Assemblée législative de l'Ontario

MINISTRY OF INDUSTRY, TRADE AND TECHNOLOGY

CONTENTS

Thursday 27 August 1992

Ministry of Industry, Trade and Technology

Hon Ed Philip, minister

Tim Armstrong, deputy minister

Peter Sadlier-Brown, assistant deputy minister, policy and development

David MacKinnon, president and chief executive officer, The Development Corporations

Peter Friedman, executive director, domestic and small business operations

Gordon Gow, president and chief executive officer, Ontario International Corp and acting deputy minister, international trade and international relations

Sarah Bernstein, project director, Ontario investment fund initiative

Peter Tanaka, director, domestic industry support branch

Bob Marrs, manager, employee ownership section

STANDING COMMITTEE ON ESTIMATES

*Chair / Président: Jackson, Cameron (Burlington South/-Sud PC)

*Vice-Chair / Vice-Présidente: Marland, Margaret (Mississauga South/-Sud PC)

Bisson, Giles (Cochrane South/-Sud ND)

*Carr, Gary (Oakville South/-Sud PC)

*Eddy, Ron (Brant-Haldimand L)

Ferguson, Will, (Kitchener ND)

Frankford, Robert (Scarborough East/-Est ND)

*Lessard, Wayne (Windsor-Walkerville ND)

O'Connor, Larry (Durham-York ND)

Perruzza, Anthony (Downsview ND)

Ramsay, David (Timiskaming L)

Sorbara, Gregory S. (York Centre L)

Substitutions / Membres remplaçants:

*Dadamo, George (Windsor-Sandwich ND) for Mr Bisson

*Haeck, Christel (St Catharines-Brock ND) for Mr Frankford

*Jamison, Norm (Norfolk ND) for Mr Ferguson

*Mathyssen, Irene (Middlesex ND) for Mr Perruzza

*Phillips, Gerry (Scarborough-Agincourt L) for Mr Ramsay

*Ruprecht, Tony (Parkdale L) for Mr Sorbara

*Waters, Daniel (Muskoka-Georgian Bay/Muskoka-Baie-Georgienne ND) for Mr O'Connor

*In attendance / présents

Clerk pro tem / Greffière par intérim: Mellor, Lynn

The committee met at 1307 in committee room 1.

MINISTRY OF INDUSTRY, TRADE AND TECHNOLOGY

The Chair (Mr Cameron Jackson): I'd like to call to order the standing committee on estimates. We are reconvening to complete approximately four and a half hours of estimates for the Ministry of Industry, Trade and Technology. Before I recognize the next rotation, does the minister or the deputy have some responses to yesterday's questions to share with the committee?

Hon Ed Philip (Minister of Industry, Trade and Technology): Thank you, Mr Chairman. Mrs Marland said that she'd put a question in Orders and Notices, and I'd like to table with you the answers to the question. I recalled yesterday that I had signed the answer to the question some time ago, and in fact I'm told it was sent over to Cabinet Office on July 9.

The problem with Cabinet Office was that they realized that under the Freedom of Information and Protection of Privacy Act, I guess, and for some other legal reasons, the names of the people referred to in Mrs Marland's question should be deleted, and that took some legal advice. But we are prepared to table this today with you. It will of course be tabled also in the House when the House reconvenes, but the names have been removed.

The Chair: Thank you very much, Minister. Were there any other items?

Hon Mr Philip: Not that I remember. I think Mr Ruprecht had some questions that didn't get answered.

The Chair: I might suggest, if there are questions that are already prepared by any member, that the Chair and the clerk would receive those so that staff could begin to work on those. Having said that, do you wish to go first, Mr Phillips?

Mr Gerry Phillips (Scarborough-Agincourt): My question is around jobs and how the ministry is tracking versus the budget. I gather this is the ministry that has the prime responsibility for job creation. Are we on track on our job situation with the budget, and how do we see the rest of the year coming out? What are going to be the key components that create the jobs that are committed to in the budget?

Hon Mr Philip: We tried to handle some of this yesterday, Gerry. In my opening statement, I think, and I don't remember the page, we talked about short term -- I don't know whether that was the word I used -- and long term. The short term was of course some of the short-term programs that were announced in the budget.

Mr Phillips: Are we on track on our job situation now?

Hon Mr Philip: As far as we know. Some of the difficulty is in tracking some of them, because there are considerable spinoff jobs you can't track. For example, when Babcock and Wilcox get a major contract which we assisted in, there are so many small supplier companies that benefit from that kind of contract and you have no way of really measuring some of that. But I think the deputy has some additional information which we can all look at.

Mr Tim Armstrong: I think I'm going to pass it to Mr Sadlier-Brown to talk about. As Mr Philip suggests, the Ontario budget did of course refer to the fact that it was supporting 90,000 jobs for this year.

Mr Phillips: What it said in the budget is that in the 12 months of this year, job growth will be 125,000 jobs.

Mr Armstrong: I was getting to that -- additional training programs put in place to help create 100,000 jobs and train an additional 80,000 over the next three years. Extrapolating from that, I don't disagree with your figure. Mr Sadlier-Brown may be able to tell us specifically whether we're able to relate that projection to the actual job figures since the budget to the end of July.

Mr Phillips: Let me just be helpful here. The budget says that at the end of the fiscal year there will be 125,000 more jobs in Ontario. Job growth over the 1992 second quarter to 1993 first quarter will be over 125,000. At the end of July, I think we were running minus 85,000, so in the final seven months of the year I gather you have to create 205,000 jobs or thereabouts. My question is just, are you on track?

Mr Armstrong: I understand the question, and Peter Sadlier-Brown, who has appeared before the committee before, may be able to fill in some of the gaps. But before he does, just to supplement what the minister said, of course the tracking system in midyear will not prove anything about the end of the year. I don't think the budget predicts the slope of the curve one way or the other but, Peter, do you have anything more specific on that?

Mr Peter Sadlier-Brown: Just in general I think the performance is a little disappointing. The US economy has not performed to the standard that was expected in the budget forecast, so some of the positive factors that should have contributed to the overall performance of the Ontario economy have not been there. I think you will find that it's probably a little below the forecast for the budget on the basis of the performance now. But again, there's still a significant amount of the year left, and we'll see how that performs.

Mr Phillips: But is it fair to say we are running behind our projections right now?

Mr Sadlier-Brown: I think the overall performance of the economy -- I noted the external conditions -- has been somewhat less than the Treasury forecast when they did the budget earlier on.

Hon Mr Philip: I think too, Mr Phillips, it should be put in the context of other jurisdictions around us and compared to other jurisdictions. I used those figures yesterday, if my deputy can find them. It's in the competitiveness report, which I sent out to you along with every other MPP. I'm sure you received it.

Mr Phillips: I read it carefully.

Hon Mr Philip: We are performing better than other surrounding jurisdictions for the most part.

Mr Phillips: Those aren't the numbers I have.

Hon Mr Philip: Okay. Compared to Quebec, for example, we're outperforming. Yes, here we are. To give you the exact figures we have as the most updated, if you want to just look at such indicators as seasonally adjusted unemployment, the most recent figures, July 1992 is 11%, compared to April 1992, which is 10.6%. You can see that there's a slight increase. But if you compare that with Quebec, for example, you've got 13% in comparison to 11.9%. So it's not indigenous to Ontario; in the surrounding areas you see similar increases.

We do a lot better when we start looking at such things as bankruptcies per million population and things like that. I used those figures yesterday, but I don't think you want that kind of data repeated.

The recovery is slow. There are signs that some types of business investments are increasing. Certainly machinery investment is increasing, and maybe Peter will have those figures handy. I had them a while back. The overall economic growth of Ontario is expected to be 1.4% in 1992 and 3.9% in 1993. So it's slower than we had anticipated, slower than anybody had anticipated in any jurisdiction in North America.

Mr Phillips: It doesn't look like we're going to hit the budget numbers, then, on job creation?

Hon Mr Philip: That depends what happens in the rest of the year. It's slower than we had anticipated at this point in time this year. Peter, do you want to add to that?

Mr Sadlier-Brown: Yes, just to make sure that the numbers are on the record. The budget forecast in April was that for the year 1992 there would be a 14,000 increase in employment.

Mr Phillips: Why would the budget say job growth will be 125,000?

Mr Sadlier-Brown: The data I have here say the employment change as expected in 1992 is 14,000. I'm not sure what the 125,000 -- it may well be that what you're referring to are jobs that will be supported by the budget. I'm not sure.

Mr Phillips: No. Job growth from the first quarter of 1992 to the end of the first quarter of 1993, ie, the fiscal year, will be 125,000 jobs. I assume that's your goal.

Mr Sadlier-Brown: No. The employment change forecast for 1993 is 129,000. I can get my copy of the budget and make sure we're talking about the same thing.

Hon Mr Philip: There is a bit of a note of optimism. If you look, for example, at the Conference Board of Canada's survey of businesses in the first quarter of 1992, over 60% of the respondents said that their capital expenditures would increase in the next six months. Nearly half of those surveyed indicated that they planned investment expenditures in Ontario, compared to over one quarter of the firms in Quebec and the Prairies. It would appear that as we come out of the recession, the major investments and recovery will take place here rather than in some of the surrounding jurisdictions. We may well have a faster recovery in the third and fourth quarters.

Mr Phillips: I'm just trying to get what MITT's view is on job creation and whether we will be on the budget target or not.

Hon Mr Philip: I think I'm trying to indicate that at this point in time we're behind. I'm saying, though, that there are some signs that towards the end of the year we may catch up.

Mr Phillips: I would have thought, Minister, that kind of on your wall was "125,000 job creation," yet I don't sense that there's even recognition that this is in the budget.

Hon Mr Philip: I think what's on my wall are prospective companies that I can attract to Ontario and prospective projects in expanding existing companies. I think that's something concrete -- opportunities that I can measure and things that I can do in a very concrete and specific way. I think that's what's on my wall. I'd be happy to talk about those and indeed list some of those new investments for you that we certainly will be sharing.

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Mr Phillips: Maybe I can just change the topic a little bit. How much time do I have, Mr Chair?

The Chair: You've got 10 more minutes.

Mr Phillips: Why would it be that plant closures, if we are in a recovery mode, are dramatically higher year to date in Ontario than they were for the first seven months of 1990 and the first seven months of 1991? Why would we not be seeing a decrease in the level of plant closures?

Hon Mr Philip: I think you'll find that plant closures are actually lower here than in any of the competing jurisdictions. You're right; certainly 1991 has a higher percentage of business failures per million population in all our competing jurisdictions than in 1990.

Mr Phillips: I'm referring to the report on permanent and indefinite layoffs, your government's release that came out on plant closures on 14 August.

Hon Mr Philip: That would be the Ministry of Labour document. It's not our ministry's document. Is that what you're referring to?

Mr Phillips: They share that with you, I hope. I'm just saying this is what I use for plant closures, because this in the information the government provides us with. What it shows is that plant closures, year to date in Ontario, that is to the end of July, the first seven months, are up about 30% over the same seven months a year ago. They were about 45% in the same period two years ago. I'm just curious, if we are now in this period of recovery, why we're seeing plant closures increasing.

Hon Mr Philip: I think part of the problem is that there has been a complete restructuring in North America. Previous governments have not planned for a restructuring in any way, and that's why we have tabled an industrial framework that both the Canadian Chamber of Commerce and the Canadian labour movement, and indeed the Financial Post if you look at its editorial today, are advocating. It takes time for those policies to have an effect.

But if you look in a very concrete way at how we are performing compared to other jurisdictions, the number of plant closures is much less than our competing jurisdictions.

Mr Phillips: Could you get those for me, please?

Hon Mr Philip: It was provided to you in what I sent out and we'll be glad to give you the document.

Mr Phillips: I don't think so. Was it? Would you show me what was sent out on plant closures?

Hon Mr Philip: Sure.

Mr Phillips: Have you got that there?

Hon Mr Philip: Yes. Business failures for 1990 in comparison to 1991. That's the total year, and we compare it with Ontario, California, Georgia, Illinois, Massachusetts, Michigan, New York and Ohio.

Mr Phillips: Those aren't plant closures.

Hon Mr Philip: These are bankruptcies, but I think you'd find a close pattern between the two.

The Chair: To be helpful, Mr Phillips is asking if you keep that data, if you're recording data on plant closures and numbers of personnel.

Mr Phillips: I don't think I have got plant closure data from you.

The Chair: Do you keep that kind of data within your ministry?

Hon Mr Philip: Do we have those data available in a form that can be handed out?

Mr Sadlier-Brown: I think Mr Phillips is referring to the Ministry of Labour's layoff data and where it describes layoffs as a result of temporary shutdowns and permanent and partial closures. Is that not correct?

Mr Phillips: Yes. That's the stuff in here?

Mr Sadlier-Brown: Yes.

Mr Phillips: I don't remember ever seeing similar data for any jurisdiction you sent out.

Mr Sadlier-Brown: The federal government keeps such data, and I believe the Department of Commerce in the United States has data and various states do. We haven't compiled it on a comparative basis exactly in those terms because I believe the way it's measured, the threshold level for getting included, would be different. For example, even in Canada the federal government only keeps data where the layoff involves 200 or more people. The Ontario data include layoffs of 50 or more people.

Mr Phillips: I'm just curious why the plant closure numbers would be 30% higher year to date in Ontario if we are now in this recovery mode.

Hon Mr Philip: I'm not convinced that we're in the recovery mode yet. What I'm saying is that we are starting to see the signs of a recovery and that we can expect that to happen but it's going to happen very, very slowly and that's what we've indicated in all of our comments.

Mr Phillips: Maybe one final question, for me at least, and this was dealt with in detail yesterday. I appreciate it, but I don't think I've talked to a single business person in the last year who hasn't indicated real concern about the labour relations amendments. I know the government's view on it is that the business community is kind of just blowing smoke and it'll all disappear.

I'm wondering, Minister, what your own view is of what is going to be the impact of these labour relations amendments in terms of investment, and can you give me three or four examples of businesses that support this, that say, "This stuff is fine"? Maybe I'd feel a lot better if I could find three or four business people who don't really express concern about it.

Hon Mr Philip: Certainly I've talked to business people in the ethnic business community who have come from countries and who operate businesses in other countries who feel that -- indeed I had one the other day who was visiting with part of an Indian delegation who felt that the labour reforms were quite modest compared to other --

Mr Phillips: Can you give me a few examples that I can talk to who said this is quite all right? Because I can't find a single business person out there.

Hon Mr Philip: I can tell you that when I go out there it's not a major topic of discussion the way it was six months ago when there were a lot of people who were fearful that whatever kind of document was released or leaked or whatever was what was proposed. I can tell you that a number of people have said they're quite happy that the government has listened, that a number of amendments have been made, and I think there's an attitude now much more of cooperation and less of confrontation than existed six months ago.

Mr Phillips: What's your own view of it?

Hon Mr Philip: If I might just tell you, there are --

The Chair: Excuse me, Minister. We're coming to the end on this and in fairness to Mr Phillips, he asked you for specific names. I'm sure you'll have an opportunity to come back to this issue, but in fairness to his time do you have any names of individuals or corporate people you could share? That was the nature of --

Hon Mr Philip: We'll go through our correspondence and see what we can find.

The Chair: Thank you very much.

Mr Phillips: Great, thank you.

Mr Gary Carr (Oakville South): Thank you very much, Minister, on behalf of Margaret for that prompt answer. I appreciate your getting back; I know she will appreciate that. I also want to thank you for the pull-up on the data. I owe one as well. I appreciate the prompt answer.

My first question, and I just want to make it a brief one, yesterday I appreciate that Mr Gow spoke with me afterwards and I also appreciate your offering to go over and look at --

Interjection.

Mr Carr: Speak up?

Hon Mr Philip: No, I think it's a matter of the volume. Could we turn it up a bit?

Mr Carr: I'll speak up a little bit too.

I spoke to Mr Gow, who was very helpful, but the question I wanted to get and what I wanted to see if you could table with this committee is from our international offices. As you know, he said we get feedback and it's in the mandate of one of the activities.

Could we get in written form the five reasons that investors are saying they want to come to Ontario and the five reasons that the investors whom our international offices are meeting do not want to come to Ontario? Could we get that tabled with the committee so we could have that? It was probably my fault. I don't think I asked it properly. I just want to do a quick follow-up with that one; if it can be done, great.

