Collection Agencies
Amendment Act, 1999, Bill 37, Mr Runciman/ Loi de 1999 modifiant la Loi sur les agences de
recouvrement, projet de loi 37, M. Runciman
First Delaware
Creditors Alliance Ltd; GE Canada
Mr Ian Sellors
Ms Rose Baldinelli
Mr Robert Weese
Mr Michael Davies
Mr Wayne
Redekop
Economic Development
Corp of Fort Erie
Mr Renato Romanin
Mr Douglas
Martin
Ontario Chamber of
Commerce
Mr Douglas Robson
Niagara
College
Mr Dan Patterson
STANDING COMMITTEE ON
GENERAL GOVERNMENT
Chair /
Présidente
Ms Marilyn Mushinski (Scarborough Centre / -Centre
PC)
Vice-Chair / Vice-Présidente
Mrs Julia Munro (York North / -Nord PC)
Mr Toby Barrett (Norfolk PC)
Mrs Marie Bountrogianni (Hamilton Mountain L)
Mr Ted Chudleigh (Halton PC)
Mr Garfield Dunlop (Simcoe North / -Nord PC)
Mr Dave Levac (Brant L)
Mr Rosario Marchese (Trinity-Spadina ND)
Mrs Julia Munro (York North / -Nord PC)
Ms Marilyn Mushinski (Scarborough Centre / -Centre
PC)
Substitutions / Membres remplaçants
Mr Peter Kormos (Niagara Centre / -Centre ND)
Mr Bart Maves (Niagara Falls PC)
Mr John O'Toole (Durham PC)
Also taking part / Autres participants et
participantes
Mr Earle H. Straus, legal counsel,
Ministry of Consumer and Commercial Relations
Clerk / Greffier
Mr Viktor Kaczkowski
Staff / Personnel
Mr Andrew McNaught, research officer,
Research and Information Services
Mr Michael Wood, legislative counsel
The committee met at 1049 in the Sheraton
Fallsview Hotel, Niagara Falls.
COLLECTION AGENCIES AMENDMENT ACT, 1999 / LOI DE
1999 MODIFIANT LA LOI SUR LES AGENCES DE RECOUVREMENT
Consideration of Bill 37, An
Act to amend the Collection Agencies Act / Projet de loi 37,
Loi modifiant la Loi sur les agences de recouvrement.
The Chair (Ms Marilyn
Mushinski): Good morning, ladies and gentlemen. This is
a hearing to consider Bill 37, An Act to amend the Collection
Agencies Act. Do I have a motion to approve the report of the
subcommittee?
Mr Garfield Dunlop
(Simcoe North): So moved.
The Chair:
We will read it into the record.
If you look at clause 8,
"That a background report be prepared by the legislative research
officer by Friday, February 4, 2000, and distributed to all
members of the committee, and that a summary of the oral
presentations be provided to the committee upon the completion of
public hearings," this was added on the assumption that we would
probably be holding one or two days of hearings on this matter.
Given that we have just scheduled today to deal with this, I am
recommending that we drop this component. Is the committee in
agreement with that? OK.
Mr Dunlop, would you read the
entire report of the subcommittee for the record, please.
Mr Dunlop:
"Your subcommittee met on Wednesday, January 19, 2000, to
consider the method of proceeding on Bill 37, An Act to amend the
Collection Agencies Act, and has agreed to recommend:
"(1) That the committee meet
on Wednesday, February 16, 2000, and, if needed, on Thursday,
February 17, 2000. The hearings will take place in Toronto and/or
the Niagara region, with the final decision being based upon the
list of requests to appear. The Chair and the clerk of the
committee are authorized to determine the committee's meeting
dates, time and locations.
"(2) That the committee
invite the Minister of Consumer and Commercial Relations, or his
designate, to make an opening statement to the committee on
Wednesday, February 16, 2000, for 15 minutes. If, and only if,
the minister or designate makes an opening statement, the two
opposition parties will each have 15 minutes to make a
statement.
"(3) That the deadline for
receipt of written submissions be 12 noon on Tuesday, February
15, 2000.
"(4) That a press release be
prepared and distributed providing notice of the public hearings.
Notice of hearings is also to be placed on the parliamentary
channel and the committee's Internet Web page.
"(5) That the deadline for
the receipt of requests for those wishing to make an oral
presentation be Wednesday, February 9, 2000, at 5 pm.
"(6) That time for those
requesting to make oral presentations be allocated on the
following basis: 15 minutes per presentation.
"(7) That the Chair and clerk
of the committee be authorized to schedule witnesses and to make
whatever logistical arrangements that are necessary to facilitate
the committee's proceedings. The Chair and the clerk will
endeavour to accommodate any witnesses that make a late request
to appear.
"(8) That a background report
be prepared by the legislative research officer by Friday,
February 4, 2000, and distributed to all members of the
committee, and that a summary of the oral presentations be
provided to the committee upon the completion of public
hearings."
The Chair:
Can I have a vote from the committee? All in favour? Opposed, if
any? That carries.
FIRST DELAWARE CREDITORS ALLIANCE LTD
GE CANADA
The Chair:
It's not quite 11 o'clock yet and the first public delegations
were scheduled for 11. Is it the wish of the committee, with the
delegates' concurrence, that we proceed a little earlier? OK.
Mr Dave Levac
(Brant): Proceed.
The Chair:
Mr Sellors, are you in agreement with that?
Mr Ian
Sellors: Yes.
The Chair:
Each of you has 15 minutes to make your presentations, including
any questions that committee members may have of the
delegations.
Mr Sellors:
My name is Ian Sellors. I'm appearing before you in my capacity
as president of First Delaware Creditors Alliance. I am
accompanied by Rose Baldinelli, a valued employee of First
Delaware, on my right; Michael Davies QC, vice-president, general counsel
and secretary of GE Canada on my left; and on my extreme right,
Bob Weese, vice-president, government and external relations, GE
Canada.
I have been in the credit
collection industry since 1972. Over the years, I have gained a
global perspective on the industry as I have enjoyed the
privilege of working throughout North America, the United Kingdom
and Australia. I have included a copy of my biography as part of
my presentation. I might add that I am also a two-time past
president of the collection industry association, the Ontario
Society of Collection Agencies.
From a corporate perspective,
First Delaware commenced operation in Fort Erie in 1995. We
operate a centralized call centre supported by modern technology
and are licensed as a collection agency in all provinces and
territories, with the exception of Quebec. In Quebec, we have a
strategic business alliance with a local Montreal company.
When GE Capital acquired our
Buffalo-based sister company, Great Lakes Bureau Inc, in 1997, it
also obtained an option to purchase First Delaware. Great Lakes
Bureau currently provides technical and related corporate
services to First Delaware through a general services
agreement.
First Delaware offers clients
a full range of receivable management services on an
international basis, including contingency collections, outsource
solutions and debt purchase. Our target markets include
governments, banks, credit card, telecommunications and retail
credit companies.
In 1999, First Delaware
revenues totalled approximately $6 million, the majority of which
was generated from United States accounts owned by our sister
company.
We have expanded from an
initial base of 50 and currently employ in excess of 150
personnel. We are targeting further expansion to at least 300
people. Many of the jobs will be created as a result of business
that is presently being collected by our sister company in the
United States. These jobs are incremental positions that do not
exist anywhere in Canada.
The sale of our company has
been delayed because of the foreign ownership prohibitions
contained in the Ontario Collection Agencies Act. Interestingly
enough, many of Ontario's Canadian-owned collection companies are
doing business in the United States. It is also interesting to
note that Ontario is the only province with foreign ownership
prohibition.
The passage of Bill 37 will
reduce red tape, repeal an outdated and unwarranted restriction
to competition, remove an impediment to investment and job
creation, and help to position Ontario to attract other
international call centres. It will also contribute to
harmonizing Ontario legislation with corresponding legislation in
all other provinces and territories.
The Niagara region has
targeted the establishment and growth of call centres as a key
component of their regional growth strategy. Niagara College
currently offers a call centre course. We are in the process of
developing a relationship that will maximize opportunities with
Niagara College, both for students and graduates. We expect that
Niagara College will play a very important role in our future
growth.
Over the past several months,
we have consulted with a variety of members and have received
their support and encouragement. Additionally, we have received
the support of the Ministry of Economic Development and Trade
and, of course, the Ministry of Consumer and Commercial
Relations. We have also met with the largest industry
association, the Ontario Society of Collection Agencies, with the
acronym of OSCA, a group of 45 firms, all but two of which, we
believe, are Canadian-owned. OSCA is not opposed to Bill 37.
At this point, I would like
to introduce you to a long-term employee, Rose Baldinelli, who
will provide you with her insight.
1100
Ms Rose
Baldinelli: Good morning, everyone. Again, my name is
Rose Baldinelli. I am currently an employee at First Delaware
Creditors Alliance. I have been employed since 1995 when our
doors first opened in Fort Erie. I have also grown up in the
Niagara region where I actively participate in many community
events.
My actual education and
expertise is in the field of correctional services. I have worked
in several group homes and have also been a supervisor in an open
custody facility in the Niagara region.
I'm an original employee of
First Delaware for many reasons. I have found a career in the
collection industry to be very challenging. I have been
continuously encouraged to learn new job skills to maximize my
productivity and hence my experiences with First Delaware have
been very rewarding. I have witnessed the growth of a company
that has increased the employment rate in the area, a company
that has provided the skills and training necessary to succeed in
today's workforce and a company that has provided me a salary
that is greatly increased annually.
I'm speaking on behalf of
many of my colleagues, including management, that enabling us to
expand will bring nothing but positive change for individuals at
First Delaware, as well as the community they live in. To have GE
purchase our company would mean expansion, job security and job
opportunities, and they may create opportunity to grow.
As a final thought, I feel
that changing this law will strengthen the economy in the Niagara
region and give an already large company the capacity to create
additional jobs for our area, as well as enhanced job security at
First Delaware. Thank you.
Mr Sellors:
Thank you, Rose. At this point, I'd like to turn it over to Bob
Weese, vice-president, government and external relations, GE
Canada.
Mr Robert
Weese: I thought it might be useful for the committee to
know a little bit more about GE in Canada as part of the
background to this particular issue.
GE Canada is a part of the General Electric Corp,
headquartered in Fairfield, Connecticut. GE has been in Canada
now for almost 110 years, when Thomas Edison, soon after he
founded the US company, came to Canada, found some Canadian
investors and bought the plant in Peterborough, which is our
mother plant and where we still manufacture motors and part of
our power systems equipment.
All the GE businesses are now
in Canada in one way or another. Those businesses include
lighting and appliances-the Camco plant in Hamilton is our
appliance affiliate in Canada-power systems, aircraft engines,
plastics, medical systems, transportation systems-I know I'm
going to miss a few because I'm just doing this from memory-NBC,
the National Broadcasting Co, which is one of the GE businesses,
and of course GE Capital, which now represents almost 50% of the
whole of GE.
All of those businesses are
represented in Canada in one way or another. We have 15 major
manufacturing plants in Canada, half of which I would guess are
in Ontario. We've got 150 sales and service locations across the
country, a total now of about 11,000 employees, 6,200 of whom are
in Ontario, and our revenues last year in Canada were just about
$5 billion.
We're active in the
communities where our offices are located through charitable
contributions and through the efforts of our GE volunteer
society, the Elfun Society. The company encourages its employees
to get involved in community volunteer activities, which we do
through the society of GE volunteers, who do mentoring and other
community projects, often with some company money to support
their efforts.
We've been very successful in
Canada over the last few years. We've been growing at an average
annual rate of about 12%. Both our manufacturing businesses and
the GE Capital businesses have been growing. The two major things
that have characterized our operations in Canada recently have
been the rationalization of our manufacturing plants, so that
instead of producing a full range of products just for the
Canadian market, we're now specializing in all of our
manufacturing facilities in a smaller range of products where we
can be globally competitive. We're getting major new investments
in those plants and exporting most of that product now to North
America or to the world. We've had recent major investments in
our Oakville lighting plant, the Peterborough motors plant, the
Camco plant in Hamilton and other places, and we've also made a
couple of significant acquisitions in Ontario in the last couple
of years.
I mentioned that GE Capital
now represents just about 50% of the whole of GE, and that's the
case in Canada too. Sixteen of the 28 divisions of GE Capital are
now in Canada and have been doing very well here. These various
divisions of GE Capital are niche businesses that provide
alternative sources of financing, often to small and medium-sized
businesses.
We've also been involved in a
couple of fairly high profile operations recently. We were
involved with Eaton's. We became the major financial supporter of
Eaton's as it was going through its difficult period and we
worked closely with them. We are also the major creditor of
Canadian Airlines and have just reached agreement to help
restructure the debt of Canadian Airlines.
I guess the bottom line here
is that our proposed acquisition of First Delaware Creditors
Alliance is very much consistent with the growth of GE Capital in
Canada and with the growth of GE in Canada, and we look forward
to being able to complete that acquisition and to expand that
office in Fort Erie.
Mr Sellors:
Thank you, Bob. I have included a three-page document in my
handouts entitled Myths and Realities, as part of the
presentation that I provided to you. We prepared this document to
answer or clarify any questions which you may have.
In summation, I would like to
take this opportunity to solicit your support of Bill 37, as I
believe it will have a positive impact on jobs, both in the
Niagara region and possibly throughout the province. Thank you
for your interest.
We would be pleased to answer
any questions that you may have.
The Chair:
Thank you, Mr Sellors.
Mr John O'Toole
(Durham): Thank you very much for a very comprehensive
presentation and, I might say, endorsement. What's most
impressive is to have Rose here expressing the view of the real
benefits for real people. I think that's absolutely commendable
that you've taken it. My background information, Mr Sellors, is
that you've also consulted and had wide endorsement with those
partners and across the sector in the collection group. Is that
the case?
Mr Sellors:
Yes. The history of that communication dates back to the fall of
1998. Most recently, in January, there was a vote on this
particular issue presented to the members, the result of which
determined that OSCA would not be opposed to making this change
to the Collection Agencies Act.
Mr Peter Kormos
(Niagara Centre): First of all, let me indicate that
you've been very generous in terms of briefing me. I spoke with
you on a couple of occasions during the course of this. Am I
correct, though, that employees of this type of operation aren't
covered-here again I'm showing my age-by workers'
compensation?
Mr Sellors:
Perhaps I could answer that, Mr Kormos. I understand that service
employees of banks and financial institutions are not covered by
workers' compensation, although the company has extensive
insurance that covers all of our employees.
