conference and the education and training programs that they run, and they get two types of money from the ministry: a general grant in support of their activities as a sector organization, and from time to time specific funding to undertake particular bits of work that are important from the ministry's point of view.

For example, we have given them some funding to ensure that they can fully participate in some of the program design work that we're doing right now and they were given other targeted funding to develop training programs that we think are important. So their revenue is derived from those sources.

Mr Tilson: Were you aware that this Ontario Non-Profit Housing Association was submitting to its members this document, Ontario Needs Non-Profit Housing?

Mr Burns: We were certainly aware that they were working on some form of material, yes, but not in the way of, approve this, or that sort of relationship.

Mr Tilson: Did you ever see a draft of it before it went out?

Mr Burns: No, I didn't.

Mr Tilson: Did they ever discuss with you the contents of this document?

Mr Burns: Not with me, no. They did ask the ministry for answers to particular questions, background material of various sorts, but this is not a document that was approved in draft in the ministry.

Mr Tilson: So you had no inkling that this group was sending out this report, the contents of this report?

Mr Burns: I knew they were working on a document which, from their point of view, was going to outline what they thought the arguments were in favour of a non-profit housing approach, but that's the sum of it.

Mr Tilson: Were you aware that they were going to be taking shots at the Provincial Auditor?

Mr Burns: You've chosen some careful words, but no, I wasn't aware they were going to take shots at the Provincial Auditor. Obviously, in the context of the time when they wrote it, they would deal with a debate about the auditor's report, but --

Mr Tilson: What did they tell you?

Mr Burns: Just what I've said, that they were working on a document from their point of view.

Mr Tilson: They didn't tell you specifically what they thought of the Provincial Auditor's report?

Mr Burns: Not in the sense that you're near with this question, no.

Mr Tilson: Did you or your staff provide any assistance to this group in the preparation of this report?

Mr Burns: As I've said, we have an ongoing dialogue at many levels with this organization and many others, and yes, they did ask for some background material, but no, we didn't review or sign off on the draft.

Mr Tilson: None of your staff would have provided assistance in the preparation of this report; if they had, you would have known about it.

Mr Burns: If it was any kind of formal thing, absolutely, but as I said, there's an ongoing dialogue with the organization, and I'm aware that they asked questions and collected background material, but --

Mr Tilson: Let's deal specifically with this letter from the Provincial Auditor to the non-profit housing group, because there are a number of questions that are now left up in the air. Is the Ministry of Housing prepared to send out information clarifying this issue, rectifying this issue, rectifying the misinformation that's been sent by Mrs Gigantes?

Mr Burns: As I've indicated earlier, I think questions that have to do with the minister's communication should be put to her.

Mr Tilson: I'm not asking that. I'm simply saying that you have now told this committee that you admit the information is incorrect. Are you prepared, as the deputy minister, to instruct your staff to prepare documentation that clarifies what the minister has said in the past or to clarify what the Ministry of Housing said in the past?

Mr Burns: You know very well that this is the terrain of the minister and I think you should put this question to her.

Mr Tilson: With respect, Mr Burns, this letter is written on the Ministry of --


Mr Gary Wilson: Madam Chair.

The Vice-Chair: Yes, Mr Wilson. Because I allowed Mr Callahan to finish his line of questioning, he got an extra couple of minutes. I'm doing the same for Mr Tilson and I'll do the same for the government caucus. He's actually got about 30 seconds left.

Mr Gary Wilson: Okay. I just thought this question has been repeated a number of times.

Mr Tilson: Well, I can ask whatever question I want, and stop interrupting me.

Mr Gary Wilson: Excuse me, would you go through the Chair, as I was trying to do? I would tell you, through the Chair, Mr Tilson --

Mr Tilson: No, I'm going to tell you to your face: Stop interrupting me.

Mr Gary Wilson: You've gone over your time. I was just checking.

The Vice-Chair: Let's just cool things down a little bit. Mr Wilson, I'll allow Mr Tilson a minute to complete his question and then we'll go to the government caucus, and I again will add a couple of minutes on your time.

Mr Tilson: Mr Burns, I find it difficult when you admit that there has now been misinformation that has been spread around this province. You, as the deputy minister, are now telling this committee that you personally don't intend to do anything to rectify that.