Hon Mr Philip: We'd be happy to but, if you want, I can give you some of the reasons they are giving me when I meet with them, and maybe Gordon Gow would like to comment because he has been doing more travelling than I have been doing and talking to them. But I'd be happy to give them to you now off the top of my head and then we can --

Mr Carr: I appreciate that. I know the feedback -- you said, "I'll speak to Elmer Buchanan when he comes back," and so on -- is fine, but I think we've got these offices that have a mandate to give feedback and certainly before policies are made, something a little more concrete than "I talked to Elmer." I would appreciate what you're hearing and then I would like to hear if we get something formal.

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Hon Mr Philip: Anecdotally, I can tell you both the positive and the negative; negative in the sense that they're more in the form of questions, but they are concerns and we have to answer them.

On the positive side, a major reason is a highly sophisticated workforce, dependable and reliable in terms of productivity; a cosmopolitan society where it is easier than in the United States to bring in skilled managers and so forth from other countries, and where those managers can obtain education for their children, and where they do not feel that they are discriminated against.

This whole quality of life, a cosmopolitan society with good theatres, restaurants, with temples and churches where they feel comfortable and where they don't feel that they're going to be discriminated against, is a major reason when we talk to people in Hong Kong and in various other countries.

Market access to 170 million, over half the population of North America, is another reason; a high degree of research and development programs that are attractive to the very high tech or value added sorts of projects. You know yourself, you were talking to the CGE people. Why are they locating in your riding, a major world-product mandate? Because they've got a government that is willing to give them research assistance and work with them and so forth.

Mr Carr: And $33 million.

Hon Mr Philip: Yes, it costs money. If you want to attract that type of industry, it costs money, there's no question about it. Ask Ford; it costs money for Ford too. I think that those are some of the answers. We're working on the business infrastructure, and you might have some questions on this whole telecommunications area on which we made some announcements this morning.

On the negative side, the major question is Confederation. Is Quebec going to separate? Is the country going to fall apart? What is this business of separatism and referendum and so forth? Hopefully, as a result of the excellent hard work of our Premier, Joe Clark -- who deserves all kinds of medals, the Order of Canada or whatever, for what he's done -- and all the other premiers who actually pulled together, I think that's a major asset to us.

There are questions about the Labour Relations Act. What is it? How is it going to affect people? What are the issues? Those are the two major questions that we get from foreign investors. I find that when the corporate presidents and chief financial officers are in town, Gordon Gow often arranges for me to get together with them for dinner, and we talk about some of these things and weigh the advantages versus disadvantages. Often they see that this is a better location than part of the northern United States and that when you start measuring productivity and some other factors, then we're in a better position than the southern states.

Mr Carr: Thank you. I'll look forward to that, and I appreciate your comments on that.

With regard to the labour relations amendments to Bill 40, has your ministry done a study of that particular piece of legislation, and if so, would it be possible for this committee to get a copy? If you haven't done one, maybe you could explain why you have not.

Hon Mr Philip: We've done a study in this sense, that we have listened to the presentations that have been presented and passed the views on to our colleagues at the Ministry of Labour.

University of Toronto professor Noah Meltz did a study, and his view was that while studies could be undertaken, there are a number of assumptions that would have to be made in any of those studies that would make the validity somewhat questionable. Relating to possible increased unionization and possible impact on already unionized establishments, Meltz noted that while wage costs may increase under the Labour Relations Act, cost savings may also result as a result of such factors as lower turnover, greater employee protection and a feeling of having a voice in decisions made in the workplace. He concluded that the proposals could have a positive impact on Ontario's industrial relations and thereby on the Ontario economy as a whole.

His appraisal was based on the proposals, interestingly enough, of the original set of proposals, and not on the somewhat more modest set of proposals in which there have been a number of changes as a result of input from the business community. I assume that he would weigh even more heavily on the positive side were he to have examined it in the light of the changes that the Minister of Labour has made.

Mr Carr: I sat on some of those hearings, and the Ontario Restaurant Association also said that it had met with consultants. I appreciate that one person says it can't be done, and that person has been brought out and championed before by the government. The restaurant association says it has talked with consultants, ie, the Ernst and Young people and Clarkson Gordon; it mentioned a few. They even said they would be prepared to pay for the study to be done. They said they've got advice from these people.

Can we get a commitment from you that you will go to some of the consultants used by the ministry and this government -- I think of Ernst and Young and Clarkson Gordon or whomever -- and see if a study can be done regarding this, and if so, would you be prepared to do one?

Hon Mr Philip: I'm not prepared to do interminable studies on something at this point in time unless I can be convinced that there is a methodology that will actually give me the data that I'm looking for.

When I say the data I'm looking for, I mean in an objective way, not the data I'd like to see. I think the good evidence of that is some of the studies that were done by some of the business groups. If you look at the way in which those questions were phrased, they got the kind of answers they wanted for very valid lobbying reasons.

I was reading a study done in New York state -- I wish I could put my finger on it -- in which they were saying to the business community, "Is it your intention, or would you like, in light of recent taxation in New York state, to move to the southern United States?" They got something like 80% of them saying they were moving to the southern United States. You and I both know that's not a valid study. Some of the studies that have been done would not have passed had I turned in a study like that in my first year of graduate school, and I think we've got to look at the methodology.

Peter Sadlier-Brown may have something to add to that in terms of the methodology.

Mr Carr: While he's getting seated, has anybody in your ministry asked for that study from you, Minister? With all the problems associated with that, I would say that if they haven't, they probably haven't done their job. Has anybody in the ministry asked you to do a study?

Hon Mr Philip: No one in the ministry has asked me to do a study.

Mr Carr: What about your deputy? Has your deputy been asked to do a study?

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Mr Armstrong: You have an order paper question on that; except for your question, it hasn't come to my attention -- and Peter can correct me -- that the ministry has been asked to do a study.

Let me just add that this is an area that in another incarnation I've had some familiarity with. The Labour Relations Act, contrary to the popular myths that sometimes float around, has been amended eight times since 1975. There was a fairly comprehensive set of amendments in 1975, and there have been fairly significant amendments at about two-year intervals since 1975. Don't hold me to the interval part, but regular amendments of some significance.

I'm not aware that any of the governments of the day tried to do impact studies, for the simple reason that the kind of studies I've seen modelled are the kind that give you what people think is going to happen, which is kind of interesting, but that's really polling data.

I think of more interest is to look at some of the scholarly work, like Freeman and Medhoff from Harvard. They talk about whether or not productivity improves when a labour relations environment is good. Without trivializing their theory, they have some data to show that in unionized plants, for example, productivity is better.

Apart from the academic literature to that effect, I don't know what you get from surveys that tend to be attitudinal in nature, especially when the composition of the package -- as the minister has indicated, what started out in terms of the discussion paper is not what ended up before the Legislature.

Mr Carr: Thank you, deputy, but right now we've got a bill before us. We've got a minister who says, as the Minister of Labour has, that he doesn't like the studies that have been done. This minister, Mr Philip, can design it any way he would like. He said they were swayed to get the answers they wanted. He could be the one to pick the person or people to do it; he could pick the questions he felt happy with.

With this piece of legislation being so critical and controversial, I would say that for the Minister of Industry, Trade and Technology not to have done some studies is wrong. The minister, quite frankly, hasn't done his job if he does not. Will you commit today that you will look at some type of study on the impact of the bill before us? I can appreciate that when you're in the discussion stage it would change. We have a bill before us. Will you do some type of impact study on Bill 40?

Hon Mr Philip: If I were to do that, I'd be the first minister of industry in this province who ever did such a study.

Mr Carr: Let's be innovative. Go ahead and do it.

Hon Mr Philip: No other Minister of Labour -- Bob Elgie, progressive as he was, never once did any such study on some of the changes he was making, even to prove his own --

Mr Carr: Surely that's not an answer, Minister: "Because it's never been done." Surely that can't be an answer. Why won't you do the study?

Hon Mr Philip: I may sound like Michael Wilson in some of the questions he's answering on the NAFTA studies and impact studies, but the fact is that there is no methodology that has been yet devised that can single out that very micro matter and then come up with the specific impacts. What you've got are a series of dynamics working within the gestalt. You're not working in a chemistry laboratory where you can isolate the individual elements; you're working with a very dynamic set of causes and countercauses and relationships. If you can show me a methodology that will in fact give me an objective sort of evaluation, I'd be happy to look at that methodology.

Mr Carr: Will you commit then -- obviously, not being an expert in the field, I could not. You know the consultants this government's used, and they can be the ones your ministry could use. Will you commit to meeting with some of those, whether they be the Ernsts, the Clarksons or whomever, and discuss with them and ask them very specifically, "Can you do a study?" Will you meet with them? You're meeting with all these people. You want to consult. Will you commit to this committee to meeting with those people and asking them very clearly, "Can you do a study with regard to Bill 40?"

Hon Mr Philip: Those we have talked to, such as the one I've just mentioned, have said that there is no such --

Mr Carr: Who was that again?

Hon Mr Philip: Meltz.

Mr Carr: That's one person at the U of T. Will you meet with the consultants, the Ernsts, the Clarkson Gordons, and ask them specifically, "Can you do a study?"

Hon Mr Philip: I think Peter indicated that he has talked to some of these people.

Mr Sadlier-Brown: First, I'm not aware, from a strictly analytical point of view, of any instance where anybody has done a model study of the impact of something like Bill 40. The people you're talking about, Ernst and Young and the others, who have done work have done surveys, as my deputy has pointed out.

Mr Carr: But they can do studies if you ask them. Have you asked them?

Mr Sadlier-Brown: I think if it were possible for them to have done a modelled analytical economic impact, they would have done so.

Mr Carr: Have you asked them that?

Mr Sadlier-Brown: They don't have any lack of funding and they have had a lot of opportunity to do so.

Mr Carr: But have you asked them?

Mr Sadlier-Brown: What they've done is perceptual work, because that's what you can do in the circumstances. A modelled analytical thing is -- as I said, from an analytical point of view, I know of no one who's done it. I don't think it's possible, and I don't think their reputations would permit them to do it either.

Mr Carr: I appreciate Peter's expertise, but the question I would still like to see stand with the minister. Notwithstanding Peter's opinion, will you meet with some of these groups that will do it -- again, I say the Ernsts -- and ask them specifically if they can do it? If they can't, all we need is to hear from them saying it can't be done and, quite frankly, the opposition won't be able to complain. Will you commit to meeting with them, Minister, and asking them whether they can do a study?

Hon Mr Philip: I meet with a number of people on a daily basis from the business world and from the consulting world and ask them a number of questions.

Mr Carr: No. With the consultants, the Ernsts. Will you meet with them?

Hon Mr Philip: What I think the business world is asking for now, and the labour community is asking, is to move beyond that, to move towards implementing the kind of sector partnerships and industrial framework we are talking about, to get the Labour Relations Act behind us and get on with the job of working together. That's what they are saying to me. They're talking about cooperation. You only have to look in the news about what Don Tapscott and the chamber of commerce and the Canadian Manufacturers' Association are saying.

Mr Carr: Thanks, Minister. I'll get off that topic for you. I appreciate it's a very sensitive one, but by not answering it --

Hon Mr Philip: It's not sensitive at all.

Mr Carr: I think it's a very simple question. You could defuse it. If you did do the studies or went to them and they said, "No, we can't do it," it would eliminate that argument. I appreciate you won't, so I will get on to another subject as we don't have much time.

With regard to the manufacturers' recovery program, you were kind enough to set up a meeting with some of the people regarding that. With regard to that program, how much money has been spent this year on that program? How many jobs have you projected have been created as a result; the number of companies and the number of jobs created?

Hon Mr Philip: Dave MacKinnon has the answers to some of those questions, if you'll give him a minute to get the right page. If you think my briefing book is large, you should see what the one Dave prepared for me just on his operation is like.

Let me introduce it this way. The program, as of July 31, had 231 applications. There were 160 firms accepted under the recovery plan phase, and 130 recovery plans have been completed; there were 77 referrals to the Ontario Development Corp adjustment funds and 80 referrals to the management and marketing personnel program. The total commitments as of July 31, 1992, for all three phases amounted to $47.7 million, and 7,600 jobs have been maintained or created as a result of this program.

Mr Carr: How many companies would that be? I lost your addition.

Hon Mr Philip: There were 7,600.

Mr Carr: No, that's the number of jobs. The number of companies. You talked about the whittling down. How many of that --

Hon Mr Philip: There were 231 applications and 160 firms.

Mr Carr: I know. Out of the $47 million, what does that boil down to? How many got money out of this program? I know some were referred. As to the $47 million, what is that number of companies?

Hon Mr Philip: Do you have that, David?

Mr David MacKinnon: As of April 27, 1992, 36 had received or had been approved for loans or loan guarantees, with a total value of about $38 million.

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The Chair: Mr MacKinnon, do you have that list of actual company names? I know that's public information. That would helpful for the committee.

Mr MacKinnon: Yes. Sure.

Mr Carr: So we got two different figures. Mr MacKinnon is saying $38 million and the minister is saying $47.7 million. You're saying 36 companies and that you've given out $30 million, or just approved?

Mr MacKinnon: Sorry. Had either received or had been approved. Our figures may not be exactly the same categories.

Mr Carr: Where are we in terms of actual money being given out? If we've given 36 approvals, how much is actually transferred into somebody's hands?

Mr MacKinnon: Approximately $13 million would have been disbursed, but of course a much larger amount would be committed to be disbursed when certain conditions are obtained.

Mr Carr: And that $13 million helped how many companies?

Mr MacKinnon: As of that date 36 had received or had been approved; about $12.5 million went to that group.

If I could just give a technical explanation, Mr Carr, typically, it's unusual for us to advance the entire amount of money in one shot to any one firm. Typically, it's advanced over time in relation to the activities of the firm and its successor, or lack thereof, in meeting them.

Mr Carr: But you know where I'm coming from.

Mr MacKinnon: I think you're trying to get a sense of the actual amount that firms had taken up.

Mr Carr: That's right.

Mr MacKinnon: The answer to that is, as of that date, about $13 million had actually been disbursed.

Mr Carr: And that was 36 companies? Probably less, right?.

Mr MacKinnon: It may be a little less. Again, that's why I made the comment I made. I couldn't guarantee that all 36 had received some money. The likelihood is that the vast majority would have.

Mr Carr: But you can't tell us, of that $13 million -- $12.5 million -- how many companies that is. Is it 6, 10, 22? You don't know?

Mr MacKinnon: I think the vast majority of the 36 would have received some funding, but I can't guarantee that all would have.

Mr Carr: As you know, the government sells this program: "We're facing very difficult times. We need to get money out." I quoted the chamber of commerce and the Canadian Federation of Independent Business yesterday, what they thought about the program. I honestly believe these are set up for the Premier and the minister of the day to stand up and say, "We're doing something."

If you look at it and see that we've only disbursed $13 million in a program that was set up to help small businesses recover, you can see where the public gets a little bit sceptical. I know you say the money is coming. As the government knows, we're in a period where we need help now, and yet we're saying we're only giving out $13 million this year, the rest of it will come next year. What do you say to the public that says, "This is a drop in the bucket"?

Mr MacKinnon: I think the important and relevant figure is the amount that has been committed, because that's the amount that will eventually flow.

Mr Carr: How many years is that $47 million committed over?

Mr MacKinnon: It depends upon the particular loan arrangement with a particular firm.

Mr Carr: What could it be?

Mr MacKinnon: Anywhere from a year or two to perhaps five or six would be the typical maturity.

Mr Carr: But you see where I'm coming from. The government sold this as something to help during this period, and now we're looking at a five-year period when we could be out of it; and $47 million over a five-year period is literally -- we're playing in the margins -- a drop in the bucket in terms of helping small manufacturers.

Mr MacKinnon: Well, I'm trying to explain. Perhaps I can go back to the larger dimensions of the program. First of all, it's not always money that these firms need.

Mr Carr: I know. I appreciate that.

Mr MacKinnon: The larger number of applications and the numbers that have been helped through the earlier stages -- quite often a study in itself is a very significant benefit. So I think the first response to that series of observations would be to say that quite often it isn't money.

Secondly, quite often it's the time for us to intervene in some way, and the money gives us the opportunity to effectively get that time. So that's the second benefit that's gained: time.

The third thing is that I would think with respect, Mr Carr, that the $12.5-million figure is not the relevant figure for discerning the impact of this program; it is the total commitment, because that's what is meaningful to a bank or to all the other stakeholders in the enterprise.

Those would be the three kind of responses I'd make to those observations.