Mr Kormos:
The reason I ask is because I acknowledge, for instance, that
where I'm from, Welland, Canadian Tire Acceptance is now one of
the biggest-I think it's the second-largest employer in the city.
I get a lot of people coming into my office and one of the big
problems is carpal tunnel syndrome with older employees. When
people are younger than I am, they do OK.
Would you support our efforts to ensure that workers
of financial institutions receive the same workers' compensation
coverage as other workers do?
Mr Sellors:
Bob, do you want to take that?
Mr Weese: I
don't think we would oppose that. Obviously a lot of our
operations are covered. Employees in many of our operations are
covered by workers' compensation. Where that's the case, we cope
fine and have a pretty good record, I'd like to think, in terms
of our health and safety. If the law required us to have our
employees at Fort Erie covered by workers' compensation, I don't
frankly think that would be a huge a problem for us.
Mr Kormos:
Great. So you'll join with me in that effort?
Mr Weese: I
have a few other things to do, Mr Kormos, but we wouldn't
vigorously oppose it.
Mr Kormos:
I'm here for you today, Mr Weese.
Mr Weese:
I'm glad to hear that.
Mr Kormos:
Will you be there for me?
Mr Weese: We
certainly won't oppose it.
Mr Kormos:
Thank you very much.
1110
The Chair:
Any further questions?
Mr Levac:
Thank you for the presentation. I have a few questions, but I'll
try to be very brief and make them easy to answer.
You indicate in your brief
that in terms of the myth, the jobs are low-quality, and the
reality is that the jobs in Fort Erie are not minimum-wage jobs.
They pay at least $10 per hour plus benefits. Can you explain the
benefits?
Mr Sellors:
The benefits that are provided to all our employees include
health, medical, dental and life insurance benefits. Perhaps the
most important thing is that although the jobs do have a minimum
entry level of $10 an hour, we prefer to hire people who don't
want to be at the minimum, because there is a very large and
important incentive component to those jobs. I think Rose can
testify to that. If Rose depended on her salary, she certainly
wouldn't enjoy the lifestyle that she does. It's only through her
good efforts that she takes advantage of the upside opportunities
offered by the incentives.
Mr Levac: I
want to stay on that for a moment in terms of the jobs. It may or
may not be a myth that there is a large turnover in the industry.
Is there a large worker turnover in the industry?
Mr Sellors:
I think there is in the industry. I've been in the industry for a
number of years, and it's always been a challenge for management.
Some management really took an interest in it and others didn't.
When I joined First Delaware, I was delighted to understand what
their training program was. At that time, it was a one-week
classroom and then a one-week incubation period. So we had a
two-week investment in employees before they started to be
productive.
We have a new program that we
hope to roll out as early as next week-I don't want to be held to
that, but certainly by March-where we will extend our one-week
classroom to a two-week classroom and subsequently a two-week
incubation period.
We are very mindful of the
turnover. We're attacking it aggressively, and we want to
increase retention. Our objective is to increase retention.
Looking at statistics as recently as yesterday-at our staff
levels right now-we seem to be losing people at a rate of about
10 a month and we're adding about 40 a month right now. That's on
a staff of roughly 150. I think we have made a real mark in the
training programs we have, not only as a company but I believe
they are superior to most of our industry colleagues. Number two,
the management team is mindful of retention and is working
tirelessly to improve the retention level.
Mr Levac: Is
there a standard practice regulation within the industry, like a
self-regulating body? In number 6, you made a comment on the myth
that US collection agencies employ disreputable practices. I
wouldn't make that assumption, but we have heard stories of some
people having those problems. Is there a standard practice within
or a self-regulating body?
Mr Sellors:
There is not a self-regulating body, Mr Levac. Basically, the
industry is regulated by the Ontario Collection Agency Act as
part of the Ministry of Consumer and Commercial Relations. The
industry association, the Ontario Society of Collection Agencies,
which some of the collection agency corporations are members of,
has certain rules and regulations as well. What drives our
business is compliance with existing regulations and a high level
of integrity. That high level of integrity can only be enhanced
with the involvement and the investment of GE Capital.
Mr Levac: I
hope I'm not dominating. Just a couple of quick ones here. You
indicated in number 5, talking about data banks and private
information being available to the US, that fears of a lack of
privacy protection are groundless. Your argument here makes
sense, except for the statement that it's groundless. We now have
a person who imitated the President of the United States on a
chat line and was finally caught. We also have all of the-
Mr Kormos:
That's what the President said.
Mr Levac:
That's what the President says.
I would voice a bit of
concern about saying that getting private information is
groundless. Would you acknowledge that indeed it is a concern and
that we really should be on the lookout to make sure that private
information is protected?
Mr Sellors:
I have no trepidation in endorsing that. I think it is very
important and a responsibility of management to ensure that
privacy rights are recognized and protected.
With respect to the
President, who knows if it's true?
Mr Levac:
That was confirmed this morning. I just heard it.
Mr
Sellors: Was it? Okay.
Mr Levac:
He was on a chat line and some other guy hacked it and said he
was the President and carried on the conversation.
Mr
Sellors: Did he say, "of the United States"?
Mr Levac: You indicated in number
7 that there are only a very few relatively small American states
that have restrictions on Canadian collection agencies. Would GE
be willing to try to discuss opening those markets with those
states?
Mr
Sellors: Michael, perhaps you could respond to Mr
Levac.
Mr Michael
Davies: Yes. The three states we have been able to
identify as having restrictions-they require a licence or that
applicants be US citizens-are Arizona, Indiana and Nevada. I
don't speak for General Electric Co south of the border-I'm with
GE Canada-but I think it's something they would likely be
prepared to look at. It's not something we have addressed.
Mr Levac:
I want to assure you that I don't have the concept or the myth
that the American markets aren't valid or are not open to us.
It's just that if they have been identified, it would be kind of
nice to know that somebody is working on behalf of the industry
to open it up for our markets as well.
Mr Davies:
We have checked, and we do know that Canadian collection agencies
that are registered in Ontario are also licensed in Buffalo,
Idaho, Connecticut, North Dakota, Maine, Maryland, Louisiana and,
we believe, also California. We're not aware-and I'm not sure if
you are, Ian-of any desire being expressed by members of OSCA to
actually be licensed in those three small states. Whether it is
an issue within the Canadian-
Mr Levac:
It may not even be an issue.
Mr Davies:
It may not be an issue.
Mr Levac:
I appreciate that.
Mr Davies:
Certainly, they are licensed and carrying on business in the
major states and those near the Canadian border.
Mr Levac:
My final question is in regard to the reference to your
co-operation with Niagara College to design courses. Is there any
consideration of the provision of courses and training, or are
you aware of any courses in Ontario?
Mr
Sellors: Niagara College is certainly a target
relationship for us. Hopefully it would be mutually beneficial.
We're in a rather embryonic stage in our discussions. I've only
had one meeting, and it was with Nancy MacDonald last week.
Perhaps that question would
be better addressed to Dan Patterson, who will be speaking
later.
Mr Levac:
Surely. Thank you very much for your time.
Mr Kormos:
This is a 100% acquisition by GE, as was the case with the
so-called Buffalo sister company, right?
Mr
Sellors: Yes.
Mr Kormos:
I have been very critical of the wages being paid in call
centres. Ten dollars an hour for a 40-hour work week comes to
$400 a week. That's somewhere around $20,000-plus a year. It's
hard for us, you see, because the minimum wage of the elected
people here is at least $78,000. Most of us make more than that,
and dare I ask what a vice-president of General Electric makes. I
suspect a vice-president of General Electric makes more than
members of the provincial Parliament, even on an MPP's good day,
even when we had per diems for coming to these committee
meetings.
What capacity is there in
this industry? Clearly, it's a profitable industry or you
wouldn't be getting into it and GE would not be interested in it.
What capacity is there to see wages increase beyond this
beginning wage of $10 an hour? Surely, your workers-and I've been
in these call centres. They're very computerized. They make sure
nobody has idle time. The workers in call centres work darned
hard. Surely there's capacity in that very profitable industry to
pay wages, even starting wages, beyond $10 an hour. I appreciate
it's not minimum wage, but in my view the minimum wage is an
unliveable wage. What does GE have to say about the capacity of
this industry-especially now with GE, a big multinational
company, owning it-increasing wages?
1120
Mr
Sellors: Perhaps I could take that, Bob, and I'd
appreciate you elevating it.
We're really pleased with
the compensation program at our company. You have to remember
that the $10 deals with guaranteed income. All of our employees
have an up-side opportunity in terms of additional income from
their performance-based compensation programs. I'm pleased to
tell the committee today that we have employees who are making in
excess of MPPs' remuneration, and we're proud of that.
Mr Bart Maves
(Niagara Falls): There you go.
Mr Kormos:
How is their performance pay based, how is it determined?
Mr
Sellors: It's based on their productivity. It is
basically based on efficiency and effectiveness.
Mr Kormos:
How many of your employees now in Fort Erie, people working in
the call centre doing the phones, make more than $78,000?
Mr
Sellors: I don't know the specific answer to that, but
there are a number of people who are in that range.
Mr Kormos:
Are these people in management positions?
Mr
Sellors: These people are not in management positions
necessarily; some of them are.
Mr Kormos:
Some of them are.
Mr
Sellors: The majority are in collector positions.
Mr Kormos:
Quite right. You're basing their incomes on the amount of money
they collect, pursuing any number of calls, their handling of
calls. What capacity, though, is there in the industry to
increase the starting wage beyond $10 an hour? That was my first
question.
Mr
Sellors: I can't speak to the industry; I can only speak
to First Delaware Creditors Alliance. However, I think the
industry has an interest in ensuring improved retention of
employees, trying to attract the best employees to a challenging
job. I think individually the owners and operators of companies
within our industry would be wise to ensure that they have fair
compensation programs for their employees. But I can't tell you
specifically what their intentions are.
Mr Kormos: Can GE tell us?
Mr Weese:
The only thing I would add to what Ian said is, like every other
business, his business operates in a market environment. He has
told us that he is interested in attracting good people and
retaining them, and that will require him presumably to pay a
decent wage. At the other end, he competes for business. He
competes for provincial and federal government business, and
others. He doesn't set wages arbitrarily; his operation has to be
competitive. He operates within a market environment, which has
an impact on the kinds of wages he is able to pay and the kinds
of wages he must pay to attract bright people like Rose to come
and work for him.
The Chair:
You have about one minute, Mr Kormos.
Mr Weese:
By the way, Rose may want to say something too about wages in the
industry.
Mr Kormos:
But I've only got one minute.
Mr Weese:
It's not my choice; I wish you had an hour.
Mr Kormos:
Your target markets include governments, banks, credit cards,
telecommunications. What type of work do you anticipate doing for
governments?
Mr
Sellors: There's a variety of government collection
programs on both a federal and provincial level, and now on a
regional level, that are associated with delinquent accounts
receivable recovery. Generally these programs are let out in
requests for proposal and the responses are in the form of
proposals that are evaluated. The winning companies are selected
and they engage their services to the provider.
Mr Kormos:
So the next time I'm delinquent in my property taxes, I'm late
paying them, it could be you, Miss Baldinelli, on the phone.
Mr
Sellors: We didn't want to talk about that. We can do
that off-line, Mr Kormos.
Mr Kormos:
Thank you kindly.
The Chair:
Thank you for addressing the committee this morning.
WAYNE REDEKOP
The Chair:
The next speaker we have on the list is Mayor Wayne Redekop. Good
morning, Mr Mayor.
Mr Kormos:
He is a hero in the region, by the way. He is a veritable hero
because he's fighting the amalgamation. He's struggling and being
very successful in maintaining autonomy for the good people of
Fort Erie.
Mr Wayne
Redekop: Of course, before you slaughter the lamb, you
always prepare it, and I presume that's what Mr Kormos is about
to do.
The Chair:
I am assuming that no member of this great committee will
slaughter anyone this morning.
Mr
Redekop: Perfect.
Mr Kormos:
We may go after each other.
The Chair:
Mayor Redekop, you have 15 minutes.
Mr
Redekop: I appreciate the opportunity to address this
committee this morning. This is a matter of significant interest
in our community in particular, and I'm sure in many other
communities.
I want to encourage you to
approve Bill 37 to amend the Ontario Collection Agencies Act. I
want to tell you why.
Fort Erie has a population
of 28,000 people, but it also has a seasonal population influx of
about 10,000 people, pretty well all of whom are non-residents;
they're Americans.
Fort Erie has a history of
inviting strangers to our town and to our country, literally back
to the time when the French traders came to trade with the
natives. Then the British came, after the Seven Years' War, and
this part of the world became a British territory. We've also
invited the Loyalists and escaping slaves to Fort Erie and to our
country. Since then we've had a significant relationship with our
neighbours to the south. Although the Americans occupied the fort
at Fort Erie in 1814 for several months and then blew it up when
they left, we still invite our American friends back to Canada.
Now annually there is a Friendship Festival which celebrates the
relationship of two great countries and two great communities. As
you all know, the Peace Bridge spans the Niagara River between
Fort Erie and Buffalo, and that's a symbol as well of the
relationship between our two countries.
Over the years, Fort Erie
has had significant foreign investment to provide jobs to the
people who live in our community. Some of the most significant,
and by no means all of the major foreign investment companies,
would include the Mentholatum company; Eurocopter; Urban
Industries; Ronal; Nordic Gaming, which is the company that now
owns the racetrack. Those are just a few. We have had major
Canadian investors in our community over the years. We still do.
Some of the major investors have left-Canadian National railway,
to name one; Bell Canada, to name one more recently.
Fort Erie over the past
several years has aimed to diversify the economic base of our
town to create job opportunities and to expand the local tax
base. We are trying to develop the economy of Fort Erie based on
economic clusters, such as the aerospace industry. We have six
companies which are involved in aerospace manufacturing and
technology; pharmaceuticals; general manufacturing; hospitality
and tourism; and of course gaming.
Bill 37 will help us to
develop a call centre and communications cluster which will
create new service sector jobs in our community, and those jobs
translate into other spending. The people who will assume those
jobs will be residents of Ontario. Some of them live in Fort Erie
now and some will come from other parts of Ontario or Canada.
They have families. They will expend money in our community on
housing, purchases of cars, appliances, other services. They will
need plumbers, teachers, mechanics, nurses and lawyers. There are
spinoffs from this type of investment.
First Delaware has been a
part of our business community since 1995. It is a progressive
company, it's a valued employer and taxpayer in our community. It
provides an excellent working environment. All of its new
employees receive a
professional four-week training program and they also receive
refresher training as they become more seasoned employees.