Mr Burns: What I have said is that questions about the minister's communication and the package should be put to her, in my view.

Mr Tilson: I'm going to ask you one more question. It sounds like that's all I'll have. How far away are you from providing the information that this committee has requested and the Provincial Auditor has requested of you?

Mr Burns: You'll remember from the discussions of the spring and the fall that we had talked about quite a large number of subjects. The work we're doing on those is imbedded in work plans with many different time schedules on them, so there isn't one answer to that.

When my office got the request, I think in the middle of last week, to attend here, we had understood that it was for the purposes of an update, as well as perhaps to discuss this.

Mr Tilson: You didn't expect this cross-examination, I'm sure. Thank you, Mr Burns.

Mr Burns: I have written to the Chair indicating what I think I can do in terms of an update and when an appropriate time might be. I said I could give you an update later in the spring. As I indicated to the auditor some weeks ago, we were going to do a review at the end of the fiscal year, which was of course last week, so we're doing it right now.

The Vice-Chair: Mr Tilson, Mr Burns has previously survived the rigours of the Toronto city council so I think he's quite used to the interrogation. It may not have been as much of a shock as we thought it was.

Mr Tilson: I'm sure he's not shocked at all.

The Vice-Chair: We'll go to the government caucus.

Mr O'Connor: I appreciate your coming here today, Mr Deputy. When I review what we've got before us and we take a look at the letter which seems to be the main bone of contention here, there seem to be some differences of opinion that these are direct personal attacks endorsed by the minister, which I don't agree with, and it seems that there are members of this committee who feel that our impact is far greater than perhaps maybe the reality is.

The very first line of the letter is, "In recent months, non-profit and co-op housing has been the subject of public debate."

What I'd like to ask you is, do you think the only public debate that has taken place is a direct result of the Provincial Auditor's report and the hard work of this committee? I would like to think that maybe that's why the public debate has all taken place, but do you think there could be public debate that takes place outside of the realm of us humble members here? Do you the main focus of public debate on non-profit housing is directly as a result of the Provincial Auditor's report and only the work of this committee.

Mr Burns: I'll restrain myself from commenting on the committee.

Mr O'Connor: We've got a great ego, though.

Mr Burns: Clearly, there has been a significant public debate about the character of housing policy generally in the province, and non-profit housing is an aspect of that. I think I started my presentation last March with a discussion of the major events and the debates about housing policy in Canada and how that had changed the non-profit program.

The debate that includes trying to assess the relative merits of a shelter allowance approach and a non-profit approach

has been quite intense for the past three years in the province and was quite intense about 10 or 12 years ago as well at another juncture when housing policy was extensively debated.

Mr O'Connor: You're disappointing me, because I thought the only reason this public debate took place was because of the hard work of all the fine members of this committee and the work that the Provincial Auditor has done. Maybe some of this debate has been going on longer than just what has taken place here, though that's clearly not the point of view that some of my opposition colleagues have.

The purpose of the non-profit housing report was to talk about some of that public debate. Have other reports gone out by this group on non-profit housing in the past? Is this the very first time they've ever done this? I don't know if you know that or not.

Mr Burns: They have a regular communications program. They have a newsletter which discusses policy issues as well as program issues. I don't know the answer to the question, have they done a sort of general policy piece of this sort before? I don't know the answer to that, but they do produce communications and publications about the program and about administrative and policy issues regularly. They have a big annual conference at which, among the many workshops, are workshops on policy issues as well as on issues of administration and financing.

Mr O'Connor: The Provincial Auditor's report was something this committee took quite seriously. It falls under the mandate of this committee to take a look at it and to make sure that we can deal with it. As we go through this process of trying to address the concerns of the Provincial Auditor, has there always been total agreement with everything the Provincial Auditor has said, from a ministry point of view? Has there always been total agreement with everything the Provincial Auditor has said, in the practices of accounting and what not?

Mr Burns: I think no public organization subjected to an audit, or very few, is ever going to say it agrees with every single thing that an audit assessment has concluded about its organization.

Mr O'Connor: So there's a process of learning, would you say?