The Chair: Mr Carr and Mr MacKinnon, I'm going to have to move the rotation. Mr MacKinnon, it would be helpful to provide us, as you have in the last estimates, with the breakout in the numbers: the numbers of applications you've received to date for the fiscal year, the numbers of companies you've approved, the amounts and those funds for this fiscal year which this committee is examining. If you could provide, even in part, some of that information now, the clerk will photocopy it and then Mr Carr can sharpen, you two can sharpen and focus your conversation in the next round and that might be very helpful to the committee.

If I could suggest you do that, I'd like to now recognize Mr Jamison.

Mr Norm Jamison (Norfolk): The question I'd asked yesterday when I left off was one about the situation in general, the economy, the recession, the impact of free trade and so on. But I'd like to begin by indicating that I'm aware of many companies that have made substantial investments over the last period of time here in Ontario. Again, quoting the Financial Post as of yesterday, the headline, "Foreign Investors Rush In," seems to --

Interjections.

Mr Jamison: Gentlemen, I certainly sat here quietly while you made your somewhat ludicrous comments, which showed a level of control on my part.

Minister, there have been a number of major investments in Ontario by major companies: Ford Motor Co, General Electric, Northern Telecom, 3M Canada, Kraft Foods, General Motors, and the list goes on. We all understand these are recessional times that we're in. I think an important question to ask at this point is, are the types of investment that are being made in Ontario the types of investment that seem to recognize the government's direction on skills training, value added jobs, the general approach that we're taking in developing or trying to maintain or develop further a high-wage economy?

Hon Mr Philip: Let me start off by saying that Ontario continues to attract more foreign investors than any other province, and indeed than all the others combined. In 1991 the province accounted for 53% of the total number of investments in Canada. The Ontario share of the investments was much higher of course than our share of population in Canada. We have about 39% of the population of Canada and we're getting over 50% of the investments.

The type of companies that are investing tend to be the high value added companies, and when I talk to them our industrial policies are among the things that certainly are attractive to them.

Maybe some of my staff will recall the name of the person very high in the echelons of General Electric who came here for a meeting, and at the end of the meeting he said, "I've met concerning possible locations for a number of my plants with most of the American governors and people like that, and you people certainly have a better idea of how to develop an industrial network than any other jurisdiction in North America." Of course, we see that in Oakville. We see that in -- is it Pickering where GE has set up the silicon plant?

We had similar comments by the president of Ford who had an opening there to announce a $2-billion investment. The president said, "This is a government that we can really work with, that understands what has to be done, and we look forward to obtaining more product mandates for Ontario."

Some of the investments have made all the newspapers, and we've got very long lists. I tried one day in question period to read, I think, one tenth of them into the record, and the Speaker cut me off because I was taking too long. There's the Ford Motor one of $2 billion in Oakville and Windsor to build mini-vans and light trucks. In Windsor more than $1 billion will be spent to produce truck engines, beginning in 1995. In Oakville more than $1 billion, including the $439 million already committed to the new paint plant, will be invested in the Oakville facility, the sole supplier of Ford's new mini-vans for 1993. About 400 jobs in Oakville will be added, and employment will be maintained at the current levels in Windsor.

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Canadian General Electric announced plans to invest $144 million in an Oakville plant to produce two new, advanced-technology, energy-efficient light products. This commitment is expected to create 190 new jobs in 1996. Of course we were able to assist CGE in this venture by providing a $25-million repayable loan.

In January, Glaxo Inc, a pharmaceutical manufacturer, stated that it intends to begin construction on a $70-million manufacturing plant in Mississauga. We've been working closely with the pharmaceutical industry, and there's a lot of interest in opening up new research centres here. We're certainly in the bidding with one of the very large Swedish companies to locate its research here rather than in Europe, the United States or Australia, which I believe is the other possible location.

In December 1991, Northern Telecom won a $1-billion contract to upgrade telephone lines for its network. Northern Telecom's Bramalea operation will receive 25% to 30% of the business arising out of that deal for Ameritech telecommunications network.

You've read about some of the investments by IBM, and 3M Canada has invested almost $50 million to expand and upgrade its Ontario operations, including a new $30-million facility in Brockville. Kraft General Foods Canada announced that it will be spending $35 million on its plants in Scarborough and Cobourg. Of course, General Motors has just made announcements about its Oshawa 2.

I could go on and on; those are just the bigger ones. In addition to that, we're winning some major international contracts that involve our architectural firms and consulting work and services. What might be useful in that regard -- has Gordon Gow just left the room or is he still here? I don't have the list of those in front of me.

Mr Jamison: That's basically what I wanted to hear. As I became aware, the negative is out there in an unreal sense today. Reflecting on the Ontario Competitiveness Report done by your ministry, the very first graph I look at indicates that almost a full half of investment in Canada is taking place here in Ontario, which again makes me wonder what type of rhetoric is out there when we hear people constantly talking about investment being scared away.

Hon Mr Philip: I'll tell you, though, what is scaring them away and why we're dealing with the problem. There's an interesting paper that identifies the problem turned out by the Canadian Bankers Association; it was sent to me. I haven't had a chance to read the whole paper -- I just got it -- but it was done by Allan Riding of Carleton University and Catherine Swift of the Canadian Federation of Independent Business. They point out that "there's evidence that the growth of Canadian technology-based firms may be mitigated by the lack of capital." Their surveys of Ontario technology firms and the report of the Premier's Council in 1989 related that the lack of adequate equity and debt capital were the two most frequently cited constraints on growth in this country.

We are having some major problems, as Gordon would tell you, in getting through the federal financing operations for getting some foreign contracts, compared to the Germans and other countries that are in there competing with lending powers. We can compete technologically, but one of the biggest problems facing this government is coming up with the way in which we can provide risk capital and venture capital. That's one of the things we're struggling with at the moment.

Mr Jamison: I think George Dadamo has some questions for you, Mr Minister.

Mr George Dadamo (Windsor-Sandwich): Minister, I want to take you back to page 4 of your report to us yesterday.

Hon Mr Philip: Of my speech?

Mr Dadamo: Yes, your speech, sir.

The Chair: It just sounded like a report, but it was actually a speech.

Hon Mr Philip: Well, it's the only way I can get a speech in in less than half an hour.

Mr Dadamo: Absolutely. I'm sure my colleague Wayne Lessard will concur with this. We're of course concerned about the cross-border fiasco. On page 4, it says, "We also worked closely with hard-hit border communities to implement a program to combat cross-border shopping," and there is a total of nine, I believe, cross-border regions.

"The results to date have been positive," and there is a member of the Fort Frances-Rainy River border zone advisory committee who says: "The loan campaign went overwhelmingly well.... The public became aware of just how important the businesses are for our town and how we are able to help."

Anyway, I wanted to talk about some of the moneys that came to Windsor, to BZAC, in the amount of just over $199,000, in the last several months. My colleague Mr Lessard and I made the announcement at Windsor city hall, and we thank you for that. What I'd like to find out, from you or from someone in your ministry, is if we can look forward to some other funds coming our way in the next little while. I'll tell you why.

Megeed Ragab is a professor of business at the University of Windsor; he is also chair of the BZAC. He made some observations in an article he wrote For In Business Windsor magazine this last month. I wanted to quote a couple of things, if I may.

He says: "It has been nearly two years since the crescendo of the cross-border shopping problem sent shock waves into our retailing community. Since then, many good-news things have happened.... Our observation is that Canadians are buying primarily loss leaders from Michigan. Their other purchases are made in Canada.

"Secondly, price levels in the Windsor area have dropped significantly -- believe it or not....

"Thirdly, our local retailers have put forth a valiant effort to win back Canadian shoppers....

"The task force has launched six initiatives, starting with the Value Assurance Awards initiative" -- and I think you talked about Ford's Q1, Quality 1, Award -- "in the clothing retailing sectors. The local consulting firm of Moore and Associates carried out the pilot test with enthusiasm. New funding has been approved for it. We are ready for a full-scale implementation in that sector."

The final thing they have done with this money: "The Shop Local Hotline initiative was launched July 1. This line provides the names and telephone numbers of Canadian retailers who meet or beat Detroit prices. We have been receiving 14 calls every hour.

"With the help of" -- a company in Windsor -- "and a group of local trainers, nearly 60 retailers and employees received specialized training ranging from competitive strategy to customer satisfaction."

I'd like to say that the mayor has done a wonderful job with BZAC, as well as the entire committee -- which is a large one, I think about 36 members -- as well as the merchants and the rest of city council. I'd like to find out if there are any other initiatives that are coming to this committee in Windsor, or can any other of the border regions look for any other kind of money that may come in order to combat cross-border shopping?

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Hon Mr Philip: As you know, and I'm going to ask Peter Friedman to add some information to this, the concept was that communities know best how they can compete with their competitors across the border. So we are in a constant consultation and monitoring process on how successful these are, and they are coming forward with new initiatives and new proposals to us.

At the same time, I can tell you that I have some real concerns with the NAFTA agreement. The very clothiers you talked about, the apparel industry, may have some real problems, and that's going to complicate what we're already doing.

Some of the programs I'm particularly enthusiastic about are that we've been able to involve the retailing industry at a provincial level. They're saying, "Yes, these initiatives at the border were important, but also we need some other initiatives at a provincial level or at a sectoral level." The retailers in Canada have been feeling some of the same kinds of pressures that perhaps those in Florida and the southern states faced a couple of years ago.

What we're looking at is working with that sector, developing training, developing new ways of merchandising and developing new ways of doing inventory control and looking at the whole financing of inventory and so forth, so that we can become a more efficient industry. If we can lower our overhead costs in that industry and become more competitive, then it's easier to compete. It's not just an advertising program or appealing to people's sense of loyalty to Canada and so forth. Peter, maybe you'd like to add something to that.

Mr Peter Friedman: There are just a couple of things I want to add. First of all, we're in the final stages of developing a province-wide consumer awareness campaign, which would be available through a media relations mechanism, where we would make known opportunities for shoppers in Canada on an across-the-system basis.

We have done quite a bit, actually, at the border communities. In fact, they have got quite a few things going for themselves in terms of awareness, in terms of retail training and in a number of areas. We want to expand that now to make it available to other communities in Ontario and to the broader shopper network, because what we're finding is that cross-border shopping is also being done by Toronto people and by Hamilton people, not just in the nine border communities.

We're now in the final stages of launching. We want to make sure we hit the pre-Christmas purchasing mechanism, and we're working now with a group of people. We have about $1 million that we're going to put into media awareness; not an advertising campaign, but telling people where the value is in Ontario, which is not very well known, I might add. Everybody seems to know about the factory outlets in Buffalo, but very few know about the factory outlets in Ontario, of which there are quite a few. That's the sort of thing where we're quite a ways down the road.

But in the border communities, the fund itself will continue next year. So it's not an ending thing; it's a beginning. We're also joining forces with the Retail Council of Canada and the Ontario Federation of Labour, as well as with the federal government, to try to work together and put many of these things in place.

We haven't stopped cross-border shopping yet. Some things have been mitigated because of a number of circumstances, but what we have done is given many people in border communities a chance, that they now have at least a handle to do something for themselves. So it's not just watching the people go by. They now seem to be much more positive. When I first got involved in this about a year and a half ago, there was a very negative feeling among those people, that they were losing control of this. Now it's beginning to look more positive, not just in Windsor -- which I think has done a good job -- but in all the nine border zones. We're getting back quite positive remarks.

Mr Tony Ruprecht (Parkdale): I'm delighted to be back here today to follow up on the questions I asked yesterday. I appreciate the remarks the minister made in terms of these questions and their importance.

Hon Mr Philip: Can you just give me a minute to find my notes on what you asked yesterday?

Mr Ruprecht: No problem. Let me just make some remarks before I ask these questions. This ministry, as you know, Minister, more than any other ministry, has had in the past, and no doubt will have in the future, an important impact on lives and the quality of life, being competitive in Ontario. That's why I think these discussions are of real value to us. While the opposition obviously is going to focus on the bad news of plant closings and job dislocations, and while it may be the government's position to focus on the issue of job creation, why can't we agree, at least, that if the bad news is bad, let's see how we can make it better? If the good news is good, in terms of job creation, if we're doing something right, let's see if that can be enhanced, at least in that perspective. I think something really good can come out of these estimates and out of these discussions. We know that Ontario's been affected greatly in terms of the US-Canada free trade agreement. There is something we could have done better; you could have done better; the ministry could have done better. It did not take a scientist to figure out that once we went into the free trade agreement with the United States, as an example -- and why these comments are important is because we're now into a new situation with Mexico -- we needed to come up with some kind of policy to figure out how to stop the haemorrhaging and the dislocations that were going to take place. It didn't take a big scientist to figure out, for instance, that the American branch plants, which we as Canadians and our financial institutions financed -- as you had indicated, one of our basic problems is financing and risk capital. It is our own institutions, if you check the record, that are financing, to a great degree, American corporations coming into Canada and making investments, but are timid and shy indeed when it comes to financing our own corporations in terms of risk capital. There's something we could have done in that direction, I think, at least through some incentive programming.

In terms of the haemorrhaging of jobs and closing of branch plants, we could have figured that out. That's something your colleague from York University indicated 20 years ago in a number of books: branch plant USA, the closing of this and the closing of that. That's nothing new, when a great deal of our industries in fact do rest in the hands of our partners to the south.

The point is this: If indeed we could have done something better to stop the move to the United States -- specifically, we could have figured out the branch plants moving totally once the barriers had been reduced -- we're now in the situation where, as I said yesterday, the new economic truck is bearing down upon us.

There are some things we can do. One, we can get out of the way of this truck coming down upon us. Two, we could slow it down. Three, we could create some barriers. But for God's sake, there is something you or we in this province can do. Let's try to figure it out.

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Now, we know -- and I'm taking some of the time, which is really okay with me -- that in the past we have been very provincial. You know that, Mr Minister; we go to some of these functions together. The point is that when we compare ourselves to the aggressiveness or to the Yankee trader mentality in the United States, we come up short. It may be that our history has something to do with it, being the hewers of wood and drawers of water; sitting on our resources, essentially. But when we compare ourselves to what they do or to what some of the Germans or Japanese do on the international market, we come up short.

Obviously, we have to have some programs and policies that will act as an incentive to own industry, and we're doing that. Our point here is that we can do it even better. We can look at what these other people are doing and then act accordingly.

How we're going to get into motivating our own industries and being internationally competitive is a different story; the whole question of motivation and what we do as Canadians. But for God's sake, let's try to figure out some plans.

That brings me to NAFTA. My first question would be --

Hon Mr Philip: Do you want me to respond to what you've just said?

Mr Ruprecht: No, I want you to respond to my question. That was just a preamble and comments. What I would like you to do is answer the first question, if you don't mind. The first question is this: We know about NAFTA; could you tell us what your ministry has done in terms of providing Canadians with access to the Mexican market? Is anything in the works? How quickly can we act on that, and are you doing it?

Hon Mr Philip: Let me respond first to your preamble by saying this: I agree that Ontario has been very provincial. I think all of North America has been very provincial, if by "provincial" you mean that we've sat back and relied on natural resources and doing business the way we have. So we face competition not just from the United States, but also globally. Even though we could have predicted, and indeed economists were predicting, that there would be some shake-down with the free trade agreement, it was introduced on January 1, 1989, and your government had no policies to cope with it. The federal government doesn't have an industrial strategy to cope; indeed, its trade policy is its industrial strategy, when it should be the other way around. You need an industrial strategy, and then trade is part of it.

Mr Ruprecht: So let's learn from that.

Hon Mr Philip: So we said: "We agree that the previous government didn't do its homework. They didn't do anything other than to say that they had a veto -- which they later discovered they didn't have -- over free trade. So let's deal with this problem."

We dealt with it in two ways. We looked at what kinds of adjustments are needed. We went to the federal government and said: "You brought in free trade. Here are the kinds of adjustments you should be looking at." They said basically, "We can't identify whether this is related to free trade or whether it's related to other things," and so forth, and they didn't bring in any adjustment programs.

Also, in terms of the free trade agreement or NAFTA, we had one of two choices. We could either say, "We disagree with this and therefore we're walking away from the table and it's your baby, Charlie, and you live with the consequences," or we could be there arguing on behalf of Ontario industry and putting forcefully our case and our concerns. We did that. My staff and I spent a tremendous amount of time talking with Michael Wilson; I give him credit that any time I wanted to speak to him, he was available, and his staff shared as much information as they could. It was a constantly changing target, as you probably know.