1130
First Delaware is a good
corporate citizen. It takes an active part in our community. It
has joined the chamber of commerce. It is a corporate partner
making a financial contribution to our economic development
corporation in order to market Fort Erie on a broader and an
international basis. First Delaware is in the call centre that
our economic development corporation is targeting for new
business investment to diversify our local economy. It's one of
the fastest-growing sectors of the economy in Canada.
The potential economic
impact from the collections segment of the call centre will never
be fully realized as long as the prohibition on foreign ownership
is in place. The world has significantly changed since 1974 when
the act was implemented, and Bill 37 will create a fairer
business environment in Ontario's collection industry. Ontario
will have the same ability to attract foreign investment as other
provinces and territories. New investment, especially foreign
investment, in this particular portion of the economy, leads to
the creation of jobs for taxpayers in communities across Ontario
like Fort Erie.
Now, before my colleague
and friend from Welland jumps out of his seat, I make a
distinction between foreign investment in things such as a
service industry, tourism, as opposed to investment in essential
aspects of our economy, things like utilities, transportation,
health services and culture. Those are fundamental aspects of our
life as Canadians. They go to the core of our life as Canadians.
So I draw the distinction, and I think there is a significant
distinction, between call centres, which provide a service that
may or may not be utilized, and essential services.
I encourage you to approve
Bill 37 so that we can foster future investment in the creation
of good-paying, service sector jobs for the residents and
taxpayers of communities across Ontario.
The Chair:
Do you have any questions, Mr Kormos?
Mr Kormos:
How much time do we have?
The Chair:
We have about eight minutes between presenters.
Mr Kormos:
I've got to tell you, Your Worship, I read the Hansards and I
trust other people have as well. They were included in the
briefing material that was very well provided.
I've got to confess I had a
hard time understanding, based on what Mr Clement, Mr Edighoffer
and Mr Renwick said, and my suspicion is that they regarded
collection agencies perhaps as part of the family of financial
institutions, but my other clearer conclusion was that they
wanted to be in a position to ensure that they could regulate the
de facto owners, that if you had outside-the-country owners it
would be hard to regulate.
Clearly, call centres
aren't the issue. The issue around this is because it contravenes
the Collection Agencies Act. The bill's going to pass-just count
the numbers-regardless of what opposition members want to do, and
I don't find this the most offensive sort of intrusion on
Canadian sovereignty by any stretch of the imagination. You might
have heard I'm more concerned about the fact that call centres
that deal with financial matters are exempt from workers'
compensation. So are banks, mind you. I was so happy to hear the
comments of Mr Weese earlier today, and I'll make sure he gets a
copy of my press release announcing our joint venture before I
send it out to the media, or to GE in the States.
I'm also concerned about
the fact that we've lost important jobs here, not that any job is
unimportant, but in terms of 330 jobs at General Motors. Fleet
Manufacturing, as you know, some time ago suffered significant
layoffs. Those were high-wage, value-added production jobs. I'm
not quarrelling with the call centres and service industry, but
do you agree with me-and this is no criticism of the call centre
or collection agencies-that $10-an-hour jobs don't replace the
high-wage jobs that we've seen disappearing here in the Niagara
region?
Mr
Redekop: To bring you up to date with respect to Fleet,
about three months ago they were in a lockout situation. They had
about 420 employees at the time. That dispute was resolved.
They've hired about 100 people since then. They've acquired some
international contracts; they're trying to get some more. We
think there's a great likelihood that their numbers will increase
to perhaps 700 within the next several months.
Mr Kormos:
I hope so.
Mr
Redekop: Of course, we hope so. Losing an employer of
that magnitude-and those are excellent-paying jobs-is
important.
But, you know, when I ran
for election, one of the platforms was that I wanted to be able
to create job opportunities in my community so that if children
who grew up in Fort Erie wanted to stay in Fort Erie, they would
have a choice. I hope my children will pursue their education,
will become well-educated, perhaps professionals, perhaps
tradespeople, and they may end up living who knows where, but if
they want to live in Fort Erie, I hope they'll have the
opportunity.
Not everyone will be a
university graduate; not everyone will be a tradesperson; not
everyone will have the ability or the opportunity. So a $10- or
$12-an-hour job at least provides employment for some people who
have the ability to fill those jobs.
I agree with you. I heard
your comment about the minimum wage. I don't know how people can
possibly live on a minimum wage. One person alone can barely live
on a minimum wage. You can't possibly raise a family on the
minimum wage. These obviously aren't the jobs at the high end of
the scale, but we have to have a spectrum of job opportunities
for all people. So for perhaps a second wage earner, a single
person, a young person who's starting out and trying to get into
the employment market-or, as the speakers before said, there are
opportunities within this type of business to pursue greater
positions with greater pay. I'm not sure how much MPPs earn, but
I'm sure it's not insignificant.
I'm trying to look at this
issue with a broad perspective, trying to address the issues that
are significant to Fort
Erie, which has a history of gaming which other communities don't
recognize or appreciate but also has a significant relationship
with American individuals and foreign investment.
Mr Kormos:
My final question: The survey that was sponsored by Fort Erie
showed what percentage of Niagara residents said, "Hell no," to
Mike Harris's plans to impose megacity on the region?
Mr
Redekop: Two thirds, and in Fort Erie it was almost 80%.
At a meeting last night with respect to governance, there were
about 800 people from Fort Erie.
Interjection.
Mr Kormos:
Of course it was irrelevant to this issue, but very relevant to
the people of Niagara.
The Chair:
Mr Kormos, I've allowed you a little bit of latitude by having a
second question, but no more.
Mr Kormos:
And I appreciate it.
Mr Maves:
Thank you, Mayor Redekop, for coming today and supporting this
bill. We have a letter here from Minister Hudak, who's in cabinet
today, and he has been very supportive all along of this
direction and of this bill. I know you've worked together on
that.
You talked at length about
our association here in Niagara with Americans, whether it be an
American company's jobs in Canada or American tourists coming
here to go to the track or to Niagara Falls. I think the problem
Mr Kormos has actually goes back to what the previous presenter
said-and it was an excellent presentation-that we act in a market
environment. You see, Mr Kormos would prefer that we didn't act
in a market environment; he'd prefer we were in 1970s Russia. In
fact, his government tried to make us into 1970s Russia, between
1990 and 1995. But as far as I know this isn't 1970 and we're not
in Russia, and thank goodness for that, because during his term
in office we went from about 15% unemployment in 1993, under your
government-
Mr Kormos:
That's not a clever comment; it's a stupid comment, Bart.
Mr Maves:
-to under 7% right now in the Niagara region. A large reason for
that is an improvement in the business climate.
Yesterday Mr Kwinter from
the Liberal Party, on another matter, talked about the importance
of trade in Ontario. He said that any impediment to trade should
be eliminated. That's a far cry from what the Liberal position
was many years ago, both federally and provincially, when they
opposed free trade, although now that they're in office
federally, I note that they've enhanced free trade.
Mrs Marie
Bountrogianni (Hamilton Mountain): Mr Chair, what's this
got to do with what we're talking about?
1140
The Chair:
Mr Maves, could you get to the question, please?
Mr Kormos:
Bart, don't snatch victory from the jaws of defeat. So far you
were doing good.
Mr Maves:
What I'll say to Mr Redekop-
Mr Kormos:
So far you were doing good and I was on time. Now don't screw up
again.
The Chair:
Mr Kormos, that's enough. Mr Maves, could you get to the
question, please. We're rapidly running out of time.
Mr Maves:
Right. This is, in effect, another removal of an impediment to
trade. I suppose that is part of the reason why I think the
Liberals are supporting the bill and you and several others would
support the bill. Would you concur with that at all? I know you
may have different opinions on free trade agreements and so on,
but this has definitely been an impediment to the free flow of
trade in goods and services. It's a removal of that impediment;
would you agree, and support that for that reason?
Mr
Redekop: It certainly is the removal of an impediment
with respect to a small segment of the economy. By the way, in
1970 it wouldn't have been Russia; it would have been the Soviet
Union.
Mr Maves:
The Soviet Union. That's correct.
Mr
Redekop: I've already indicated that I don't agree that
you eliminate every impediment to trade. I've indicated that I
have concerns about foreign investment in essential services. I
don't consider collection agencies or call centres to necessarily
be a threat to our sovereignty or certainly an essential
service.
So I agree with your
comment to that extent. I didn't actually follow everything that
you said, and I'm sure that it wasn't necessary for me to do
that. You've heard my comments.
Mr Maves:
Okay. We appreciate your support. I don't want to live in 1970s
Russia or the Soviet Union, by any of the names.
The Chair:
Mr Levac. We're a little over time.
Mr Kormos:
That's stupid, Bart. That sort of red-baiting went out 15 years
ago.
Interjections.
The Chair:
Mr Kormos, if you wish to-members of committee, if you wish to
discuss this, would you discuss it outside, please.
Mr Levac:
Mr Mayor, just a question of clarification: Are you here
representing, by resolution, the entire council, or are you here
as mayor?
Mr
Redekop: I'm here as the mayor. There hasn't been a
resolution with respect to this issue.
Mr Levac:
Is there intention?
Mr
Redekop: My comments are completely consistent with the
economic development initiatives that our community has embarked
upon. We're looking very much towards the expansion of this
particular sector so that it can participate with the other
economic growth sectors.
Mr Levac:
I appreciate that, and I also appreciate that you are here on
that behalf. It's just more of a clarification. Something I've
learned lately is that resolution is important so that everyone
has an opportunity to say, "This is the elected body," and
therefore you're speaking on behalf of the entire community. I
will take it as such. Thank you very much, and I appreciate your
presentation.
The Chair:
Thank you, Mayor Redekop.
ECONOMIC DEVELOPMENT CORP OF FORT ERIE
The Chair:
I hope I'm going to pronounce this correctly. Renato Romanin. Did
I say that correctly?
Mr Renato
Romanin: Good job. Yes.
The Chair:
Good morning. You have 15 minutes.
Mr
Romanin: It certainly won't take that long.
Good morning. My name is
Renato Romanin. I'm the general manager of the Economic
Development Corp of Fort Erie. The EDC is mandated by the
municipal council to lead the town's economic growth, progress
and diversification. Directed by a board of directors drawn
primarily from the private sector, its core objective is
fostering growth in economic sectors that generate the most
potential for jobs, employment spin-offs, new and expanded tax
assessment and overall wealth generation.
I am here today to
encourage you to support Bill 37, which amends the Ontario
Collection Agencies Act.
The EDC facilitated the
establishment of First Delaware Creditors Alliance's Canadian
operation in 1995. This past year we provided further assistance
to relocate them into expanded premises in Fort Erie. The company
is a member of the Greater Fort Erie Chamber of Commerce and is a
corporate partner of our corporation.
First Delaware operates a
call centre, very successfully I understand. One of the economic
sectors that we target for new investment is the call centre
industry. We see huge potential for diversifying our local
economy with new service sector jobs. This focus parallels the
regional strategy. Bill 37 will remove a potentially significant
impediment to our collective success of attracting new investment
in the collections segment of the call centre industry in the
future. Bill 37 will facilitate the creation of new, stable,
full-time and part-time service sector jobs for residents, young
and old, from not only Fort Erie, but also in Niagara and
possibly throughout Ontario. Bill 37 will facilitate future
increased investment in advanced telecommunications, computer
technology and employees. They will undoubtedly purchase goods
and services from our local business community.
Viewed from a Canadian
perspective, Bill 37 will put Ontario on an equal footing with
other provinces and territories to compete for new investment
from the collections industry that leads to increased employment
opportunities and wealth creation for all Ontario's
communities.
In closing, I wish to thank
you for the opportunity to make this brief presentation. I also
encourage you to support Bill 37 because it will stimulate
positive economic benefits for Ontario communities like Fort
Erie.
Thank you very much. I
would be pleased to answer any questions.
The Chair:
Thank you, Mr Romanin.
Mr Levac:
Maybe just a generic question regarding a question I asked
earlier of the industry. Do you see a value in having a
self-regulating or a minimum-standard practice outside of the
Ontario regulations within the industry itself to ensure that the
working people of that particular industry are cared for?
Mr
Romanin: Are you speaking of the collection
agencies?
Mr Levac:
Correct.
Mr
Romanin: I think that's a prudent move, and I would
concur with the comments made by the company representatives here
today. That would be a wise thing to do.
Mr Levac:
Finally, in terms of your own particular department, this
presentation you're making now is basically saying: "Yes, I'm in
support of the bill." It's not necessarily for one particular
member in the industry. It's the idea that you just simply want
the regulation so that anyone can have the opportunity to make a
presentation in your particular area.
Mr
Romanin: That's correct. Because that's the provision in
other provinces. We feel that Ontario should have a similar
provision.
Mr Levac:
Do you have a sense that, because of the regulation, you have not
been able to secure any of this industry at all, because the
other provinces have it, and you have evidence that you would
have had it, had this regulation not been in place?
Mr
Romanin: I don't have any specific evidence. I haven't
polled my colleagues across the province who may have encountered
situations like that. Perhaps we could do that.
Mr Levac:
So in terms of the argument that this regulation has stopped that
type of development, is it fair to say that might be somewhat of
an exaggerated stance, versus that we just simply want to open
the door for that opportunity?
Mr
Romanin: I think there were some opportunities that did
bypass us because of the provision in the current act, but I
think that by changing certain provisions in the act, it will
open the doors and it will make us more welcoming to new foreign
investment.
Mr Kormos:
I've got to tell you why we're here, and I'm doing this without
even any press in the room. This bill was introduced on December
16, 1999. The Charter of Rights, the Constitution says every
Legislature has to meet at least once a year. In 1999, the
Legislature met for-how many?-30 days through all of 1999.
Interjection.
Mr Kormos:
There was an election intervening, fair enough. I understand that
the lobby for this bill started in April of last year, when this
deal started getting put together. That's what the member for
Erie-Lincoln says. The minister, Mr Runciman, approaches me and
says: "Pete, here's the situation. Mr Weese and his colleagues
visited with me."
I said: "I can't get overly
excited about this." Do you know what I mean?
Mr
Romanin: You personally?
Mr Kormos: Yes. This isn't the
sort of thing, as has been discussed, a bank or a financial
institution. This is a collection agency. I don't dislike
collection agencies. Insurance companies I don't like at all;
collection agencies I'm indifferent about. It all depends which
side I'm on.