Mr Burns: So there were some things about the auditor's report that we didn't fully agree with and we indicated those in our letter to the auditor, which was embedded in his report. But I do want to emphasize that those parts of the auditor's report that pointed to weaknesses in our administration and in our financial management were comments that we agreed with and that we thought as a ministry we had to respond to.

Yes, we did -- and there's nothing uncommon about that -- disagree with some parts of the auditor's assessment of the program. It's not because there was a disagreement about what we thought was fundamentally important about areas that needed improvement.

Mr O'Connor: As you go through a process like you're going through right now, and you're going to come back to this committee, there is always a little bit of learning that takes place, on behalf of both the auditor and the auditee, the people who are being audited, because there could be some differences in the way things are evaluated.

I don't know; I guess my concern is that what we've got here are some egos around this room that have been touched. We'd like to think this committee is the only reason we have public debate on housing issues, but I don't think that's the case. I'd like to pass it forward to my colleague Mr Wilson.

Mr Gary Wilson: Welcome, Dan. Nice to see you here. I'm not a member of this committee and I have a great deal of respect for it. I certainly must say that this imbroglio that has been highlighted here has in no way undermined my respect for the operation of the committee, although on the other hand, in fact, this morning I was supposed to be sitting on another committee, looking at what I thought was a very important bill, namely, Bill 120, which I thought the opposition was eager to get on with too, but we can't do two things at once so it was determined that this was the more important matter from their perspective. From what I've heard so far this morning, I think it is a tempest in a teapot, to use an old phrase.

I think, though, from what I see of the correspondence I have in front of me --

Mr Callahan: Point of order, Madam Chair: I believe the member said -- I don't want to misquote him. Did you say that the reason the opposition didn't deal with item 3 on our agenda was because we thought this was more important? Is that what you said?

Mr O'Connor: No, there's another committee that has been cancelled.

Mr Callahan: Oh, all right. That's why I wanted to know what he had said.

Mr O'Connor: Let's get it clear then; you don't care about those tenants.

Mr Callahan: Relax, Larry.

Mr O'Connor: It's clear.

The Vice-Chair: Mr O'Connor, Mr Wilson has the floor. That was not a point of order. Mr Wilson, would you please continue.


Mr Gary Wilson: I'm not surprised to hear the point of order since I found it unfortunate that Mr Callahan used the word "witchhunt" when he didn't have to at the beginning of this committee. As I say, it's in keeping with that. You went on to say that you didn't mean that it was a witchhunt, so at least you caught yourself after you said it, but as I say, I wasn't going to get into that.

As I was saying, I thought it was said here by one of the Liberal members that it is the mandate of the public accounts committee to make sure that administrative matters are looked at. I know that this is what you thought it was too since you spent a lot of time before this committee looking at the auditor's assessment of non-profit housing from the Ministry of Housing, and in fact you've said that you'll be back to discuss some of the concerns that were raised. I think you said that it was raised that you agree that significant administrative improvements could be made and that work is being done on that, which I would like to touch on briefly in my questioning.

But I did want to say about the letter that the letter was sent by Mr Peters to the Ontario Non-Profit Housing Association, in particular to Robin Campbell, and that was dated March 1. On March 7, there is a reply sent by Robin Campbell to Mr Peters that says that any kind of misrepresentation that the auditor found was unintentional, that it wasn't their intention; it was to set out -- in what I think the auditor himself said would at times seem like a propaganda campaign waged in the public media. When looked at in that context, I think it's quite clear that things can be put out in a way that does not reflect what is being attempted.

Mr Tilson: You are getting worse. He's getting worse.

Mr Gary Wilson: I would like just to ask: What is the ministry view of trying to put out what it is that the ministry is doing through its non-profit housing program, that has been criticised quite roundly in the media, in particular with the view of the shelter allowances? Could you just summarize that perhaps, bring some light to bear on this question of what is, after all, the whole background to this question.

Mr Burns: I take it in your remarks that there were two questions, one about our work on improving the administration of the program and the second on the ongoing public discussion about the value of shelter allowance approaches or the value of non-profit program approaches, or other approaches to housing policy.

As I indicated earlier to another question and in a letter that I wrote to the Chair of the committee about 10 days ago, we're doing a review of where we stand in relation to these things at the moment, and we expect to be sharing that with the committee after we've shared it with the Provincial Auditor's office some time in the next number of weeks.

