Friday 20 November 1998
Highway 407 Act, 1998, Bill 70, Mr Sampson / Loi de 1998 sur l'autoroute 407, projet de loi 70, M. Sampson
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Présidente
Mrs Brenda Elliott (Guelph PC)
Vice-Chair / Vice-Président
Mr Peter L. Preston (Brant-Haldimand PC)
Mr David Christopherson (Hamilton Centre / -Centre ND)
Mr Ted Chudleigh (Halton North / -Nord PC)
Mr Sean G. Conway (Renfrew North / -Nord L)
Mrs Brenda Elliott (Guelph PC)
Mr Doug Galt (Northumberland PC)
Mr John Hastings (Etobicoke-Rexdale PC)
Mr Pat Hoy (Essex-Kent L)
Mr Bart Maves (Niagara Falls PC)
Mr Peter L. Preston (Brant-Haldimand PC)
Substitutions / Membres remplaçants
Mr John R. Baird (Nepean PC)
Mr Joseph Cordiano (Lawrence L)
Mr John L. Parker (York East / -Est PC)
Mr Gilles Pouliot (Lake Nipigon / Lac-Nipigon ND)
Mr Mario Sergio (Yorkview L)
Also taking part / Autres participants et participantes
Mr Kenneth Kagan, legal services branch, Ministry of Finance
Clerk / Greffier
Mr Viktor Kaczkowski
Staff / Personnel
Mr Lewis Yeager, research officer, Legislative Research Service
Ms Sybille Filion, legislative counsel
The committee met at 0909 in committee room 1.
HIGHWAY 407 ACT, 1998 / LOI DE 1998 SUR L'AUTOROUTE 407
Consideration of Bill 70, An Act to engage the private sector in improving transportation infrastructure, reducing traffic congestion, creating jobs, and stimulating economic activity through the sale of Highway 407 / Projet de loi 70, Loi visant à intéresser le secteur privé à améliorer l'infrastructure des transports, réduire la circulation engorgée, créer des emplois et stimuler l'activité économique par la vente de l'autoroute 407.
The Chair (Mrs Brenda Elliott): Good morning, everyone. Welcome to the standing committee on resources development. We are gathered this morning for the purposes of clause-by-clause consideration of Bill 70, the Highway 407 Act.
Before we begin, I think Mr Yeager would like to make a brief report to us.
Mr Lewis Yeager: Good morning, committee members. You have before you the summary of the proceedings that we prepared. This includes all of the people who appeared before you in the hearings yesterday, as well as a number of written briefs that were sent to the committee for consideration before the committee's deadline. We managed to get almost everything in.
As you can see from the table of contents, it's organized in the same order as the bill, by the major topics that are in your compendium. So it should be quite easy to find recommendations or comments that relate to the various sections of the bill.
The office of the Information and Privacy Commissioner did not appear before you, but they did send a brief with quite a number of comments relating to section 45. So you'll see under "Other laws" a section there that details those. There were quite a number of recommendations.
On the back of the little summary report there is a list of the abbreviations that are used to identify the various groups and individuals that appeared before you to help you tell who they were. They're identified by acronyms after each one of the comments in the report.
Unless you have any questions, I'll turn you over to the good hands of legislative counsel.
Mr John Hastings (Etobicoke-Rexdale): Under the Information and Privacy Commissioner's recommendations, on page 1, at the bottom, it points out that there ought to be scrutiny by the office of the Information and Privacy Commissioner to examine the draft contract, but there isn't any specification, from what I could see in her submission, for a time frame as to when that ought to be returned.
In other words, the contract could be signed, whoever the bidder is, for the 407. It goes to the privacy office for examination, as to whether there are sufficient safeguards on the information and data that could be transcribed for the use of the transaction between the consumer of the service and the provider, but there's no date time from the commissioner. I'm wondering if you have any comments on that. In other words, that contract could be there for two, three months after it's signed, maybe longer.
Mr Yeager: I don't have any information beyond that which they sent us in their written submission. Unfortunately, they didn't appear before your committee to answer that type of question. But I don't have any additional information beyond that which is in the written brief and I'm not sure that they dealt with that timing aspect.
Mr Hastings: Madam Chair, when we get to the appropriate section of the act, I would like to see how we would deal with that specific item.
The Chair: OK. Mr Yeager, thank you very much for your work, very prompt. We appreciate it.
Colleagues, you have before you a summary of all the amendments and they are numbered, which will be easy for us to refer to as we go through this. Just to refresh your memory, I will read to you the section from the orders of the day of November 2, and I quote:
"That, on the day designated for clause-by-clause consideration of the bill, the committee be authorized to meet until completion of clause-by-clause consideration;
"That, at 12 noon on that day, those amendments which have not yet been moved shall be deemed to have been moved and the Chair of the committee shall interrupt the proceedings and shall without further debate or amendment, put every question necessary to dispose of all remaining sections of the bill, and any amendments thereto. Any divisions required shall be deferred until all remaining questions have been put and taken in succession with one 20-minute waiting period allowed pursuant to standing order 127(a)."
We will continue this morning with a full discussion of all the amendments. Without any further questions or comments, we'll begin right away.
Mr Gilles Pouliot (Lake Nipigon): On a point of order: I shouldn't be appalled or shocked, but truly, this is consequential indeed. It's the first privatization endeavour from this regime.
We've had closure. We were shackled, handcuffed, muzzled in the Legislature. They moved closure on us, your government did. We've had one day of public hearings on a project, split or not, that will amount to $1.5 billion to $2 billion. It will be the largest capital project historically in the province of Ontario.
And now we have 24 amendments: four submitted by my distinguished colleague and friend from the opposition; we have three; the incompetence of the government is again reflected with 17 amendments. We have less than three hours to debate, to assimilate and blend with it, to digest the recommendations from the privacy commissioner.
This is not a semblance of democracy. This is not the ability, the opportunity for elected members to discuss the subject matters at hand. It's not the first time. In this case, it is becoming habitual. Life with the Progressive Conservatives begins to resemble the life -- I'm not going to say Franco, Salazar, and the list is endless, Mobutu, Pinochet, but my Lord, give us a chance to discuss these things.
In conclusion, you have seven bills dealing with property taxation. Each and every one of those bills was there to correct the bill preceding it. Get your act together. I know the revolution is in a hurry, but when you're in a hurry you get tired, and when you're tired you make mistakes. Can you not do things right? You have 17 amendments at second reading, and then you're giving us two hours to debate third reading.
The Chair: I think we should get right at it, then. If you truly want to debate these amendments, we should get right at it.
Mr Pouliot: Madam, we have rights and points of order. You can rule me out of order. If you don't want to recognize my points of order, read the statutes.
The Chair: I think it is important, though, for the record --
The Chair: Order, please. It is important to be noted for the record that this committee did hear every single presenter that wished to appear before this committee.
Mr Joseph Cordiano (Lawrence): That isn't the issue, Madam Chair. On a point of order: The issue really is --
Mr Cordiano: I have the floor, if you will excuse me.
Mr Doug Galt (Northumberland): You don't interrupt other people, either.
Mr Cordiano: Do I have the floor, Madam Chair?
The Chair: Please, go forward.
Mr Cordiano: The issue really is one around the number of government amendments. This was not anticipated. At no time, when the discussion took place around having the subsequent day, the following day, for consideration of clause-by-clause was there any intention on the part of the government or any indication to opposition members that there would be 17 amendments. That is quite extensive for a bill of this size. That is the point that my colleague is making.
Mr Pouliot: You can't deny that there was a package this morning.
Mr Cordiano: There is quite a significant number of amendments. It is very difficult to go through these with any degree of certainty that what we're talking about is correct or accurate. Tell me that isn't the case. You're all members of this Legislative Assembly. Tell me you've had enough time to absorb this and then we'll proceed. Tell me the truth.
Mr John R. Baird (Nepean): I would argue that this is not a point of order. I certainly received a package of amendments last evening and I stayed in the office until quite late reading them. I met this morning with at least one of my caucus colleagues and officials to discuss them. The 17 amendments presented, some of which are so simple they involve striking one word from a section, are simply there to make some small changes. There are other substantial amendments which were based on the input that we heard: the privacy commissioner's comments. Officials have met with her and we certainly reflected on her submission. I think we go 90% of the way to dealing with the concerns that she had raised, so they're quite substantial.
In terms of public hearings which the member for Lake Nipigon mentioned, we heard from every group that wanted to appear. We even, by unanimous consent, cancelled half the hearings because we couldn't find any more groups to come forward to discuss. We listened to every single person who wanted to come, to the point where we even got Liberal and NDP agreement to cancel half the hearings because we didn't have enough people wanting to come forward.
With respect to the issue of closure, this government has made no changes to the rules with respect to closure. The rules under which we currently operate in those areas were authored by the previous NDP government, and that's the reality, however you'd like to interpret it.
Mr Pouliot: The reality, sir, is that you invoked closure more often than the previous government. That's the fact.
Mr Baird: You wrote the rules, sir.
The Chair: If I may, please, comments directed through the Chair are most appropriate. Are there any --
The Chair: Order, please. Colleagues, we have work before us this morning. I suggest we get underway. As the Chair, I would ask, are there any amendments to this bill that wish to be placed?
Mr Baird: I have an amendment to subsection 1(1). I move that the definition of "holder" in subsection 1(1) of the bill be struck out.
Just briefly. "Holder" is a defined term in the Highway Traffic Act. In terms of working with legislative counsel and others, we wanted to include not just "holder" but the people who pay the tolls, the second category, and that's why that change was proposed.
The Chair: Further discussions or comments on this amendment? Seeing none, I put the question. Shall this amendment carry? All those in favour? All those opposed? This amendment carries.
We have another amendment before us, a government amendment.
Mr Baird: I move that the definition of "validate" in subsection 1(1) of the bill be struck out.
"Validate" is a term used in the Highway Traffic Act and the government's view is that the dictionary definition is quite fine. It's just a small amendment to make the bill clearer and more reader-friendly.
The Chair: Further questions or comments? Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Any further discussion to section 1? I see no further amendments to section 1. Shall section 1, as amended, carry? All those in favour? Opposed? This section carries.
Section 2, there are no amendments before us. Neither are there amendments to section 3 or section 4. Any questions or comments on those three sections?
I put the question. Shall sections 2, 3 and 4 carry? All those in favour? Opposed? Those three sections carry.
We have a proposed amendment to section 5.
Mr Baird: I move that section 5 of the bill be amended by adding the following subsection:
"Corporation, Crown agency
"(2) A corporation incorporated under clause (1)(d) shall be deemed to be an agent of the crown in right of Ontario until its shares have been transferred by the minister for privatization."
This is simply a transitional amendment. If, in the discussions surrounding the privatization, the best option is deemed to be a share deal and it requires a reorganization of the existing corporate framework, it would fill the gap between the time the reorganization occurred and the privatization, which, albeit short, would require clarity.
The Chair: Further discussion or comment on this amendment? Seeing none, I put the question. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Any further questions or comments to section 5? Shall section 5, as amended, carry? All those in favour? Opposed? Section 5 carries.
We have a Liberal amendment proposed for section 6. We should deal with section 6, as it is proposed in the bill, first, and then we'll deal with the amendment.
Are there any questions or comments to section 6, as proposed in the bill? Seeing none, shall section 6 carry? All those in favour? Opposed? Section 6 carries.
We now have a Liberal amendment that we should deal with.
Mr Cordiano: This amendment simply deals with the provision to enable --
The Chair: Sorry to interrupt. You should read it into the record.
Mr Galt: Madam Chair, on a point of order: I'm confused on the sequence here. We have already passed section 6 and now we're going to try an amendment.
The Chair: This would be a new section to the bill. I get confused myself.
Mr Galt: OK. Rather than a change, it's an addition?
The Chair: Yes.
Mr Galt: It had nothing to do with what's being added; it had to do with procedure.
Mr Cordiano: It's adding to the bill.
Mr Galt: Go ahead.
Mr Cordiano: I move that the bill be amended by adding the following section:
"Review by Provincial Auditor
"6.1 Despite any provision in this act, the minister shall not transfer the following unless the Provincial Auditor has reviewed the terms of the transfer and is satisfied that the consideration to be received by the province in exchange for the transfer equals the fair value of what is being transferred:
"1. Highway 407 lands, assets comprising or relating to Highway 407 or interest in those assets.
"2. Shares of a corporation that owns Highway 407 lands, assets comprising or relating to Highway 407 or interest in those assets."
This is very important for the Ontario public to be satisfied this is a deal that is going to be done with regard to value for money, with regard to fairness, with regard to ensuring that all parties have been treated fairly, that this deal can be consummated with a great degree of transparency. I think it would serve everyone's interest to have the auditor review this so that this, being the first deal that's done with respect to privatization, is done in a fashion in which we can move forward and say without any questions that this was a deal done properly, with integrity, with transparency and that the public interest was well served.
Mr Pouliot: I'm speaking in favour of the proposed motion by the Liberals. Over the years there has been an ongoing transition -- referring here to the mandate of the Provincial Auditor, who is the ultimate or certainly the recognized authority -- from financial audit to value-for-money audit. I know I'm being repetitious, but please allow me to mention briefly that this is again very consequential. You are breaking new ground, and it's important that the taxpayers of Ontario receive the OK from the Provincial Auditor to say, "Yes, the province did get value for money when it sold Highway 407 to the private sector." We will be supporting the motion.