There are some problems now with NAFTA. If you'd like, I can outline some of the problems we see with the present agreement. Maybe Katherine and Peter Sadlier-Brown can also fill us in on some additional information, because they've got a lot of documentation with them; as it comes off the fax machine, so to speak. But there are some real problems we are going to face with the present NAFTA agreement. The rules restricting free trade in clothing and textiles to products containing North American fibres and yarns will certainly boost the US textile industry. We tend not to have, to the best of my knowledge, any cotton-growing farms. We tend to import fabrics from India, from Italy, from the Philippines. We manufacture clothes like this suit, which is an excellent suit made by Cambridge, an Ontario-made suit; I won't ask any of you to pass that test. It's a good Hamilton company, I believe, even though it has the name Cambridge. I don't know where the fabric came from, but I wouldn't be surprised if it were made offshore.

Mr Ruprecht: I think you've made your point on that.

Hon Mr Philip: I can tell you where I bought it -- a $300 discount. I got it for $700 and something. You'd be surprised how much my wife was pleased. I bought two of them.

Mr Ruprecht: Maybe we can concentrate on the access to the Mexican market, Ed.

Hon Mr Philip: Okay. I can go through the different problems, but in terms of your Mexican market question, we certainly have gone very aggressively after the Mexican market. I met with their various political and other leaders. The most visible example of Canadian-Ontario interest in Mexico was the remarkable success we had in Monterrey at the Canada Expo '92. For instance, we confirmed sales of $2.9 million, with projected sales of $80 million over the next two years; 30 firms concluded agent-representative agreements. We got 16 joint ventures, 10 direct investment projects, and I could list the various groups who got sales out of that.

In the auto parts, ABC Group; plastics technology, which of course we are very hawkish on, the plastics industry, and think there's a tremendous potential for it in Ontario; machine tool and die, related metalworking technology and materials, and so forth. We did extremely well.

My assistant deputy minister had spent a considerable amount of time in Mexico. Of course we are now serving Mexico out of the Houston office; however, we are looking at all our offices and looking at ways of servicing that market -- not just because of the Mexican market in itself, but also because we're interested in the whole Latin American market. I think that has tremendous potential; we're selling an awful lot in Latin America. DelCan has just obtained some major contracts to put in two sewage treatment plants in Venezuela, and we're looking at new opportunities in Argentina. The Argentinian government has just appointed its first consul general to Ontario and I've spent some time with him on a couple of occasions discussing opportunities. So there are tremendous opportunities in that whole Latin America area. If we get a GATT agreement, then the opportunities are even more so.

Gordon, do you have something you want to add, as you are now the director of everything out there?

The Chair: Mr Gow, Hansard wouldn't pick up the fact that you don't have anything additional to contribute at this time. Mr Ruprecht, do you have any further questions on this?

Mr Ruprecht: Yes. While Mr Gow is coming forward -- at least I hope he does --

Hon Mr Philip: I think Mr Ruprecht wanted Mr Gow to reply.

The Chair: I was waiting for Mr Ruprecht to indicate what he wanted to do.

Mr Ruprecht: If he's coming forward -- he just sat down again. You might as well get up and make your way to the table over all these other bodies that are in your way.

Hon Mr Philip: Gordon does a lot of travelling, and he's doing it in this room.

Mr Ruprecht: I would very much appreciate you following up the minister's statement that we're expanding into the Latin American market. That may be one of your areas of jurisdiction. Can you tell this committee, are we expanding trade missions into that Latin American market or are we just standing still in terms of the number of trade missions?

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Mr Gordon Gow: I don't think I can tell you that we're standing still, because we're not. I noticed in some of the questions that "trade mission" is defined as an office. Within that area at the present time, that's all under the evaluation and the consultant's report that is doing a study as to where our offices go.

However, in the actual business climate, there are number of joint ventures we're doing with the federal government in going to business shows. There's been a large one in Mexico just recently on the construction industry, which was extremely successful. As a matter of fact, our engineers and architects are presently looking at building plants in Mexico for Mexican and foreign companies. One, we hope, very soon will be with Volkswagen to do a full manufacturing plant just outside of Mexico. The minister was up to Royal Plastics a couple of weeks ago -- maybe it was even last week; I'm losing time. There was an announcement there that Argentina has bought the first 4,000 plastic homes, which will go into that jurisdiction through the government there.

So we are participating in the missions. We are participating in doing the business. I would say it's on the increase. If I take the term of the last two years, we've been doing more activity in the central Americas than we've ever done before.

Mr Ruprecht: That's good news.

Hon Mr Philip: May I just comment, because I don't want us in any way to mislead -- I'm sure Gordon isn't doing that. Some of us have some concerns, particularly myself, about some of the traditional trade missions. I think we have to be careful in how we use that word. To me, a trade mission can be one minister and two or three companies going selectively, as Gordon Gow and I did in Iran, where we had a very small group of people. The ambassador said he thought it was the best and most focused mission, if you want to use that word, he had seen, and he had been ambassador to a number of countries.

I am not overly enamoured with bringing large numbers of people -- without being too partisan -- such as the Italian visit of David Peterson, in which anybody who had a name that ended in "i" got to go on a trip to Italy. I don't think that was particularly useful.

Mr Ruprecht: We'll skip those comments. Let's not get into this particular argument.

The Chair: Minister, your comments are bordering on the offensive, and I'd ask you to respond directly to the question.

Hon Mr Philip: Mr Ruprecht and I are good friends. He didn't find it offensive; he thought I was just joking.

Mr Ruprecht: I know he was joking. Still, keep your comments short on the partisan line.

Let's get back to the exhibitions and trade missions, if you don't mind. I know Gord is trying to do a good job, and no doubt he is, but my concern is this: We're talking about expansion. If I'm not mistaken, 76 exhibitions during the last year went in an aggressive way across the globe. How many of these 76 were focused towards Latin America, if indeed we're moving in that direction? What countries are you targeting specifically south of Mexico?

Mr Gow: I don't know the exact split of the 76 that went into the central Americas, but I can certainly find that number out and give it to you. Generally, right now we are focusing on the markets where we will get paid, where there's money around in those communities, and where in fact our businesses have already made some entrenchment and are making some successes; we're trying to leverage those successes. I, like the minister, do not favour just going on a fishing trip, but more going into some specific business deals to which we can bring focus and leverage that business we're already doing there. So that brings us to a lot of activities in southeast Asia, the central Americas, the United States, of course, and Europe, both the fringes of eastern Europe and western Europe. Those are the targets we're aiming at.

Mr Ruprecht: I appreciate those comments, but what I want to know specifically is this: If we had 76 missions this year, if our statistics are correct, then you've reduced that number, and your response to this reduction in terms of trade missions or exhibitions going from Ontario to other places to drum up business -- I suppose that's the aggressiveness I like to see. If you are in fact reducing that number, is it because we're still in the mentality of a recession or is it because there is a philosophical point to be made simply by saying, "We're not in favour of your simply going on a mission"?

Of course we wouldn't be in favour if it wouldn't be productive, but I would think there may be some variables that can be identified, adjusted or at least seen as being positive by having an increasing number of missions, because only through these expositions and exhibitions can we be seen as being aggressive enough to get after some business from abroad. So if you could tell me, please.

Hon Mr Philip: Maybe I can start to answer that and then Gordon will look at it and add to it. But I'm not convinced, and I think if we look at the figures of what Ontario International Corp actually can relate in contracts this year as compared to previous years, they're up substantially. I don't think that you relate necessarily the business you bring back by the number of missions that you have. What you have to have is a strategy in which you are focused and in which you do a variety of things that bring in missions.

During the 1991-92 fiscal year, OIC assisted Ontario professional service firms to acquire 35 contracts valued at $486 million to Ontario, and at the end of the fiscal year it was assisting companies to pursue 550 projects valued at $6.7 billion in 96 countries. When you consider that OIC has an operating budget of $4 million, that's pretty good value for money.

What I'm saying is that I guess I've been sceptical about very large fishing trips. What we've tried to do is to focus on other ways that we can be more effective. For example, I've been doing a lot more than I think the previous government had been doing in meeting with and encouraging immigrant Canadian business associations to be formed and working with them to see what the opportunities are in their countries of origin, and in meeting with consuls general to find out what the changes are in trade laws in their countries.

For example, India and Pakistan are changing their trade laws so that we can invest in their countries, do joint ventures and take profits out of the country, whereas before there was a disincentive, because of their trade laws, to do things like that. Therefore it becomes more important for us to look at a country that's doing that kind of thing. I think we're more focused and I think if you compare our record now with previous records, we're doing more with less money. I think that we have a better feel, that it's working better that way. But as I said to Monte Kwinter, who has some contacts in various countries, and I'll say the same thing to you because I know that you have some good contacts in what used to be called the Iron bloc countries, we are willing to meet with anybody. Representatives from Ukraine were in to talk to us. We're signing a memorandum of understanding with the Russian republic soon. We're working on that.

The other method that we're using, which I think is more innovative, is that we're signing agreements on a provincial level, if I can use that, or a state level, for joint ventures in research and development and trade missions back and forth between jurisdictions. For example, I have met with representatives, including the prime minister, of Catalonia, the major industrial province -- or is it called a state? -- of northern Spain. We've got the Four Motors projects. We are looking at other similar kinds of things, because unless we're willing to do joint ventures and joint research -- I think that the payoff in the long term will mean that we'll have more access to Europe and to other countries.

Those are the kinds of things that we're looking at, rather than the traditional pattern of bringing 20 business people to a particular country, so it's a different focus.

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Mr Ruprecht: Yes, I understand, and it may even be a better focus, but let's encourage you to continue along those lines and do it fairly quickly.

Can I get one more question in or am I out of time?

The Chair: You are out of time.

Mr Ruprecht: Almost out of time?

The Chair: You are out of time.

Mr Ruprecht: In that case, let me ask one quick question. You had mentioned earlier --

Interjections.

Hon Mr Philip: Come on, gang. He's got a question.

Mr Ruprecht: You had mentioned earlier what I think is probably one of the most important points you had raised that could really make an impact here in Ontario and that was the idea that our own financial institutions are unable to provide risk capital for venture. What is your ministry now doing? Knowing that fact, what can you do to encourage this kind of risk capital to be developed, and that would of course help us to establish new corporations?

Hon Mr Philip: I'm so glad you asked that question. I haven't provided any of the people on that side with questions, but I might have been tempted to --

Mr Ruprecht: No, because that's an important point even if it's --

Hon Mr Philip: -- if you hadn't asked that question.

Mr Ruprecht: Yes.

Hon Mr Philip: Certainly, as you know, we're moving along with our Ontario investment fund. We have had just tremendous support from the private business community, the trust companies and others who are very interested in this, including the banks, and I believe --

The Chair: Do you want to hear from Sarah Bernstein?

Hon Mr Philip: Would Sarah Bernstein like to bring you up to date perhaps on the consultation that we've done? We're developing a model that I think everyone is very supportive of.

The Chair: Please introduce yourself, Ms Bernstein.

Ms Sarah Bernstein: I'm Sarah Bernstein. I'm project director for the Ontario investment fund initiative of the ministry.

As you may know, the treasury released a discussion paper last April on the Ontario investment fund initiative and over the last four months, under the leadership of Felix Chee, who was seconded from Hydro to help out on the project, we've held many consultations with a broad range of stakeholders from the business community, from the financial sector, from labour and also from pension funds.

We have also been working with a very high profile advisory committee to the minister, again including representation across the broad range of stakeholders who may be interested and necessary to bring together to promote investments in this area. Some of the people include Gordon Cheesbrough from ScotiaMcLeod, Peter Maurice, president and CEO of Canada Trust, Julie Davis, the secretary-treasurer of the Ontario Federation of Labour, and I can go on.

We have an excellent committee that has put in a lot of time to help us and the ministers both go through the results of the consultation meetings and come up with a design for the model that really responds to the types of comments we've got, both from general consultations and from other people we've had a chance to involve in the process.

As the minister mentioned, we've had very interested and supportive, constructive comments. Our consultations have not been just public relations to set forth the initiative but real working meetings where we get effective input from business and every other community to design a working initiative that can bring everybody to the table.

As of this point in time, we have pretty much wrapped up the preliminary consultation stage and will be working with the advisory committee over the next month or so to define a more precise model that we can bring to the minister and finally to cabinet in the fall.

I'd be happy to answer any further questions, but I think we are on the road to helping in a small way, to try and do something along the lines of the question you were asking, which is to help Ontario provide more risk capital to small and mid-sized companies and expand the knowledge base of these companies over the long term.

The Chair: Thank you, Ms Bernstein.

Mr Carr: I was looking on page 45 where the minister mentioned Canadian General Electric in my riding getting the 200 jobs -- $33 million was given to that company -- and I was interested in your comments, Minister, with regard to General Electric and the problems with Camco and General Steel Wares.

As you know, it's been in the paper that we could have some problems with the Camco plant and maybe the minister or the deputy or whoever could update us on what has transpired with that, because there are some concerns of people in Hamilton with regard to the jobs there.

Hon Mr Philip: I recognize that there are those concerns. Peter Tanaka, who has put together so many of the big deals in our ministry for the last year or so, is on top of that, and it's a difficult situation.

Mr Armstrong: Maybe just before Peter talks, just for purposes of clarity, I think Mr Carr was referring to the GE-Camco matter in particular. Peter can perhaps talk about both of them, but on that one, I guess there's a word of caution.

Mr Carr: I know it's before the courts.

Mr Armstrong: We know that GE and Camco are before the courts, and we know what each side is alleging with respect to whether or not Camco is being stripped of --

Mr Carr: That's the one I specifically wanted.

Hon Mr Philip: That's why I courageously gave the question to Peter Tanaka.

Mr Carr: That's why the deputy gave him a bit of a warning. We all recognize that.

Mr Armstrong: That's why I courageously intervened.

Mr Carr: As a good deputy should.

The Chair: The Chair would just like to hear from somebody about this.

Hon Mr Philip: Peter's had recent court experience, so I just figured he'd be better able to answer that.

Mr Carr: Recognizing that, all I want to know is where we're at with it.

Mr Armstrong: It's very difficult. We have been briefed on that dispute by both sides. If I may say so, it would be inappropriate for us to comment on the merits of that particular piece of litigation.

Mr Carr: Okay, if you'd rather not, I understand.

Mr Armstrong: Other than that, Peter's free to say anything.

Mr Carr: Under the circumstances, I appreciate it. Peter, go ahead.

The Chair: Please introduce yourself and proceed.

Mr Peter Tanaka: Peter Tanaka, director of the domestic industry support branch. Thanks for the warning, deputy. Mr Carr, that was going to be my answer in terms of GSW. I think we all understand the sensitivity surrounding that. However, Camco and MITT have been continuing to work for the last four years in trying to seek out a solution for a product-mandated operation for North America. As I speak, those discussions are still continuing as of today.

Mr Carr: Thank you. I understand. I know the circumstance you're under. Minister, this question is to you regarding Bill 150. Yesterday in my presentation I read out what the Canadian Federation of Independent Business said. They said a better use of the $250 million -- which would accomplish the same abovenoted objective, which, if you know when the government announced it, was to provide small and medium-sized companies with new sources of capital which they can use to modernize for growth and for restructuring for the operations.

As I said yesterday, the Canadian Federation of Independent Business came in and said, "Thank you, we realize you're trying to help small and medium businesses." What they said in the presentation was that this won't do it. At the bottom of page 2, they say, "Even if the availability of financing were a bigger problem than it is in the small business community, the labour-sponsored venture capital corporation program is inappropriately designed to deliver a solution." They came and said that. I gave the quote yesterday from the chamber of commerce, yet the government is proceeding with it.

How can you on the one hand say you're listening to business when on the other hand they make a definite statement saying, "Thank you very much, but this isn't going to do it," and then the government proceeds? Maybe you could explain exactly why you proceeded with that in light of the fact that the small business community didn't want it.

Hon Mr Philip: I'm not convinced that any one group speaks for small business any more than any one group --

Mr Carr: There are two: the chamber and the CFIB.

Hon Mr Philip: Well, I'm sorry, but if you'd checked with the Canadian Chamber of Commerce, they endorsed our industrial strategy.

Mr Carr: No, Bill 150.

Hon Mr Philip: Oh, Bill 150, the employee ownership.

Mr Carr: Yes.

Hon Mr Philip: The fact is that if you meet with the banking community, if you meet with the various groups, and particularly if you meet with those groups that are entered in what we would call the high value added industries, they constantly talk about the need for additional capital.

The employee ownership proposal was brought forward. It is an optional proposal. It will only be used in those cases where communities and employees and investors see it as a mechanism to purchase firms. It's one of many vehicles. We don't think that because some particular groups say that this is not the route to go that we should exclude others that have obviously chosen that this is the route for them. It promotes partnership.

