CONTENTS
Monday 12 September 1994
Ministry of Transportation
Hon Gilles Pouliot, minister
George Davies, deputy minister
David Guscott, assistant deputy minister, policy and planningCarl Vervoort, assistant deputy minister, operations
Kim Devooght, assistant deputy minister, safety and regulation
Ken Knox, assistant deputy minister, quality and standards
David Hobbs, chair, GO Transit
David Aronoff, director, financial planning and evaluation branch
Mary Proc, assistant deputy minister, corporate services
Margaret Kelch, assistant deputy minister, relocation
STANDING COMMITTEE ON ESTIMATES
*Chair / Président: Jackson, Cameron (Burlington South/-Sud PC)
*Vice-Chair / Vice-Président: Arnott, Ted (Wellington PC)
Abel, Donald (Wentworth North/-Nord ND)
Carr, Gary (Oakville South/-Sud PC)
*Duignan, Noel (Halton North/-Nord ND)
*Elston, Murray J. (Bruce L)
Fletcher, Derek (Guelph ND)
Hayes, Pat (Essex-Kent ND)
*Lessard, Wayne (Windsor-Walkerville ND)
Mahoney, Steven W. (Mississauga West/-Ouest L)
*Ramsay, David (Timiskaming L)
*Wiseman, Jim (Durham West/-Ouest ND)
*In attendance / présents
Substitutions present/ Membres remplaçants présents:
Dadamo, George (Windsor-Sandwich ND) for Mr Abel
Daigeler, Hans (Nepean L) for Mr Mahoney
MacKinnon, Ellen (Lambton ND) for Mr Fletcher
Rizzo, Tony (Oakwood ND) for Mr Hayes
Turnbull, David (York Mills PC) for Mr Carr
Clerk / Greffière: Grannum, Tonia
Staff / Personnel: McLellan, Ray, research officer, Legislative Research Service
The committee met at 1309 in room 228.
MINISTRY OF TRANSPORTATION
The Chair (Mr Cam Jackson): I'd like to call to order the standing committee on estimates. We've reconvened to complete the 1994-95 estimates of the Ministry of Transportation. This committee last met on June 22 and had completed almost two hours of its six hours' allocation for this ministry. According to our records, we have four hours and five minutes remaining to be completed today.
Before I proceed to recognize in rotation Mr Daigeler, the ministry did have a series of questions, which we've received some of the responses to and some information which was catalogued. Has the ministry got the full responses that were raised from the last time?
Mr Hans Daigeler (Nepean): I have not received any responses.
The Chair: I believe it's on your desk, Mr Daigeler, but the researcher for this committee sort of examined the areas where questions were raised in anticipation of --
Mr Daigeler: Summarized the questions, you're saying.
The Chair: That's correct, and this was resubmitted to the ministry with the hope and assumption it would have that material to distribute at the commencement of these hearings. Do you have that material, Minister?
Hon Gilles Pouliot (Minister of Transportation): It's my understanding that the majority of questions were of a general nature. It's also my understanding that there is a tradition whereby meticulous or focused questions will be answered at the end of estimates. We don't wish to bridge the definition of hope and assumption. All questions will be answered and they will be answered fully, but it's a matter of style. It's not a matter of denial or tactics or strategy to answer or not to answer questions, nor positioning indeed. We will take today to answer some of those questions at this session.
The Chair: Minister, it's not a question of style, it's just a question of courtesy. The procedure is that we have given you considerable time and you and your staff undertook to respond to these questions. If your staff misinformed you or misrepresented the requirements of this committee, I wish to simply suggest to you that is the process, that was the understanding and that is the tradition. If you'd like to create a separate tradition, that's another issue, but I don't think that's necessary.
Hon Mr Pouliot: We will follow your mode, sir, if you want to put it that way. I shall indeed. No problem with me. Let's go.
The Chair: Does the deputy have any written materials, in accordance with the undertaking given to the committee that they would be forthcoming? Are any of those available? That was my question, and the answer is no.
Mr George Davies: Any questions that remain that we have not answered by the end of the day we will undertake to respond to in detail in writing.
The Chair: Okay. Are there any additional requests for individuals to come forward? If not, then I'll proceed. Mr Daigeler.