Mr Galt: I'm interested in the comment of the member from the NDP that it's breaking new ground. Indeed it would be breaking new ground if the government started directing the auditor as to what the auditor should or should not be doing. I don't think the government of the day or opposition parties have any right to give any direction to the auditor. The auditor does have a responsibility for all these activities, but I have a lot of faith in our auditor and I'm sure that he or she will investigate this particular transaction.
We talk about what's a fair price. A fair price is what a willing buyer is prepared to spend, in this case in the bidding process, the one that's prepared to spend the most. There's no question that the government has evaluated and knows the cost of this project, and it's not going to be sold at some kind of bargain basement price; it's going to obtain a reasonable price before it's going to be sold. We have those safeguards in there.
I heard the Good Roads convention say that this was going to be a private enterprise. If the previous government had carried it out that way, we wouldn't even be here today.
Trying to direct the auditor as to what they should be doing I think is very much out of order.
Mr Cordiano: You misunderstood what this is all about. This is not directing the auditor; this is giving the right to the auditor to do a value-for-money audit, which he does not have. He may examine the financial books of the province, but he cannot do a value-for-money audit. It would be very difficult for him unless it was permitted by this act.
Mr Hastings: I find it passing curious that our friends opposite are interested in this concept of value-for-money auditing and that they've caught the religion, so to speak, in the last few years because they see how the trend of public expenditures is going and the thinking of the public regarding public and governmental expenditures.
In my estimation, if there were ever a problem with this enterprise, there is the public accounts committee, and there are other ways in which the government of the day in the future can request that the auditor look at all of these enterprises.
I saw this occur through the public accounts committee three years ago when the auditor was requested to undertake a value-for-money audit of children's mental health services vis-à-vis group homes versus the more traditional institutional approach, and I'm sure that the public accounts committees of the past have also made varying requests throughout the years when the members of that particular important committee saw the necessity for that kind of an audit to be undertaken pre-examination, and I think we need to leave considerable flexibility to the public accounts committee as the vehicle by which these types of enterprises need to be looked at.
In my estimation, the amendments as they're set out and proposed on other items are more than adequate. I think this particular amendment will clog up the movement to getting this project underway, as was cited by at least six of our 10 deputants yesterday and by some of the letters we see on file with the clerk, so I don't see the necessity for what the members opposite are proposing in this context.
Mr Cordiano: Let me try and explain it to you.
Mr Hastings: It's not a matter of misunderstanding. I can read just as well as anybody else what the intent is here.
Mr Baird: I certainly agree with my colleague from Lawrence on the need for the Provincial Auditor to have the right to audit any part of the government of Ontario, so on that angle there's no disagreement.
I do have a concern with respect to the Provincial Auditor's getting involved before he conducts his audit. According to his documents, he feels his independence is very important. Just look at his last annual report where he says:
"The Provincial Auditor and staff of the office are independent of the government and its administration. Our independence is a safeguard which enables the office to fulfill its auditing and reporting responsibilities objectively and fairly."
I have a concern that if he conducts the audit during the fact and then is required to do so or chooses to do so after the fact, he will be auditing his own work. That does raise, not 100%, but that does raise the matter of the independence that he would be able to bring to the table to audit the deal once it was done, not just a proposed deal. Essentially he'd be auditing himself, and it's important that we have an independent auditor who has the ability to review the government's financial dealings after the fact, and I wouldn't want to see that compromised.
Obviously the minister for privatization and the government have a terrific number of process advisers and auditors to oversee the process specifically on the fairness issue, to ensure that there is no conflict of interest, and I think the government has gone to great lengths to build in a good number of safeguards and retain some excellent financial advice.
We have the benefit of the 1996 auditor's report where he went on at great length in terms of talking about the operational risks, there being only two bidders, looked at the benefits. He made some clear recommendations on future RFPs, which have been extremely helpful to the government in this process. He talked about toll revenue projections and the need to strike a better balance between risk and reward. That advice from his audit of the original deal has certainly been helpful to the minister for privatization and the government on this issue.
The government of the day is of course politically accountable for the decisions, and obviously the minister has gone to great lengths to say that this is a proposed privatization and that at the end of the day, if there is not value for the taxpayers in the process, he would not proceed. I think he has gone out of his way to say that.
The auditor, in his last report, certainly went into a good number of areas where he looked at the value for money that the taxpayers were getting from decisions made, whether by political actors or public service actors. There has been an ongoing discussion both federally and provincially about whether they have the explicit right for value-for-money auditing, and since the early 1980s when a former Auditor General of Canada, J.J. Macdonell, started this process, it has grown in a way that I think we would all agree has been productive, not just in Ottawa but here at Queen's Park, so I think that is becoming a reality. It certainly was in the last report that I thumbed through. For that matter, I think it would be inappropriate to have the auditor review it before the deal is signed. He has that independence to do it after the fact and to be able to report, not just to a committee of the Legislature but to the Legislature, and the government of the day will be accountable for those decisions.
Mr Cordiano: Two points come to mind. Firstly, the auditor will not have access to documentation which will be approved by cabinet. Therefore, it would be impossible or his ability to examine this deal before it is finalized will be impeded. The intent of this amendment: Before this deal is consummated, the auditor should have an opportunity to examine the details of this deal, after you have reached a final agreement and before it is consummated by cabinet or given its blessing by cabinet, when it then becomes law.
I think that's not too much to ask, because if not, the auditor will never have the opportunity to examine those documents. They'll be sealed by cabinet and there's no way you can get at it. This is why this amendment is called for. You're mistaken when you suggest that the auditor can examine this after the fact. What he can examine after the fact are financial documents, and he can do a financial audit; he will not be able to do a value-for-money audit, which is quite different. That's the first point.
Secondly, your own minister has indicated that he intends to hire a process auditor, which would do much the same thing, so the auditor of Ontario would not be setting the framework for that audit. The process auditor you're hiring would set the framework and determine the criteria. I don't see the incompatibility between the public auditor, and your point about the auditor maintaining his independence would also be carried forward with this amendment. That would not be jeopardized in any way.
What I think we're asking for at the end of the day is a third-party oversight of this deal before it is consummated. If you can't do that, then I suggest you're leery of what might be determined and you're a little nervous about the fact that this deal will go through and someone in the form of an auditor of Ontario would examine this deal. I don't think you have anything to hide if you really believe that this deal will be transparent. If, on the other hand, you think that somehow this might be distorted, I think all of us would agree that the auditor has, without question, the integrity and the fairness that's required to examine this.
Mr Hastings: Just one further comment. If this was such a brilliant idea --
Mr Cordiano: You would have thought of it. That's the attitude of the government.
The Chair: Order.
Mr Hastings: -- I don't understand why Mr Cordiano didn't institute it 10 years ago when you were examining -- I think they could have examined about $3 million to $4 million of expenditures for the proposed computer museum down at Harbourfront. It would have been a really fantastic idea to have in place then, if you were looking for a pre-audit. That's history.
Mr Cordiano: What's he talking about?
Mr Hastings: What we're talking about, maybe he recalls -- the member can sharpen his memory that during the Peterson administration there was a proposal to create a museum dealing with high technology, and it was to be located down in the existing King's Landing facility on Queen's Quay. The thing came to nought. If you wanted to apply an idea that was ahead of its time, Mr Cordiano, you could have started back then.
Mr Cordiano: Why don't we bring up Bill Davis?
The Chair: Order.
The Chair: Order. Mr Cordiano, please.
Mr Galt: Point of order, Madam Chair: I think it's interesting that the member from the Liberal Party went to a great extent a few minutes ago to talk about people interrupting. He constantly interrupts the government side. I think maybe it's time he paid attention to his own comments and didn't interrupt every time somebody on the government side is speaking.
The Chair: Are there further questions and comments to this amendment?
Mr Pouliot: I'm the last one to caution; I'll be brief. Once the questions from the three parties, the rationale and the substance for what is in front of us has been done, may the question be put, unless there is something -- the table has the capacity to say: "Yes, I have that jurisdiction. I think I've heard enough," or, "I think there is something extraordinary that will change the nature." If we're going to go to the likes of Andersen Consulting and SkyDome and so on, unless it's directly related and the analogy is filled with validity, it has no place here. I think we should try to proceed, because it doesn't bring out the best in people, myself included.
Mr Baird: I share the view of my colleague from Lake Nipigon that we should get on. I want to make two comments. One is that certainly the auditor spent a full 15 pages, which is quite extraordinary, in the 1996 report on the audit he did with respect to the Highway 407 central project, so that was clear evidence that he did have a terrific amount to look into and to report back to the Legislative Assembly and to the people of Ontario.
I am cautious, and take with a grain of salt the new-found enthusiasm for auditing by my colleagues. The member for Lawrence served as the parliamentary assistant to the Premier, who presented a surplus to the people of Ontario in September 1990, and it grew by $3.6 billion from the day they called the election to the day the new government was put in. So if his enthusiasm for auditing was so apparent, it perhaps would have been of value for the taxpayer that he shared that with his boss at the time. I take with a grain of salt the auditing advice from my colleagues.
Mr Cordiano: Just for his edification, I was the Chair of the public accounts committee for a number of years, where I found a great deal of enthusiasm, as you put it, for what I think is important, regardless of what political party is in power -- yours included, lest you think otherwise.
You're not infallible. The $180 million you gifted to Andersen Consulting is proof positive of that. Certainly, you're not beyond the realm of making terrible mistakes, and that just indicates to everyone how terrible mistakes can be. Your government is embarrassed about that, and it ought to be. So let's not scold anyone. We try to reprimand people, and previous history -- everyone makes mistakes. Just admit that you do; you're not infallible. That's why this amendment is important. That is why it's important to have a third-party, independent oversight of what will take place here, what will go forward. The office of the public auditor is independent. That's precisely why I'm advocating this.
The Chair: Further questions and comments to the amendment to section 6.1? Seeing none, I'll put the question.
Shall the amendment carry?
Mr Cordiano: I want a recorded vote.
The Chair: All those in favour?
The Chair: Those opposed?
Baird, Galt, Hastings, Parker.
The Chair: The motion is lost.
Any further discussion to section 6? Seeing none, shall section 6 carry?
The Chair: I'm sorry; I apologize. We've done section 6.
Moving, with my apologies, to section 7 -- again, the amendments you have before you on page 5 and 6 are actually new to the section, so we'll deal with section 7 first.
Are there any questions and comments to section 7, as proposed in the bill? Seeing none, shall section 7 carry? All those in favour? Opposed? That section is carried.
Mr Cordiano: We have an amendment to section 7.
The Chair: Yes. These are new, though; they're additions, so we deal with them separately.
Mr Pouliot: Just after the one in the bill.
The Chair: Yes. The first one we'll deal with is a Liberal amendment. Mr Cordiano, would you please read it.
Mr Cordiano: I move that the bill be amended by adding the following section:
"Restriction on transfer
"7.1 Despite any provision in this act, a transfer of the 407 highway lands under this act is restricted to a transfer of a leasehold interest only and for a period of time not to exceed the point at which projected revenues equal the costs and liabilities relating to the Highway 407 lands, including its financing, design, construction, operation or extension."
The intent here is to set a time limit with respect to the lease provision, which has not been spelled out in Bill 70. As I said earlier in yesterday's discussions, we believe selling this highway in perpetuity is a huge mistake for Ontario. Again, Bill 70 is silent on this matter. The minister made some indication that there would be some finite date set for this sale, that there would be a lifespan associated with the sale. I don't know what that is to be. It's not included in Bill 70. It may just be fanciful on the part of the minister to suggest that could be worked out in an agreement.
I think the public has a right to know right now what those terms are going to be with respect to the lifespan of that leasehold, and it should be done as a leasehold. The land underneath the highway is crown land. It is not being sold. I understand that. But neither should the infrastructure, the structure itself, in perpetuity. I think there is a time period, and what I've proposed here is that the time period be -- and I've given you some flexibility with regard to that -- the point at which capital costs are recovered. That includes some consideration for the financing costs, design, construction and operation.
All those things, for the extensions, should be included in the equation for the payback period. So if the payback period is 35 years, 39 years, 29 years, whatever that may be -- again, this also relates to tolls, because if you wanted a longer payback period, you would decrease the tolls; if you wanted a shorter payback period, you would increase the tolls. Presumably, revenues would not be affected.
I understand there needs to be some flexibility here in working out an arrangement with the private sector operators, but I think this section ought to be included right in Bill 70, this provision which would clearly demonstrate that there is a time limit and that it would revert back to the province, and also that at that point, once the province receives the highway back, there could be consideration of eliminating tolls altogether. Again, that's way down the road beyond probably most of our lifetimes -- hopefully not, but certainly our political lifetimes. I think a future government would want that flexibility.
Mr Baird: I think on this there may be just an honest issue where reasonable people can differ. As some clarification, although it's not entirely different from what the member for Lawrence said, section 7, which we just passed, is clear: "Despite any other provision of this act, the minister for privatization may not convey title in fee simple to Highway 407 lands...." So of course it couldn't be in perpetuity, using the language that he used. It's a small difference, I'll concede.
The concern on this issue is numberfold, and I know my colleague from Lake Nipigon has another amendment dealing with this issue later. While he does talk about his amendments, he uses the word "operation." One has to wonder whether that would cover profit for any company, because a company is not going to enter into this exercise as a public service. I know the member for Lake Nipigon specifically requires that room be made for profit, which is absent in this. The member seems to concede that it does. I suggest that perhaps it isn't as clear as it otherwise could be, pointing to the other amendment.