There is research in the United States and elsewhere that companies that are owned by employees do have a higher productivity than those that are not. We've seen companies that, through voluntary or other ways, without any kind of government help, are employee-owned, and Husky is a good example. It's one of the better examples of a company that has a growth rate of 20% and is almost -- with the exception of the 26% Japanese ownership -- entirely owned by employees. United Parcel Service is another example. We think it's one of the tools that should be open. It may not be for everyone any more than naturopaths may be for everyone as their choice of medical attention, but it's one of the options.

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Mr Carr: I'll go into the next question, because the concern is, as they said, "You're not going to reach the goal." They appreciate the fact that there were hearings on the bill and they said it won't achieve the objectives for the amount of money to be spent. They told you specifically what you should do, which was to reduce the employer health payroll tax to as much as you could to spend that $250 million. That would be a better help for small businesses. Yet the government proceeds. So be it.

On the next question -- on page 25 of your industrial strategy, An Industrial Policy Framework for Ontario --

Hon Mr Philip: Someone should give me a copy of that. I didn't bring it. I thought I had it memorized, but I don't know the page numbers.

Mr Carr: Page 25 is the sector partnership fund. Maybe you could let us know, of the $150 million that we're spending on that over three years, how much will be spent this year? Is that new money? Also, can you give a clear mandate of the objectives of that and maybe table it with the committee as to what specifically that fund is going to do?

Hon Mr Philip: Yes. Peter Sadlier-Brown will want to add to this. In this year we've budgeted, as I recall, $30 million, because as you know, in the startup of any program it takes a while to get started. Part of the money is to actually assist groups of companies to form themselves into sectors and to start developing programs of working and cooperating together.

If we look at various industries, you find that some are very far ahead in terms of developing sector associations and sector proposals, and others have been used to perhaps more of an Adam Smith approach to the world, if you want, of every man for himself.

Part of the fund then can be used initially to get those sectors together, get them talking to one another and get the kind of research that it's necessary to pull together. After that, of course, we will be looking at specific proposals coming out of those sectors. This morning, for example, in the telecommunications area, the telecommunications companies have released to Karen Haslam and myself a very elaborate set of guidelines of proposals, if you want, that perhaps someone might like to ask me about later, that have 11 specific initiatives. Some of those are initiatives that might fall under sector partnership. A vast majority would probably fall under their own financing. We've been working with the auto parts industry. Certainly the plastics association is very far ahead, and we've signed a memorandum of understanding with it.

Mr Carr: So, how much is new money? How much, for example, would the plastics industry --

Hon Mr Philip: It's all new money, yes.

Mr Carr: It's all new money. And how much, for example, would the plastics industry get? Are you close to sending specific money to people or --

Hon Mr Philip: Nothing has been allocated under the new $150 million. But if we wanted to look at examples of what, knowing where we were going, we did through other programs -- through Peter Tanaka's department and so forth and through ODC -- we have done various projects that probably could more or less have fit into the sector partnership fund, had it existed at that time. I think, for example, of the Ontario health biotech centre in Ottawa that might have fallen under that -- at least the study parts might have -- as a possibility.

Mr Armstrong: It's the Ontario health sciences.

Hon Mr Philip: Ontario health sciences. I always know the details of these programs and can never remember the names.

Certainly the program in the tool, die and mould area that I have referred to in the city of Midland would be a good example.

Mr Carr: If we could get just a copy of that one where the mandate is laid out, it would be --

Hon Mr Philip: The point I would like to make, though, is that $150 million is a small amount compared to the money that we hope to generate from private enterprise as a result of these.

Mr Carr: And how much would that be?

Hon Mr Philip: It depends on the project, the sophistication of the group and so forth. Let me just give you an example of the Husky case, because I know some of you have been receiving letters on it, and I've shared with you so that in case you wanted to ask a question in the House, at least you'd ask it with the full information.

With a $20-million loan, we actually were able to get loosened up from private enterprise, namely Husky, $196 million. Any time that I can give a $20-million loan and get $196 million invested in making that company and some 100 or 200 other companies more competitive, I think that is good value for money, and we're looking at that type of project.

Mr Carr: We're assured of the transfer, because, as you know in that particular case, there is concern that one company gets it and the other does not. How are we working to ensure that, indeed, it will be -- because the perception could be out there that, when we're doing that for one particular company, that company gets the benefit over the XYZ Co?

Hon Mr Philip: That's an unfortunate perception, because certainly the plastics association thought it was a good idea. They endorsed it. I don't want to talk about what's before the courts, but as you know, one company that isn't happy is suing the plastics association.

Mr Carr: I agree that through associations is the best way to do it, and your group, if you're the biggest and get into associations, I appreciate that.

Hon Mr Philip: Part of the problem, though, that we run into is that in some areas competition has been so fierce that we may not be able to go entirely through associations. For example, when I talked with auto and auto parts industries, some of them have said, "Well, we may not be able to have a program that combines all the Big Three and all the Japanese-invested Canadian companies, but what we may be able to do is develop a program, for example, in which Ford and all of its suppliers initially involve themselves in a sector initiative," and maybe GM might do something similar. Hopefully, then, as we start working through them, we can show them that it's in their economic interests, in at least pre-competitive areas, to do things that benefit the whole industry.

Toyota has moved, interestingly enough, into some very interesting things which it is throwing open to the whole industry, to every company, to get training and so forth. They are doing it through two community colleges. So there are some fairly progressive companies out there that see the value of that.

Mr Carr: I, like a lot of members, received the new ventures book, and I appreciate that, from the minister. We got quite a few of them that came through from the Ontario Development Corporation. With regard to that program, specifically this year -- and I know the numbers are listed there -- how many companies and how much money are we going to be spending and, more importantly, through that, what is our estimate of the number of jobs that will be created through the program?

Hon Mr Philip: I think Brian may have that figure for you. No, David has the actual numbers.

Mr MacKinnon: For the current year, which is a projection, of course, to the end of the year, our expectation is that we would assist 2,934 firms with that program, with an anticipated creation of approximately 4,078 jobs. These, of course, are very small firms because they are startups.

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Mr Carr: And the amount spent, total, on that?

Mr MacKinnon: The maximum loan that we guarantee through the chartered banks is $15,000 per enterprise. The smallest ones that we do have been just over $5,000. The typical size is around $13,000. Those, I think, would be the approximately accurate numbers.

Mr Carr: And in terms of how much will be spent, how much do you figure will be spent?

Mr MacKinnon: Again, I don't have the exact expenditures, at least not immediately available. My colleague will perhaps dig them up in a moment.

Mr Carr: Maybe while they're doing that, you could go through the criteria that are used, because I received the book, as I said, which was very helpful. What criteria do you use in making that out and in making the determination? I think you've got policy and guidelines that are laid out here --

Mr MacKinnon: Yes.

Mr Carr: -- but maybe you could just summarize. What are you looking for in this type of project?

Mr MacKinnon: You'll notice in that application form, there's a business plan form. What we're really looking for is a quality effort in filling out that plan and showing that the proponent has really thought through this proposal in a serious way, and also every single aspect of it. I think that's the most important single thing, by far, we're looking for. It's a demonstration of viability.

Just as an aside from that -- it's aside altogether -- we're finding a very considerable demand for that form in academic institutions and elsewhere simply because it is such a useful way of judging whether this enterprise will succeed or fail.

Just on the numbers, in 1992-93, the budget for new ventures would be $17.1 million, and the vast bulk of that expenditure would be for guarantees honoured from the previous parcels of loans dating back to 1987.

Mr Carr: What are our loan losses since 1987? What are the figures on that?

Mr MacKinnon: The actual losses would range. It depends on the individual parcel of loan. For example, the loan losses for the 1987 parcel would have gone for five years, and that's the best indication of that particular year. There's also a declining rate, as you'd expect, given the relatively less time that has elapsed for each of the years subsequent to that. We're just looking those up now.

Mr Carr: What I'm looking at basically is, are we getting value for the amount? If it is too much to get here, certainly perhaps you could table it. What I'd like to see is if we've got the amount that's been spent since the inception of the program, the loan losses and the number of jobs created. Obviously what we're looking at is to see if we're getting good value for the amount that is being spent. If he's got it, great. If not, if we could just --

Mr MacKinnon: I can give you some of that. From the program inception to March 31, $61.1 million in guarantees have been honoured and $287.7 million in loans have been guaranteed. If you wish, I can supply you later with the breakdown.

If I could make two comments on the value for money, perhaps that might be helpful.

Mr Carr: Sure.

Mr MacKinnon: One is that we have analysed this program in some detail, and the question centres on what proportion of those jobs created are incremental, that would not otherwise have been created. According to the accounting firm that did that project, the answer is nearly half. If you then work your way through the income generation and the provincial income taxes paid as a result of that incremental half only, because it's not fair to count the other half, the advice of the accounting firm was that in all probability, we were getting a financial return to the province through the tax collection system that exceeded the expenditure on the program.

Mr Carr: What about for ODC, on the whole? That's for the new ventures. What about all your loans through all the programs? You've obviously done a study on that. How does that correlate and what did the accounting firm say about that?

Hon Mr Philip: We were just hearing about that this morning.

Mr Carr: Great minds think alike.

Mr MacKinnon: We didn't have an accounting firm. The study I'm quoting from is a specific study targeted at new ventures only.

Mr Carr: Oh, it wasn't an accounting firm. A study, okay.

Mr MacKinnon: Large programs like this are periodically examined, either internally or externally, in sunset reviews; you're familiar with that mechanism. This is really in the form of an internal sunset review of that program only. However, on the ODC programs generally, if I can put it that way, I'll answer in the broader sense. Basically, the budgeting system of the government does not always reveal the full operational details. In the budget for the current year you have a gross number of about $120 million -- it's in the documents you have; $120 million or $125 million -- for our program in total. On the basis of that program, we would provide financial assistance made available of something in the order of $300 million or $350 million, depending on your accounts. Now that of course works through guarantees. You get a multiplier effect because much of that is guaranteed.

For many years in the late 1980s, during a positive economic environment, the corporation as a whole actually broke even in cash terms, so there was a period of three years when there was no net cost; I think it was under $1 million for that three-year period. Over the next three years the net cost to the province was close to $100 million.

We will examine these figures to be sure that what I'm saying is absolutely accurate, but the net result was that over that period the entire program cost to the corporation would have been about $100 million and the financing made available would probably have been -- yes, the figures I'm talking about are right -- somewhere between $1 billion and $1.5 billion. Additionally, we have done some studies on the payback from individual transactions. The payback comes in three forms: either repayment of the loan; taxes earned, taxes the province gains on the incomes earned by the individuals affected; or expenses forgone, that is, expenses the province does not have to incur because it did those deals.

Based on those three components, on the individual cases we've looked at, the return to the province in financial terms exceeds the original loan or investment by about year 3.

Mr Carr: And by what ratio?

Mr MacKinnon: Well, we've only worked it to the break-even, which would be in year 3. To get a full ratio, you'd have to go all the years beyond that.

Mr Carr: But if it's just in the break-even, you surely can't be happy with that.

Mr MacKinnon: No, but clearly if it's going to break even in three years, then everything beyond that is a major gain.

Mr Carr: Okay. With regard to the loans, what do you figure in terms of jobs? It's a difficult question, but how many would we be projecting we've kept or created? I know it's like projecting budget deficits and so on, that it might not be accurate, but what are your figures telling you on number of jobs?

Mr MacKinnon: In very rough terms -- I have to really qualify this because, as you know, the methodological problems are major -- our sense is that over the last five years we have either maintained or created approximately 50,000 jobs through the program.

Mr Carr: What expenditure would that be over that same period?

Mr MacKinnon: Using the round terms, the net cost to the taxpayer would have been about $100 million over that period, net cash cost.

Mr Carr: With regard to the loans, as you know, I talked yesterday about some of the problems. As the minister rightly pointed out, and actually in the auditor's report, some of those go back to 1985 in some of the programs. As you know, there are some major concerns about MITT and its loan program. What steps have we taken to ensure that some of the problems that were outlined have been corrected?

It was pretty scathing. It's too bad Mr Kwinter isn't here, because I guess some of them go back that far. It was a real condemnation of MITT and its loan programs. What have we done now so that the public can say we're not doing a bad job in terms of loans? In this day and age we really need to work on that area so the public feels confident. What have we done specifically to help in that area?

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Mr MacKinnon: If I can make an introductory comment, you'll have noticed in the Provincial Auditor's reports that there was a reply. The deputy minister, a man of considerably greater experience in these sorts of things than I, cautions me on the wisdom, or lack thereof, of disagreeing with the Provincial Auditor, so I should refrain --

Mr Carr: The minister already said he's 95% right.

Hon Mr Philip: It was the previous Provincial Auditor. You're on safe ground.

Mr Carr: Anyway, you know what I'm getting at. What have we done specifically? Because there are concerns.

Mr MacKinnon: In the Ontario Development Corp, in the last five or six years we have implemented a brand-new computerized loan accounting administration system. We have put in a new organizational structure that focuses entirely upon one individual taking responsibility of a loan throughout its entire cycle.

We have developed a whole series of new procedures for the review of loans, after the fact, when they default. Every single bad loan over $100,000 is reviewed by our board of directors when a problem occurs that occasions a write-off.

We have broadened our management team and significantly upgraded it. We've also decentralized the decision-making of most of our lending structures from Toronto to the community where the loan exists or to nearby communities.

I'll supply you with our annual report for the last few years. Basically, the corporation bears little or no resemblance to the corporation of five or six years ago. All those steps, plus many others, have been taken to make sure that standards were as high as possible.

Mr Carr: I think we got into this last year, when you said, "You've got to remember that we're not a bank; that isn't what we're doing it for." But have we more or less standardized some of our procedures similar to what banks are doing? Is that what the reorganization was all about?

Mr MacKinnon: No.

Mr Carr: Then how did this come about? What was the rationale behind this?

Mr MacKinnon: The rationale was simply to ensure that our operations were of a standard that would be generally appropriate in relation to the private sector, that the lending standards we adopt and our accounting standards and so on were the highest possible quality.

You might recall that in the mid-1980s there was a provincial venture capital corporation, the IDEA Corp, that ran into serious difficulties.

Mr Carr: Yes. That's one of them.

Mr MacKinnon: The Ontario Development Corp assumed it and wound it up. I think it's fair to say that a great many of the lessons learned from that process were of great assistance to us in the management of our program base generally.

If I could comment briefly on the specific program the Provincial Auditor commented upon, we do manage most of those assets for the Ministry of Industry, Trade and Technology once the decision-making surrounding them is done. We are audited routinely in a variety of different ways. There can be few parts of the public service of Ontario that get more attention from auditors and others than ODC, and in each case in the last five or six years, each annual audit has been entirely without remark by the auditor. If you look back at the private sector as well, in the light of history, when you've got the full benefit of hindsight, a lot of lending decisions --

Mr Carr: But if we were to compare your record to theirs, you would say yours is far worse, I would think.

Mr MacKinnon: Well, let me give you those figures. I think I can give you some of those figures, if it may help. At the beginning of the year, our loan losses as a percentage of total portfolio for ODC were 4.2% in 1991-92. They have risen somewhat. They were 5.2% in the previous year, 2.1% in 1989-90 and 4% in 1988-89.

The banking figures for that period would be less than that, but it is also true that our rates of increase are much lower than those of the banks. For example, loan losses for the major chartered banks in 1991 were 81% higher than their 1990 results, which is a rate of increase much higher than our own.

Mr Carr: They of course could be hit by big ones like the famous Reichmann situation, which would throw that out; that has ripple effects through the entire economy. So the big comment is that you're doing worse than they are percentagewise.

I recognize the fact that our goal isn't to be a bank. I think you said that before. All I'm trying to say is that I'm hoping there is a big emphasis on that portion of it. As you know, banks are now looking at scaling back a lot of things, and we might not want to do that. Are you confident that we're now heading in the right direction in terms of the amounts of loan losses with regard to ODC?

Mr MacKinnon: I recall that you and I had this exact discussion last year, and I think I indicated at that time that as long as our overall percentage losses were less than 5% of the initial dollar value of the portfolio, bearing in mind that 1/10th of 1% is a big number in this frame, we could say -- and this requires constant discussion with other ministries, MITT and others -- that in general we feel we're on the track. If we went above that 5% figure, I think we would have to examine pretty carefully what the reasons were and understand them. They may be explicable in this environment. But as long we're under 5%, I think I can say to you that we're reasonably satisfied we're doing what we ought to be doing and doing it with reasonable prudence in risk management.