Members will remember that the discussions of last spring and fall focused on some particular areas; one was the selection process for proposals. At least in a general way I can indicate that we've made a very substantial change in the way project proposals are evaluated and selected.

A proposal call was moved to a proposal call format, which provided extensive information to potential sponsors but also extensive requirements. We did a very formal assessment of those submissions, a scoring system. We provided those evaluations back to sponsors; they knew where they stood. We interviewed a large number of the people who made application. In fact, in the next round we will be interviewing everybody, all the boards that wish to sponsor non-profit housing. We did a whole series of things intended to make the selection process clearer, fairer, easier to understand and that would effectively reflect the program's goals.

Second, we've published a major compendium of guidelines that have to do with the early stages of development, selection of a site, selection of professionals to work on a site, and the requirements that we have about sites and particular proposals, their qualities dealing with environmental issues. All of these things are significant improvements or, in some cases, brand-new introductions into the program delivery, and they're all areas that were discussed at some length in the spring and the fall.

We had a significant discussions at one of those times, I've forgotten which, about appraisal methodologies. We have done a review of our appraisal methodologies, and I think concluded they needed some improvement. We've installed a new system. We've installed new business practices for dealing with turnkey developers, and a series of other activities like that.

As I indicated earlier, we are doing a review and we'll provide formal updated material as soon as we are able to do that.

With respect to the ongoing public debate about the relative merits of shelter allowance approaches to housing policy or non-profit programs or other supply strategies, what the ministry has done is to undertake some general policy work that looks at those things and tries to contribute to the debate by providing professional assessment of what we believe the alternatives may mean, looking at the literature, and from time to time we publish materials of that sort. I think we're about to do another one of that type of material.

Mr Gary Wilson: Do you know what the reaction to the mailing was that's in question here? Was there a response to it that looked for more information, for example? Is this why you're preparing another document?

Mr Burns: I understand that some of the response to this particular mailout was "We would like to know more about this," but that's not the only reason we've been taking a look at that. As many people have indicated here, this has been a significant public debate for a while. We have contributed professional material to this debate before and we're going to do it again. Yes, I understand that people have made those sorts of inquiries, but that's not the only reason we've been doing this kind of work.

Mr Gary Wilson: In the changes you've made to the new non-profit program and the kinds of appraisals you're carrying out now, what are you hearing from the sponsors? Are you finding this is something they're pleased with? Are there suggestions that have been made by them in the past? For instance, interviewing them all now, that seems to me a very positive step: Everyone will have a chance to put their proposal in the way they think it should be seen.

Mr Burns: I think I can summarize the response by saying a few things. First, this process is much more demanding than earlier ones, and some potential sponsors have found it tough to respond to the kinds of requirements that have been laid down.

On the other side, feedback from quite a few sponsors, particularly ones who want to try for the first time, who are not repeaters, is that they have found the material enormously helpful in getting organized themselves, particularly having a formal interview with a group of people from the sponsoring board. We've had a lot of positive feedback on that. That's part of the reason we're going to move to a universal interview format for the current round, to make sure that every potential sponsoring group has an opportunity to participate in an interview format.

Mr Gary Wilson: Have you noticed any fallout from this discussion? Is the number of proposals coming forward, say, any less than in the past?

Mr Burns: I think I've indicated to the committee before that the number of people who wish to participate in this program has risen dramatically in the last couple of years. In the 1988-89 period, there weren't a lot more qualified sponsors than there was funding available, but by the time we got to 1991 or 1992, there were perhaps two or three good-quality proposals for every one that was fundable.


In the last proposal call we issued last year, we had funding available for 5,000 units and we had proposals for 44,000, nine to one, and in some regions it was considerably higher than that. The end result is that the people who have been able to get funding are good sponsoring groups, and many groups who even a few years ago could have expected to have qualified and receive support haven't. The preliminary indication from the current proposal call is that we're going to be in the same range, that is, nine to 10 times as many applications as we have the capacity to fund.

Mr Gary Wilson: It just shows how important it is to make sure that the money that is spent on the program is as cost-effective as possible.

Mr Burns: Absolutely.

The Vice-Chair: The government time has actually expired plus a bit; I gave you an extra three minutes.