The concern as well is that the road really is never going to be finished in terms of the significant amount of public expenditures that are going to be taking place. Obviously the full lengths will be built over the next number of years. I would imagine you would want to put in any contract some specific commitments with respect to the time. Certainly based on what we heard, for example, from folks in Durham region, they would want to spell out a timetable when those would be done. So it's not like the highway would be built in a few months or even a year.
As well, the legislation allows, and the minister would want, I would think, to review the idea of putting expansion triggers in legislation where, as time went by, as the volume of traffic increased on the highway, you put in expansion triggers to go to six lanes and perhaps eight lanes, whether that's 10, 25 or 50 years out, which would require obviously a significant capital investment. Certainly after a time there would be significant retrofits required, as there are on all of our transportation infrastructure.
I have a concern that being explicitly clear in legislation with respect to this issue would limit the ability of the minister to try to make an arrangement that would be in the best interests of the taxpayer.
Reasonable people can disagree. I guess what you see is a reasonable difference of opinion. I have a concern where it's just cost plus profit margin. The costs are likely to be demonstrably higher, I think we would all concede, and that is a concern, and I think it tries to get away from the fundamental principle of private design, build and operation which the government is seeking to provide in the legislation.
Mr Pouliot: Chair, I need your help. I appreciate the amendment and certainly the government's critique of the proposed addition. It's brief; I'll read it.
"Despite any provision in this act, a transfer of the 407 highway lands under this act is restricted to a transfer of a leasehold interest only and for a period of time not to exceed the point at which projected revenues equal the costs and liabilities relating to the Highway 407 lands, including it's financing, design, construction, operation or extension."
I have the good fortune of getting supplementary help when I go to the bill, because this is tedious reading. It is for me; I must work hard at these things. But at least with the bill, if I'm hesitant, in doubt, I refer to the French text. I go back and forth, and sometimes I think I begin to see more clarity, especially in dealing with this. I don't have that ability, because amendments are not -- but that's for another forum, another time.
I see in this amendment two things. It addresses the issue of tolls being imposed in perpetuity, and our party is pleased with that. We have a little more difficulty with our second interpretation, which is the first part of the amendment, which I believe addresses that an owner, the purchaser, can only make a profit if that amount of money surpasses, exceeds, projected revenue. What common denominator are we going to use and so on? I have some reservations on that. I have no reservations in perpetuity of the bill; it goes to the very basis of 407.
By the way, we are biased vis-à-vis 407. It was the flagship of our administration during a very difficult period, and now you're about to sell it. So be it. We're not always right, but we simply pay a lot of attention to 407. It's very close to our doctrine of the day, if you wish.
If I can split a vote -- I'm going to support the amendment anyway, but this is the way I read this and I have some difficulty with the entrepreneur once the deal has been done, has been signed, has been sealed, that you can only get a profit on an amount which is above "projected revenue."
Mr Galt: Just looking at this particular amendment, as I interpret it, it sort of ensures that the bidder would not get any profits, would be assured of all the losses. Really, after you interpret it and look at it, it would guarantee that we'd have no bidders in the end. I just don't see why anybody would bid if this amendment were in the particular bill. There's no advantage to get involved. There's a significant amount of interest out there right now, but with this amendment it would totally wipe out any private interest in taking this venture over. I, for one, would certainly be unable to support it. To me it just appears like a typical Liberal type of motion that just wouldn't function satisfactorily out there in private enterprise.
Mr Cordiano: Just to further clarify, the wording of this amendment was actually lifted from the wording that was used for the highway that was built in Nova Scotia and is operated by the private sector. It's a privatized highway, as you will recall, the first of its kind. It is in place. It was a deal that's consummated. It's working.
Just to respond to Mr Galt's point about there not being any room for the private owner to make a profit, it's certainly referred to -- and I think Mr Baird alluded to this -- where I say "operation." There's an expectation of profits there, that that's to be included in this formula. It just sets the framework, it does not specify what that is to be. It allows for flexibility in the negotiations that will obviously take place for a deal to be made. Therefore, there is the flexibility to do so.
However, it does put this in the context of a leasehold rather than a sale that has no limitation in time. Obviously, the formula would determine what that time period would be. It's not for me at this point, or for anyone else, to determine what that time period would be. It should relate back to the reality, and the reality is that when the highway is paid off, there's a payback period: Enough revenues have been raised to pay down those capital costs, including the operation, including the initial design, construction etc, all of those costs, and some reasonable profit, which also relates back to tolls.
That is incumbent upon your government, which is transacting this and negotiating, to ensure that tolls will not be outrageous. This at least gives you a framework within which you can work to determine that in advance and we can make accurate estimations of what the return on profit should be, a rate of return which I think you can negotiate with any private sector operator which is reasonable. However, it does so in the act; it doesn't leave it entirely to some other kind of discretion. It gives you a guideline as to how this might be conducted.
Mr Pouliot: The more I read about it, I try to fit it in, in terms of the style, the tone. There's a third party, which is very important. This is to stop or to institute -- you can play it either way -- escape clauses. You have a third party in the province of Nova Scotia. It's a triumvirate. That's the arrangement. You have the presence of the federal government, which is very much involved in this venture. You also have, obviously, the province. This has a Doug Young style of operation written in, and I say this with respect. I have known him for close to 30 years. I know him very well. It need not apply here.
I have increased difficulty. You see, fight, fight, fight, if you're against; once the deal is consummated, I turn to the consumer and say, what about the ability in perpetuity for the tolls, which is contrary to us? But I don't have the ability to fix the revenue and I don't believe anybody else has, only the profit exceeding that revenue. I'm afraid if that's the case, you will get lowballed in the offer to purchase. I know you need the money to balance the books, and that's not altogether unfair. The thing is, you will get lowballed on the front end. There's no secret here. It all comes out in the wash. If the profit margin is very thin, there will be contingencies which will be larger than the contract.
We've dealt with the Bombardiers and AEG Westinghouses and the Daimlers of this world, and I can assure you that it's enough to scare a contingency of the finest advocate emanating from Philadelphia or from U of T. So I will most reluctantly not be supporting this amendment because of the first portion.
Mr Baird: I just have a quick question for my colleague from Lawrence. Going back to the issue of profit, the member for Lake Nipigon has specifically allowed for that, so obviously he felt that financing, design, construction, operation and extension also are required to be explicit on profits. I accept that there could certainly be an argument that "operation" could include profit. Before someone puts down $1 billion to buy a road, they may want a little bit more certainty on it.
But just to help me a bit, what would be one example of how you would build in profit margins, if we accepted this amendment? Give me one example.
Mr Cordiano: Rate of return.
Mr Baird: It would be a fixed rate.
Mr Cordiano: It would be a percentage, a rate of return. That's how any deal is consummated in the private sector. When you look at these deals, you look at what's your rate of return, what can I reasonably expect.
Mr Baird: I'm not being political, I'm being very genuine. Would that not just make it cost plus profit margin?
Mr Cordiano: You're thinking construction costs plus profit.
Mr Baird: Construction costs plus operational costs plus profit margin.
Mr Cordiano: This thing is built already, and apart from the extensions, it's operational. You already have a stream of revenue, which is quite different. We're not talking about a construction contract here; we're talking about a going concern. You can determine what that is from the revenues already. You have cash flow. You can determine from the cash flow what this thing is worth. Then I'm allowing for flexibility, because you're able to deal with the parameters of this in the negotiations themselves. It gives you that flexibility.
Mr Baird: But you've got the financing and a better idea of the operation costs for 407 central, and those are not insignificant financing costs. You've also got the obligations on the east and the west corridors to extend them.
Mr Cordiano: That has nothing to do with this.
Mr Baird: The concern I have, though, is, if it's just become cost, your operational or your construction or financing costs, plus a profit margin --
Mr Cordiano: No. It's just the revenue side. It's got nothing to do -- the private sector operator will have to go out and finance the construction costs, that is their baby, so to put it. It's not included in this.
Mr Baird: So we would pay for that.
Mr Cordiano: You're including them as part of a long-term picture, but now you have cash flow in which to determine what this thing is worth. The extension would obviously add to the cash flow.
Mr Baird: For example, the day that the entire thing is completed from east to west and it's all in place, there would be your financing costs and then your operating costs, plus a profit.
Mr Cordiano: First of all, the private sector operator has to go out and borrow some money to buy this to pay you, unless they have cash, and I don't think they've got that. They're going to go out to the capital markets and finance this. So they're going to make their estimations based on what it costs them to finance. As my esteemed colleague from the NDP has been arguing, the government can do that more cheaply. That's never going to be argued by me, because that is a fact. However, having said that, the firm that buys this will go out and try to build this as cheaply as possible and do it much more efficiently than government would, which is why you're moving in this direction. All of those will be cost considerations in this formula. You're going to have to do this anyway. I'm just trying to write it into Bill 70. The process of determining what this thing is worth and what you should sell it for is a valuation method. This is a valuation method in general terms, but it's not in detail.
Mr Baird: I am trying to follow it, but it would essentially mean, going back to what you said earlier, a guaranteed rate of return. Does that not go back to the issue of risk, that if traffic volumes come down, tolls would have to go up or there has to be some subsidy of some sort?
Mr Cordiano: Wait a minute. We're not limiting what they can charge on tolls here. As an operator, they can still regulate and change what that level is. They can charge whatever they want on tolls.
Mr Baird: If they get a guaranteed rate of return, which is what I believe you're arguing, if I'm right, and the traffic volumes were to go down due to a recession or what have you, then tolls, in the absence of a subsidy, would have to go up in order to allow the financing charges to be made before the rate of return.
Mr Cordiano: No. The effect of this is to limit the time period. It puts a finite limit on the number of years that you're transferring this leasehold over.
Mr Baird: I agree with you.
Mr Cordiano: When they make their estimation on rate of return, it's for you to determine what that time period should be. You're not setting a rate of return. If it happens to be higher because they're hugely successful, then that's profit to the operator.
Mr Baird: What if it's lower?
Mr Cordiano: That's your risk. I'm trying to limit your risk, and the consumer, ultimately, in terms of tolls and what those will cost. If you have a finite number of years, this reverts back to the province. At that point, presumably, that government would lift the tolls on the road. That's what I'm after here.
Mr Pouliot: I don't know. It's time for me to move on. I've appreciated that. It's been 14 years. Sometimes I think I know why better than other times. Under the influence of a milieu, I guess I still am, a number of years. Don't ask me what I'm doing with the NDP. I'm comfortable there too.
The higher the reward, the higher the risk. If we say the government was the risk-taker and now other people will be the risk-taker, you can bookend the perimeters, and this will be reflected in your criteria when you call for your requests for proposal.
It will be big enough that you will achieve economies of scale. Likely, two or three consortiums will be formed, or four consortiums. They will be a group of majors and some medium, mid-cap companies, all with some related expertise, and every one of those, hopefully, will be encouraged to bid on the design, construction, operation and maintenance of the project. They might throw the engineering in for free, because they get a bigger piece of the pie. That's where you will enact some savings.
There is no secret here. If you control one side of the operation, aside from standards -- I think most people agree that standards should be done at arm's length or by an independent body, because it's the safety of all of us, of all motorists, and that should not be, with respect, solely the responsibility of an entrepreneur. MTO has very good standards, there are reasons to liaise and so on, but in the final analysis, government has to have the rein on safety, because they do so throughout the province and it would be inconsistent not to do so for any future development. That's not in the quarrel.
It's all linked. You have competition here. You have the 401, thank heaven. Competition in the marketplace is the essence of what is being done here, it's the essence of the system. Once you remove that, it's an invitation to monopoly and cartel. No one wishes that.
Maybe later on you will wish to reflect, because it's a massive project, to split the project. Then you would minimize risk, but that's another philosophy. Rather than give another 70-some-odd kilometres, because you're looking at $2 billion with the toll equipment, you might wish to say, "Well, let's see how the first one goes," because you have a timetable attached to it anyway. They won't be able to deliver any faster, and you may wish to split the project. It's also fairly good politics in terms of having those consortiums. If you lose a $1-billion contract, you don't swallow that easily. Them dim the lights, they scare one another and they come after you. Every little line is scrutinized 10 times over again. But that's the exposure you give yourself when you're in government. We went through it. It's not a problem usually.
I cannot see how the limitation of an entrepreneur will not impact on the bidding of the overall process, because you cannot take a molecule, an atom, and move it out of the convention and isolate it and then put it back in; it is a whole piece that they will be bidding on. I heard "cost plus." Nothing scares me more than cost-plus factors. We all have oratory. I did SkyDome for the opposition. I'd never want to go through that again. One day, with good, premium, single-malt scotch we can talk about SkyDome. I don't want to go into the cost-plus factor any more.
I have some difficulty, Joseph, with limiting the profits. I have no difficulties with seeing finality to charging the motorists.
Mr Cordiano: You're not limiting profits; you're limiting the time period.
Mr Pouliot: We're talking about a different thing here.
The Chair: Further questions and comments? Time for decisions. All right, then. Shall this amendment carry? I put the question. All those in favour?
Mr Cordiano: Can we have a recorded vote, please?
Baird, Chudleigh, Hastings, Pouliot.
The Chair: That amendment is lost.
We have another amendment to section 7. This is an NDP motion. Mr Pouliot, please read it.