We had second reading
debate on December 22, where everybody agreed to debate it for a
mere 20 minutes, I believe. Jim Bradley spoke for the Liberals. I
spoke. It was close to Christmas. I had been bugging Mr Runciman,
the Minister of Consumer and Commercial Relations, early on,
saying: "Get that bill brought on or else you ain't going to see
it by Christmas." I had several conversations with Bob Runciman,
saying, "Get the bill on, or else we're not going to see it by
Christmas." This bill wasn't a big stickler for me. I mean, here
we are. Everybody's come here today saying basically the same
things you are. Right? There's been no opposition. Had there been
opposition to it, it would have been piqued my interest.
1150
We're here because this was
a bargaining chip at the end of the session in December. The
government gave two days on committee on this because it wanted
to run other bills through and because it had waited too long to
introduce this bill. That's the only reason we're here. The bill
is going to pass in committee. There aren't going to be any
amendments to it. It's going to have support on third reading.
There's no opposition to it. There's no criticism of the bill.
We're here because, notwithstanding my urging to Bob
Runciman-because I had spoken with Mr Weese and other players
dealing with the transaction, saying: "It's not going to be
something that's going to get my fur standing up on end." And
here we are today. I just wanted you to know that.
My apologies to all of you,
but it was a bargaining chip by the government. They gave two
days of committee hearings on this in exchange for getting
some-because that's what happens at the end of the year,
Christmastime. The House is sitting until midnight. There's a
scramble to get things done. Ministers are crawling all over each
other, trying to get their bill priority. They're competing like
all get out. Mr Runciman, whom I respect and admire, because I've
known him for 12 or 13 years now at least and have had a good
working relationship with him, obviously had problems getting the
bill through.
I was embarrassed. You see,
I'm in opposition. You know that, don't you? And I'm going over
saying: "Bob Runciman, get the bill on, for Pete's sake. It's not
going to clear by Christmas." These guys from GE are leaning on
me, saying, "Co-operate." I'm saying, "Fine, I'll co-operate." I
checked out my constituency. I talked to COMER, the Committee on
Monetary and Economic Reform, because this would be the sort of
thing they would be interested in if it were of concern. For
them, again-it wasn't like a bank. It wasn't the sort of thing
that Mr Redekop, the mayor, talked about that should attract our
interest. So here we are, as I say, without even any press.
That's a disappointment for some of us. It prevents my exchange
with Mr Maves from ever being exposed to the public.
Mr Maves:
Hansard.
Mr Kormos:
Bart, people don't read Hansard. If you distribute that Hansard
in my riding, my popularity will go up another 5%.
Mr Maves:
You're probably right.
Mr Kormos:
So here we are. That's why we're here. Thank you very much for
coming. It's good to see you again. Good submission.
We're going to have
clause-by-clause shortly, are we, Chair?
The Chair:
We'll entertain that, but-
Mr Kormos:
If there are other folks, have the other folks make their
contribution.
Mr
O'Toole: Thank you, Mr Romanin. Mr Dunlop would like to
make a comment as well.
Just out of respect for the
people who have attended today, as well as the members from all
sides, I think it's important for our common economy to work in
co-operation. I commend you, your mayor and the economic
development people for working with First Delaware and GE Capital
to make this happen, because it is about real people and their
lives. This small impediment, however trivial that might be-it is
important to remove those barriers for real people.
It may sound overly
sincere, but I believe genuinely that Mr Hudak and all of the
people involved-Mr Sellors-all played a very important role in
creating an opportunity for perhaps 300 people. That's a real
success story. Each member here should take credit for that. I
thank you for taking the time out of your busy day. Out of
respect, I think that's why we're here as well.
Mr Dunlop may want to say
something.
Mr Dunlop:
I just had a quick question. What is the unemployment rate in the
Fort Erie region?
Mr
Romanin: We don't have specific statistics for
unemployment because they're gathered on a regional basis for the
St Catharines-Niagara CMA. We think it's around 8%. It's usually
a point or two higher than the rest of the region, and the region
sits around 6% or 7% now, so a couple of points higher than
that.
Mr Dunlop:
The province is around 5.6%, so it's quite a bit higher than the
province, then, in this area?
Mr
Romanin: It's a bit higher than the provincial
average.
The Chair:
Thank you very much, Mr Romanin, for being here this morning.
DOUGLAS MARTIN
The Chair:
The next speaker is Mr Douglas Martin, regional councillor.
Mr Douglas
Martin: It's my pleasure to be here. I'm actually here
on behalf of myself as the regional councillor for the
municipality of the town of Fort Erie. I'm also here on behalf of
Debbie Zimmerman, the chair of regional Niagara, who wasn't able
to attend this meeting.
I believe, in opening up, that Mayor Redekop
indicated the history of the town of Fort Erie and the foreign
investment in the town of Fort Erie. Being in a border community,
we're not as fearful, shall we say, of foreign investment as
maybe other areas of the province would be in that we have dealt
with and lived with foreign investment. Geography has dictated
that we are so close to the United States especially that I think
we have a clear understanding as to maintaining our own identity
and are not as fearful of losing it as maybe some other areas of
the province.
I'm here to speak on behalf
of the Niagara region, with the support of NETCorp, the Niagara
Economic and Tourism Corp, at the regional level, in support of
Bill 37, An Act to amend the Collection Agencies Act. I've
provided a brief for the members and I'll briefly go through it,
if I may.
In the Niagara region, we
see this as essentially being more jobs for the Niagara region.
The acquisition of Great Lakes Receivable Management Corp by GE
Capital will result in additional jobs in Fort Erie. It is my
understanding that Great Lakes started their operation in Fort
Erie with 50 employees and now they have 150 and target to
achieve a workforce of 300, with the potential for significant
further growth.
Niagara supports the view
that creating a level playing field in Ontario for the collection
agency industry will result in the creation of a significant
number of new jobs, as the industry continues to expand right
across the region itself.
The call centre industry is
important to the Niagara region in that the call centre industry
is one of Canada's fastest-growing industry sectors, with a
compound annual growth rate of 15%. The current value of the call
centre technology market is estimated at about $1 billion. As of
1997, it was estimated that there were 40,000 call centre
operators in Canada, employing about 175,000 people.
Ontario has the largest
concentration of call centres in Canada, generating the most
revenue and employing the most people. There are more than 3,300
call centres with 10 or more agents. The industry employs
approximately 20,000 people, and the growth of call centres is
expected to greatly outpace even Ontario's estimated annual
growth rate of 3.6%.
The call centres are an
investment opportunity for the Niagara region. The Niagara
Economic and Tourism Corp, as part of its investment marketing
strategy, has targeted the call centre industry as a sector for
significant growth. Let me tell you why.
Sixty-five per cent of
Canada's call centre operations are located in Ontario. Niagara
is a key contributor to Ontario's dominance in this industry
sector.
Ontario is home to Canada's
largest telephone companies. A co-operative venture between the
government of Ontario and Bell Canada established the Call
Ontario Team to initiate and support call centre attraction to
the province.
Niagara is integrated into
one of the most sophisticated, fully digital telephone
communications structures in North America, with the capacity to
support major future call centre developments.
The Call Ontario KPMG/Boyd
study ranked Welland-Niagara as the municipality with the lowest
call centre operating costs for cities with a population of less
than 750,000.
Niagara's educational
institutions have led Ontario communities in providing
educational and training programs to assist call centre companies
in meeting their human resources requirements.
Our strategy, then,
includes expanding marketing efforts to attract national and
international call centres and their supplier companies to the
Niagara region and to strengthen the alliances between
educational industries and call centre employers to ensure an
ongoing supply of trained workers to support the growth rate in
this industry sector.
The importance of foreign
investment in Canada: Foreign investment is important to Canada,
to Ontario and to the Niagara region. It's my understanding that
Ontario is the only province in Canada with restrictions on
foreign ownership of the collection agencies.
International investment
creates jobs. Today it is estimated that international investment
in Canada accounts for more than one out of every 10 jobs. In the
future, it will become even more important as critical links are
established between Canada and the growing world economy.
1200
Foreign direct investment
in Canada in the third quarter of 1999 reached a record level of
$12.6 billion, largely due to the acquisition of Canadian firms
and other investments by US investors. It is essential,
therefore, to create and sustain a climate in Ontario that is
conducive to foreign investment.
As part of our investment
marketing strategy, the Niagara Economic and Tourism Corp has
targeted the international marketplace, and the United States in
particular, as a primary source for new investment. Restricting
foreign ownership in Ontario-based collection agencies sends the
wrong message to the investment community. Over the long run, it
would also result in the loss of investment opportunity and
adversely affect our ability to create much-needed jobs in the
Niagara region.
In my view, amending the
Collection Agencies Act to remove limits on foreign ownership in
Ontario collection agencies will not only bring provincial
legislation in line with the rest of Canada but, more
importantly, will create a stimulus for new investment and
economic growth in the Niagara region.
Thank you very much.
The Chair:
Thank you, Mr Martin. Questions, Mr Kormos?
Mr Kormos:
Fort Erie, population of-
Mr Martin:
Twenty-eight thousand. That's the census population. As the mayor
indicated, our full population is around 40,000.
Mr Kormos:
So one of the region's smaller com-munities, right?
Mr Martin: Yes.
Mr Kormos:
A long history in its own right. The mayor talked about the
unique qualities of Fort Erie, with its historical role being on
the border. That was a fair comment, wasn't it?
Mr Martin:
Yes.
Mr Kormos:
And a little bit higher unemployment than the rest of the
region.
Mr Martin:
We're basically in line, I think, now. We're up and down, because
at one time I think we were mostly regulated on large industries,
especially the fleet, the Horton CBIs. Now we're looking to
expand our employment base to include this type of
opportunity.
Mr Kormos:
The fleet was a little bit cyclical from time to time.
Mr Martin:
Yes.
Mr Kormos:
But one of the lowest property tax rates in all of the
region.
Mr Martin:
We tend to think so, yes. We're about second or third in
line.
Mr Kormos:
So here's a little, small Ontario town-think about that,
Chair-with a unique history. I have some family in Fort Erie.
Boy, people identify. They're Fort Erieans. So their people are
community-proud, they stick with each other, they've got an
incredible arena and city hall for a small town-you should see
it, Chair-built between 1990 and 1995, when the provincial
government was sharing those sorts of capital costs,
notwithstanding the difficult economic times of the recession.
And among the lowest tax rates in all of the region. By God, I
hope Fort Erie is there not just this year but for our grandkids
and great-grandkids to enjoy as well. Thank you very much, Mr
Martin.
Mr Martin:
Just in clarification, we like to think of ourselves as the
fourth-largest municipality in the region.
Mr Maves:
Thank you very much for your presentation. Actually, on that
line, we had a presentation yesterday in the committee about
industrial tax rates. It showed that Niagara region tax rates
were all around 9%. I know that a lot of people in the industrial
community-the General Motors, the Hayes-Danas and TRWs-for about
two years now have worked with the Chamber of Commerce and some
of the municipalities to get a recognition of that problem, the
problem that it poses for current businesses. Can you talk about
some of the steps the region has been taking to address that?
Mr Martin:
If you're referring to the tax ratio inequities that we have in
the region, the region has, over the last two budgets, utilized
an initiative that we've taken the assessment growth within the
region and we've utilized a portion of that of the residential to
lower the industrial tax base. We're helping to reduce the burden
on the heavy industries, the large industries especially, to
attract more of that type of industry to Niagara, and not only
that but to maintain the industry that we have in Niagara. By
reducing that, we're demonstrating to them that we are willing to
work and wanting to work with them to maintain the employment
base that we have here.
Mr Maves:
One of the benefits of having the province on the same assessment
system was that it allowed people to actually compare tax rates
for the first time and really compare apples to apples.
Mr Martin:
That's correct.
Mr Maves:
The region has rightly, I would think, recognized that we have a
problem with industrial tax rates, and they are actually matching
a provincial cut. Since we took over, industrial property tax
rates from the school boards, which used to set them-we're
actually reducing the rates by 33% for industries in Niagara as
we lower that portion of the industrial tax rate which the
province now controls. In fact, the program that the region is
availing themselves of is actually matching our reductions and
therefore speeding it up. So that reduction will take place now
in how many years? Is that at eight?
Mr Martin:
We're looking at five years.
Mr Maves:
Excellent. Thank you very much.
Mr Levac:
Welcome, Mr Martin, and thank you for your presentation. I would
ask the same questions I asked the mayor. Did you come here by
resolution or representing the region?
Mr Martin:
We didn't come by resolution. We're coming in support of this
bill because, I guess, as the region representatives we feel that
this is a significant investment into the municipality,
especially in Fort Erie, and we'd definitely be supporting it. We
haven't, in effect, passed it as a resolution at a regional
council meeting though.
Mr Levac:
But it's fair to say that you represent the region as the voice
of the citizens.
Mr Martin:
Certainly.
Mr Levac:
The first presentation, brought to us by First Delaware,
indicated a sound strategy of discussing with education, trying
to help the educational institutions. In one of your bullets it
is said that one of your strategies is to strengthen the
alliances. Have you had an opportunity to meet with either of the
proponents-you mentioned Niagara or Brock or whatever. Have you
had an opportunity to kind of facilitate meetings?
Mr Martin:
Not on this specific subject, but Mr Patterson will be speaking
later in the program and I think he will identify the initiatives
that Niagara College has been working with to try and identify
the types of jobs that are available within the Niagara region
and to provide the opportunities for students in Niagara to avail
themselves of those opportunities to remain in Niagara. Mayor
Redekop indicated that we want to make it available for our
children to stay in this area. I think those are the initiatives
we're looking for and I think Niagara College is well in advance
of trying to promote those types of programs to allow those
people to stay here.
Mr Levac:
I guess maybe I'll go a little further and try to put words in
your mouth: The region would facilitate that. They would be a
partner in that.
Mr Martin:
Absolutely. We have partnered with Niagara College on many
ventures. We're looking at the police services, that we are
venturing to-the range, the training technology for our Niagara
regional police at Niagara College. We'll continue to do so and
work with Niagara College in every way possible.
The Chair:
Any further questions of Mr Martin? Thank you very much, Mr
Martin.
ONTARIO CHAMBER OF COMMERCE
The Chair:
The next speaker is Mr Robson, president and chief operating
officer of the Ontario Chamber of Commerce. Good afternoon, Mr
Robson.
Mr Douglas
Robson: Chair, honourable members, thank you very much
for allowing me to make this presentation today. I've talked to a
number of you in other committees in the last couple of weeks, so
if some of what I have to say is repetitive I apologize.