The Vice-Chair: No, it was all very fair and impartial, I can assure you. The auditor has, I believe, a question of the deputy minister and some comments.

Mr Peters: Actually, in a way, not a question; I just wanted to just see whether we can't find some ground here to work on.

First, I'd like to read the last paragraph of my letter to the Ontario Non-Profit Housing Association. We said:

"For the benefit of all concerned, especially the Ontario taxpayers, we look forward to the Ontario Non-Profit Housing Association working together with the Ministry of Housing in developing solutions to improve the cost-effectiveness of Ontario's non-profit housing program. That would be far more constructive than to publish `Ontario Needs Non-Profit Housing' with factually incorrect and misleading statements."

I want to get back to the point that was made, the inference -- maybe it was unintentional -- that there is just a difference of opinion between the Ontario Non-Profit Housing Association and ourselves. The facts speak for themselves. The Ontario Non-Profit Housing Association has a big title: "Four misleading statements from the Auditor's Report." The statements they cite are statements that we have not made the way they made them, and that, to us, is totally unacceptable. That's why we raised it to this committee.

The minister herself had some concern. I cite a press release which unfortunately is undated, but it was picked up verbatim in February 1993 in one newspaper. I would like to read her own statement, and that might help in some of the debate. She says in here, and it was part of the package the ministry provided us with:

"I'd like to address one other issue, and that's the suggestion that the auditor's draft report was somehow laundered. The Provincial Auditor is an official of Ontario's Legislative Assembly, operating at arm's length from the government. The auditor writes a draft report and gives the ministry a chance to respond to it. After that, he chooses what goes into the final report -- the same kind of process that is followed in other corporate audits."

The reason I'm reading this in is that I would like to get off the table any impression that the process by which we make our statements and by which we debate with the ministry our report -- that's a totally different process from the one which was followed by the Ontario Non-Profit Housing Association in, quite frankly, what I consider quite an irresponsible statement.

The deputy has advised the committee that he was not made aware of the details of that document, in questioning by Mr Tilson. We have made the statement, and it's written right in the letter, that we find it inexcusable that they would make these sorts of statements in public and distribute them to media outlets and to 2,000 non-profit housing associations without any debate with my office about whether they're citing this correctly.

Where it becomes a problem, indeed, in the end is the covering letter by the minister. Here's an association that has not followed what would be common courtesy and a good way to write a report and make statement about an office of the Legislative Assembly, and then sent it out.

I'm a little concerned about downplaying this to the level of a tempest in a teapot, quite frankly. I think this is a more serious issue than that.

The Vice-Chair: We have notice of motion that Mr Callahan mentioned when he was making comments about an hour ago, but in the meantime, do we have any other questions of the deputy minister before we release him?

Mr Cordiano: I've been asking to be on the list.

The Vice-Chair: There appear still to be a few questions. Can you keep your questions as brief as possible? I know the deputy will also cooperate in giving very brief answers. Can you limit it to one question each? We only have a little over 10 minutes left.

Mr Callahan: One question from each caucus? Joe wants to ask a question; I do too. This is a very important issue. I don't think it's something we should just --

The Vice-Chair: If the questions are kept extremely brief, without preamble, each of the members who wants to ask a question, regardless of caucus, can ask one -- but very little preamble.

Mr Gary Wilson: Excuse me, Madam Chair. How are you going to determine the order of speaking here?

The Vice-Chair: Whoever put their hand up.

Mr Gary Wilson: Starting now? I mean, there was a rotation here.

Mr Cordiano: Madam Chair, on a point of order: We started this session 10 or 15 minutes late. I know the deputy minister was here on time, but we did start at 10:15, I believe, so we do have some leeway.

The Vice-Chair: We started at 10:07.

Mr Tilson: Let's move on.

The Vice-Chair: Yes, let's move on rather than waste it in procedural time. One very brief question, one minute each. Mr Cordiano, go.

Mr Cordiano: Mr Burns, the central point here is that you have disassociated yourself from the remarks put forward by the Ontario Non-Profit Housing Association document which was sent out and which the committee has taken issue with, along with the auditor. Obviously, you have clearly stated in questioning this morning that you do not agree with the points of view put forward in that document, specifically the comments made with regard to the misleading statements in the auditor's report. If you don't, I personally, as the critic for my party, would have to question whether anything we've recommended in the report of the committee that we put forward is being taken seriously by the ministry, regardless of what letters were put out by the minister. We should take that up, as you say, with her, and we will.