Mr Pouliot: I move that the bill be amended by adding the following section:
"Limitation on transfer
"7.1 Despite any provision in this act, the minister for privatization shall not enter into an agreement for the sale of Highway 407 lands and of assets comprising or related to Highway 407 unless,
"(a) at least 90 days before the sale is concluded, the minister tables in the assembly all reports commissioned by the government relating to the privatization of Highway 407; and
"(b) the reports demonstrate that it is likely that the total cost of managing Highway 407 will be less under private ownership than under public ownership."
If I may speak to the motion, simply put, our motion asks for the tabling of the privatization document that was commissioned by the taxpayers of Ontario under the auspices of this government. We feel it is imperative that, notwithstanding our understanding of commercial confidentiality, since we paid for it, we see what the privatization document says. That's why we're moving the resolution. We say 90 days to digest the process is not a long time. People have been waiting so long for the extension.
Then in terms of the management of the highways, I go back to what my colleague and friend Mr Cordiano has said about how you get the best bang for your dollars. Prove to me that it can be done cheaper by the private sector. It's not always the case. We've just uncovered the horror show of one -- well, reputable in some circles, I guess -- Andersen company, where the cost per hour was something that I for one, being of moderate means, can never relate to, costs like $575 per hour in some cases for work that could have been done for half the price. So, again, our much-maligned civil service, who achieve continuity, and they're the essence of our system, without them you couldn't even cross the street as a politician.
We're not political pundits. Most of us shake hands with people and hope they feel good about themselves. That's about the extent of it, and then we help them with their sore backs and the small things. That's our human dimension, our world. Let's make sure that it can be done more cheaply with the private sector, because for those people there are several motivations; one is hunger, one is profit. God bless the President. Civil servants are not profit-motivated. So, what we're saying is, "Prove it to us." That's what the amendment is saying. It's very simple. We feel it's commonsensical, that it should be readily accepted, acquiesced to by the government; we know it will.
Mr Hastings: Thank you, Mr Pouliot, for your comments about this proposal. You're always accusing us of not listening. That seems to have been a constant theme around here for three and a half years. I think this particular example would suggest that the proponent wasn't listening to our deputants over the last day, because I think at least four of them, maybe five, said that it's time to get on with the job and to create some construction jobs, get going on the west end of this marvellous project and get moving on the east end of this project. Why? For several reasons, primarily two: first, the traffic paralysis that is mounting even on the existing configuration; and second, I think at least two of our deputants spoke of the loss of productivity in this province in terms of jobs in a number of sectors, auto parts, trucking, food processing, a lot of areas throughout the GTA that need this particular project completed in order to maximize investment and particularly to increase productivity, because if we're going to have the dollars we need for all the social safety programs that are in place, we have to maximize our wealth opportunities here.
This strip of highway is one of the modest keys to achieving that increased productivity, because all you have to do today is examine some of the literature that shows pretty clearly that this country is starting to lag behind in productivity, for a whole set of complex reasons. If we don't start making some efforts and initiatives at changing that particular context, we're going to be in deeper trouble than we're already in, because of the G7 countries, we're probably on the low end of productivity. If it weren't for Ontario, Alberta and Quebec to a certain extent now, this country would be even further behind the productivity ball.
I find the proponent's request in this amendment for a 90-day delay simply unconscionable. We've had more than 10 years of delay. This thing probably should have been completed many years ago. At least all the sections but the east side of this project should have probably been in place long before now. I think one of the deputants said that the planning for this particular project started 20 years ago. It's time to get on with the job. Another 90-day delay certainly doesn't help us in the broader context of the themes I've brought up today. We need to defeat this particular amendment.
Mr Baird: I certainly appreciate the comments made by my colleague the member for Etobicoke-Rexdale in terms of the tremendous loss of productivity for the economy of the greater Toronto area. But where I would disagree with him is that it's not just the greater Toronto area; it's also eastern Ontario and western Ontario, who have to go through the area. This affects folks in my part of the province as well, albeit not as significantly as folks in his constituency. So he's not just right, but more right than he knows.
I appreciate the spirit in which my colleague has offered this amendment. I think it is problematic to negotiate financial transactions that are almost certainly going to go into the 10-digit area in terms of the costs and the obligations. Together, they will certainly go into the 10-digit area. It's problematic to conduct such large and sensitive negotiations in the public domain, as I know he would appreciate.
In addition, with respect to clause 7.1(b) of his amendment, it's again problematic to quantify the total cost of managing the highway when we're talking about a long-term lease arrangement. Obviously a big part of the solution can be touched on in the legislation, but indeed you would think a potential contract would deal with issues including the traffic volume and the obligations to expand the number of lanes and the operation costs depending on the volume itself. It's problematic to know that ahead of time, to be able to accomplish what he hopes to accomplish with his amendment.
Mr Cordiano: I probably will support this amendment, but because I'm reading the following amendment, dealing with costs etc, what I think we're after here is ensuring not only that the taxpayer gets good value for money in terms of the sale but also some consumer protection, the ultimate users of the highway.
I don't think it's too much to ask for 90 days; 90 days is not an unreasonable time period. Mr Hastings suggested that we're falling behind in productivity, that this should have been built many years ago. Well, it could have been built. You could have started this process even in the first year of your mandate. If it was such a priority for this government, then they could have started that three years ago, right at the very beginning. I don't see why it took you three and a half years to deal with this. I think some of your supporters would ask that same question. Here is this government that professes to work with the private sector, and yet this is the first deal they've ever done, three and a half years later.
Mr Baird: Moving too slow.
Mr Cordiano: You moved fast on things you shouldn't have moved fast on, and on something like this, where you should have moved quickly, perhaps there would have been every intention to move ahead with those extensions, but you never lived up to that promise. I don't think this is an unreasonable amendment, and I'll be supporting it.
Mr Pouliot: I hear you in terms of the 90 days, but the 90 days I have to take with a grain of salt. You portray it as if the sky is about to fall or it's catalytic, it's a make-or-break point. It is really not. You've showed your intent. The 90 days will not kill the project.
What we're saying -- and we don't wish to get involved, Mr Baird, not at all -- is that we want it to be tabled before you go ahead, because it will establish some criteria. Once you enter negotiations, we wouldn't even dream of having a cup of coffee with the people who are involved. It is not our role. Then, of course, we should respect commercial confidentiality, but what we're seeing is that you commissioned a review, with great trumpet and fanfare, at taxpayers' expense. The taxpayers come calling again and they are saying: "We have a reciprocal agreement. We want to see what's in it." There's nothing talking about any individual company. There is no deal that will ever be jeopardized. We're not there yet.
We're saying, before you go to your request for a proposal -- although I read the paper, I was at the airport the other day and someone had left behind a copy of the Financial Post. It was the only paper there, so I picked up the Financial Post.
Mr Hastings: No.
Mr Pouliot: Yes. I picked up the Financial Post and, my God, what do I see? A request for a proposal. So I said, "When I go back to Queen's Park, I must make sure that there is an amendment." I was surprised. In Manitouwadge, if I pick up a paper, it says, "Vietnam War Over," or "Pearl Harbour Bombed," but this was a daily newspaper right there, and no less than -- who owns the Financial Post?
Mr Baird: Your friend Diane Francis.
Mr Pouliot: No, Diane Francis is only a contributing editor.
Mr Hastings: Jim Bradley.
Mr Pouliot: I don't see why people of good conscience in our parliamentary system -- I know you wish to be adversarial, but you're not going to jeopardize the government. You have 82 members. This is not going to delay the project. Ninety days is -- we heard what you said. We weren't wrong. For some it's very difficult to admit any wrongdoing. Why don't you vote for this? I'm at a loss. I'm your friend. We chat in the House, we exchange confidential views at committee. Sure, we don't tread the same circles once we're out of here. I don't belong to any clubs and I don't drive the same vehicle as you do, probably --
Mr Hastings: Don't you belong to the Manitouwadge curling club?
Mr Pouliot: No, sir. The rod and gun club I do, though.
This is the final plea. I'm starting to lose a bit of confidence. I was so sure when I got up this morning that this was going to pass. I would have bet anything that this was going to pass.
The Chair: Any other questions or comments? OK, I'll ask the question. Shall this amendment carry?
Mr Pouliot: A recorded vote.
Baird, Chudleigh, Galt, Hastings.
The Chair: This amendment is lost.
Moving on to sections 8, 9, 10, 11 and 12, there are no amendments proposed to those sections. Are there any questions or comments on those five sections? Seeing none, shall sections 8 through 12, inclusive, carry? All those in favour? Opposed? Those sections carry.
Moving now to section 13, we have a government amendment proposed that's found on page 7.
Mr Baird: I move that section 13 of the bill be struck out and the following substituted:
"Person responsible for payment of toll
"13(1) A toll and any related fee and interest payable under this act for the operation of a vehicle on Highway 407 shall be paid to the owner by,
"(a) if a toll device is not affixed to the vehicle, the person in whose name the plate portion of the vehicle permit is issued;
"(b) if a toll device is affixed to the vehicle, the person to whom the toll device is registered.
"(2) Photographic or electronic evidence of the use of Highway 407 is proof in the absence of evidence to the contrary of the obligation to pay a toll.
"(3) Sections 16 to 16.9 apply to the enforcement and collection of tolls and related fees and interest payable under this act by a person described in subsection (1) but do not apply to the enforcement and collection of such tolls, fees and interest if,
"(a) the person is responsible for the payment of such tolls, fees and interest under clause 13(1)(b); and
"(b) the toll device that was affixed to the vehicle in question was obtained without providing information identifying the plate portion of a vehicle permit."
Perhaps it would be quicker to speak to (1), (2) and (3) separately.
Subsection (1) just clarifies the liability to pay. For example, if someone were to lend me their toll device, the person whose name the toll devise is in is responsible for paying. That just seeks to clarify that issue.
Subsection (2) in this amendment is from subsection 16(22) of the bill. We just moved it for clarity.
On the third issue, subsection (3) deals with enforcement and further amendments with respect to -- sometimes the licence plate is not taken so there's no plate denial available. For example, someone could walk in and give a cash advance for a transponder, or a credit card or something else, and not tie it to their licence plate but to other means.
Mr Pouliot: Briefly, I take the first part as mostly technical, as in many of the amendments. That's OK. Then I go on to "evidence," and I want to draw your attention to the last paragraph, "(b) the toll device that was affixed to the vehicle in question was obtained without providing information identifying the plate portion of a vehicle permit."
I read under "application," "Sections 16 to 16.9." I guess we'll have to wait. My question is, what happens then? You say, for instance:
"(3) Sections 16 to 16.9 apply to the enforcement and collection of tolls and related fees and interest payable under this act by a person described in subsection (1) but do not apply to the enforcement and collection of such tolls, fees and interest if,
"(a) the person is responsible for the payment of such tolls, fees and interest under clause 13(1)(b); and
"(b) the toll device that was affixed to the vehicle in question was obtained without providing information identifying the plate portion of a vehicle permit."
One would assume that they regularly would have to go back to the act and say, "This is what you do."
Mr Baird: For example, if I chose to get a toll device and didn't want to register it to my licence plate, I could perhaps give a credit card. That would allow me to take the toll device and use it. If I were someone of different means and had more than one car, for example, or a family had one toll device that they wanted to share among them, it wouldn't necessarily have to be tied to someone's licence plate; it could rather be tied to a person, if they chose to provide means of payment, whether it was by automatic bank debit, by credit card or other means.
Mr Pouliot: I like that. Thank you.
The Chair: Further questions or comments? Seeing none, shall this amendment carry? All those in favour? All those opposed? This amendment carries.
The next amendment before you is to this section but it's a new amendment, so we're going to deal with section 13, as amended. Further questions or comments on section 13 as a whole? Seeing none, shall section 13, as amended, carry? All those in favour? Opposed? It carries.
We now have an NDP amendment that will be new, added to section 13.
Mr Pouliot: I move that the bill be amended by adding the following section:
"When tolls cease
"13.1(1) Despite any other provision in this act, the owner shall not impose or collect a toll with respect to the operation of a vehicle on Highway 407 after the owner has recovered the costs referred to in subsection (2) and such additional amount as may be prescribed by regulation as the owner's profit margin.
"(2) The costs referred to in subsection (1) shall include all costs and liabilities relating to the Highway 407, including the costs relating to its management, construction and operation and to any improvement, replacement, alteration or extension of the highway.
"(3) A regulation prescribing the amount of the owner's profit margin shall only be made if, at least 60 days before the regulation is made, the proposed amount is published in a newspaper of general circulation in the province."
We have the cost factor again. We strongly believe that we must not interfere, but having said that, we just as strongly believe that the profit margin should be published pertinent to Highway 407. If we read carefully, we don't want -- and I'm not imputing motive in the least. Some of you are used to reading prospectuses and financial reports. They're supposed to make things easier, but sometimes you need an excellent advocate just to decipher. It's quite difficult. It's not easily digested. What we're saying is, don't take the overall picture; just give us a profit margin specifically on Highway 407. What you do is publish it aside from your quarterly or annual reports. We want it to show independently. That's what our proposal says.
Mr Baird: I think my colleague's amendment deals with two issues. I didn't spend a considerable amount of time looking at the second issue because I had a concern with the first. A very, very wise man once said, "Nothing scares me more than cost plus" -- M. Pouliot, 1005 today. I think with respect to the last four words in his proposed amendment, 13.1(1), that scares me enough to back off.