For those of you who aren't
familiar with the Ontario Chamber of Commerce, it's a federation
of 160 local chambers of commerce and boards of trade. We have
over 500 direct corporate members and we represent all types of
businesses in all sectors of the economy throughout this
province. Through our federation, we currently represent over
55,000 businesses totally in the province. We have been the voice
of business since 1911.
We believe that the overall
fiscal and economic goal of the provincial government should be
to make Ontario's economy the leading economy, the most
competitive economy. To achieve this goal, we feel the government
must focus on three critical areas: creating a competitive fiscal
and economic climate; maintaining excellence in education; and
investing and maintaining Ontario's infrastructure.
The Ontario chamber
supports Bill 37 because it helps create a more competitive
economic climate in Ontario and it opens up the possibility of
creating new jobs in this region. Ontario is the only province or
territory that prohibits foreign ownership of collection
agencies. The bill removes this requirement but it still requires
that a collection agency be incorporated in Canada. We believe
this is a sufficient condition to deal with any problems that may
arise.
The Ontario legislative
restriction goes back to 1974, a time when many artificial
restrictions were in place to protect Canadian businesses. We
feel times have changed. This restriction is clearly outmoded and
inconsistent with the current business climate and, we believe,
with the outlook of the current provincial government. The
Ontario chamber believes that this legislation is another example
of the government's drive to eliminate red tape and to allow
business to grow and prosper in Ontario and to create jobs in
Ontario.
1210
We at the chamber support
the work of the Red Tape Commission. We believe the commission
should be continued. We believe the government should make the
commission permanent and should mandate it to conduct a biannual
review of regulations to ensure they are still relevant and not a
burden on business. This bill is an example of the type of work
that could be the responsibility of a permanent Red Tape
Commission.
The amendment proposed in
this legislation should help create more jobs in this industry
and in this part of the province. A competitive fiscal and
economic climate combined with Ontario's highly skilled labour
force makes Ontario a natural location for businesses.
It is our understanding
that if this bill is passed, there could be a major expansion of
the industry, with more than 250 jobs being created. These jobs
are not being created because of some government temporary
make-work project. The government is not being asked to give
taxpayers' money to businesses to support the new jobs. These
jobs are being created by simply removing an anachronism to the
current economic climate. As I said, these jobs are not costing
the taxpayers of Ontario. In fact, the more jobs created, the
more taxes get paid to all levels of government and the more
money gets spent in the local economy.
Keeping jobs in Ontario is
the responsibility of all of us. It is the government's
responsibility to continue to create a competitive fiscal and
economic climate. This government has done a great deal to
improve the fiscal and economic climate in Ontario, but we feel
it can always do more.
I mentioned that it is the
responsibility of all of us to keep and grow jobs in Ontario. Our
responsibility is to suggest public policy that will continue job
creation in Ontario and to provide the occasional nudge, when
warranted, to ensure that the government continues to improve the
business climate here.
I would like to conclude by
reiterating that we support the changes proposed in this
legislation. We believe these types of changes will help make our
province one of the most competitive economies in North
America.
Thank you again for
allowing me the opportunity to make this presentation.
The Chair:
Questions for Mr Robson? Mr Levac.
Mr Levac:
Thank you very much for the presentation. I just have a question
of the Ontario Chamber of Commerce. Specific to this particular
bill, are there any downfalls? When you analyze it, are there any
areas which you believe (a) haven't gone far enough, or (b) have
gone too far?
Mr Robson:
No, we don't see any pitfalls. Our general point is that we
should be open for business. We're an economy that has always
depended on outside financing, and partly outside ownerships, to
get larger projects going. We, in turn, are traders. We see
ourselves as traders. So, in our view, we can't be putting up
barriers to investment.
Mr Levac:
That being said, I'm not sure if you were able to be here for
some of the comments earlier, but in our first presentation three
states were identified as having trade barriers with regard to
this issue. Would you be willing to point those out in the other
direction, in terms of our making those changes, maybe seeking
that opportunity for those three states to be penetrated by the
Ontario market?
Mr Robson:
We do that sort of thing when we meet with our American friends.
We're part of the American Chamber of Commerce Executives, and when we get
into it there, we point out these inequities.
Mr Levac:
So you are consistently looking for those inequities?
Mr Robson:
Yes. A quick example that's going to hit us all in the face is
section 110, which was a concern two years ago and is probably
going to come back and haunt us all again in the near future.
That's a cross-border problem for all the chambers.
Mr Levac:
I appreciate that. Throughout the morning I have heard a couple
of words used, and maybe I'll just let you give me your take on
this. I have some reservation when I start to hear "harmonize"
and "level playing field," not in the context of this bill in
particular, because I have the propensity to say that the bill
makes sense right now, but the overall philosophy of
"harmonization" and "level playing field." A bit of a tweak comes
into my head saying, "Where do we draw the line?"
What is it that makes us
Ontario versus just a place to do business, what makes us
Canadian versus American, and do we even need to have that
discussion?
Mr Robson:
In the context in which you are putting it, my sense is that I
deal with the glass being half full. When you talk about a level
playing field, I'm convinced that our employees, our businessmen
and our investors are every bit as savvy as the majority of
traders we are dealing with.
I myself have had
experience in international trade. I was chief of staff to
Canada's first Minister of International Trade. There are many
jurisdictions in this world where other people trade in a way
that's foreign to us and that we feel is illegal and immoral. But
in terms of dealing with our major trading partner, the United
States, for the most part I see us as being equal or better. So
I'm not threatened by anything there. I feel we can match them in
terms of wits and skill as business people.
Mr Levac:
I tend to agree with you. I guess what I'm getting at, and I'll
be very specific: The mayor indicated his concern for some of our
own levels of protective legislation, that some things should not
be foreign owned and there should be an area which we hold dear.
One of them that I would respectfully suggest to you would be
water-certain types of resources-so that we don't simply,
holus-bolus, say: "We're open for business. Go ahead and buy all
you want or do what you want."
Do you have a comment on
any areas that you feel should be restricted?
Mr Robson:
No. I'm dealing with the general principles, and I don't want to
get into specific debate on something that one of my councils may
have something strong to say about.
To use the example of
water, we have the basic premise that this country and this
province should be open for business. Many of us are aware of
what a failure FIRA was. It was two thirds of the federal
government's paperwork 21 years ago. It had no audit function,
and what enforcement provisions were there were meaningless
because nobody audited it to see where the people weren't
following up on their promises.
My point is simply that we
think this country is better than a lot of people may think and
that protectionism is not something we can indulge in without
some reciprocity somewhere else.
Mr Levac:
I'll leave it at that, Madam Chair.
The Chair:
Thank you, Mr Levac. Mr Kormos.
Mr Kormos:
I'm sorry I missed the first part, but I anticipated what your
position was going to be, and that's OK. I doubt that you're a
New Democrat. That wasn't a shot at the Liberals when you made
the comment about the make-work projects, was it?
Mr Robson:
No.
Mr Kormos:
I didn't think so.
Just a little while ago, I
was invited down by Physicians for National Health Care, in the
States, to speak to some groups, because they're trying to whip
up enthusiasm for a public health care system. I also met with
the AFL-CIO leadership down there. They were ticked off because
they figure that they're in an uncompetitive position with
Canadian workers because of the huge cost to an employer,
especially in heavy industry, and the automotive industry
specifically, to pay for health care costs out of a private,
for-profit system and that Canadian workers are in effect less
expensive. So when Canadian plants are bidding-of course, I have
to be faithful to my folks here. But they were taking some
pleasure, in a perverse way, because they would like to have
public health care for their workers, in the erosion of health
care in Ontario and the rest of Canada, quite frankly, because it
would put our workers in a less competitive position than theirs
if we had a private health care system.
You certainly agree with
full funding of health care, don't you, to ensure that our
workers remain competitive and retain their competitive edge?
Mr Robson:
I'm fully in favour of a fully funded health care program.
Mr Kormos:
Thank you kindly.
Mr Robson:
But that's a personal comment.
Mr Kormos:
That's OK.
Mr Robson:
I haven't asked the question of our health committee
recently.
Mr Kormos:
I just want to be able to quote you when the time comes. Thank
you. I appreciate your being here.
Mr Robson:
You must realize that I have a conflict of interest there. As
someone who has had cancer in the last three years, I know that
in a private system I'd likely not be covered. So my bias is
pretty obvious.
Mr Kormos:
Stay healthy.
Mr Robson:
I'm trying.
The Chair:
Thank you, Mr Kormos. Mr Maves.
Mr Maves:
That actually leads me to one of my questions about the upcoming
federal budget. I just wonder if the chamber is supporting the
province's call for the federal Liberal government to restore the
Canada health and social transfers to at least their 1995
levels?
Mr Robson:
We tend not to get too involved in the federal scene, even though
we're empowered to do so. Our chairman did write every federal MP
in December with regard to tax reductions. We didn't comment on
health transfers, but
the bottom line is that we feel strongly that, federally, there's
a lot of room for debt reduction and tax breaks, whether it's EI
or personal income tax. We believe the country needs that
stimulus.
1220
Mr Maves:
Your position is obviously that those would continue to stimulate
economic growth?
Mr Robson:
Yes.
Mr Maves:
Very good.
I'm glad you mentioned the
Red Tape Commission and talked about the success of that. I
believe it is our intention to make it a permanent agency. And
you're right: This Collection Agencies Amendment Act is something
that would have been caught by, and will in the future be caught
by, the permanent Red Tape Commission headed by Frank
Sheehan.
Are you staying tonight for
the annual Niagara Falls chamber dinner?
Mr Robson:
No, I'm not. I have to go back to talk to an MPP
mid-afternoon.
Mr Maves:
Too bad. We would have loved to have you stay for the Niagara
Falls dinner.
Last, if I can get some
thoughts about the upcoming provincial budget in a little over a
month or so. Have you got any thoughts on that and any
directions, maybe similar to the direction of this bill, or any
other directions with regard to taxes?
Mr Robson:
We did make a presentation to the standing committee which Mr
O'Toole and others here were part of, so I don't want to be too
repetitive, but we feel very strongly that the government of
Ontario has to target debt as the thing it should be aiming at
right now. Currently, the level of debt in Ontario is about 32%
of GDP, and traditionally it has been 15% or 16%. What we are
saying is that $2 billion over four years, I think it is, is not
enough of an attack against debt. You're supposed to get your
house in order when you have good times. We all know we have
tremendous times, and we want to see the Minister of Finance
really attack the debt levels. There's room there for him to
continue to help education and health care and so on, but I was
an observer at the meeting in Hamilton on the weekend, and he
said there that it wasn't enough of an attack, so maybe some of
the message is getting through.
Mr Maves:
Excellent. Thank you very much.
Mrs
Bountrogianni: Given that no one else is necessarily
right on focus and target with the issue of the day, I'd like to
ask a question directly too, given that I have the
opportunity.
My critic role is in
post-secondary education, and I was happy to hear that one of the
chamber's beliefs is in a strong education system. What is the
chamber's or your personal belief on rising tuition fees and how
that will affect the economy in the future-and rising student
debt, speaking of collection agencies, but I'm saving that
question for Mr Patterson.
Mr Robson:
To be honest with you, that's not something the chamber has
gotten into. One of the big targets has been in preschool, where
Fraser Mustard is concerned, with the early years; we're very
supportive of that. We're concerned about apprenticeship, and
certainly concerned about what the curriculum is and teacher
testing and so on. I don't know of any discussions that have been
held with regard to tuition fees.
I'm personally not as
sympathetic as some people are. I'm on the board of a university
which I was a student leader at-actually, it's for the second
time-and I worked my own way through university. So I think back
to what money was worth then and what money is worth now and I
don't think the ratios are that different. To some of us who have
been out of university for 20 or 25 years, it sounds huge, but
then we weren't making as much in the summertime. Students always
complain about how much they have to pay for their education, but
we know that it's worth it and we know that this country has to
have well-educated people to prosper. What I'm in favour of is
having systems that allow people to put aside the money and make
the money for that.
Mrs
Bountrogianni: Agreed. Has your chamber talked about the
issue of student debt, which is rising, and how that will affect
the future economy?
Mr Robson:
No, we have not. I'm just giving you my personal comments.
Mrs
Bountrogianni: That might be a nice topic-if you ever
want to invite me to have the discussion with the chamber, I'd be
happy to do so.
Mr Robson:
I appreciate it. I'll keep that in mind and pass it on to the
education committee. We're a very active group.
The Chair:
Members of the committee, you have about five more minutes before
the next delegation.
Mr
O'Toole: Thank you, Mr Robson, for coming before the
committee. I know the chamber, in all of its functions, tries to
monitor government policy and decision-making, and for you to
make the effort to come down here on this rather unpleasant
weather day is important to support, really, small business. That
really is what this bill is about. It is about what you mentioned
in your presentation: the removal of red tape and barriers.
That's one of the themes of the government.
Mr Robson:
And one of ours.
Mr
O'Toole: And of your group. The chamber is always
bringing to the government's attention opportunities to remove
the barriers for small business. I think we have clearly here
all-party, from what I hear, general consensus that this is badly
needed. It helps an area that has higher levels of unemployment
than the average of the province. If this is what the chamber,
the elected local politicians and all parties in the area are
trying to do-and for you to take the time I think is very
commendable, and thank you very much for that.
Mr Robson.
Thank you. I appreciate the opportunity.
Mr Kormos:
Mr O'Toole said something interesting. GE is not a small
business, please.
Mr Robson:
No, but we represent all sizes.
Mr Kormos:
That's right. But GE is really big business.
Mr Maves:
American.
Mr Kormos: American too-bigger
than many countries in the world, and very powerful. Let's not
forget that. I'll join it, thank you.
Mr Robson:
If I may, I've known GE intimately for most of my life. I had the
opportunity of having a neighbour who was the executive
vice-president of GE for over 20 years. He used to drive me to
school every once in a while, so I feel I know a fair amount
about it. They've contributed a huge amount to the economy of
this country. Back after the war, they had about $400 million
that they did not send south, and with that they financed a whole
fleet of tankers that was leased to Imperial Oil, which started
marine turbines, marine radar, all sorts of extra industries
here. We have big companies and we have smaller companies.
Mr Kormos:
No quarrel. They do it to make money, and that's OK too, I
suppose.
That having been said,
what's interesting about this interplay is that, as a New
Democrat, I can criticize both the provincial government and the
feds, and my colleagues are restricted, you see. They have to
constantly defend the provincial government-
Mr Levac:
Not always, Peter.
Mr Kormos:
To be fair, some of my Liberal colleagues from time to time will
be critical, but they have to defend their Liberal federal
government. Even on the rare occasion when New Democrats have
formed the government, I have felt free to criticize them. So I
have this wonderful luxury here that my colleagues don't share. I
wish they could share the freedom that I have.