Ms Christel Haeck (St Catharines-Brock): Minister, I have two questions for you. As you know, there's been a large concern expressed in my riding with regard to the closing of the foundry in St Catharines. I know you and your ministry have been very active in trying to intercede and do what you can to -- well, you could say to keep it going, but I know that's not necessarily going to be possible. I'm wondering if you could update me on exactly what kind of auto negotiations you and your ministry have been undertaking which might have some implications for the foundry in St Catharines. Then I have one other question for you.

Hon Mr Philip: We've met, as you know, with the mayors, the regional chairs, the MPPs in the area. It's not just a problem with the foundry. We're trying to look at it on a regional basis as to what the economic factors are that are affecting that area and what we can do. I must say that the MPPs, regardless of political party, have been cooperative, and certainly the municipal leaders have been.

In addition to that, of course, we've had individual staff, such as Peter Friedman and others, down in that area working with small business and trying to come up with some new initiatives to assist people who might have some adjustments. We've formed an interministerial committee consisting of Agriculture, Environment, Industry, Trade and Technology, Labour, Municipal Affairs, Tourism, Transportation and Treasury and Economics, which is working with the municipality in finding possible things that can be done.

I mentioned Peter Friedman. We're working at a self-help centre for the region that would be established in St Catharines, with our contribution for the first year of about -- how much is it, Peter?

Mr Friedman: It's $35,000.

Hon Mr Philip: I thought it was $70,000 initially and then $35,000 after that. We set up four information kiosks to assist small business across the Niagara region, and we're working with the federal government and the regional governments and Brock University to establish the Niagara Enterprise Agency, which is an agency to attract and establish new firms and help them establish a firm when they are moving into the area. We're hoping to use in that agency local business leaders and local labour leaders.

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Other measures taken by the provincial government, of course, are that we're moving ahead with the relocation of the Ministry of Transportation and the Ministry of Tourism and Recreation. That involves some 1,400 jobs with the Ministry of Transportation and some 400 jobs with MTR.

The winery program is one that has been very successful in the area. As a matter of fact, I had lunch with the president of Brights and very laudatory -- if you want an explanation on the "laudatory" --

Mr Carr: What colour did you have, red or white?

Hon Mr Philip: I always drink red wine. There's actual research that shows that the reason the citizens of France have less heart attacks is because of the red wine they drink, even though they have a very high cholesterol count. I'd be happy to give you the research on that, because every time I have a glass of red wine I feel that I'm adding to my health, and I only drink Ontario wine.

Ms Haeck: I think I saw the same 60 Minutes report as you did, and I occasionally imbibe some of the very good Niagara red wine as well.

Hon Mr Philip: And sometimes with me, yes.

Ms Haeck: Yes, that's true. But I was wondering if the recent announcement from General Motors about the Lumina line in Oshawa is sort of engendering some hope around the foundry at all, if there's been any hint that your ministry staff might have picked up that this might have some positive impact on St Catharines.

Hon Mr Philip: Yes.

Ms Haeck: Thank you. My second question: As you probably don't know --

Hon Mr Philip: Gerry just told me to shorten my answers.

Ms Haeck: Oh, okay. Succinctness.

Hon Mr Philip: I always do what he tells me.

Ms Haeck: As you probably don't know, I have a niece who is 15 who in fact is doing very well in school and is looking for a career. I know that your ministry is doing a few things to support, as well as my colleague here Wayne Lessard -- I'm not sure where he's gone to -- with the Ministry of Colleges and Universities, getting more women involved in science, which is something that is extremely important to all of us, and I'm wondering if you could take a very few minutes to at least expand on what you're doing in that area.

Hon Mr Philip: We've been very concerned, and it's a subject I've spoken about to school boards and others and of course to our cabinet minister responsible for women's issues, as well as the Minister of Colleges and Universities and the Minister of Education.

Unfortunately, the number of females who are dropping out of science and math programs is still high, and it's not because of lack of intelligence or aptitude. There's a whole series of factors that we're trying to identify. I talked yesterday at some length about my enthusiasm for the entrepreneurship program, which I think encourages both male and female to get beyond the traditional stereotyping and mindset, if you want, and make themselves more creative.

One of the initiatives that I think is paying off and will pay off and that I'm very enthusiastic about is the Algonquin Space Camp, which is a private enterprise initiative primarily by the universities and by the aerospace industry. We're contributing only $40,000, which isn't a lot of money, but I think we're getting a big bang for our buck with that; that's $40,000 over two years, $20,000 each year.

One of the things I've checked into: I've said I would like as many young women as there are young men attending that. This summer I had hoped to get up there. They have a lot of equipment which has been donated by Spar and by other companies, including a zero gravity machine that I'm dying to try before lunch, not after lunch.

Ms Haeck: As opposed to bungee jumping.

Hon Mr Philip: No, this is a lot better than bungee jumping. I think those kinds of programs are going to have an effect.

But I'm very concerned that we are not graduating nearly as many engineers. I've seen the figures per capita: about half as many engineers as Japan is per capita. There's a whole very large population of talent out there that we're missing, namely, the female talent.

Ms Haeck: I agree with you. My niece has done very well in school and she has been interested in veterinary for some time. She's doing well in science and math, and some of these things obviously can encourage young women like her to think of other things.

Hon Mr Philip: That's an issue, by the way, that the OTAB is also looking at, so it isn't as though it's just one ministry, but it is a thing that is driving us. We want the Sarah Bernsteins of this world to be found out there so that we can promote them and so forth.

Mrs Marland: How about the Christel Haecks of this world?

Hon Mr Philip: That's good.

Ms Haeck: Thank you, Margaret.

Mrs Irene Mathyssen (Middlesex): Mr Minister, I've heard some wondrous praise this morning of an initiative that was announced in connection with the field of telecommunications, and I wonder if you could expand on that. I don't have any of the details and I wonder if you could tell me about that. I also wondered if you were working in conjunction with the Ministry of Culture and Communications with our colleague the Honourable Karen Haslam in that regard.

Hon Mr Philip: I was afraid I hadn't brought it with me, because I came directly. I didn't know whether my staff had taken this with me.

Yes, it's very exciting. I've been working with Karen Haslam, as well as with other what we could call economic ministers as we develop various sector policies, and Karen and her deputy, Elaine Todres, and their staff have been able to attract some really very impressive people from private enterprise to develop this set of proposals on the telecommunications industry.

When we talk about telecommunications, we're not just talking about satellites, satellite dishes and all this stuff that you see if you're an addict to some of the science fiction sorts of programs that I am, but also about integrating the whole computer system and making businesses more competitive.

They've turned out a report which I haven't read. I've read a summary, but we only received it. It isn't as though we're in there doing it. I spoke at the meeting this morning and thanked the people, and we do have representatives from our science centres of excellence who have been part of that, but of course they're independent as well. It is not a government initiative, other than the fact that we asked them to get together and they devoted hundreds of hours of time.

They've proposed 11 specific initiatives, which of course as a government we'll be looking at, and then they will of course be proposing in a very concrete form, in what I guess would be considered cabinet submissions or cabinet proposals, certain courses of action.

The 11 specific initiatives in the report are a networks of networks, that is, increasing the connectivity of computer networks as they now exist; Ontario Online, which is a way of increasing delivery of government services and information through telecommunications; a proposal which they call the Centre for Reengineering of Work Through Information Technology, which is a centre-of-excellence-like establishment that would do research and development and application sorts of things coming out of the telecommunications and information processing technologies;

a Telework project for Ontario, which would be the establishment of tools to encourage pilot projects in the telecommunications-empowered work; an Ontario international software repository, which would be a library and distribution mechanism for reusable software components; community economic development and support, which would be support and development of municipal and regional action plans aimed at moving communities to higher value added industries and improving the infrastructure;

an information technology architecture for the government of Ontario, which would be kind of a state-of-the-art telecommunications infrastructure designed by, I guess, an interministerial committee in cooperation with the industry; a health care network, which would connect 25,000 health practitioners to support, administrative and business aspects of the health care delivery system; an Ontario information policy which would integrate the computer and telecommunications network, and a telecommunications basic service, which would be basically to look at what levels of service we need to provide Ontarians by the year 1999 and how we start and proceed in an orderly way.

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A lot of these proposals are very expensive. You've got to look at them and see what the payoff is and do the value-for-money and weigh them against other ways of doing things and more traditional ways and so forth, but all of that is coming on. I found it encouraging when we received this this morning. It's the start of how a sector can work closely with government and with the universities and develop some very specific proposals.

Mr Daniel Waters (Muskoka-Georgian Bay): First off, I think I'd like to thank the minister and the ministry indeed, because they have proven something to me, and that is that government doesn't necessarily take years and years and do nothing. That is the IRDI proposal.

Hon Mr Philip: And we're not there to do everything either.

Mr Waters: It took five years for the feds to do what this ministry managed to do in a matter of months, so obviously this ministry is working and working well.

But I would ask the minister that, along with IRDI, which is research and development mould and die, we have a definite lack of skills in this province. As we move to the new generation in the province, I would be curious as to how this ministry is working not only with other ministries but also with industry to upgrade the skill level of the workers within this province so that we aren't constantly importing highly paid, high-skilled jobs from offshore. I was just wondering how the minister could respond to that.

Hon Mr Philip: My ministry staff are working closely with the Ministry of Skills Development. OTAB is a way of trying to bring training in a very realistic way back into business and back into the community and out of -- and I don't use it in a pejorative sense -- bureaucracy. I don't think we can run training programs out of Queen's Park, or at least a lot of training programs out of Queen's Park, that are terribly relevant. I think business and the sectors have to identify what training they need.

I was impressed when I first became minister and started going around and talking to people. Indeed even as Minister of Transportation I got the same kinds of comments, that we seem to have a lot of very dedicated people out there doing a lot of things, but some of them are falling over one another, some of them are duplicating one another's programs, some of them are getting frustrated, and indeed business is finding that some of the training that's being done isn't terribly relevant to its needs. Hopefully, OTAB is being set up in a way that I think is closer to business and the community and, in a sense, run more by business and the community and will be able to do more of that.

With regard to my own ministry, of course we have a number of programs that, coming from a training background and a management background, I don't see training as something you necessarily do in a classroom. For example, our programs have been very successful, and I'll have David maybe comment on this, but some of the training programs I've received the most comment on are our ability to put a very skilled marketing person in a company, or the technical personnel program, or a skilled engineer, in which we pay I think 50% the first year and 25% the second year of the person's salary. By having that kind of person in that company, often the training to coworkers and the innovation and the creativity that is generated in that three-year contract is, to me, where training is really at. It's out there in the factories working with the people.

In addition to that, I think we have to look at the whole computer system, and we're looking at what has been done in the past. We're doing some interesting things with supercomputers, but the average company out there doesn't know how to access them, doesn't know how to use them, so we're looking at how we're going to deal with that type of system.

The $1.1-billion Jobs Ontario Training fund will provide a one-year training credit, of course, of up to $10,000 to an employer for each eligible employee who's been unemployed for a long period of time. At least half the training credit must be used for the new employee, but the other half of that $10,000 can be used to train another employee or other employees. I'm finding that I'm getting quite a few inquiries, and not just from industry.

For example, I have a friend who has a private psychological counselling service, I guess it would be called, or family counselling service. He said there are some very skilled people who may have been trained as psychologists in India or in Pakistan but do not have the "little piece of paper" here that says that you're a trained psychologist or psychometrician or whatever it takes to work in Ontario, but they could be involved in a counselling setting under the supervision of a trained psychologist and psychiatrist. He was looking at ways of taking some of those people who've been unemployed, perhaps, as they've learned the English language and so forth when they immigrated, and getting those people involved in meaningful work. So it isn't necessarily just what we consider the factory jobs that are involved; there are a whole lot of other opportunities as well in that program.

Of course, the lowering of the corporate tax rate will also encourage more companies to use some of that money for training and for other purposes as well. You could go on looking at some other things. Peter Friedman may want to add something to that.

The Chair: If I could, in the interest of time I'd like to move to Mr Phillips, unless Mr Waters wanted to get additional information from Mr Friedman.

Mr Waters: How long were you going to take?

Mr Friedman: Two or three minutes.

Mr Waters: Well, I would like the information if it's only a matter of a couple of minutes.

The Chair: Fine. Mr Friedman, please come forward.

Mr Friedman: There are basically three areas our ministry interacts with in the training area. We're not the main training players; Skills Development and OTAB and the new Jobs Ontario group are the main people.

Let me just begin with the Jobs Ontario group. Part of the Jobs Ontario function is to work with companies in trying to get them to move faster on training large numbers of people. Our own regional operations group is in partnership with the Jobs Ontario group to try to find companies that are expanding in Ontario, and there are companies that are expanding in Ontario. I can give you two examples: Linamar in Guelph and Navistar in Chatham. There we've put together the Jobs Ontario people and Navistar, which is looking at 200 jobs; the training program of Jobs Ontario would help to move that faster. So our regional operations are putting together companies with the Jobs Ontario people, who have the program operating.

In the two other programs the ministry mentioned, the technical personnel program, we've now assisted 600 companies by putting in engineers, scientists and so on to get them to become more competitive and increase their exports. Part of the rationale for that is that owners of businesses are reluctant to introduce technology when they don't have a technical person in their company, so we put a technical person in the company, and that person would then be the focal point to train people and to get equipment into that company. That program has been working extremely well, and quite a large number of these 600 companies are mostly small and medium-sized and locally owned, and they're expanding rapidly in the international markets.

One other area is the manufacturing marketing program, which is part of the manufacturing recovery program. There we've assisted with 55 marketing management people into small and medium-sized companies. Marketing is a big problem in small and medium-sized companies. Again, that marketing manager is a catalyst to train other people in the companies to be able to increase the markets and expansion and so on. Those are the three areas our ministry is directly involved in.

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Mr Phillips: OTAB is a big part of your answer. I'm curious when the legislation will be brought forward to set that up. We've all been anxiously awaiting that. Secondly, how do you see this agency operating?

Hon Mr Philip: With regard to your first question, I can't answer that question, for obvious reasons. I don't think I'm telling any secrets, but each of the cabinet committees, including my own, is preparing a list of what we consider priority items for the Legislature, and that will be dealt with at the cabinet retreat and shared, with input from the caucus as well. The specific date and that kind of thing will be discussed between our House leader and your House leader at the appropriate time. I can't give you a time frame on that.

Mr Phillips: Doesn't it seem odd? It's a big part of your industrial strategy, but we don't even have legislation yet to set it up.

Hon Mr Philip: No, because I think part of our industrial strategy is that we believe in consulting and in having programs come from the sectors and from the community, with the assistance of the government. What is going on now is the consulting process, and that's very much a part of the OTAB program. If we were to bring forward legislation before consulting, I think you'd be the first to criticize us.

Mr Phillips: No, no, the Premier said he was going to bring in the legislation in the spring.

Hon Mr Philip: Well, if the Premier said he'd bring it in in the spring, then I guess the Premier feels the consulting process will be finished in time to bring it in in the spring, and that's fine. But the Premier will consult with the cabinet, look at all the other priorities, and I'm sure we'll look at the spring, provided that the consultation suggests that's the appropriate time to do it. If the consultation is such that more time is needed or there's a suggestion that some other things need to be done first, then of course we'd pay attention to whatever is received in the consultation. I'm looking forward to hearing the results of the consultation. Other than in one or two instances, I haven't been directly involved personally, but I'm sure Dr Richard Allen would be happy to give you answers to those questions.

Mr Phillips: By the way, it was the spring of 1992 he said he'd bring it in.

Hon Mr Philip: I guess we've passed that. Let me say this, though. I would rather bring in legislation and programs with adequate consultation and proper input and not have to go around and correct them -- although I don't know any legislation you bring in that you can't correct -- than have inadequate consultation. That's my preference. In my 17 or 18 years around here -- is it 18 years now? I was elected at an early age; I was a child prodigy in politics -- I've discovered that people I admired most in politics, from a political point of view but also from a point of view of knowing what they were doing, people like Roy McMurtry, for example, always said, "I'd much rather have an adequate consultation." Sometimes he'd drive us crazy, because we'd go through green papers, white papers, red papers and I don't know how many other consultations, but I found that through the consultation process and working closely with Roy McMurtry as Chairman of the justice committee, we usually corrected things before we brought them in and it was time well spent.