The Vice-Chair: And your question is?

Mr Cordiano: I have asked the question, that you disassociate yourself from the report that was sent out by the non-profit housing association.

Mr Burns: Just in keeping with the Chair's injunction, two brief comments. The ONPHA publication is not a completely accurate description of what happened; I acknowledge that. Second, though, I said a couple of times and I'll just confirm again that the ministry itself remains committed to the goals that were established in the dialogue with this committee.

Mr Callahan: In looking at the letter of January 28 from the minister, Evelyn Gigantes, it appears to be a form letter, "Dear Sir/Madam," and then it goes on to say what it says: "In recent months, non-profit and co-op housing has been the subject of public debate. Some critics have attempted to discredit Ontario's highly successful...."

It appears as though it was a strategy to offset the rather unfavourable comments that emanated from groups such as the landlord groups, but more importantly from what the auditor was quoted or headlined in the papers as saying. I can't remember the exact terminology. It's referred to by Ms Campbell where she says, "The press carried many articles using such language as `Auditor Slams Non-Profit Housing,'" and she was upset because he didn't respond and say, "I didn't slam non-profit housing."


It appears to me that this was obviously a prearranged and a well-conceived plan to try and fight off these facts, so clearly the ministry was involved in this process. My question, first of all, is was it a clearly planned program? You've got a form letter with the contents in the form letter. Second, one would think that with the auditor's report which came out in 1992 where those remarks were made, someone would have reviewed the comments in the documents you're about to put in there to give some support to your process and made certain it was accurate.

Those are two questions. I don't know whether you can answer either one of them, but give it a whack.

Mr Burns: Just to confirm a couple of things we touched on earlier, this work was not commissioned by the ministry. Second, questions about the minister's communication should be put to her.

Mr Tilson: My question is simply to repeat a question by Mr Callahan earlier. My understanding is that this group, the Ontario Non-Profit Housing Association, wasn't the only group that sent this material out, that similar statements were sent out by Cityhome and others.

Will you undertake to inform this committee of two things: One, what was the cost of the ministry in sending out this information to not only non-profit housing associations but also to municipalities? I understand it was sent as well to municipalities around this province. Second, what other groups, within the knowledge of the ministry, sent out similar statements to their groups? I know Cityhome is one. What other groups sent out similar statements?

Mr Burns: The answer to the first question I actually have. The distribution cost was $3,000. The question of whether other groups in the community may have used this in some other distribution process they're involved in is one I can't answer today, and it may well be that we can't answer it. We're not necessarily aware of what community organizations are doing with the material.

Mr Tilson: I can't believe those groups don't sent you copies of their newsletters or their distributions. You may not know personally, but I'm sure it's just a simple question to your staff about what those groups were and who they were.

Mr Burns: I am certainly prepared to ask. We do, as you say, get the people's newsletters. However, other distributions they may be doing with their own communities --

Mr Tilson: Cityhome did it, as one group.

Mr Burns: They may well have. I don't know that.

The Vice-Chair: If the deputy could provide any information he has in writing, that would be helpful.

Mr Gary Wilson: I would like to put this in the perspective I see it, that the overriding concern of the public accounts committee is to make sure that the Ministry of Housing is meeting its mandate in a cost-effective way.

You've been before this committee many months in the recent past and have listened carefully to what has been said here and apparently have made some changes. Is this not true, that you have taken what's been discussed at this committee and made changes to the non-profit housing program at the ministry? Do you not see that as being a very valuable role of the public accounts committee?

Mr Burns: As I think I've indicated in my previous attendance at the meetings of this committee, these forums are valuable and important. We take both the findings of the audit report and the discussion that arises as a result of it seriously. We've said that before, and I'll say it again here.

Mr O'Connor: I'd like to state for the committee that in reviewing the minister's letter, I don't see that in any way an endorsement of some disagreements that have been put on the record by the Ontario Non-Profit Housing Association. In looking at the letter --

Mr Tilson: On a point of order, Madam Chair: Mr O'Connor has indicated that he's speaking on behalf of the committee, and that's not true.