Mr Pouliot: No, no. When you read this, I don't blame you. If it comes from the New Democratic Party, it must be so far --
Mr Baird: You're inciting fear in your comments. You're a merchant of fear.
Mr Pouliot: I'm trying hard, just in case we're on camera one day in the Amethyst Room, to keep a straight face on this one. All we're saying is -- OK, you caught me -- you're not listening to us when it comes to ending the tolls. If there is one item, one catalyst for us, it's the tolls in perpetuity. We have the commitment at present. You see, we evolve away from the premise that you extend the 407 as quickly and as long as possible but do it with the present format.
Ideologically, with the mindset that you have -- that doesn't mean you're wrong -- philosophically we are opposites. We are aware that the cost factor -- you're looking at $20 million per year, just cost-related, until the year 2025 or 2030. Well, you'll make it longer. You watch them borrow over a 35-year period so that it's going to cost them less per year. The thing is, $20 million need not apply. It's the cost of borrowing that's the killer right at the beginning, and, added to that, the need to make a profit. So what we're saying is, be reciprocal. We're not talking about cost plus here in terms of the project; we're talking about the recuperation of money. At one time, you have to start looking and saying, "OK, this thing has paid for itself eight times over."
They're going to use your highway as collateral. There's nothing wrong with that. They're going to market the technology all over the world. Again, there's nothing wrong with that. What we're saying is that you have to protect the motorists a little bit at one time.
Under our provision, it goes back to the province after 30 years. The thing is oversubscribed, by estimates, making more money. All the capital corporation, which is the facilitator, does is collect money. They borrow and collect money. If they wanted to, it would be able to pay faster than anticipated. Hopefully your private sector will have the same success story, but what I'm saying is that when you're profit-motivated -- and there's nothing wrong with that -- expect that you must make a profit. The shareholders own you. That's OK. Also, expect that the cost of borrowing -- go to Merrill and float an issue of Ontario bonds. You've got less than 20 basis points between Ontario and Ontario Hydro. With the mess Ontario Hydro is in, how much do you think it would cost Ontario Hydro, as a private entity, to float a debenture?
Mr Baird: Without the 50-basis-point charges the Ministry of Finance instituted under your government, I suggest probably fairly approximate.
Mr Pouliot: No, no, the costs are there. It's not only our government, it's every government.
Mr Baird: I'd suggest it's fairly approximate with the 50-basis-point levy that the NDP government put on Ontario Hydro bonds.
Mr Pouliot: They're a basket case; they've got $20 billion of unfunded liabilities.
Mr Baird: I'm saying in terms of Ontario Hydro debt versus province of Ontario debt, Hydro is actually a little bit cheaper because of the 50-basis-points add-on that we put on.
Mr Pouliot: I don't want to argue. I'll give you one Pickering; buy one Pickering for a buck and you get one free. They're $32 billion in debt. The assets are worth not even half of that. You know that and I know that and that's been established by all accountants. But they still command a commendable rate with the marketplace because if they don't pay the coupons, the government will pay the coupons. It's as simple as that. I'm sorry, but that's the way it is.
Mr Pouliot: You're saying that the tolls will stay here forever. There is nothing in this bill that says otherwise, so get used to it.
Mr Baird: Section 7.
Mr Cordiano: I understand what my esteemed colleague is attempting to do and that is to limit the time period for tolls. I suppose that's what you're after here, but I don't see how this accomplishes that. I'm trying to understand this. I appreciate what is being sought here, but you really do have to put a time limit on the sale. Therefore, my amendment dealing with leasehold is the only way to accomplish that. At some point tolls come off and that point is the point at which the highway is paid for, and along the way there's been a reasonable profit for the operator. That's simply a formula that's worked out to determine that.
With respect to this, you're contemplating what happens once that point is reached that the initial capital costs of the highway are paid for. After that, you want tolls to be lifted. Quite frankly, what happens after that is up for discussion. It may be 39 years down the road, it may be 29 years down the road, it may be more than that. I think it's far more important to put a time limit on this now in the act rather than trying to contemplate when tolls are lifted. I cannot foresee that; that's too far forward into the future.
I think it would also shackle the operator at some point, trying to limit the profit margin. I think you would want unfettered ability on the part of the operator to have a reasonable profit based on the marketplace. But in order to establish that, it would be reasonable to limit the time frame in terms of when tolls can be collected and should be collected, relating back to capital costs, which is originally what you did anyway. The deal that you have now is 29 years, I believe, and tolls would come off after that time period. That relates back to the question of capital costs. So I don't think I'm going to support this amendment.
The Chair: Further comments? Seeing none, I put the question. Shall this amendment carry? All those in favour? Opposed? This amendment is lost.
We move now to section 14. A government amendment is proposed to that.
Mr Baird: I move that clause 14(1)(e) of the bill be amended by striking out "registration, distribution and validation" in the second line and substituting "registration and distribution".
To explain, as per the amendment we made to subsection 1(1) of the bill, where we struck the word "validation," this is just a corresponding amendment.
The Chair: Further discussion? Seeing none, shall this amendment carry? All those in favour? Opposed? This amendment carries.
We have another government amendment to section 14.
Mr Baird: I move that section 14 of the bill be amended by adding the following subsection:
"Validation of toll devices
"(3.1) For the purposes of subsection 191.2(2) of the Highway Traffic Act, a toll device is a validated toll device under this act if a toll device agreement is in effect with the owner with respect to that toll device."
Just as an explanatory comment, this is obviously following up on the last amendment and the one to subsection 1(1), that any toll device agreement that's in effect is obviously a self-evident validated toll device.
The Chair: Further discussion? Seeing none, shall this amendment carry? All those in favour? Opposed? This amendment carries.
Another government amendment to section 14, found on page 11.
Mr Baird: I move that section 14 of the bill be amended by adding the following subsections:
"Transitional, collection of tolls
"(5) If, before the day this section comes into force" --
Mr Pouliot: On a point of order, Chair: My apologies. It's a transitional measure and it's minor. I would ask that we dispense and deem it read into the record. It's fairly lengthy.
The Chair: I'm sorry, it has to be read into the record.
Mr Baird: I appreciate the spirit in which the member's comments were made. I'll start over again.
I move that section 14 of the bill be amended by adding the following subsections:
"Transitional, collection of tolls
"(5) If, before the day this section comes into force, a vehicle was driven on Highway 407 and, as of that day, no invoice or statement has been sent with respect to payment of a toll for the use of Highway 407, the owner shall collect and enforce payment of the toll as though the vehicle had been driven on Highway 407 after the day this section comes into force.
"(6) If, before the day this section comes into force, a vehicle was driven on Highway 407 and an invoice or statement was sent with respect to payment of a toll for the use of Highway 407 and, as of that day, the toll has not been paid, then, despite anything in this Act,
"(a) the crown in right of Ontario may collect and enforce payment of the toll in accordance with section 43 of the Capital Investment Plan Act, 1993; or
"(b) if the owner and the minister for privatization enter into an agreement to that effect, the owner may collect and enforce payment of the toll in accordance with section 43 of the Capital Investment Plan Act, 1993."
As the member for Lac Nipigon said, this is a transitional issue. It just deals with tolls that would be outstanding and are accounts receivable and invoices outstanding would be accounts receivable, and that would be up to the negotiation between the two prospective parties on who would get the benefit of that. Obviously, no one would get it for free and that would be involved in the accounting of any financial arrangement.
The Chair: Further questions or comments? Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Any further discussion of section 14? Shall section 14, as amended, carry? All those in favour? Opposed? Section 14 carries.
Section 15: also a government amendment proposed.
Mr Baird: I move that section 15 of the bill be struck out and the following substituted:
"When payment due
"15(1) Subject to any agreement between the owner and a person responsible for the payment of a toll, a toll or fee is payable on the day an invoice for it is mailed, delivered by hand or sent by any other prescribed method to that person.
"(2) Subject to any agreement between the owner and a person responsible for the payment of a toll, interest on a toll or fee begins to accrue and is payable 35 days after the invoice for the toll or fee is mailed, delivered by hand or sent by any other prescribed method to that person.
"Cause of action
"(3) A toll and any related fee or interest is a debt owing to the owner and the owner has a cause of action enforceable in any court of competent jurisdiction for the payment of that debt but the debt may not be enforced while the obligation to pay a toll or fee is being disputed under section 16.1 or is subject to an appeal under section 16.3."
The issues raised in this amendment were touched on by the Canadian Council for Public-Private Partnerships yesterday and provide a greater degree of flexibility. I would draw members' attention in the proposed amendment to subsection 15(1), to the last four words, "prescribed method to that person." We're trying to get away from saying "mailed or delivered by hand." For example, invoices could be sent more readily by e-mail in the future. I know I've received the odd invoice by e-mail already and that's something that's likely to continue. It just provides a greater degree of flexibility. Also, it would deal with issues like prepaid accounts and automatic credit card payments.
The Chair: Further discussion or comment? Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Further discussion on section 15? Shall section 15, as amended, carry? All those in favour? Opposed? Section 15 carries.
Section 16: A government amendment is proposed, found on page 13.
Mr Baird: I move that section 16 of the bill be struck out and the following substituted:
"Failure to pay toll
"16(1) If a toll charged for operating a vehicle on Highway 407 or any administrative fee is not paid within 35 days after the day it is payable under subsection 15(1), the owner may send the person responsible for the payment of the toll a notice of failure to pay the toll.
"Content of notice
"(2) The notice shall,
"(a) set out the amount of the toll, of any administrative fee and the interest rate that is being charged;
"(b) inform the person named in the notice that he or she may dispute the matter on a ground referred to in subsection 16.1(1);
"(c) inform the person named in the notice that if he or she disputes the matter,
"(i) he or she must send a notice of dispute to the owner within the time period referred to in subsection 16.1(2),
"(ii) he or she bears the onus of proving the grounds on which the matter is disputed, and
"(iii) the tolls, fees and interest set out in the notice shall be deemed to be paid in full if the owner fails to send the person its decision within 30 days of receiving the person's notice of dispute; and
"(d) inform the person named in the notice that if the toll or fee referred to in the notice, or any interest on that toil or fee, is not paid within 90 days of the day on which the person received the notice, the registrar of motor vehicles may refuse to validate the person's vehicle permit or refuse to issue a vehicle permit to the person and that the registrar of motor vehicles may do so even if the failure to pay is disputed under section 16.1.
"16.1 (1) A person who receives notice under section 16 may dispute the alleged failure to pay a toll on any of the following grounds:
"1. The toll was paid in full.
"2. The amount of the toil is incorrect.
"3. The vehicle, the numbered plate or the toll device registered to the person was lost or stolen at the time the toll was incurred.
"4. The person is not the person responsible for the payment of the toll under subsection 13(1).
"Notice of dispute
"(2) A person who receives notice under section 16 may dispute the alleged failure to pay a toll if the person sends a notice of dispute, setting out the grounds on which the dispute is based, to the owner within 30 days of receiving the notice of failure to pay the toll under section 16.
"Payment without prejudice
"(3) The payment of a toll and related fees and interest shall not prejudice the right of a person who receives notice under section 16 to dispute the alleged failure to pay the toll, fees and interest.
"(4) The onus of proving the grounds upon which a dispute under this section is based is on the person who sends notice of the dispute.
"(5) Within 30 days of receiving a notice of dispute from a person under subsection (2), the owner shall render a decision and shall send the person a copy of the decision, with or without reasons.
"(6)If the dispute is unsuccessful, the owner shall, in writing together with the copy of the decision, inform the person who gave the notice of dispute of his or her right to appeal the decision to a dispute arbitrator and shall provide the address of the dispute arbitrator.
"Failure to give timely decision
"(7) If the owner fails to send a copy of the decision to the person who sent the notice of dispute within the time period required under subsection (5), the tolls and the related fees and interest that were the subject of the dispute shall be deemed to be paid in full.
"Appointment of dispute arbitrator
"16.2(1) The Lieutenant Governor in Council may appoint a dispute arbitrator for the purposes of section 16.3.
"Fees and expenses
"(2) The fees and expenses of the dispute arbitrator shall be paid by the owner.
"16.3(1) A person may appeal the owner's decision under section 16.1 on any of the grounds referred to in subsection 16.1(1) if the person sends a notice of appeal, setting out the grounds of the appeal, to the dispute arbitrator and to the owner within 30 days of receiving a copy of the owner's decision under subsection 16.1(5).
"Submission by owner
"(2) Within 15 days of receipt of a notice of appeal under subsection (1), the owner may send a written submission to the dispute arbitrator.
"Copy to appellant
"(3) Upon making a submission under subsection (2), the owner shall send a copy of the submission to the appellant.
"(4) The dispute arbitrator shall review the notice of appeal and any submission made by the owner under subsection (2) and may,
"(a) decide the matter on the basis of the written material;
"(b) if he or she thinks it appropriate, hold a hearing into the matter; or
"(c) use any available mediation or alternative dispute resolution method that he or she considers appropriate.
"(5) The dispute arbitrator shall decide the appeal solely on the grounds referred to in subsection 16.1(1).
"Order for expenses
"(6) If the dispute arbitrator finds that the appellant is not responsible for payment of the toll he or she may order the owner to pay the appellant the amount of his or her reasonable out of pocket expenses incurred in connection with the dispute or appeal of the dispute.
"(7) The decision of the dispute arbitrator is final and binding and is not subject to appeal.
"Notice of decision
"(8) The dispute arbitrator shall send the appellant, the owner and the registrar of motor vehicles a copy of his or her decision within 120 days of receiving the notice of appeal under subsection (1).