Mr Robson:
I have freedom too, because we shoot at everybody's policies.
Mr Kormos:
Exactly. There you go.
The Chair:
Thank you very much, Mr Robson, for driving down here.
Mr Patterson, I understand,
has just arrived. We'll give you a couple of minutes, Mr
Patterson.
Mr Levac:
Madam Chair, while we're waiting, may we have a quick, open
discussion regarding the recess, whether or not we need extra
time?
The Chair:
Certainly, if the committee would like to discuss that for a
couple of minutes. We are scheduled for clause-by-clause
consideration at 2 o'clock unless I receive direction from the
committee to proceed with that earlier or later. If you would
like a brief discussion, Mr Levac, that would be fine with me.
What is the wish of the committee?
Mr
O'Toole: Mr Levac, have you made a proposed amendment to
the agenda? Then we can talk about it.
Mr Levac:
Yes. My proposal is to move the time up from 2 o'clock, and I'd
be open to that specific time. I don't want to get into a debate
about 1:30 or 1:45 or whatever, but just as long as we can have
an understanding that if we can move it up, it provides us with
an opportunity to do more in-depth clause-by-clause.
Mr
O'Toole: I would be supportive. I hope that Mr Kormos
would look at that for the interest of all members to expedite.
We just had the input. There are only a couple of particular
sections that amend the bill that I'd be pleased to follow right
through and push it along. Legislative counsel is here.
Mr Levac:
I understand too-I don't think we're going to see any
amendments.
Mr
O'Toole: I'm waiting for Mr Kormos if I can get him off
the record.
Mr Kormos:
I'm so flexible.
Mr Levac:
I know that. I think you made a statement that you didn't
anticipate any amendments.
Mr Kormos:
I didn't anticipate any.
The Chair:
I would suggest, however, that we take a brief break for lunch. I
think some of us probably left early this morning.
Mr Levac:
Fifteen or 20 minutes and then proceed?
The Chair:
OK. Mr Kormos, is that OK with you?
Mr Kormos:
That's fine.
The Chair:
We'll hear from Mr Patterson and then we'll break for a brief
lunch and come back after about 15 minutes, which will probably
be 1 o'clock, for clause-by-clause consideration.
1230
NIAGARA COLLEGE
The Chair:
Mr Patterson, welcome.
Mr Dan
Patterson: In the spirit of the guidelines, I will have
a formal brief comment to make and allow for questions.
Good afternoon. I am
pleased to be here today to tell you that Niagara College is a
strong and proud partner in the economic development of the
Niagara region, and to assure you that we are willing and able to
assist companies and organizations that are poised to grow as a
result of the proposed legislative changes that are before
you.
Niagara College prides
itself on being an enterprising college building skills and
knowledge for a rapidly changing world. Our core business and
focus are on enabling our students, clients and the community we
serve to develop applied skills and knowledge for employment,
economic success and responsible citizenship in a global
society.
Since the college opened in
1967, we have produced over 30,000 graduates. Today, with
campuses in Niagara Falls, Niagara-on-the-Lake and Welland, we
are offering nearly 70 post-secondary and post-graduate programs,
as well as apprenticeship training and certificates in technical
and skills training.
In addition, we meet the
specific training needs of industry by providing a variety of
customized training and consulting services. Whatever the
training needs are, we have expertise to tailor programs and
services to meet the very specific requirements of industry.
We are particularly
well-equipped to serve Niagara's thriving call centre industry.
Four years ago, we established a call centre training lab, which
we use to provide customized training for companies and for
continuing education students in our call centre management
programs. The lab is also utilized by organizations,
including local
charities for fund-raising initiatives and other short-term
projects.
In short, Niagara College
is ready and able to meet the training needs of call centre
companies, such as Great Lakes in Fort Erie, which is expected to
create up to 300 jobs, if not 500, as a result of Bill 37.
Areas of training would
include customer service, telemarketing, communication skills for
telephone and Internet, technology awareness and data
application. Training delivery can be flexible in both timing and
location to meet the needs of employers.
I would like to thank the
committee for the opportunity to share about the very important
role that Niagara College plays in our community, and to indicate
our support specifically for this legislation and for any reforms
that enhance job growth and economic development in the region. I
would be pleased to answer any questions.
The Chair:
Thank you, Mr Patterson.
Mrs
Bountrogianni: Welcome. My critic's role is colleges and
universities, so I was looking forward to asking you a couple of
questions. If you can expand a little bit on the program and how
it would address the needs of the employees just a bit more,
specifically around communication. The reason I ask that is that
for every negative call I get about a collection agency, there
are 100, 1,000 that are very well done. I get them from students.
Mistakes have been made and they have been harassed by collection
agencies. So I guess my bias would be to have an interpersonal
skills development component for employees. Is that part of the
communication skills?
Mr
Patterson: Yes, very much. The call industry is probably
one of the most misunderstood industries currently in our range
of economic sectors in the province. I don't know whether the
economic development corporation have made their presentation,
but this region is particularly earmarked as an area that we want
to attract call centre operations to. The set of organizational
skills and knowledge that are required can be very complex. But
you're right: The whole issue of customer service and
interpersonal communications is an area in industry that started
up very quickly.
There were some negative
images that had been created as a result of that. Hence,
employers have come to us to talk about how we can increase the
kinds of skill sets that are required for this very complex
industry that they're in. So Niagara College has worked very hard
with employers, and we have held call centre conferences here in
Niagara region and have had some of the leading-edge experts in
call centres come to speak to people in this community, and they
have indicated that our curriculum is some of the finest they've
seen. We've been cited in journals in the United States as having
leading-edge curriculum in call centre management. One of the
issues indeed that has been identified is that emphasis in the
past has been on technology and not enough on the interpersonal
skills that are necessary in order to be an important player
within that.
Mrs
Bountrogianni: That's terrific. Do you have any
relationship with Brock with respect to this training?
Mr
Patterson: We have very strong relationships with Brock
University in a number of areas. In this particular one we have
not specifically. It's now out of our post-secondary programming
and now we're into short-term programming, but Brock has a really
good communications department and we are working in a number of
other aspects with them.
Mrs
Bountrogianni: Previously my colleague Mr Levac talked
about having a self-regulation body. Would you support that among
the collection agencies?
Mr
Patterson: Self-regulation within the collection agency
or the broader sector?
Mrs
Bountrogianni: Whether Brock would.
Mr
Patterson: I think it's important in all sector
development that it be self-regulatory at least at the initial
stage, where there are standards and references and benchmarks in
which we can judge from a public perspective, from a governance
perspective, key performances and judging performances. Not
knowing this sector in great depth, my immediate reaction is that
self-regulatory would be a helpful process.
Mrs
Bountrogianni: Thank you, Mr Patterson.
Mr Kormos:
Thank you, Mr Patterson. Needless to say, I don't agree with you
about self-regulation. But you should know that yesterday Don
Johnston, who's head of the Niagara College Foundation, was over
at the Renaissance Fallsview, where the pre-budget committee met,
and I had the pleasure of being there and Mr Maves was there as
well with some of his colleagues, and some Liberal members were
there. Mr Johnston very effectively made a case for Niagara
College's need for adequate funding for capital projects, for
renewing the aged infrastructure, expressed gratitude for the NDP
commitment to the new campus up on Glendale, which had been
announced, of course, in very difficult economic times, but
understanding that even in a recession when revenues aren't
there, you've still got to continue to invest in young people and
education.
Don was hopeful, now that
we're no longer in a recession, with an economy that's growing,
with revenues that are certainly increasing significantly-I
acknowledge that, everybody does; you can't deny it-that this
government would see its way clear to assist Niagara College in
rebuilding some of the infrastructure, which is old; it's getting
old. It was a very effective presentation. Unfortunately, he
joined it with a presentation on behalf of the St Catharines
Chamber of Commerce by virtue of switching hats during the same
half-hour-you can imagine my disappointment, Chair-as well as his
endorsement of three mega-cities in the region. That isn't the
policy of Niagara College, is it?
Mr
Patterson: We do not take a formal position on
amalgamation.
Mr Kormos:
I just wanted to hear that view because I was concerned that
people might be confused, thinking that Mr Johnston had to switch
hats during the course of his presentation.
The Chair: Mr O'Toole.
Mr
O'Toole: Chair, a moment with Mr Barrett as well. Just a
couple of things. I think the Niagara College should be
complimented. As you know, in my riding, Gary Polonsky is
president of Durham College and is working wonderful
partnerships. That needs to be said about what we've heard this
morning. It's not just the private sector but the academic sector
which is very important to prepare people for the world of work.
This is a good example that you described that has been endorsed
by journals and other experts who compliment you. That's the best
form of flattery, imitation, so you're able to work with the
industry. I know Durham College does the same thing with York and
with Trent University.
To Ms Bountrogianni's
comment with respect to the capital needs of colleges and
universities-Rob Prichard and a lot of leaders in the educational
community have talked about the importance of infrastructure; I'm
sure there are ongoing debates right now-as you would know, the
SuperBuild Growth Fund of $642 million has been allocated for the
expansion of capital in post-secondary education, which is
absolutely critical, and you will probably be part of that. I
wonder, have you made an application? Minister Cunningham has
recently received applications for those plans. Have you made
application?
1240
Mr
Patterson: Yes, indeed. We have two SuperBuild proposals
on hand, and we had the opportunity yesterday to speak to Mr Eves
and Minister Cunningham about those proposals. They are very
important to Niagara College and to our community. We are looking
at doubling the size of our Maid of the Mist Centre for
Hospitality and Tourism, which is at capacity. Tourism is the
fastest-growing sector in the world, and we want to take
advantage of that. We have linked up with the hospitality and
tourism leadership in Niagara and are building that. We have a
major proposal for $19 million to retrofit a number of our
buildings in Welland.
It's key, and I think you
have captured the critical link between industry and the college,
which the Ontario Jobs and Investment Board has so eloquently
articulated. I think colleges are critical to our economic
future. When we look at the issue of skills and the importance of
those being your competitive edge, having an agile, quick,
adaptive education system that can, in this case, deal with
call-centre management and attract industry to come here because
they have the educational infrastructure available is very
important. Similarly in Durham, in your riding, where General
Motors and other important manufacturers are, it's important that
the institution have very flexible programming available. I think
the hallmark of community college education is its ability to
work with industry very quickly to build programs that are
relevant and linked to the world of work.
Mr
O'Toole: I compliment you, because it is part of what I
would call the knowledge infrastructure. I think the government
is taking a new approach to partnerships, and this particular
piece admirably demonstrates the importance of that balance of
industry, ie GE, an American investment in a local company with
the support of an academic institution like yours, and of course
by the government, and all members endorsing a small regulatory
change. What more appropriate way to create real opportunities
for real people? It may be theoretical, but we have here today a
real-life model of how working together makes it work for people.
It sounds a bit thematic and idealistic, but I think it's quite
real. Thank you for coming to the committee today.
I think Mr Barrett had a
comment as well.
Mr Toby Barrett
(Haldimand-Norfolk-Brant): My question also related to
SuperBuild, and I think you have covered that. With respect to
these particular courses, how are they funded? Is it through
federal or provincial money? Also, how much do students pay? How
many hours do they take to, I assume, receive a diploma of some
kind?
Mr
Patterson: They're all very good questions. It really
depends on the target group taking the training. If the students
move into post-secondary programming, there is a flat tuition
rate of approximately $1,200. If they're unemployed EI people, we
apply for Human Resources Development Canada funding. Some of our
students go through that route. The other route is part-time
studies in continuing education, where they get certificates, and
that is a different tuition scale. The funding for the education
sector is a rather complex set of funding envelopes, and the
price varies depending on the individual attending the
call-centre management courses. In more cases than not, we're
getting more into customized training where a company will come
to us for upgrading and bringing in new entries, and we will do a
fee-for-service. We will cost out the amount of time it would
take an instructor to develop a curriculum depending on the
individual client's needs.
Mr
Barrett: Would they get this instruction in a special
lab, or can they take it at night in a local high school?
Mr
Patterson: Again, depending on the level of
sophistication-we're very pleased that at our Welland campus we
have a state-of-the-art call-centre lab that is equipped with the
latest technology. Students get an outstanding introduction to
the complexities around technology. We can offer it off-site as
well. In the Fort Erie example, we have links with other
organizations to develop programming either on location at the
work site or in an alternative classroom setting. Our ability to
adapt to the circumstances and needs of the individual client is
paramount in those discussions.
The Chair:
Mr Levac.
Mr Levac:
Welcome, Mr Paterson. Your timing was impeccable. But because
your timing was so good, you missed my faux pas and I want to
apologize to you even though you weren't here to hear it. I made
an assumption that Niagara College was in the States, the Niagara
in the States as opposed to your college. My apologies for
that.
Mr
Patterson: No problem.
Mr Levac:
Just a general comment: It is my joy to hear that these
partnerships are being forwarded and looking in different and new
directions. Mr O'Toole made reference to it as being a new idea. If
I'm not mistaken, this really isn't a new idea. Community
colleges have been partnering for quite a long time. Is that
correct?
Mr
Patterson: Yes. I think the newness lies perhaps in the
notion that colleges are much more aggressive with their
programming than in the past, but partnerships have been a way of
life for colleges.
Mr Levac:
In terms of these partnerships, I also understand that as it
rises in terms of importance to the district and the area, so too
they go with the wind, and if a service being provided by a
college gets fewer and fewer students, they drop that and look to
other areas. So it's a very fluid relationship as industries come
in and maybe stay for a while, and because of economics and
because of decisions made by companies to downsize or right size
or change size, that also affects the community colleges.
Mr
Patterson: Clearly market forces are at play. Our core
business is to prepare people for the world of work. Similarly,
an institution like Niagara College has to recognize the changing
nature of the labour market and the need to adapt in given
circumstances.
Mr Levac:
In hearing that, I also get the sense that, of all the people we
have heard from, this particular area of concentration is very
strong in this area and has been identified with good study, good
research that indicates that for quite a long time we should be
counting on those partnerships, the relationship with your
college courses and the employment possibilities. Is that fair to
say?
Mr
Patterson: Yes, indeed. In fact, I think the
relationship we have with the Niagara economic development
corporation and other industry organizations has led to very
strong collaborative relationships here in Niagara. Increasingly,
the Niagara Peninsula is known as an area where a great deal of
co-operation exists for this sort of partnership.