Mr Phillips: My point is this: We have been promised this OTAB for at least a year, and we are now, in my opinion, still a year away from it, because presumably the Legislature will have an opportunity to debate it as well. I'm waiting for it. It was promised in the spring. It didn't come forward. I'm just alerting you, I guess, that I think it's going to be a huge issue in these debates, and the sooner the Legislature gets at debating it, the better, because right now it's going to be the spring of 1993 before the bill is potentially passed, and here we are at the height of what Treasury calls the worst recession since the 1930s, this is the centrepiece of recovery, and we're a year away from seeing it. That's my only point.

The Chair: Mr Phillips, perhaps it might be appropriate to ask the question of whether in the current estimates there are any funds allocated for that project, and if so, how much. There is no impact in the current estimates for this ministry?

Mr Armstrong: No.

The Chair: Thank you.

Hon Mr Philip: But I appreciate the comments and I'll certainly pass on your comments to both the Premier and the Minister of Colleges and Universities, because I think you're making some valid points that should be passed on to them.

Mr Phillips: This thing is huge. It's a $2-billion budget. The plan is to set it up as what they call a schedule 4 agency, and I have some severe questions about that, personally.

My second question is on the employee ownership evaluation program. There was a lot of concern declared by the Steelworkers that the way this thing is being established would preclude many acquisitions they might want to get themselves involved in. Second -- this wasn't the Steelworkers, but others -- by having the Employee Ownership Advisory Board evaluate and recommend approval of proposals, the government would be leaving itself liable for legal redress on programs that were approved. I wonder if you could help me feel more comfortable that that's not a risk.

Hon Mr Philip: Bob Marrs is here and he may want to add to our comments, but I think it's a legitimate question. It's a question that I certainly raised when I first looked at it, but I guess I've been convinced that we have enough safeguards in it.

There can be a problem, no matter what program you introduce, no matter how many safeguards. You can't guarantee with any certainty anything in life, other than taxes and death. But I think there are a number of safeguards built into it, and you must remember that no one is forcing any group of people to get involved in this program. It is a rational, reasonable decision, and I guess one has to have some faith that working people -- employees, if you like -- be they professional or non-professional, are capable of choosing people to give them the correct advice and of making the correct economic decisions for them, and they do that every day.

Mr Phillips: But that's my very point, and that's the whole point the Steelworkers were making. I agree with the Steelworkers and disagree with the government on that. That's my point.

Hon Mr Philip: There are parts of that industry and workers who do happen to agree with the government. You can pick your sources, I can pick mine, and we could go around the table. But I think the fact is that people have a right as individuals and as groups to make economic choices for themselves.

Mr Phillips: I'm agreeing with that. The legislation acts in exactly the opposite direction, and that's the point the Steelworkers made. They said, "Why have you set this group up to second-guess the workplace parties?" That's the point I'm making. I'm agreeing with you and disagreeing with your legislation.

Hon Mr Philip: Well, I disagree that it second-guesses. It's a process that in fact allows them to have the information on which to make a reasonable decision. But I'll turn the microphone over.

The Chair: Please introduce yourself.

Mr Bob Marrs: I'm Bob Marrs, manager of the employee ownership program. I guess the first point on the Steelworkers was the fact that they wanted to operate mechanically and without a board. I guess that is what you're indicating, Mr Phillips.

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Mr Phillips: Just to clarify, what they said was that if the workplace parties have reached a conclusion, if they want to make this investment in their workplace, why has the government set up an agency to second-guess them on that and to have the potential to veto a business arrangement they believe they're prepared to invest in? That was one.

The second thing they said was, "We think it's a mistake to have the minister sign an order in council approving this because" -- to quote them, they said, "When we peeled our US lawyers off the ceiling when they heard this was the process, we are expressing grave concerns that this will limit the companies we can possibly acquire because it subjects them to countervail."

Mr Marrs: On the countervail, just quickly, we did have our legal counsel review that in terms of the cabinet approval and order in council, and it was their view that would not add any more exposure to countervail. What would determine at the end of the day would be whether the board targeted its approvals to certain sectors or certain firms, and that would be the exposure.

In terms of the board and the fact that it has, as you say, the opportunity to second-guess employees, certainly there's a strong argument to be made on that part. However, I think what the board does in terms of putting a little discipline on the system is require the employee groups to go through the exercise of developing a proposal, with assistance that we will provide at the front end or however they wish to do it, and it will hopefully vet out those things that employees ought not to invest in, that they may be pressured into because of the community and the impact it has. They may be pushed into a rash decision that they might otherwise not make if they had the comfort of time and information and some independent advice, which the legislation provides for.

Hon Mr Philip: It may well be, knowing the dynamics of any situation like this, that not all employees will be part of the group that prepares the proposal, and therefore an objective battery of knowledge, if you want, or of assessment is useful to all the employees in that situation. I don't think the average employee would object to that; it's one extra part.

Mr Marrs: Not long ago, just as an example, we had an employee group come with its corporate finance people. They were quite interested in acquiring it and doing it tomorrow. When you got down to it -- it may or may not have been a good decision for them to proceed -- when you asked the corporate finance people in the divesting firm, "How does this make sense to you folks?" the equation was, "It's two million bucks for us to close it, and it's a million if we sell it to the employees." The arithmetic was pretty clear in terms of which direction they wanted.

Mr Phillips: What would prevent the public from recourse when a venture doesn't work out but this advisory board has evaluated it and recommended approval?

Mr Marrs: I don't think you escape that. Look at the Sunday Star in Etobicoke, in your riding, where people are going back after the city of Etobicoke because it invested in a golf course on land leased from Etobicoke. I don't think we're going to escape it.

Hon Mr Philip: That's not Gerry Phillips's riding; it's the other Philip. I read it too. We always get mixed up.

Mr Marrs: Oh, sorry.

Hon Mr Philip: All politicians look alike.

Mr Marrs: Anyway, on that, I think what we've tried to do in the disclosure document is what we have in Bill 150, a bit of the Ontario Securities Commission. We've taken many of the features of the Securities Act and put them in there so there will be health warnings on the front page and it will be against the law to represent that it's been blessed or otherwise approved by government in terms of the decision-making process made by employees before the formal vote.

Mr Phillips: I'd just restate the concerns I expressed in committee, because it's part of your industrial strategy, that the Ontario Federation of Labour said it wants no part of the venture capital part of it, and the Steelworkers have got severe reservations about the worker ownership part. I question the effectiveness of those two programs, that's all.

Hon Mr Philip: I would love to use that as an example when certain people get up in the House and say we always do what the unions tell us to do. As a government we take advice from a variety of sources, and sometimes we agree with some sources and sometimes we feel we have a responsibility either to the taxpayer or to others to do other things. It's a judgement call. That's where it's at at the moment, I guess. That's all I can say; I can't add anything further to it.

Mr Phillips: Have you had much uptake on the venture capital fund now?

Hon Mr Philip: We can give you --

Mr Marrs: On the yields side or on the investment fund side?

Mr Phillips: The venture capital side.

Mr Marrs: I haven't heard any news since the committee, when there were two deals in front of the working ventures. There's been a number, three or four, of union-sponsored groups discussing with Revenue the possibility of setting up a fund but nothing concrete at this time.

Hon Mr Philip: You may be quoting me next year and say, "You were dead wrong," and I'll say yes if I was wrong, but my theory is that some of the small professional sorts of companies may be the ones that will start seeing this as an opportunity for raising funds. I'm talking about software companies and things like that rather than what I think the media may have been painting this as, the Algomas or that kind of thing. There seems to be some interest when I talk to people out there -- "How does this work?" and so forth -- but it takes a little while to get people from the stage where they have an inquiry to where they actually decide they're going to get together as a group then and put a proposal together.

Mr Phillips: A last, quick question: Last year at these discussions I asked if you could provide a breakdown of where you think the jobs are going to come from. Earlier today we talked about 125,000 jobs that are going to be created over -- actually, it's 200,000 jobs, because we're running about minus 80 right now. I wonder, Mr Chairman, if I might request similar information on where the jobs are going to come from, what sectors the jobs are going to come from that the minister is predicting we will see over the next -- I guess we're down to seven months left in the fiscal year now.

Hon Mr Philip: In the past decade entire industries, like auto, steel, petroleum, housing and so forth, have arisen out of some very modest origins. Certainly the plastics industry is expanding at a very fast rate at the moment. The telecommunications industry, the computer industry and pharmaceuticals tend to be some of the areas where we're seeing considerable interest in growth and considerable interest in investment.

Peter, did you want to add anything to that?

The Chair: I think the request was for any specific sectors and/or numbers that you can share with the committee. Can you do that, Mr Friedman?

Hon Mr Philip: Peter Sadlier-Brown might also; perhaps I shouldn't have asked Peter Friedman but rather Peter Sadlier-Brown. Peter Friedman, you can give your answer and then hopefully it will be complementary to whatever Peter Sadlier-Brown's going to say after you.

Mr Friedman: For the last 10 years in Ontario and most of North America, new jobs have come from new business starts, small businesses starting; 70% of the jobs have come from small business and two thirds of those from new business starts.

The new business starts in Ontario have continued to go up dramatically until 1989, where we had about 130,000 new businesses started. From 1989 to 1991, the thing went down about 20%, so we're down to about 110,000 to 120,000 new businesses being started.

The only information I can tell you is that we have figures month by month on registration of new businesses. The interesting part is that from 1989 to 1991 the figures went down. Starting in May 1992, the figures started to go back up again.

You were saying "recovery." One sign of a recovery is that we're getting a gain, growth, of new business starts. If tradition for the last 10 years has been correct, new jobs will be created from those new business starts. That's the only information I can add to this picture.

The Chair: Mr Phillips, the Chair would like to advise you that you have about six minutes left, if you have another area that you'd like to explore.

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Mr Phillips: I have this need to see where the 125,000 net new jobs are going to come from, whatever way you look at it. I always thought you looked at it like manufacturing, resource, service, government.

Hon Mr Philip: Mr Sadlier-Brown can give it to you by sector.

Mr Sadlier-Brown: Actually, what I'm going to refer to is a document put out by the treasury in June 1992 called the Ontario Economic Report, and I will make sure the committee has a copy. In that document on page 13, they have a little pie chart which outlines the share of jobs to be created in 1992 and 1993, so it is over a two-year period by sector.

The highlights are that consumer products and services will increase 15%, the auto sector 8%, housing and real estate 30%, business services and knowledge-based industries 41%. That's the way they've done it, and that's what has been built into the thinking behind the budget forecast. I will make sure that you and the other members of the committee have this document and can look at the pie chart and read the reasoning behind it that's in their report.

Mr Ruprecht: Mr Minister, I have a question related to my previous comments on trade exhibitions and missions and how we're doing in terms of helping our industry compete abroad. The level of export sales influenced, I suppose, is one measure of success of how we're helping them. Now export sales influenced is estimated to be $865 million for 1992-93. Apparently that's a drop of 36% compared to 1991-92. Okay?

Hon Mr Philip: I believe that the --

Mr Ruprecht: Hold on. Let me get to my question, Ed.

Hon Mr Philip: Sorry.

Mr Ruprecht: While you're looking at your figures, let me just continue with the questioning.

Hon Mr Philip: No, I have the figure here. I was going to give it you.

Mr Ruprecht: Apparently there's a drop of 36%. Can you tell us why that figure's falling after it's been increasing for the previous two years?

Hon Mr Philip: I think that Gordon will answer. But there has been actually an increase in exports. The figure I had was a 9% increase in the last year, but maybe I'm --

The Chair: Welcome back, Mr Gow.

Mr Gow: In fact that number you have is the estimate. It is $865 million, down from the actual of 1991-92 of $1.3 billion, roughly. That's an estimated number. We are in fact going on that basis, a little bit ahead of that estimated target in some sectors.

For instance, in the Middle East we're well ahead. We're about 400% or 500% ahead of that target. The problem we have with this estimated number is that some of these estimates are made because the gestation period for many of these projects is three to five years and you don't know when they're going to fall into the element of success.

In other words, the conclusion of the 1992-93 estimates really started in 1989, 1990 or 1991 in some of these projects. We assume they will fall into place in this period of time. So it's not an actual number that we're looking at. The $865 million that you're looking at is the estimate. We targeted this year's plans, that that's what would come in.

We're lucky, for instance, with the Babcock and Wilcox deal in Iran. We actually expected it last year. It's coming in this year and it's something like $330 million that in fact will go into these projects.

Mr Ruprecht: Are you telling us then that your rate is at an even keel or we're actually doing better than the previous year or previous years? Is that what you're saying?

Mr Gow: I would say as we stand today in the first bit, we are ahead of these estimated numbers, but whether we'll finish the year out ahead I still don't know yet.

Mr Ruprecht: What method are you using to make these comparisons? How do you arrive at these figures?

Mr Gow: It's almost like any sales or marketing plan where we're looking at what is estimated to be in the hopper at the conclusion on your sales and you're guesstimating how many of those contracts are going to come in this year on the international side of the business. That's really what we're looking at.

Mr Ruprecht: Okay, that's it?

The Chair: I'm afraid so.

Mr Ruprecht: One more or not?

The Chair: How short can it be?

Mr Ruprecht: This is one in terms of default of payment, Algoma Steel and other companies.

The Chair: You've got half your question out, so why don't you get the rest of it out?

Mr Ruprecht: Mr Minister, could you tell us about the guarantees your government has made in terms of loans to private sector companies? Of course we've got some examples, as you probably know. What's the probability in terms of default of some of these loans? What figures do you have now?

Hon Mr Philip: I think you may have been out of the room, Tony.

Mr Ruprecht: Oh, I'm sorry.

Hon Mr Philip: Part of that question was answered before by ODC, but Peter Tanaka can deal specifically with any one project you may want to discuss, being careful, of course, that as we talk about an individual company we have to protect the right of that company's competitive advantage or disadvantage, as the case may be.

The Chair: Welcome back, Mr Tanaka. You've been introduced. Please respond.

Mr Tanaka: Can you repeat the question again, please, Mr Ruprecht?

Mr Ruprecht: You know the government has guaranteed a number of loans to private sector companies. In terms of the default of payment, what can you tell this committee? Has this been a sort of successful policy, or should we have done something else in terms of getting into guarantees or some other factors that should have been added to these guarantees? It's a policy statement, I suppose, not necessarily a number-crunching statement.

Mr Tanaka: In terms of the major investment cases we handle through our unit within the ministry, the combination of loan guarantees, concessional loans which are interest-free or interest-subsidized, grants or repayable grants, all of those instruments have been very successful from the standpoint that I can only refer to perhaps one account where we had a loan guarantee called.

Mr Ruprecht: I'm talking about the failure rate as well. Have you got --

The Chair: Mr Ruprecht, I appreciate it --

Mr Tanaka: None.

The Chair: -- but we're really going to run out of time here, or we could stay till 5:30 actually. I could ask you to maybe talk to Mr Tanaka after the estimates or --

Mr Ruprecht: Yes, I appreciate that.

Mrs Margaret Marland (Mississauga South): Minister, I realize that the government has a tremendous challenge ahead of it in dealing with not only the current $12-billion deficit, more or less, and the projected deficits for the next two years, and that in facing this challenge you have to find ways to look for money. I know one of the ways you're looking for money to do a number of things, as we understand it, is the proposed Ontario investment fund, and I would like to know if you are going ahead with the proposed Ontario investment fund.

Hon Mr Philip: Yes.

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Mrs Marland: I guess in my 19 years in politics, only the last seven being at Queen's Park, I have never received such an outcry on an individual issue from my constituents as I have on the proposed Ontario investment fund. I'm wondering how you feel you can proceed in face of such a strong position of opposition from the pensioners of particularly our public sector pension funds in the province today.

I recognize that the proposal for the OIF is that it would be a voluntary involvement and the decisions were to be made by the pension fund trustees, but I'd like to know, in the face of that strong opposition -- I'm sure you're getting the same letters from your constituents that I am -- how you feel the government can extract that money from those funds and from the trustees who make the decisions about those funds. Are you concerned about the public, the old-age pensioners, not all of them old, who are saying to them, "No way do we want you to use our money that has been accumulated in those funds for the purposes of our pension plans, which have been guaranteed"?

Hon Mr Philip: One of the ways I would certainly hope we would get some support would be the people like you correcting the misinformation that has been spread out there by people who, simply because they didn't have the information or for whatever reason, have spread to OMERS pensioners and alarmed them unnecessarily about stuff that is simply not true. This is a voluntary program. We have all kinds of interest by the private sector in this because it sees this as a real opportunity for it to invest. I can tell you that there are people who are on our advisory committee from trust companies, from banks, and also some trade unionists, who see this as a real opportunity to invest in Ontario, and that it's a good opportunity not only to invest for the sake of their pensioners but also to invest on behalf of keeping a strong industry in this province.