"Failure to give timely decision
"(9) If the dispute arbitrator fails to send a copy of his or her decision within the time period set out in subsection (8), the appellant or the owner may apply to a court of competent jurisdiction for an order compelling the dispute arbitrator to give his or her decision.
"Repayment of paid tolls
"16.4(1) Where a person who receives notice of failure to pay a toll under section 16 pays the toll and the related fees and interest, in whole or in part, the owner shall return the amount paid to the person, together with interest, if,
"(a) the owner or the dispute arbitrator subsequently decides that the person is not responsible for the payment of the toll, fees and interest; or
"(b) the tolls, fees and interest are deemed to be paid in full under subsection 16.1(7).
"(2) The interest on an amount returned under subsection (1) shall be charged at the same rate as the rate established by the owner under clause 14(1)(c).
"Interest on unpaid tolls
"16.5 Interest on unpaid tolls and fees continues to accrue even if a person disputes or appeals the obligation to pay a toll.
"Registrar notified of failure to pay toll
"16.6(1) If a toll, and the related fees and interest, are not paid within 90 days of the day a person receives a notice of failure to pay under section 16, the owner may notify the registrar of motor vehicles of the failure to pay.
"Method of giving notice
"(2) Any notice to the registrar of motor vehicles under this section may be given in writing, by direct electronic transmission or by any other prescribed method.
"(3) The owner shall promptly inform the person who received notice of failure to pay under section 16 that notice has been given to the registrar of motor vehicles under subsection (1).
"(4) If the registrar of motor vehicles receives notice under subsection (1), he or she shall, at the next opportunity, refuse to validate the vehicle permit issued to the person who received the notice of failure to pay under section 16 and refuse to issue a vehicle permit to that person.
"Same, if dispute
"(5) The registrar of motor vehicles may act under subsection (4) even though the person who received the notice of failure to pay under section 16 has disputed his or her obligation to pay under section 16.1 or has appealed a decision of the owner under section 16.3.
"When toll is paid
"(6) If notice has been given to the registrar of motor vehicles under subsection (1) and the toll and related fees and interest are subsequently paid, the owner shall immediately notify the registrar of the payment.
"(7) If the registrar of motor vehicles is notified by the owner that the toll, fees and interest have been paid or is notified by the dispute arbitrator that the person is not responsible for paying the toll, fees and interest, the registrar shall,
"(a) validate any vehicle permit that he or she refused to validate under subsection (4);
"(b) issue a vehicle permit to a person if it was refused under subsection (4).
"Statutory Powers Procedure Act
"16.7 The Statutory Powers Procedure Act does not apply to the owner's or a dispute arbitrator's powers of decision under section 16.1 or 16.3.
"16.8 (1) Any document or notification required or permitted to be sent under section 16, 16.1, 16.3 or 16.6 shall be sent by registered mail or delivered by a bonded courier, or sent by any other prescribed method.
"(4) A document referred to in subsection (1) shall be deemed to have been received,
"(a) if sent by registered mail, on the fifth business day after the day it was mailed; or
"(b) if sent by a prescribed method, on a prescribed day.
"(3) For the purposes of clause (2)(a), a business day includes every day other than a Saturday, Sunday or a day that is a public holiday as defined in the Employment Standards Act.
"16.9 Actions taken by the owner under sections 16 to 16.6 are in addition to any other methods of enforcement and collection available at law."
The Chair: Do you wish to comment on this section?
Mr Baird: Maybe just a brief comment, and then if there are any questions pertaining to a specific part of the amendment.
The government feels strongly that everyone knows the rules and that they are spelled out so it's crystal clear. It's important that the new owner has some understanding that they will be able to collect tolls and that there be a clear code in place to collect and enforce tolls. Certainly I think every successive government has looked at collecting fines and enforcing other orders, and we've tried to provide a very clear and specific method right up front that will be effective, and a clear appeal process and how that would operate so it is crystal clear to all parties.
Section 16 has been reorganized and simplified and spells out exactly how those would operate.
Mr Pouliot: I don't mean to open the can, but following what you have said, I quickly went back to the beginning of your revamped process, of this amendment. I go to clause (d), right before "Dispute," which is 16.1. In the third last line, you say, "the registrar of motor vehicles may do so even if the failure to pay is disputed under section 16.1."
It seems unfair to some that someone's licence could be lifted while the matter is still in dispute. We built the 407, but we didn't have the chance to cut the ribbon. What happens now with 407 if you have a failure to pay but it's still under dispute? Does your licence get lifted?
Mr Baird: If I could just clarify something, under (d) it is not, of course, someone's driver's licence; it's the registration of their motor vehicle.
I would also refer you to 16.1(3), that payment is without prejudice.
As well, in terms of your question, the registrar's powers to refuse to validate the permit is consistent with the process outlined in the Capital Investment Plan Act, 1993, subsections 43(6) and (7).
Mr Pouliot: Your argument says it shall not withhold the right to dispute, but what you are saying is that the registrar of motor vehicles may refuse to validate the person's vehicle permit or may refuse to issue a vehicle permit to the person, and that the registrar of motor vehicles may do so even if the failure to pay is disputed.
Then you refer me to 16.1(3), under "Payment without prejudice," where you say "(3) The payment of a toll and related fees and interest shall not prejudice the right of a person who receives notice under section 16 to dispute...." That's not, with respect, the kind of rationale to support your amendment that I would expect. Of course you have the right to dispute, but even while disputing, you could have your registration lifted.
Mr Baird: Clause (d) deals with the notice provision, but your vehicle registration could not be pulled if you were under appeal. Section (d) only deals with the terms of the notice, but it couldn't be pulled. Perhaps my colleague could --
Mr Pouliot: You're like me; you don't perspire confidence in this one.
Mr Kenneth Kagan: If I may just clarify that point, the section is written on the basis that if a person pays the toll outstanding without prejudice, that precludes the owner from sending a notice to the registrar and denying the plate from being validated. If they don't pay the toll in that interim, within a 90-day period, only then can the owner send a notice to the registrar, and that starts the process for refusing to validate the permit when it comes up next for renewal. In the interim, the individual can still go to the dispute arbitrator for a decision. If the dispute arbitrator decides that the toll isn't to be paid, he notifies the registrar to lift the freeze on the licence plate. But the safeguard in this section is that the person pays the toll without prejudice, and then the registrar cannot refuse to validate.
Mr Cordiano: That's beginning to alarm me as well. In some cases these tolls can be quite significant in terms of the amounts of dollars we are talking about. Suppose an error were to occur. Suppose I was sent a bill for thousands of dollars for outstanding tolls.
Interjection: A trucker.
Mr Cordiano: Yes, a trucker. In the meantime, what you are suggesting is that they could freeze re-registration, correct? What you are saying is that they could freeze their registration at any point in time.
Mr Kagan: It doesn't work that way automatically, because if someone renews their vehicle permit, their licence plate, it either happens on a yearly or bi-yearly basis. When the notice goes to the registrar, they don't lift or pull the licence plate.
Mr Cordiano: It's flagged for the registrar.
Mr Kagan: It's just flagged for the next time it's renewed.
Mr Cordiano: What if it happens during the time when you're registering, close to the time when you need to renew your registration?
Mr Kagan: What the individual would have to do in that case is pay the toll without prejudice, and then the registrar won't be able to freeze it.
Mr Cordiano: That's ludicrous. What if it's an error on the part of the owner-operator? What if their computer has a glitch and suddenly there's $10,000 of outstanding tolls that have not been paid by some error? This has happened to me with respect to the Attorney General's office, parking tickets, totally in error. That wasn't picked up. You could be in a situation where you no longer have the ability to renew your registration because of some error that it's outstanding, and therefore the registrar would lift your registration rights, or freeze them. I couldn't renew my registration. You would have to wait until you went through that process and cleared it all up. That could be days. For a trucker, they could be out of business.
Mr Kagan: But this section does provide that there is a minimum 90-day period. The trucker has received the invoice and has 35 days, first of all, to look at it and see if there's an error. After the 35 days is the first time the owner can send out a notice of failure. So there's every opportunity to talk to the owner about that problem. The owner then has to send out a notice of failure by registered mail or bonded courier to the trucker, who then has another 30 days to file a written dispute explaining what the problem is. Then there's another 30-day period -- so you have a full three months -- before which the owner can send any notice to the registrar. The owner doesn't have to send it on the 90th day. He may wait another three months. All I can suggest is that if there is a major problem, you would expect the owner to deal with the trucker and try to resolve it. It's in their mutual interest to try to do that.
Mr Cordiano: What I'm suggesting is that you could be in a dispute with the owner. It's taken, de facto, that their information is correct. Some of these computer glitches and computer errors may not be picked up for many months after the fact, so you could have a situation that arises. You will agree with me that that could be possible.
The Chair: Mr Pouliot wants to jump into this argument, so we'll allow him an opportunity.
Mr Pouliot: Upon completion, and just hypothetically, of course -- one way, 174 kilometres -- Harry and Jane Smith are independent truckers and must pay for their vehicle, and it's an ongoing concern. You're charging them at peak times 30 cents a kilometre, so one way is $52.20. Somehow they fall in arrears, and although you allow some mitigation -- you're not completely callous in your approach because you're dealing with a client, so you don't cut off the electricity and put them on restricted service -- you say: "OK, talk to us. What seems to be the problem?" It's a fairly large bill, and everything is relative.
But when you hit you say, "The registrar of motor vehicles may refuse to validate...." That's OK. It opens the door to say, "Talk to me, I'm a client." But once you move, you "refuse to issue a vehicle permit to the person and that the registrar of motor vehicles may do so...." So you don't kick me out, you don't kick Harry and Jane Smith, trucker, operator, mortgaged to the hilt, a small entrepreneur, off the 407; they can't even use the alternative. You kick them out altogether. Maybe I'm stretching it a bit but please bear with me. If I don't pay my Hydro bill, Bell Canada says, "Since you haven't paid your Hydro bill, we'll cut the telephone too."
What's at stake here is the bill that you've received, a user, for one purpose, the purpose is the 407. But if I don't honour that bill, I have a chance to mitigate, I have a chance to explain myself. But when you hit me, I can't even use the 401, because I don't have a permit.
Mr Baird: Let me say at the outset that our discussion on this issue is certainly not a superficial one. We should all be justifiably concerned on these issues in terms of how people are treated by government.
I think it's important to remember three things. One is that my colleague from the Ministry of the Attorney General has laid out the -- it's a pretty significant time period that goes in place. You obviously would get the notice. You have 35 days to review, 30 days in addition to dispute, and then 30 days for the owner to render a decision. So you're talking the better part of 100 days. That's not a shoddy, quick decision.
Mr Cordiano: Just for clarification, during that period of time, could the registrar freeze that registration should it happen to come up for renewal? This is what I'm getting at.
Mr Kagan: Not during the first 90-day period. The owner cannot give notice to the registrar to put a freeze --
Mr Cordiano: So after 90 days.
Mr Kagan: At least, and there's no obligation on the owner to send it on the 91st day.
Mr Baird: If I could just indicate, the registrar's powers to refuse to validate the permit are consistent with the process outlined in the Capital Investment Plan Act, 1993. Just so that I'm clear, I'll read subsections 43(6) and (7) of the text and then pass it around.
"(6) If a toll or fee is not paid within the 30-day period, the corporation may in writing notify the registrar of motor vehicles of the failure to pay and, if the holder pays the toll, fee and interest after the registrar has been notified of the failure to pay, the corporation shall notify the registrar in writing of the payment.
"(7) Upon receipt of a notification of failure to pay under subsection (6), the registrar of motor vehicles shall refuse to validate the permit for the vehicle in respect of which a toll, fee or interest is owed or to issue any permit to the holder for that vehicle until the registrar is notified by the corporation that the holder has paid the toll, fee and interest."
If you'd like to take a few minutes, I'll pass this around. It's certainly consistent with the process. It's been pushed up to 90, 95 days from 30.
It's a justifiable concern. When you talk about computer glitches, I think we've all looked at governments over the last 15 years of all parties and, believe me, it's happened. But it is increased from 30 days to essentially 90, 95 days.
Mr Cordiano: I don't know that that's enough time, to be honest with you, to clarify these matters. They can become awfully complicated, and I think that when it's somebody's livelihood we're talking about, I would not want to tamper with that. I would not want to be the government that does that to somebody's livelihood.
Mr Baird: I think it's obviously like everything the government deals with: It's a balance. If it were perhaps longer than 95 days, you might see an endless number of disputes and everyone would be delaying payment by disputes. There is a balance there. We're going from 30 days to what amounts to upwards of 95 days now. So it is a very delicate balance.
The owner and the registrar of motor vehicles will obviously want to be vigilant, as they would in the absence of this legislation, in anything that they do, whether it's with your parking ticket or what have you, that it operates well in the public interest, and in the owner's case, in the interests of their operation.
Mr Cordiano: I'm just cautioning the government that 95 days in this fast-paced electronic world we live in may not be sufficient time to uncover mistakes that occur, and they do occur regularly, and even more so today than ever before.
Mr Baird: We can uncover them within the first 35 and then there is the extra time.
I'm not disagreeing with you. I think we're going to want to be very vigilant, as we would in the absence of it. It has been increased from 30 to upwards of 90, 95 days, so there's a lot more flexibility built in there than there has been in the past. But I agree with you that we want to watch it exceptionally closely and have both the Minister of Transportation and the owner be very vigilant on it, and we as legislators, because I agree with you; no dispute here.