Mr Levac:
Two last quick points-one that you mentioned earlier, and I want
to repeat it to make sure that people on the other side hear
this. You made reference to a very complex funding formula in
education-the word "complex" was used. Maybe we could simplify
that a bit and give a little more autonomy to the local people
who need to do that. Would that be beneficial to your
college?
Mr
Patterson: Yes, indeed. If we could have a labour
agreement with the federal government, I think that would add to
our ability to manage relationships effectively.
Mr Levac:
So we need a broader sense of co-operation between federal,
provincial and municipal and college areas for their improvement
in terms of funding?
Mr
Patterson: We are the only province in the country that
does not have an agreement for human resources.
Mr Levac:
My last question was, is it your understanding that the
SuperBuild Growth Fund, which has been referred to the last
couple of times, is not new money; it's basically money taken
from different areas of the present spending formula compacted
into one area?
Mr
Patterson: I'm not sure. In the end, I suppose, it
depends on how you count on this envelope. If you take the
leverage of private sector dollars, I think the SuperBuild fund
would perhaps exceed previous allocations.
Mr Levac:
The assumption is that the private sector is going to be putting
the new money in and not the government?
Mr
Patterson: I would need to look at all the data that are
available in order to-
Mr Levac:
That was just my one opportunity.
Mr
Patterson: If I could just add, on your reference to
Niagara University: While I'm not the president of Niagara
University, I must say that we have very close bonds. One of the
unique things about the Niagara region is our bi-national area.
We do programming with Niagara University. We do cross-border
education with our colleagues, and I think that strengthens our
role in the region.
The Chair:
Final question, Mrs Bountrogianni.
Mrs
Bountrogianni: Would you say that if you were awarded
the monies from the SuperBuild fund for your two proposals, that
would adequately address the influx of students in 2003 with the
double cohort, or would it just begin to address that?
Mr
Patterson: The double-cohort issue is one we're all
concerned about. We anticipate a 21% increase in the college
system over the next four or five years, a tremendous issue for
us. I think it would just begin the process. The Minister of
Finance spoke to some college presidents yesterday and indicated
that this was just the beginning.
Mrs
Bountrogianni: He did? I'll have to get that in
writing.
Mr
Patterson: He did indicate that, so we'll see.
It's a huge problem for a
college system that's 30 years old in some of our buildings.
Mrs
Bountrogianni: For maintenance.
Mr
Patterson: We understand there is a huge request out
there that's not going to be met with the first round, and so we
certainly need to see the government putting more money into
SuperBuild.
The Chair:
Thank you, Mr Patterson.
We will now recess for
approximately 15 minutes.
The committee recessed
from 1252 to 1330.
The Chair:
We will now do clause-by-clause consideration of the bill. We'll
call section 1 and ask if there are any comments, questions or
amendments.
Mr Kormos:
It's a very brief bill, and I don't intend to keep people here
for a lengthy period of time. I'll speak to section 1 because in
many respects this is the nub of it, if you will, or at least
addresses it.
As I told the Legislature
and as I mentioned during the course of these committee hearings
today, I tried to analyze the brief debate. It was very brief.
There was Mr Clement introducing the bill, responding to some
questions; Mr Edighoffer, who I knew-he was the Speaker before he
retired from the Legislature, and a very good Speaker; and Mr
Renwick, who was very much a leading figure in the New Democratic
Party.
There are two possible interpretations-and I
referred to these earlier-of the motivation behind the amendment
in 1974, perhaps three; one is just the overriding awareness
across Canada of the loss of our economic independence because of
foreign ownership. I would suggest that the amendment in 1974
wasn't directed at Americans, it was directed at any foreign
ownership. Second was the possibility that collection agencies
were thrown into the hopper along with other financial
institutions such that there was that need to protect ownership
of our financial institutions. Third-and I had to read it a
couple of times-was the suggestion that when you had non-resident
owners, it would be more difficult to regulate or control them by
virtue of the regulatory regime vis-à-vis, in this case,
collection agencies or any other number of government-regulated
activities.
I acknowledge that in the
course of 26 years the efforts to maintain an independent
Canadian economy have not been overly successful. The reality of
the free trade agreement and then NAFTA, whether we agreed with
it or not-I didn't and I still don't, but that's not the point.
The fact is that sufficient Canadians agreed with it in terms of
how they voted to make it a reality.
During the course of the
legislative debate in second reading everybody knew that it still
required the corporation engaging in the activity to be an
Ontario or Canadian corporation. It had to be incorporated in the
province of Ontario or in Canada. I suppose, having said that, a
company that had a public offering would be more difficult to
identify as one in terms of who its owner is. If it has a public
offering, the owners could be any number of people in any number
of places, assuming it was widespread rather than just a small
number of large shareholders.
I'm impressed, not
necessarily positively, but I'm well aware of the fact that there
has been no opposition to the proposition. Both Mr Bradley from
the Liberal Party and I, when we spoke on the bill, were
aware-and Mr Bradley referred to it-of concerns that were raised
by the collection agencies' organization, the Ontario Society of
Collection Agencies. We've been told today that that concern no
longer exists. I can't dispute that. I haven't received any
correspondence from that organization saying, "We withdraw any
expression of concern," but at the same time they aren't here at
the public hearings to express whatever concerns they may
have.
That confirms what we were
told by the presenters, Mr Weese and his group. I do have to tell
you, Mr Weese was very co-operative during the course of his
contact with me. I know he spoke with the other Niagara member
from the opposition, with Jim Bradley for the Liberals. Mr
Bradley and I, quite frankly, have discussed it as well. Is it
the ideal world? Certainly not. You see, my problem is that I
hear the concept being articulated about brain drain. I am
increasingly convinced that what Canada suffers from, and
Ontario, is not so much a brain drain as a profit drain. My
concern about foreign ownership is that the-do jobs result? Of
course they do. It's naive to suggest that they don't. What I'm
concerned about is the profit drain, the fact that the profits,
when you don't have restrictions on foreign ownership, don't stay
in Canada. That's, in my view, one of Canada's major problems.
We're not just talking about investment capital. Investment
capital can take many forms. It doesn't have to be equity. But
clearly, when you have equity type of investment, that's when you
have similar control over the profits. I am concerned about
that.
I'm also concerned about
the approach that's used here. Look, GE is GE. I know that one
member made reference to this particular operation as small
business, and I suppose in the total scheme of things it's still
within the realm of small business because it anticipates, let's
say, 250 employees. But let's not kid ourselves. GE is not small
business. GE is big business. It's as big a business as you're
going to find. I took a look at Murray Dobbin's book, The Myth of
the Good Corporate Citizen, and its damning comments about GE-and
they were damning. Again, I have the highest regard for Mr Weese.
I don't attribute any of these shortcomings or negative qualities
of GE in terms of how it conducts itself to Mr Weese or the
current owners of the Fort Erie collection agency/call
centre.
Let's understand. General
Electric is rated the 55th-largest economy in the world, behind,
I suppose, 54 countries, ahead of the Philippines, Iran,
Venezuela, Pakistan, New Zealand, among others. GE's history in
the United States, with respect to using its powerful economic
clout to impact on governmental decision-making, is a frightening
one-again, always self-serving. GE was, according to Dobbin in
this book, at the forefront of dealing with campaigns for cuts to
programs like social security; was at the forefront, by virtue of
being a key funder, of the Committee on the Present Danger, which
propagandized for the massive military buildup in the 1980s; was
at the forefront of the Center for Economic Progress and
Employment, which was, according to Dobbin, "a front group of
industry giants determined to gut product liability laws," etc,
etc, etc.
That's what corporations
do; I understand that. I'm concerned, though, about the language
that's perpetually used, and that is to say that we should
acquiesce to this corporation's request so we can create jobs. I
acknowledge that, based on everything we've heard, the major
investment-and the capacity to invest even more, because GE has
huge resources-will result in employment. But let's understand
something. GE isn't doing this because it decided to embark on a
job creation program, because it felt sorry for people in Niagara
region, who have a higher level of unemployment than the rest of
Ontario does or than Canada does, in terms of an average. GE's
doing this to make money. That in itself is fine too; that's the
nature of the beast. I understand that. I'm not so isolated that
I don't understand that that's-quite frankly, if they weren't
making money, there'd be hell to pay with any number of
executives and shareholders. The bottom line isn't how many jobs
you created today at GE; it's, how much profit did you make for
your shareholders? That's not rocket science, as the Food Network
chef says.
1340
George Soros, who is no
left-winger, Mr Maves, no pinko, but who is the capitalist's
capitalist, one of the wealthiest men in the world and a highly
regarded money trader-he's the king of the hill when it comes to
international capitalists-in his book The Crisis of Global
Capitalism very articulately points out that corporations don't
exist, or have as their primary goal, to create jobs or to
provide a better quality of life for huge chunks of the
population; they exist to create profits. He says that in a
non-judgmental way. I quote him because some people are liable to
suspect me of having some sort of ideological motive when I
attribute that quality to corporations. But that comment comes
from George Soros. The book is readily available; it's still on
the shelves.
What is a person like me
doing reading George Soros? I find it peculiar where I get
inspiration in this strange, new world. I read Dalton Camp for
progressive analysis. I find him a remarkably enlightened person.
I look to Dalton Camp for inspiration when it comes to attacking
Ontario's Tories.
So here I am. I quote Camp,
I quote Soros, rather than those more traditional left-wing
thinkers whom people like Mr Maves might suspect me of being
obsessed with as I sit in my garret reading old tomes from the
19th century or broadsheets by any number of revolutionary
propagandists.
Mr Maves, it's George Soros
and Dalton Camp who inspire me. It's not those old-fashioned
ideologues.
Mr Maves:
Camp doesn't inspire the rest of us.
Mr Kormos:
Mr Maves knows that Camp doesn't inspire him. I have no doubt
about that. Mr Camp's been a Conservative far longer than Mr
Maves has, and has been around the block.
In any event, at the end of
the day I suspect or interpret what I read in Hansard as the
primary purpose behind the 1974 amendment as being the need for
non-foreign ownership so as to facilitate regulation. The
maintenance of the residency requirement comforts me somewhat in
terms of its having to be an Ontario, Canada, corporation.
I'm impressed by Wayne
Redekop, the mayor of Fort Erie. He's an outstanding municipal
leader whose judgment I trust impeccably. He's demonstrated that
in a number of areas recently here down in Niagara. I understand
Niagara College's role in the development of call centres.
I am very familiar with the
Canadian Tire Acceptance operation in Welland, which is a call
centre, not a collection agency call centre.
I'm interested in and
intrigued by GE's anticipation of government as being one of its
sources of contracts, because that frightens me with respect to
the fact that it indicates yet more contracting out of government
services, which, as you well know, I don't advocate. I know there
are people here who do. Fair enough. So be it.
First, I am just cautioning
people that we've got to be very careful, because any number of
things could create jobs, depending upon the type of argument you
want to make. There would be some investors who'd say: "You
eliminate health and safety standards and we'll invest money in
Ontario. That'll create jobs."
There might be some
investors who would say, "You eliminate child labour laws in
Ontario and we'll invest there; we can build Nike shoes in
Ontario then instead of in the Third World countries where they
build them," and the argument would be made, "Well, that creates
jobs."
There might be investors
who would say, "You get rid of"-I suppose they have gotten rid of
all the environmental standards. Investors did say that. They
said, "You reduce environmental standards and we'll invest in
Ontario, because we don't want the red tape that prohibits us
from spewing toxins into the air or into our water or about our
communities."
I'm just saying we have to
be very cautious. All of us want to see more jobs and higher
levels of employment. Quite frankly, I hope that all of us want
to see more better-quality jobs in terms of both the quality of
the job and the wage. I appreciate what the presenters today
said, in response to their acknowledgement that the base wage at
this existing Fort Erie centre is $10 an hour. I don't consider
that a very satisfactory wage. "Entry level"-I don't know what
that means. The fact is, you can't support a family on $10 an
hour. I don't think anybody here would propose that you can.
I was comforted by Mr
Weese's position that he would not oppose incorporating the call
centre employees into a workers' compensation scheme. I intend to
at some point call him on that, take him for his word on
that.
I was a little disappointed
in the disinterest in the very specific question, "Is there a
capacity in this industry to have base wages that are higher than
$10 an hour?" I regret being in a position where we, as a region,
have to take jobs at any wage level because of the high levels of
unemployment. That's what happens when you have high levels of
unemployment: You put pressure on people to work for lower and
lower wages. That's the nature of the beast. It's one of the
phenomena.
Now, am I going to be a
conspiracy theorist and suggest that somebody is out there
creating high levels of unemployment so that people have to work
for less and less? Read Linda McQuaig in The Cult of Impotence
and her analysis of it and you might understand why that's not
some wacko theory. In fact, it has been a practice of the United
States and Canada, maybe not with the sole purpose but certainly
the net effect. So I'm disappointed that we are in a position,
because of our high levels of unemployment, to applaud low-wage
jobs, but I will nonetheless agree that there are going to be
people to take those jobs, no two ways about it.
Niagara College has
certainly been active in terms of training and working with the
industry. Canadian Tire Acceptance, which I'm very familiar
with-I've been in their operation many times-is a good corporate
citizen, as Mr Redekop indicated the Fort Erie operation is.
Canadian Tire Acceptance is a good corporate citizen. It's active
in the community. It works hard, I'm convinced, to develop ergonomics within the
workplace to try to reduce the levels of workplace injury.
But at the same time, I
hope some of you folks who haven't been to call centres go to
some of them, because those folks work hard. They are under
incredible pressure. The computerization of them, as I indicated
earlier today, guarantees that no single staff person who's
working the phones is idle for more than X period of time,
because it routes the calls as they come in and spreads them out
around the workplace. It's an incredibly high-pressure job, very
demanding, and clearly is not an entry-level job when you
consider that Niagara College considers it sufficiently important
to have specific training programs for it because of the
complexity of the computer work and the actual interaction with
people. If it's an entry-level job, what is Niagara College doing
providing specific programs training people for it? I suggest
that that's a little bit of a contradiction.
I sincerely hope that I am
not in error when I take GE at their word-and I do-that there
will be the creation of these new jobs, a total complement of
250. I sincerely hope that this is not a tactic designed to
simply move this operation into other jurisdictions, in other
words, to take the business that it has accumulated-because
that's a phenomenon of call centres. The insurance industry, I
understand, has call centres from as far away as the Caribbean
where, when you're talking to an insurance agent for any number
of purposes on a phone, you're talking to some call centre in the
Caribbean. I understand that phenomenon.