Mr O'Connor: I didn't say that. I said I don't agree with everything the committee has said at this point. The fact of the matter is that I don't believe all this public debate that's referred to in here is totally because of the egos of this committee. There's been a lot of public debate over non-profit housing and there will continue to be. Even the auditor's integrity as to non-profit housing -- he doesn't attack non-profit housing, at least I don't believe he does. What he's talking about is the accounting principles.

I have a question to the auditor. In the letter back to you on March 7, from Robin Campbell, the executive director, on the last page is:

"I regret your feeling that we misrepresented your report, since that was not our intention. Our intention was merely to respond on behalf of our members in a matter of public policy and public debate.

"Thank you for bringing your concerns to my attention" and would you like to sit down and meet further to discuss this?

I wondered whether you've responded to that. I believe what we've got here is that tempest, at this point, and I hate to see this committee wasted in this sort of endeavour. Have you contacted Ms Campbell to address this?

Mr Peters: No, I have not contacted her. My concern, quite frankly, is that if somebody said to you that you have made a misleading statement and then said "I didn't intend to state that," I have a real problem with that, I have a very serious problem with that. You cannot push this out into the public and say we misled, and use the word "misled," and then say afterwards, "I didn't intend to say that." I find that not acceptable. I have not met with them yet and we have not considered meeting with them because we considered that it's lukewarm. It was more important to us that this committee was informed that this indeed had happened, because the standing committee is mentioned in that publication as having challenged my office, and that was simply not true.

Mr Cordiano: On a point of order, Madam Chair: I think it's totally inappropriate, with all due respect to the question that was asked. This committee's mandate, very clearly, is to defend the integrity of the office of the auditor --

The Vice-Chair: I'm sorry, Mr Cordiano --

Mr Cordiano: -- and we would be out of order if we didn't do that, Madam Chair.

The Vice-Chair: That is a very nebulous point of order. What I would suggest is that Mr Callahan has given notice of motion --

Mr Callahan: I'm about to give.

The Vice-Chair: Well, you said you were going to raise a motion.

Mr Callahan: Yes. I'll read it into the record and then we can deal with it at the next --

The Vice-Chair: I would suggest that the subcommittee meet within the next week and decide --

Mr Callahan: Sure. You can decide whether you like my motion or whether you want to make it different:

"Whereas ONPHA prepared and distributed a report entitled `Ontario Needs Non-Profit Housing'; and

"Whereas the Minister of Housing referred to such publication for the purpose of setting the record straight, by letter of January 28, 1994; and

"Whereas some 2,000 copies of this report were distributed; and

"Whereas such report contains several incorrect and misleading statements attributed to the auditor;

"Moved that the public accounts committee require from the Minister of Housing a public apology at committee for disseminating a document which inaccurately reflected findings of the auditor of Ontario on the issue of non-profit housing in his 1992 report;

"Or, in the alternative," -- we'd give her an alternative -- "send a letter correcting the inaccuracies contained in the report `Ontario Needs Non-Profit Housing,' prepared by ONPHA, to all those who received the original document."

The reason for this is that I feel very concerned that Peel Non-Profit, a very successful group in my community, had to rely and did rely on the integrity of this document based on the fact that it was accompanied by a letter from the minister recommending it. I object to that, and I think we have to stand up and have this matter rectified in a public forum so that the auditor's integrity is maintained, and that the people out there in the non-profit community know what the truth is as opposed to what fantasy people want to fly into when they read a report.

The Vice-Chair: Thank you, Mr Callahan. As we don't have sufficient time for debate, I would suggest, rather than opening up for comments now, that we table this, that the subcommittee will meet to discuss any further action or recommendations to the full committee, and we can bring that back to the committee.

I would like to very much thank the deputy minister for his attendance today. We can appreciate the difficult position you are in, in that you couldn't give answers as fulsome as you would have liked, given the fact you did not send out the letter, and we do appreciate the fact that you have come before us. We will send a letter to you at a later date itemizing any further actions of the committee.

The public accounts committee stands adjourned until next Thursday morning at 10 o'clock.

The committee adjourned at 1200.