Mr Pouliot: You see, Mr Parliamentary Assistant, you've mentioned at some length balance, and in the same tone you said if we don't have a time limitation, everyone would. It's not a major sin. Maybe some would, but not everyone would push the envelope, push the limit.
My friend, one more time, I think is right on. This is not an option that closes at the end of the day, nor is it a margin called that is payable at the end of the business day. This is good business. If you go to a casino and you use markers, which is a line of credit, if you wish, all flexibility is exercised so that you don't lose them. It makes no sense to anyone to have a citizen not be like the others.
Sure, it has to be there, but I would wish to see it -- and we still have third reading. Mr Advocate, if it is not fully clear, we still have third reading, and it's a minor amendment. We want the assurance that this is a court of last resort. So we'd like the word "may" here. Don't think we're opposed to the direction, but if you lose your job, if you don't have the truck, the money doesn't roll in. I would imagine this will be used quite sporadically from time to time in extreme cases. But this is quite a hammer.
Many governments have drafted legislation and it looks very good on paper -- and I say this with respect, regardless of stripe -- and then you find out once you hit -- remember the housing thing? The same happened to us -- 51 amendments. I saw a bill that had so many amendments it was thicker than the original bill. Then they went back, because once it hit the street it was not applicable. I don't want to pick up the intellectual press, the Toronto Sun, the local tab down the street here, and have a headline that Harry and Jane Smith have applied for bankruptcy because they owe $150 and they were on holidays and then they came back, the kid took sick -- that's what I mean. I don't think this would happen under this anyway because they would have a chance to talk back and forth and to answer some letters, but to take away the permit is fairly draconian, I think.
Mr Baird: In the spirit in which your comments were made, we'll certainly reflect on what you've had to say. I think increasing it from 30 to 95 does deal with it, but in the spirit of what you've said, we'll take it back and reflect on the issue. The comment has been made that if there's clearly an error that's completely wrong, a computer problem, as the member for Lawrence mentioned, obviously the owner of the highway is going to want to solve it because they're going to be liable for all their costs. So if this trucker had to take a day off to go to dispute resolution, he'd be liable for their reasonable costs as set out in the act. So the owner has a significant interest in dealing with anything expeditiously.
On the property assessment thing, I heard one house that was valued at $130,000 being valued at $13 million. Obviously someone put their finger on the zero key an extra few times. That does happen and generally is dealt with expeditiously.
The one thing I would say as well, though, is that if you drove this thing 24 hours a day, you'd be hard-pressed to rack up more than $1,000 a month. We heard from the Home Builders' Association that if they used it for a round trip the whole length, 160-odd kilometres a day, there and back, a round trip once a day, they'd be hard-pressed to run up more than maybe $1,000 or $2,000, taking a quick guess. The potential for anyone to owe $20,000 in a month is pretty low.
Mr Pouliot: Just on that point alone, yesterday we had the privilege to listen to the Ontario Trucking Association. They are the acknowledged authority -- and why not? It's their mandate -- when it comes to trucking in Ontario. The great majority, percentage-wise, of truckers belong to the association and they've helped successive governments time and time again with their legislation. Their figures -- and Hansard can attest to it -- they've mentioned for a busy operator could be as high as $20,000 per unit, and this was based on --
Mr Cordiano: It was 220 working days.
Mr Pouliot: -- 220 working days. So you accumulate it. It does go quickly. Anyway, it's academic.
Mr Baird: It's their customer that's getting that $20,000 a year. A good company is going to want to deal with any problem expeditiously. But I accept the spirit in which your thoughts are made and we'll take them back and reflect on whether an extension from 30 to 90 days is sufficient.
The Chair: Further questions and comments on this section? Shall this amendment carry? All those in favour? All those opposed? This amendment carries.
Further comments on section 16? Shall section 16, as amended, carry? All those in favour? All those opposed? Section 16, as amended, carries.
There are no amendments proposed for sections 17, 18, 19, 20, 21, 22, 23, 24 or 25. Are there any questions or comments to those sections? Seeing none, shall sections 17 through to and including section 25 carry? All those in favour? Opposed? They carry.
Section 26: We have a proposed government amendment on page 14.
Mr Baird: I move that subsection 26(1) of the bill be amended by adding "subject to any agreement entered into by the owner and the minister for privatization" at the end.
The amendment enables the minister to place limits on the owner's control of the Highway 407 land. It's required to ensure, for example, that the owner cannot use the right-of-way for utility purposes. I know in the hearings yesterday on a number of occasions, I remember the member for Yorkview mentioned the issue of controls on the ownership by the government. It's not just in the contract, but allows the minister to have a little expanded authority in respect to the control of the 407 lands.
Mr Pouliot: We're referring here to controlled access land. What we're saying is that two people, the contractor and the minister for privatization, can agree. I'm not just wondering about a third player, which is MTO policy. Does that not leave some possibility that the MTO policy will be violated.
Mr Baird: Just to address this specific comment, without an amendment of this nature, the owner's rights to control the Highway 407 lands would be the same as the Ministry of Transportation's rights to control the highway lands, and we want the minister for privatization to have the ability, if they choose, to place limits. In the absence of it, it would be the same as the Ministry of Transportation's rights.
Mr Pouliot: You make us quite nervous, because that's your style, that's the way you people operate -- sometimes I wonder if you're the government -- when it suits your purpose, and when it doesn't, then you give power away either to a minister or what you do is establish commissions and then you detach yourself.
I'll give you an example. Somebody says: "I do not close hospitals. I do not close schools." Who's in charge there? I'll tell you what you do: You go and say there's only so much money available, and then you say: "Oh, no, I have nothing to do with that. The municipality should be able to enact a 10% tax break." Where is the supporting documentation? There's no such thing. "It's yours now, so you take care of it."
What I'd really like, and it took since Confederation to establish -- granted, things move quite a bit faster -- I'd like somebody to get up one day and stop saying "educrats" and "bureaucrats." As I said earlier, you can't begin to even cross the street. You are surrounded by a world of experts. They save our bacon daily. This place couldn't function here. It's the same for legislation. They're not numbers in a book or just vague faces in the crowd. I like the ministry, because I know when I was at transportation, whenever in doubt -- ministers are given a lot of leeway; they're the ones who can call bills; or the Premier's office is given a lot of leeway -- anyway, the political system, but then you have process, and the more you take away from process, the less guarantee you have.
I don't mind the global economy, I don't mind the marketplace -- the more the merrier -- but don't take all the referees out of there. Don't strangle them with regulations, but don't leave it to say, "It's going to be better, because of free enterprise it's going to be better." It might well be. It's more expedient in some ways, but the reason we're not so expedient sometimes is that we have many checkmarks in place. You talk about equilibrium, you talk about balance, but almost every bill seems to have a provision in it where it's taken away from the system. Sometimes it's better to do nothing, it's better not to change things. If the only reason you have is, "We can make a deal faster than somebody else," that's not good enough. I'm just cautioning you, and when I see this "entered into by the owner and the minister for privatization," I'm asking simply what happened to MTO policy. Does this give the right to people to violate, to ignore a policy, because two other parties have a say? That's my only question.
Mr Baird: Let me address both your concerns, your larger concern and then your specific concern with this amendment, in terms of the role that the public service plays in the implementation of policy. Our government believes strongly in performance measures with respect to the public service, and I suggest if you look at the ministry business plans and if you evaluate the performance of any ministry in the government, you're probably hard-pressed to find any other ministry that is as advanced as the officials and the staff and the team at the Ministry of Transportation. They are probably one of the best actors in government in terms of meeting performance measures, and that's black and white. You can even quantify it in numbers. I would certainly raise that, because I think it's an important point to address your concern with respect to that issue.
This amendment specifically allows the minister to raise the bar above the minimum standards of the Ministry of Transportation with respect to the right of way, for example, for utility purposes, if the minister wants to exceed that. Otherwise, the Ministry of Transportation regulation applies.
Mr Pouliot: I came to this province to learn English, and you're not helping me. A standard is a standard. A standard is a criterion. You change the standard; you don't improve or deprove. You live by the standard. If you say, with all the confidence at your command, that allows the minister to raise the bar, when that bar starts moving, in my experience, if it allows to raise the bar it allows to lower the bar as well. It's almost like a slip of the tongue, because you have to address these matters meticulously. There's no leeway here. People say, "You have lowered the standards." If you have lowered the standards, it's because you have changed the standards. You cannot lower or have a higher standard. If the standard calls for this, that's what it is. If you change it, it calls for this and this and this. We have an amendment coming up under section 31, the last section of the bill dealing with that, but I have some difficulties once you get MTO out of there, or an invitation to bypass MTO.
They're experts, but in the worst-case scenario, you'll have ABC Co which is loaded by engineers. They get into the minister's office for privatization? Where is your balance there?
Mr Baird: I think the length that the government has gone to, and specifically the minister for privatization has gone to, to spell out in excruciating detail, particularly with respect to safety, the requirements of the potential owner of Highway 407, is considerable. I think the minister has gone the extra mile, and I congratulate him for it, because we've got a strong public policy just in maintaining the safety aspects of the road, and I think it's strongly maintained in the legislation, so we disagree.
The Chair: Further discussion on this amendment? Seeing none, I put the question. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Further discussion on section 26? Shall 26, as amended, carry? All those in favour? All those opposed? Section 26, as amended, carries.
There are no amendments proposed for section 27 or 28. Questions or comments to either of those sections? Seeing none, I put the question. Shall sections 27 and 28 carry? All those in favour? Opposed? Both those sections carry.
Section 29, A government amendment is proposed by Mr Baird. This is found on page 15.
Mr Baird: I move that subsection 29(4) of the bill be amended by adding the following clause:
(a.1) enter any place, other than a dwelling, at any reasonable time, if the official reasonably believes that it is likely to contain records relating to compliance by the owner with ministry safety standards."
This relates to what I just said. The minister wants to ensure that it's able to enforce on a very strict basis the public safety requirements that the ministry is maintaining and wants the ability to enforce that, because safety is exceptionally important in this issue.
Mr Pouliot: I'm not going to ask about "reasonable time." This wording is also found elsewhere in the act, I believe.
The Chair: I'll put the question. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Further discussion to section 29? Shall section 29, as amended, carry? All those in favour? Opposed? Section 29 carries.
Section 30, there are no amendments proposed. Any discussion to this section? Shall section 30 carry? All those in favour? Opposed? Section 30 carries.
Section 31, A government amendment is proposed, found on page 16.
Mr Baird: I move that section 31 of the bill be struck out and the following substituted:
"31(1) Despite section 28, if the Minister of Transportation is of the opinion that the management of all or part of Highway 407 should meet a higher standard than ministry safety standards, the minister may enter into an agreement with the owner whereby the owner agrees to undertake the additional work necessary to meet the higher standard.
"Where no agreement
"(2) Failing an agreement under subsection (1), the Ministry of Transportation may undertake all or part of the work required to meet ministry safety standards and to meet the higher standard and, if it does so, the costs of undertaking the work shall be paid as follows:
"1. To the extent that the work done is necessary to comply with ministry safety standards, the owner shall pay the costs of undertaking the work.
"2. To the extent that the work done is necessary to comply with the higher standards, the ministry shall pay the costs of undertaking the work.
"(3) For the purposes of subsection (2), the costs that the Ministry of Transportation must pay shall include any loss of revenue that is directly related to the work required to meet the higher standard."
Just briefly. This amendment clarifies that only the incremental costs resulting from the imposition of a higher safety standard by the Ministry of Transportation, higher than the ministry's own safety standards, are to be paid for by the ministry. In the event that a higher safety standard than was taken on another highway was deemed advisable and in the public interest, the minister would have the ability to step in and ensure that the public interest was served in that regard.
Mr Pouliot: Again, it's a matter of fundamentals. It's such a departure. You have a case that's bound to happen in time: The ministry says, "In our view, in our opinion, we should change the standards to make them higher." They try to negotiate with the owner. Failing an agreement, they still have the right to make the standards possible, in which case they will pay for them, and also the people will pay for lost business.
I like wording which is a little -- it's not an escape clause, but something which gives the government a little bit of flexibility. We constantly talk about shared onus, dual responsibility. I'm not a lawyer -- suffice that I'm a politician; that's enough -- but people of that most honourable profession, who abound at Queen's Park, will say, "My God, if I'm there to protect the government," it does not jeopardize the thing. What you're saying is it's wide open, this clause. You live with this and keep your fingers crossed that no calamity will take place, and if you want to change, if you want to upgrade it, you pay and you pay for the loss of business.
Failing to negotiate -- the attorneys for the contractor, for the owner, are saying, "Tell them to go and jump in the lake." People are too intelligent. They don't talk that way. They'll say: "We just don't have the funds right now. Let MTO do it." If anything happens there, it's not the contractor that's going to take the hit, I can assure you. It will be the responsibility of the government, and you're not protecting yourself.
The Chair: Further discussion? Seeing none, I put the question. Shall this amendment carry? All those in favour? All those opposed? This amendment carries.
An NDP amendment, Mr Pouliot, found on page 17.
Mr Pouliot: Let me make the point again. This is the same subject matter.
I move that section 31 of the bill be amended by adding the following subsections:
"(3) The Minister of Transportation may require that standards higher than ministry safety standards be met under this section only if doing so is reasonable and necessary in order to ensure public safety.