I'm going to ask Sarah Bernstein to repeat perhaps some of the things she said earlier, because she outlined the various people who are on our advisory board. There's a tremendous enthusiasm out there, particularly in the private sector, for this kind of investment fund, and there's tremendous opportunity, tremendous interest also in those sectors that are having real trouble getting investment from the traditional banks.

Mrs Marland: Excuse me --

The Chair: Mr Philip, I, as the Chair, am not inviting Ms Bernstein back to repeat herself. I'm going to ask Ms Marland if she's received the answer she was looking for, and would like to continue with her question.

Mrs Marland: I appreciate anything Ms Bernstein has said and can review it in Hansard. Thank you. So I don't think --

Hon Mr Philip: She probably has a lot of new things.

Mrs Marland: I don't really need that approach to the question. It's a political question that I'm asking you, because it's a political response as a politician that I have to make, and I'm trying to make the response responsibly and honestly to inform my constituents, because I share their concern. How is the government actually going to engineer it? Is it going to be through guaranteed loans?

Hon Mr Philip: No.

Mrs Marland: So how are you going to interest them in voluntarily giving up their secure investments that exist in the fund for something that is under the control of the government and not under their control?

Hon Mr Philip: First of all, it won't be under the control of the government. I would ask Sarah perhaps to show and explain the exact structure of how we are thinking of setting up, because we're still in the consulting stages. But it will not be run by the government, nor will there be a majority of government equity in that program.

Mrs Marland: In fairness to the critic for our party, unless the critic wants the extensive answer, I'm quite happy to deal with it. I just don't want to use up my critic's time. If you want to hear that other answer --

Mr Carr: No, actually, I got it. The simple answer is that if nobody wants to invest they're not going to guarantee it; so there's going to be no money regardless.

Hon Mr Philip: We're not prepared to offer any guarantees. We think the expertise we will attract to running that fund will give enough comfort that there will be companies that will be coming forward. Indeed, from the financial community, trust companies and other people, we've had a number of people say to us: "We have difficulty understanding some of these newer high-value-added industries enough to feel comfortable in making certain types of investment. If you can develop a fund that has that kind of expertise, then we will be attracted to it." That's why they're cooperating with it. They're devoting a lot of time to the advisory committee, and they wouldn't be doing that if they thought it was just a waste of time.

Mrs Marland: Minister, I thank you for your answer, and it's not a reflection on Ms Bernstein; it's just that we're so short of time here, but I do want to express that there is a tremendous amount of concern out there about this proposal by the government. I was looking for some helpful response that I could forward to my constituents, but I will yield the floor.

Hon Mr Philip: This plan could be successful without any pension money. We're hoping some of the pensions will participate; but if they don't, we think it will be successful. When the pension funds see how successful it is, then they will be attracted into it later, maybe.

Mr Carr: Okay, thank you very much. Minister, you mentioned one of the growth areas has been pharmaceuticals. I've had some calls from the pharmaceutical companies, Smith Kline and French, the Glaxos and so on, regarding the federal drug bill that's before the federal government right now. They say a lot of the guarantees of investment will only come through if that bill comes forward.

You government, particularly the Minister of Health, Frances Lankin, has been very critical of that in some speeches. Will you be supporting the pharmaceutical companies in regard to that bill, or what is the position of the government of Ontario?

Hon Mr Philip: I think Peter Sadlier-Brown can give you a history of some of the things, since he's accompanied me to Ottawa when I've spoken with Michael Wilson about some of that.

Mr Carr: So you haven't made a decision yet?

Hon Mr Philip: No, the federal government is going ahead with intellectual properties protection, and the government has not made any decision to oppose that in any way.

Mr Carr: And what is the ministry recommending with regard to that? Do you support some of the pharmaceutical companies, or what? I don't need a history, with all due respect; I just want an answer. If there isn't an answer, if you haven't decided --

Hon Mr Philip: One of the things I have said to Michael Wilson is that I have had some concerns about some of the generic companies that have some products in stream, and that the cutoff, the curtain, if you want, will create some economic problems to some of those companies. So we've presented that position to Michael Wilson at the trade ministers' conference in Ottawa.

Mr Carr: Okay, I appreciate that, and I appreciate that the government might decide not to make any decision. That's fine, it was just a quick question. Thank you very much. I don't need the answer on that.

With regard to our offices: On page 42 we talk about our municipal economic development branches; the ministry works with them. I was wondering if we could have tabled, and if the answer's readily available, what number of inquiries are coming through. I'm thinking now of inquiries from outside of Ontario and internationally coming into Ontario; I'm not thinking in terms of the number of inquiries that are coming to the various municipal business developments from people moving from Mississauga to Halton. Do we have any statistics on what is happening in those offices we're working with, on inquiries coming into Ontario from other jurisdictions, whether they be other provinces or other states? Certainly, the number of inquiries is a key indicator of what type of investment will be coming. Do we have those stats? If not, maybe we could get them tabled.

Hon Mr Philip: Peter Friedman may want to --

Interjection.

The Chair: I really can't pick you up for Hansard, Mr Friedman. It would be helpful if you could tell us.

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Mr Friedman: I don't have the stats here, but we can certainly give the information. Do you want it from what the municipal economic development people are saying regarding total leads, or a comparison for some of the years?

Mr Carr: Both, please, the total leads and comparison and potential dollar value. I appreciate it; that would be great.If I could ask a broad question, in some of the US states, particularly New York, their offices said there's been a heavy influx of Ontario companies. Do you know what the trend is? Is it good, bad or indifferent with the inquiries?

Hon Mr Philip: That certainly is not true.

The Chair: He asked a question. He didn't make a statement, did he?

Hon Mr Philip: I mean, that information is not factual. There hasn't been a major exodus to --

Mr Carr: I talked about inquiries. The US states are saying they're getting more inquiries from them. Not an exodus; I'm talking about inquiries. What is the trend in Ontario of inquiries coming in? I appreciate that you don't know them all, but could you tell whether there is any particular area they're coming from -- other provinces, other states?

Mr Friedman: I can't give you an answer today, because there are 300 municipalities out there and we don't tabulate all the leads from each municipality. We can get the information for you, but I don't have it right now.

Mr Carr: But certainly -- and I'll address this to the minister -- that is a key indicator of what's happening. To enable you from a policy standpoint to make the correct decisions, I would think that would be a key indicator you should be looking at. I'm surprised that the minister's staff isn't aware of that, because certainly the number of inquiries coming in will be a major factor down the road. I take it, then, that this isn't information the minister regularly wants or gets with regard to making policy decisions. Is that correct?

Hon Mr Philip: I'm more interested in who's locating here, and I have the figures of some of the major companies that are locating here in Ontario and have closed operations in the States or are opening new offices here. I'm not sure what inquiries actually give you. Inquiries in times of recession may mean a skittishness on behalf of some people somewhere else.

Mr Carr: But surely, as a minister, you'd want to know whether these offices, which are the eyes and ears of the province of Ontario, are saying, "We might have a problem; We're getting a lot of inquiries about people wanting to move," or thinking the other way: "Boy, we aren't getting any inquiries. We used to get X amount a year, and we aren't getting any now." Wouldn't that be a key indicator to you that there may be some problems that need to be addressed?

Hon Mr Philip: I think it would be an indicator describing who is moving this year as compared to last year and the year before. If you look at the figures, for example, for the northwestern United States, you'll find that in the last year seven Ontario corporations actually set up operations in northwestern New York. Six of those, as I recall off the top of my head, were distribution centres to export Ontario-manufactured goods. That seven compares to something like 22 under the last year of the previous government, so I don't see any great trend towards going to at least the northern United States.

The Chair: It really sounds like free trade's really working here. This is scary. This is quite frightening.

Mr Carr: If you could, obviously we would like to see them.

In terms of the jobs that are leaving, I am familiar with some of those that are. Could somebody given us an indication of the total jobs that have been lost in companies moving out of the province? I'm not thinking closures now; I'm thinking movements. Maybe we can compare that to the numbers coming in. You can pick out one or two companies in a broad section. Basically what I'm asking is, are we winning or losing? Perhaps you could table those if you don't have them here, specifically what they are in terms of job losses; in other words, when Tridon leaves and they're taking 500 jobs and XYZ company comes in and is bringing in 400 jobs. Where are we at in terms of competitiveness versus other jurisdictions? Is that statistic available?

The Chair: Part of the problem, and I've discussed this with my federal counterparts, is getting a handle. The companies that are leaving, of course, you find out about, at least if they're over a certain number of employees, because there are various types of adjustment programs. In the US there are different types of adjustment programs. So it is very difficult, unless we have assisted a company in some way or are actively courting a company, to know who is coming in. There may well be a number of companies coming in and there may well be a number of companies exiting, smaller companies that you cannot have a figure on because there's no reporting system, either federally or provincially.

But we'll take a look at the question and we'll see if there's some way, between us and our federal colleagues in Ottawa, of coming up with some kind of answer to your question.

Mr Carr: I'd appreciate that, because the reverse seems to be true: When companies leave, historically they like to quietly get out, particularly if they are still going to sell back into this market.

Hon Mr Philip: But they can't do that under our present labour laws.

Mr Carr: The statistics should be there, then, if they can't do that.

Hon Mr Philip: Oh, yes. The stats are there for the exits of the major companies because we know about them. Unless we've assisted them, the entrance is harder to get a handle on.

Mr Carr: Historically, what has happened when companies come in is that, as part of the marketing tool, they love to have MITT come in to cut the ribbon when they're getting 20 new jobs. I appreciate it might not be readily available.

Hon Mr Philip: I've had so many invitations to ribbon cuttings, and believe me, I can't accept them all.

Mr Carr: That's great; then you should be able to tell the ones that are leaving and the ones that are coming in.

Hon Mr Philip: Ask the parliamentary assistants; they'll tell you they can't get around the province to do all the ribbon cuttings.

Mr Carr: Great. You tally all the ribbon cuttings, the number of jobs, and then you tally the ones that are leaving. If you could table that with the committee, we'll make the judgement of whether we're winning or losing on that. It should be possible to do.

Hon Mr Philip: The only ones we know about are the bigger ones, both coming and going, and that's the problem.

Mr Carr: But again, that's a key indicator of how well we're doing, and surely that information should be readily available to the Minister of Industry, Trade and Technology. I appreciate you're kidding about the ribbon cutting portion of it, but quite frankly you should have that information. Is there any reason it isn't readily available?

Hon Mr Philip: I'm sorry, and pardon me for sounding like Michael Wilson, but unless you're going to set up a huge police state or a statistical state to collect massive amounts of data, at tremendous cost to the taxpayers, I don't know how you collect all that information.

Mr Carr: You said you already have it leaving, and I admit it might be by employees --

Hon Mr Philip: I said if these are ones that have a labour component or a labour adjustment program of some sort, then we would know about them. We also know about the major larger ones, such as KeepRite, that closed down in Illinois and transferred to Brantford, and others like that which we may have assisted in coming in. What I don't know about are the tremendous number of engineering firms that are setting up new offices as we go around the world and get new contracts. I don't know how many new companies are set up as a result of Babcock and Wilcox getting a major contract in Latin America or something like that, because it is subcontracting a lot of its drafting and other kinds of work to smaller companies. We just don't have those figures.

Mr Carr: Let's leave it at this: Let's see if we can get them. I would think that bottom-line totals are very important. It is good that you are highlighting the ones coming in. With the climate, of course, being able to point to those does help other companies, and I appreciate that that's your responsibility. Our responsibility is to see whether we're winning or losing, but we'll leave it at that.

Hon Mr Philip: If we can get those figures, either through the federal government or through our own records, we'll get them. But it's equally helpful to Michael Wilson; if he could prove that more companies were locating in Ontario, he'd certainly attribute that to his free trade policy, and he hasn't been able to provide us with those figures.

Mr Carr: If I were an MP, I'd be asking Michael Wilson. I'm not; I'm an MPP, so I'm asking you.

Hon Mr Philip: I understand that.

Mr Carr: With regard to the 13 offices across the province, what type of feedback are we getting on the good and bad things about the province of Ontario? Can anybody come forward and give us some idea from our 13 offices, which act as front-line delivery sources, what industry and businesses are saying about the province of Ontario? Are there any data? What is the reporting process? Again, I'm looking at it from the point of a minister making a policy decision. How are we getting feedback from these 13 offices about what we should be doing? Part of the mandate is to get the commercial intelligence to then pass along to the deputy, to the minister, to the cabinet, to make the right decisions. Minister, how are you getting the information from these offices about what we should be doing in MITT?

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Hon Mr Philip: With respect, Gary, I think I answered that question earlier.

Mr Carr: No, that was with regard to international. The original question was towards the international offices, New York and so on. I'm talking about our offices in the province of Ontario now. How is the feedback coming through those offices?

Hon Mr Philip: Peter, do you want to respond to that and explain the reporting mechanism?

The Chair: Welcome back, Mr Friedman.

Mr Friedman: We have two different reporting mechanisms. We have what we would call a critical system, by which we hear from companies, or situations our regional people pick up, that a company may be either doing very well or doing poorly or requires this or requires that. We have a direct input system to my office, which then immediately goes up to the minister and deputy. So we have a mechanism by which each of our regional people, as the situation comes up, would report either an issue or a particular situation with the company. Sometimes an issue relates to a generic problem a region is having or what have you. Those come in on an ad hoc basis on a daily basis; as they find out, it comes in.

In terms of the general, we have quarterly reports that come in from all our regional offices for the companies we worked with, the numbers of people we assisted with various programs and the specific companies. In other words, there's a quantitative report and a qualitative report relating highlights.

Mr Carr: Okay. From that, we should be able to determine the same questions with regard to what I asked in the international: What are the five major things people are saying they like about Ontario? From these offices, I take it we can take that information and say, "Based on these data, numbers, statistics and so on, our offices are reporting that the major problems we're facing are" one, two, three, four, five. Or the major successes, if you want, in Ontario are one, two, three, four, five. Would it be possible to get that for the committee members?

Mr Friedman: I can table our quarterly report, yes.

Mr Carr: Okay. Just for clarification, how is that broken down? Will that give us the information I'm talking about? I don't know if I've been clear, but from that can you determine that this is a problem area and this is what we're doing well, in your estimation?

Mr Friedman: I'm not sure whether, each quarter, the five major problems being reported are highlighted as one, two, three, four, five. I think what you get is anything they believe is a new significant problem that comes up. We don't highlight every month, here's what --

Mr Carr: But having looked at these reports, what would you say are the five things we should be working on? It could be WCB, it could be tax. What are you saying the problem areas are in the province of Ontario, as reported through our reporting structure through these offices? What would you say the five problem areas are?

Mr Friedman: Oh. The problems we've been hearing recently are the Labour Relations Act, the things relating to continuing paper burden regulations, business financing or the banks being particularly difficult. Those are the main three that come to my mind that basically we seem to be hearing. Environmental issues are another problem that comes up periodically. It varies by region, but those are the three or four major areas that by and large are coming forward to us.

Mr Carr: What about with regards --

The Chair: Mr Carr, did you have a lot of additional questions in this area? Because I think, by agreement, the committee is prepared to give --

Mr Carr: Sorry. I thought I'd get through a lot faster. It may have been because my questions were too long. If there are some we're missing, could we table those as written questions to the minister? If he could answer them, that would be helpful.

Hon Mr Philip: The other thing I point out is that part of the problem I think you've hit on we hope to overcome with the Ontario investment centre, which will be able to collect more of the kind of data you want, and I think will be more coordinated. It is a problem we have to recognize.

The Chair: Thank you very much. At this point, members of the committee, although there is some time still remaining, I believe there's unanimous consent to call the votes at this time.

Mr James J. Bradley (St Catharines): What?

The Chair: I was hoping Mr Bradley had left the room, but obviously he hasn't.

Interjection.

Hon Mr Philip: I said nice things about Mr Bradley earlier, and I'm sure he will want to be quiet right now.

The Chair: Which is precisely why this hearing should come to an abrupt halt.

Seeing no objections, then I will proceed with the votes for the Ministry of Industry, Trade and Technology.

Votes 2201 to 2203, inclusive, agreed to.

The Chair: Shall the 1992-93 estimates for the Ministry of Industry, Trade and Technology be reported to the House?

Agreed to.

The Chair: I'd like to thank the minister and the staff and the committee for their participation in completing these estimates in record time. This committee stands adjourned till the House reconvenes, and the committee will be so advised, at which time we will begin the estimates of the Ministry of Community and Social Services.

The committee adjourned at 1636.