So I sincerely hope that we
haven't been misled. At the same time, I hope that this does not,
by virtue of being a GE entry point in the collection agencies
business here in Ontario, impact in a negative way on those
made-in-Ontario, based-in-Ontario, invested-in-by-Ontarians
operations that are currently some of the similar types of call
centres and/or collection agencies.
I have to acknowledge the
lack of opposition to this. I think I've done a fair amount of
work in trying to analyze the rationale for the original 74
amendments. But I also have to ask committee members to be
cautious in the jobs-at-any-cost argument. I'm not suggesting
this is a worst-case scenario. I'm not suggesting GE is asking us
to eliminate child labour laws or reduce minimum wages. Oh no,
they probably wouldn't mind at the end of the day, but I'm not
suggesting they're asking anybody to do that, by any stretch of
the imagination. But I just caution you people to be very careful
about the types of leveraging of this very, and rightly so,
passionate effort on every Ontarian to reduce unemployment; be
cautious about the sort of leveraging that can be used in the
course of that context. Thank you very much.
1350
The Chair:
Do we have any further comments on section 1? If there aren't any
further comments, questions or amendments, I'll now put the
question. Shall the motion carry? Section 1 is carried.
Do we have any comments,
questions or amendments on section 2? Then I will now put the
question. Shall the motion carry on section 2? Carried.
Are there any comments,
questions or amendments on section 3?
Mr Levac:
It's more clarification for myself. It says that resident
ownership requirements for individuals who carry on the business
of collection agencies are being repealed. Does that mean that if
a person comes from any other country or any other jurisdiction
outside Ontario, they at one time had some type of restriction on
them? Can anyone help on that?
The Chair:
Can we have a technical response to the question.
Mr
O'Toole: As PA, I'll attempt without the legal
background. There were in the previous bill. That's the single
most important part of Bill 37: to remove that restriction on
foreign ownership.
Mr Levac:
So that applied as well to individuals, that's what I'm reading
into this, or is it more that it's resident ownership, meaning
the company itself, per se? I'm just wondering if there's a
difference between-
Mr
O'Toole: Individual and company, you mean?
Mr Levac:
Correct.
Mr
O'Toole: I can't specifically answer that. Is legal
counsel here?
Mr Michael
Wood: I think I might be able to provide some
information on the question. Section 3 of the amending bill is
designed to repeal section 10 of the act as it now stands. You'll
see in the materials that section 10 of the act as it presently
reads imposes some restrictions on individuals who carry on
business in Ontario as a collection agency. It's limited to
individuals. Section 11 of the present act deals with
corporations that carry on business in Ontario as a collection
agency.
Mr Levac:
So, in terms of what the answer to my question is, now that this
is being repealed, an individual representing the company does
not have to be an Ontario resident.
Mr Wood:
For a legal opinion, I would refer you to legal counsel to the
Ministry of Consumer and Commercial Relations that administers
the act, but yes, it is my understanding that as a result of
repealing section 10 there is no longer any residency restriction
on an individual who carries on business in Ontario as a
collection agency. With respect to any restrictions on
corporations, they are dealt with in section 11 of the act
presently, and in the amending bill, section 4 of the amending
bill sets out a new version for section 11 of the act.
The Chair:
Mr Straus, did you wish to add to that?
Mr Earle H.
Straus: Earle Straus, legal services branch for the
Ministry of Consumer and Commercial Relations. The purpose of
section 3 is to eliminate residency requirements for individuals
who are registered to carry on the business of collection
agencies, as opposed to employees of collection agencies who are
collectors. The act currently requires registration both for
collection agencies and collectors. Collectors work for
collection agencies. A collection agency can be owned by an
individual person or by a corporation. The residency requirement
for both the individual person-owner and the corporate
person-owner is proposed to be eliminated.
Mr Levac: It speaks a little
bit to what Mr Kormos was making reference to, and that is the
regulatory authority the province would have on such individuals.
Do they apply?
Mr Straus:
The current requirement for the registration of an individual who
wishes to be registered to carry on a collection agency business
is provided for both in the act and in the regulations.
Therefore, the elimination of those requirements for registration
purposes would be within the authority of the Legislature.
Mr Levac:
That's enough of a clarification. I just want to ensure that
there is a regulatory section of the act that still allows for,
shall I say, checking up on a non-resident person. Is there such
an animal?
Mr Straus:
The checking up would still apply to individuals who carry on the
business of collection agencies, because they will still have to
be registered, but they will not have to be resident.
Mr Levac:
I guess maybe that's the nub of it. Being a non-resident does not
matter, whether the regulations apply to that individual.
Mr Straus:
Precisely. The distinction is between ownership, for which
residency is not required, and the conduct of the business, the
operations, which is not affected by the proposed amendments.
Mr Levac:
That probably opens up a couple more questions, but I'll defer,
Chair.
Mr Kormos:
Let's be perfectly clear here, because this whole issue of
capacity to regulate implies that provincial legislation will be
applicable to the person whom one is seeking to regulate. Is that
fair?
Mr Straus:
Yes.
Mr Kormos:
Let's just deal with out-of-province collection agencies, because
some collection agencies are real scoundrels. They harass people.
They are horrid operations. I don't know if you're familiar with
any of those kinds of collection agencies.
Mr Straus:
Not personally, fortunately.
Mr Kormos:
But you've heard of them. How do you control the collection
agency that's committing a quasi-crime, a violation in Ontario,
when they're not resident in Ontario?
Mr Straus:
The offices from which the business is carried on have to be
located in Ontario. Books and records have to be located in
Ontario. Collectors, who have to be registered, are resident in
Ontario. Trust funds, into which payments are made, have to be
located in Ontario. The regulation of a business as an operation
as opposed to the ownership of the business is the distinction
we're making.
Mr Kormos:
That's helpful. That's important.
The Chair:
Thank you, Mr Straus.
Any further comments or
questions on section 3? Then I'll put the question. Shall section
3 carry? Carried.
Section 4: Any comments,
questions or amendments? Then I'll put the question. Shall
section 4 carry? Carried.
Section 5: Are there any
comments, questions or amendments? Then I shall put the question.
Shall section 5 carry? Carried.
Section 6: Any comments,
questions or amendments? Then I shall put the question. Shall
section 6 carry? Carried.
Section 7: The short title
of the bill-you wish to speak, Mr Kormos?
Mr Kormos:
Thank you, Chair. Obviously we're close to the end here. I want
to speak very briefly to the business of regulation. I may speak
for all of the 20 minutes I'm allowed or I might only speak for
10 or 15 minutes.
1400
You will recall, Mr Maves,
that yesterday when the pre-budget committee sat here, one of the
groups that attended were representatives of the Canadian
Co-operative Association. What has happened over the recent past
is that they have been put into a quasi-self-regulatory regime by
virtue of rather than the Ministry of Consumer and Commercial
Relations regulating them, it was an arm's-length body with yet
another acronym, FSCO, the Financial Services Commission of
Ontario. The FSCO's job was to regulate co-operatives, which are
special beasts but not totally dissimilar from other business
corporations. What they came to the committee with-and again
there was no contradiction of what they told us-is that because
regulation had been transferred over to this arm's-length body
which was to be self-sustaining, self-sufficient, the
co-operatives-I appreciate we're talking about not just
non-profit but also for-profit co-operatives. Gay Lea Foods was
one of the examples.
Another one was the pork
producers' co-operative, and I loved their name because it was
called Progressive Pork Producers. I thought was really neat,
that it was both a co-operative and Progressive Pork Producers. I
told them, "To heck with Maple Leaf and all those others; I'm
buying Progressive from now on." It's a co-operative of pig
producers who are trying to protect themselves from the wackiness
of the market.
What's happened is that
because of this new arm's-length regulatory body-the current
incorporation fees for a co-op are $285 under the Ministry of
Consumer and Commercial Relations. The current business
corporation fees for a business corporation-you know, ABC Co
Ltd-are $330. But the FSCO, this new regulator, proposes to raise
the incorporation fees to $1,000, because what's happened is that
it's got to be self-sufficient. This is a much smaller group of
players, yet you have effectively the same overriding level of
bureaucracy to administer them. It's not a very cost-efficient
way to do things.
So I know Mr Maves will
take this back. He and Ernie Eves are going to be having several
conversations about Niagara College, about so many other things.
So Mr Maves will be taking this back. But it was pretty shocking,
I think for all of us, to have this and similar atrocious
increases in fees that take them off a similar playing field from
business corporations per se, even though they share many of the
same qualities. That's just one observation.
And I'm addressing here again the business of
self-regulation or arm's-length regulation as compared to
Ministry of Consumer and Commercial Relations regulation. I know
that the ministry, and it's not just in the last year or two
years, has been talking about all these self-regulatory schemes.
I think it's very dangerous to move away from the ministry's
regulation.
Let's talk about collection
agencies. The impression we got from GE today is that this
expanded company is going to be dealing on a pretty sophisticated
level of collections, but I'm assuming that they could similarly
take on the little consumer debt collections. Some of the tactics
that are out there include the dunning letters with no return
address and only voice mail telephone calls.
You know some of the
practices: the practice of so-called collectors using phony
names, all of the ruses about the threats. I've had people come
in showing me stuff that looks like Small Claims Court documents
coming from collection agencies, people who think they've had
judgment obtained against them because of the similarity between
that document and a Small Claims Court judgment, the sort of
thing the sheriff serves on you. Some of the tactics are really
deplorable. Some of the very aggressive telephone harassment
tactics-harassing people at workplaces, harassing spouses,
children, neighbours, the whole nine yards-are really
repugnant.
So just in the general
realm of collection agencies, this is not the most attractive
facet of any financial institution's business, right? This is way
down the food chain, if you will-well, it is. These are not
high-class operations; they're chasing bad debts. That's what
they're doing. And when you have incentive programs, which we
heard of from the submitters this morning, that motivates
individuals to do everything within their power to get that
money, because they get paid on how much money they actually
collect.
I'm simply saying that as
we close off the hearings on this bill, being mere amendments, I
would ask that government members remain very conscious of the
need for tough regulation of collection agencies in general in
terms of the tactics they use, in terms of protecting people from
abusive tactics, in terms of ensuring that what they do is within
the confines of reasonable legislation.
I don't believe you can
entrust that to the industry itself, because most of our
experiences of self-regulation-as a matter of fact, Ian Scott,
who was a brilliant Attorney General, wrote an article in one of
the University of Toronto law journals. He was very disappointed
one day when I confronted him with it during question period-not
that he had forgotten he had written it; he just wasn't sure I'd
be able to find it-because he was advocating, among other things,
not quite self-regulation but something akin to it. I referred to
an article by one Ian Scott, QC, wherein the theme of the article
was that regulatory bodies tend to be co-opted by the regulated.
That was his essential theme.
Take things like the
Ontario Insurance Commission. Who ends up working for the Ontario
Insurance Commission? Usually people with backgrounds in
insurance. Who has the greatest deal of influence but the
insurance industry itself? So I'm very sceptical about that. I
enjoyed Mr Scott's University of Toronto law journal article, his
essay on the issue, because I thought it was a very valuable
insight into the whole business of this basic principle that
regulatory bodies are most inevitably co-opted by the
institutions that they purport to regulate.
So I think the government
should be active in the regulation of collection agencies. I'm
suggesting that the collection agencies' practices range from
very good to downright seedy and deplorable; the sort of people
who should be put in jail for the sort of stuff they do. I hope
they're in the minority, but I want a regulatory scheme-and I
hope other people share this view-that is independent of the
industry and, quite frankly, one that's performed by the
government, performing one of the those governmental roles that
it can't abandon or abdicate.
Mr Levac:
Just a couple of quick comments and I'll wrap up. I won't need to
go into great detail. I think some of what Mr Kormos is saying
needs to be heard, and very clearly; maybe not acted on but at
least considered when making some of the decisions based on this
change in the law.
I would also say to this
government and to future governments that when these bills get
changed there should be a review process and an opportunity for
people to make comment on the change and what valid things have
happened as a result of it, the things that have happened in a
positive way but also the things that have not gone the way the
change was intended to go; to be honest and open about that and
be able to make other changes down the road that would probably
plug the holes that become evident.
On the concept of
self-regulation, though, I differ from Mr Kormos in that I
believe there is a role for both parties to be involved. I would
advocate that the good companies, the good call centres and the
good collection agencies that are out there, would want some type
of self-regulation to ensure that the bottom end, shall I say-as
Mr Kormos has indicated, there is a bottom end to this-probably
festers and kills itself because of the good practices of those
companies that are performing better; and that the government
does play a role in providing regulation in that they work
co-operatively with not only the companies but the communities
that indeed are going to have these companies in their areas and
would want to have a reputation as a good corporate citizen. I
don't necessarily mean good corporate citizen by the number of
dollars they donate to the charities in the community but how
well they treat their employees. If the employees are treated
well, they'll do their job well and they'll treat their community
well.
There's a combination there
of the types of things that are necessary to happen, and it takes
a vigilant government not to acquiesce its responsibility and
simply say, "We're not in that business," but to say, "We are
going to be a part of the solution, to ensure that all the
communities are best served by these types of agencies." I would
suggest very
respectfully that that's of all companies and corporations,
because we've heard comments about the size and scope of GE and
we've also heard comments about the smaller organizations that
are out there.
I see a possibility of a
combination of this government's vigilance when they make these
changes, to ensure that they follow up on study, to ensure that
it is a good change, that it is beneficial for the community.
I do not question for one
minute that we are going to see some improvement in the job
situation, but I too would echo a concern that simply says, "At
what price do we just run in and start taking the types of jobs
that are out there to take advantage of people's situation in an
unemployment setting?" I'm very concerned that we start hitting
minimum wage jobs that basically create working poor. I think we
should be very cautious of allowing that to be the mainstay of
job creation.
The Chair:
Are there any further comments?
Mr
O'Toole: Just in summary on section 6, which we're
addressing, I appreciate the input from other members. I can
assure them from my understanding that the collection agencies
operating in Ontario must be licensed here, and the same
regulatory standards apply with respect to the practices of the
business. So there are no changes there. But I think it's
important to caution those who do write the new regulations that
I agree with much of the sentiment that's been said, that we
don't want any practices that are not appropriate business
standards. That's well understood.
The Chair:
Any further comments? If there are no further comments, questions
or amendments, I will now put the question.
Shall section 7, the short
title of the bill, carry? Carried.
Shall the long title of the
bill carry? Carried.
Shall Bill 37 carry?
Carried.
Shall Bill 37 be reported
to the House? Agreed.
Do I have a motion to
adjourn? This meeting is adjourned.