"(4) If the Minister of Transportation requires that standards higher than ministry safety standards be met under this section, the minister shall publish and make available to the public its reasons for doing so."
If certain conditions are met, it allows the ministry to do exactly what I just read, to move the bar.
Mr Baird: I appreciate the intent with which the member is coming forward with his amendment, and I reflected on this, as I recall seeing it. I'm unclear whether it's something that's necessary in legislation. I appreciate where he's coming from and the spirit in which he's offering his suggestion. As a former Minister of Transportation, I'm sure he's well versed in the whole issue of public liability for the 23,000 kilometres of public highways in Ontario, and certainly the concern at the ministry is probably equally as great as it was when he was the minister, so the policy hasn't changed. We still operate with that.
Obviously, if there's the expenditure of any public funds, it's done completely in the public environment and they're accounted for in the public accounts and in the assembly. From that perspective, they'll have to be justified in that regard. In terms of putting in place a public requirement, it raises issues of public liability, and that policy, I'd suggest, hasn't changed since he left the keys to the limousine at the receptionist's desk.
Mr Pouliot: The limousine, sir, was a five-year-old Chevrolet Caprice.
Mr Baird: Those are the words you used, limousine. Those are your words, not mine.
Mr Pouliot: I should be oblivious to this, but I'm listening to your comments, and I give them full appreciation. The reason why we counter-drafted was that I looked at this, and I found your position and opinion fundamentally different from ours. I've explained this before. So I drafted something that has only one onus.
We don't foresee too many changes to standards, but sometimes, and it happens -- and I have my expert friends at transportation, former colleagues -- in the worst-case scenario, it meets all the standards; granted, that's a given. But 10 people in the past two years have been killed at this intersection. Obviously something needs to be done. So you inquire, you really see if it meets all the standards, that the curve, the banking is perfect.
Your owner has an ability to adjust. He can recuperate the cost. It's the cost of doing business. Why shouldn't it be a dual responsibility, even if you had to go to a third party to arbitrate, to say, "This is the way we see these standards"? Why should the government get none of the benefits and pay all of the costs? Some partnership.
I would prefer that we go to the operator and say, "We're going to do this," or, "This needs to be done." Put the onus on the positive. The operator must find a way to do it, must negotiate with the purpose in mind to find a way to achieve that. Then you establish your mechanism to achieve what needs to be changed, as opposed to saying, "Well, if you don't get an agreement, you pay." Then you pay for lost business. To me it's not that kind of relationship. Maybe if you live in the best marriage with those people, you ask nothing and you get nothing -- the perfect marriage.
I think there's a way if we just twist it around, put it in the positive. We both pay, we both look at it together and we develop a mechanism to make it happen, as opposed to saying, "We're going to pay, and we'll talk to you," and you tell us to go fly a kite and then we'll pay. That's why we say, if you want to load it, it's not going to pass. We're not juveniles here. This is unpalatable, if there's any such terminology.
Our amendment is exactly the opposite of yours. We say: "We set the standard at MTO. Let them pay." But in there, there's a compromise.
Mr Baird: I think there has been a terrific amount of discussion on this issue at MTO with the minister. I know among our caucus colleagues we take road safety issues very seriously.
Mr Pouliot: Everybody says that.
Mr Baird: I think the record of this government is pretty good on road safety. To be non-partisan, we've got all-party support for tough drunk driving legislation. We've made good progress in that area.
I think what the legislation says with respect to safety is that the private operator must live up to the same high standards that MTO has for their roads. On occasion, there may be an issue where it's a good idea to wear a belt and suspenders; it may not be entirely justifiable. I know in my own constituency there is a road built by MTO and we're looking at if we can get it reconfigured. The engineering folks tell us that it's a safe road. Is it as safe as it could be? We sometimes want to go the extra mile more than we're perhaps required to do.
The amendment that we just dealt with seeks to make it an issue that if the ministry feels strongly and wants to step in and impose an even higher standard and wants to raise the bar in a particular area, it has that ability to do so. To be quite genuine, the government appreciates the comments you've made, and the previous amendment tried to raise the bar; that if we want to go in and raise the bar, we'll pay you to do so.
Mr Pouliot: I'll give you another scenario which, again, you must envisage. Standards are good, but now they have to be either improved or whatever. The owner tells you that it's unsafe. "Minister, this part of the highway is unsafe. It doesn't meet the standard." You don't have an agreement here; that's the owner telling you that. He wants the improvement done. In a worst-case scenario, again, he might wish to raise the fees because of the new addition. But he doesn't have the money to do it. You are compelled to do it. You don't even make your own decision. He says, "I have no money to do it, but I know it's unsafe, and I know it should be fixed." In this case, the ministry says: "We're going to pick up the loss of business because of detours. We're going to close one lane or two. Not only that, but I'll pick up the costs, because the owner told me to." It can be farcical.
The good solicitors we have must be given direction, directives by the ministry, how you want to play this, how you want to draft this. It's one-sided. I have some difficulties with that.
Mr Baird: To answer the direct part of your comments, which I don't think are invalid, if there is a part of this road that, once constructed, is revealed to be unsafe and not up to standards and this operator does not want to repair it or doesn't have the money to repair it, we're going to step in, we're going to repair it, we're going to send them the bill, if it's not up to the high standards that MTO sets. That's very clear. I think that's pretty clear in the legislation, just as the government stepped in and wouldn't allow the thing to open until it was up to scratch over the past 24 months.
Mr Pouliot: With due respect, the world abounds with cost overruns, with jobs hanging in the balance and with spin doctors. It's not that simple. I don't see in the legislation any protection at all for the taxpayers. I see a one-way street here. The owners have every right. You don't even stipulate what changes we're talking about.
Mr Baird: They don't have a right to operate an unsafe road, period. That's black and white. They can't operate an unsafe road. If it's not up to standard, they're abrogating their contract.
Mr Pouliot: Every time you change a regulation, that impacts the private sector almost daily. They have to comply. That's the cost of doing business here.
Mr Cordiano: Can I make a point here?
Mr Pouliot: I'll just finish briefly. That's the cost of doing business.
Mr Baird: I agree.
Mr Pouliot: Now you go to these people with cap in hand and you say, "If we change anything, we're going to pay for the loss and for the cost of business." Go to Coca-Cola and tell them about recycling. Go to Pepsi-Cola and tell them about bottling. They're doing it every day federally and provincially. When you passed legislation to have labelling in this country in both official languages, for people in Alberta and other provinces it was an added cost, it costs money. Did the government come in? No. The government passed the legislation. Standards are set all the time. The paper mills have to change with AOX and others because the technology exists to render a system better. What do we do? Do we send millions and billions of dollars to corporate Canada and say, "We're going to do the job for you"? What is the bloody difference, sir?
Mr Baird: As we raise the standards, though, for the limited-access 400 series highways around the province, they have to raise their standards as well. Those standards evolve over time, over the next five years, the next 25 years.
Mr Pouliot: Excuse me. You're no longer there. This is not your highway, the people's highway any more. There's a new owner. You have to sever the cord. You cannot be tied umbilically to those people any more.
Mr Baird: But on safety standards, we are.
The Chair: Excuse me. Mr Cordiano wants to jump in. But I would caution members to direct their comments to the Chair, please.
Mr Cordiano: This raises an interesting point, because once the highway converts to private hands, the auditor we talked about earlier, who had 96 pages of his report dedicated to Highway 407 and the unsafe conditions before it opened, will no longer have access to the same kinds of books, the same financial documents and the same ability to audit once the sale is consummated. The extensions will not be subject to any of those kinds of audits. They'll be scrutinized by the Ministry of Transportation officials to see that they meet those standards, but how is the public going to be reassured that those safety and maintenance standards are being met? There's no provision for that.
Mr Baird: I think the ministry as the regulator in this regard is going to play an ongoing, significant and strong role with respect to safety, not just in terms of the design, not just in terms of the operation but as the ministry raises the bar and as we learn, as we do, from technology and experience. We don't have to pay. What we're saying very clearly in the legislation is that the new owners have to live up to the same high standards to which the ministry operates their limited-access 400 series highways; that if we raise the bar for ourselves, the bar is automatically raised for them and that they have to pay.
Mr Cordiano: But in the 407 case, the bar wasn't even high enough.
Mr Pouliot: On a point of order, Madam Chair: "Failing an agreement under subsection (1)," -- the ministry goes and contacts the owner and says: "We are changing this rule. Will you co-operate?" Failing an agreement, if the owner says, "No agreement," then the ministry "may undertake all or part of the work required to meet ministry safety standards and to meet the higher standard and, if it does so, the costs of undertaking the work shall be paid as follows.... the ministry shall pay," and it will also pay for the cost of business.
When you tell Dow Chemical and other chemical companies that the toxicity level must be dropped, do you send them money to compensate? No, you don't. What I'm saying is, treat them like all other industries. They're independent now. They're the new owner. You set the rules; we do universally. We regulate almost anything. That's the way it should be. You don't have a free-for-all. So why the exception when it comes to the highway? It's because your mindset is that we are still tied to the highway, we are the highway. Well, you are no longer; you just sold the highway. It's no longer your money, because if you do so under every act, every industry where you set standards, and you change standards because the world changes, you don't send one penny in 95% of the cases to anybody making the changes. Am I right?
Mr Baird: You can selectively interpret this: "To the extent that the work done is necessary to comply with ministry safety standards, the owner shall" -- not "may" -- pay the costs of undertaking the work." It even goes further in the paragraph preceding that: "Failing an agreement under subsection (1), the Ministry of Transportation may undertake all or part of the work required to meet ministry safety standards" and bill the owner -- black and white right there.
Mr Cordiano: What about the loss in revenue? I don't understand why "the costs that the Ministry of Transportation must pay shall include any loss of revenue that is directly related to the work required to meet the higher standard."
Mr Baird: If the ministry thought it would be in the public interest to have a higher standard on Highway 407 than they would otherwise compel themselves to undertake, that they would pay. Sometimes it may be argued in the public interest to wear a belt and --
Mr Pouliot: I know we're running out of time, Madam, but --
The Chair: We are out of time. I must interrupt.
The Chair: I think we have had further discussion on this particular amendment. I am going to call the question on this amendment.
Mr Cordiano: Recorded vote.
Mr Baird: This is not the amendment. We already dealt with that amendment.
The Chair: Order. We're dealing with an amendment to section 31. It's the NDP amendment found on page 17. It is 12 of the clock so we're going to go into the standing order rules. The procedure is, if you've called for a recorded vote, that will be done at the end as opposed to while we're going through these votes now.
Mr Baird: Could I suggest just for ease of argument that we vote on this amendment?
The Chair: All right, we'll finish off this one then. Shall this amendment carry?
Baird, Chudleigh, Galt, Hastings.
The Chair: The amendment is lost.
Shall section 31, as amended, carry? All those in favour?
Mr Cordiano: Recorded vote.
The Chair: We'll stack them up and do it at the end.
Shall section 31, as amended, carry? All those in favour? All those opposed? Section 31, as amended, carries.
We have a Liberal amendment on page 18. Shall this amendment carry? All those in favour? All those opposed? This amendment is lost.
A government amendment to section 32: Shall this amendment carry? All those in favour? All those opposed? This amendment carries.
Shall section 32, as amended, carry? All those in favour? All those opposed? Section 32, as amended, carries.
Section 33: No amendments proposed. Shall this section carry? All those in favour? All those opposed? Section 33 carries.
Section 34: Government amendment found on page 20. Shall this amendment carry? All those in favour? All those opposed? This amendment carries.
Shall section 34, as amended, carry? All those in favour? Opposed? It carries.
Section 35: No amendments proposed. Shall this section carry? All those in favour? Opposed? Section 35 carries.
Section 36: One government amendment is proposed. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Shall section 36, as amended, carry? All those in favour? Opposed? Section 36, as amended, carries.
Sections 37, 38, 39, 40, 41, 42, 43 and 44 have no amendments proposed. Shall sections 37 through to and including section 44 carry? All those in favour? Opposed? They carry.
Section 45 has a government amendment. This is found on page 22. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Shall section 45, as amended, carry? All those in favour? Opposed? It carries.
Sections 46, 47, 48 and 49 have no amendments proposed. Shall sections 46 through to 49 carry? All those in favour? Opposed? These sections carry.
Section 50 has a government amendment proposed, found on page 23. Shall this amendment carry? All those in favour? Opposed? This amendment carries.
Shall section 50, as amended, carry? All those in favour? Opposed? Section 50, as amended, carries.
Sections 51, 52, 53, 54 and 55 have no amendments proposed. Shall those sections carry? All those in favour? Opposed? Sections 51 to and including 55 carry.
Section 56: A government amendment is proposed, found on page 24. All those in favour of this amendment? Opposed? The amendment passes.
Shall section 56, as amended, carry? All those in favour? Opposed? Section 56, as amended, carries.
Sections 57, 58 and 59 have no amendments proposed. Shall these three sections carry? All those in favour? Opposed? Sections 57, 58 and 59 carry.
Section 60, the short title of the bill: Shall this carry? All those in favour? Opposed? This carries.
Shall the long title of the bill carry? Carried.
Shall Bill 70, as amended, be reported to the House? Agreed.
Colleagues, that concludes our clause-by-clause work today. We are adjourned and we'll reconvene when the next business is sent our way as the resources development committee. Thank you all for your work this morning.
The committee adjourned at 1203.