Mr Daigeler: Thank you very much, Mr Chairman. I think, as the Chairman has indicated quite correctly, it would have been nice -- not perhaps a requirement, I understand that, Minister, but I think it would have been nice -- since you and your officials had quite a bit of time to look at the questions that we, certainly myself, put on record. In fact, I have the Hansard in front of me and I spelled out quite a few questions. It would probably have saved us quite a bit of time to have something in writing. But since we don't, I will simply proceed with the questions I raised on June 22, and I will not explain them at length because they're there. However, I hope I will get an answer at length.
The first question I did raise because of coming from eastern Ontario. I hope you will understand that and appreciate that.
Secondly, also, in view of the fact that you were quoted in the press within the last 10 days as saying that the federal government is holding up construction of Highway 416, I would like you to be very specific as to what you have done with regard to taking up the offers of the federal contribution towards the completion of the 416, what your offer is. Frankly, I don't know whether you were quoted correctly. Hopefully you were quoted correctly. But you were quoted correctly for the first time, I would like to say, that the province, that you, are ready to pay your two thirds, as you should. Up to now, you had always indicated, "Well, if we have a toll road and everything else; if we can get things together." Certainly there was no indication that things were clear sailing on your part. The understanding was certainly clear that it was clear sailing on the federal part. So I would like you to let us know in detail what has happened in your negotiations with regard to the federal government and with regard to your own plans for the completion of Highway 416.
Hon Mr Pouliot: Okay. Thank you kindly. We all recall that the 416, the southern section -- we recall that, shortly after the last federal election -- and I don't wish to put this in a political context, but it's a sequence of events that is worthy of analysing -- I became the recipient of a copy of a letter that was sent to Mr Jordan, who I understand is the Liberal federal representative of the area. The letter was signed by Mr Eggleton, and although I don't have a copy in front of me, and in anticipation of your question maybe I should have, for it tells the tale, it was pretty well as follows:
"Dear Mr Jordan:
"I was unaware of the personal commitment" --
Mr Daigeler: I know what the letter is, but I'm wondering what you have done since then. I know what the background is.
Hon Mr Pouliot: We'll set the table before we dig into the plate, suffice it to say.
"I was unaware that the Prime Minister had made a personal commitment for $60 million of funding."
The $60 million is one third of an approximate $180 million. We met with Mr Eggleton. We agreed in principle on the one third, two thirds. We agreed that we would present a business plan that would obviously become satisfactory to both, all to focus on the acceleration of 416 south. We were already committed respecting adhering to our timetable on 416 north. We made a commitment that we would swing our money; the money would be there.
However, we not only sensed a reluctance in tone as to the federal commitment, but it was indicated to us lately that there would be no new money, that the money would have to come from the infrastructure program.
Mr David Turnbull (York Mills): That was then; this is now.
Hon Mr Pouliot: Yes, that was then and this is now. That's the kind of terminology which is foreign to our government, in any case.
There's no money in the infrastructure program, as you are well aware, Mr Daigeler. The money is fully committed. In any event, it would have to be one third, one third, one third. The small municipalities don't have sufficient money. We're talking about a large sum.
We feel that there is at present a reluctance on the part of the federal government to come up with its $60 million. We're confident that we will generate our $120 million. That is not the problem. We wish to build the 416, we had hoped to have the shovel in the ground, work to be done this fall, but we're no longer as optimistic, and then it's going to cost us a whole season. So the federal government failed to honour its commitment.
Mr Guscott, you handled this negotiation. Maybe you'd wish to tell us more about it.
Mr Daigeler: Before the minister goes on, I think, Mr Chairman, if you can try and keep the answers also relatively short so we do get an opportunity to poke a little bit deeper.
Minister, you're saying you sense a reluctance. Frankly, I am not too trusting with regard to your sensitivity as to where the federal government is at. Let's put the feelings away here and let's look at the facts.
You just said yourself you, the province, agreed to present a business plan. Have you done so? Where is that business plan at? What has happened with regard to this business plan?
Frankly, when you just said one third, one third, one third, that's absolutely incorrect. You yourself have never indicated that there was a requirement for one third from the municipalities. You said, and the federal government has said, this is a special circumstance under which the federal government is contributing one third and the province is contributing two thirds.
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So my question again is, have you presented that business plan? What is in that business plan? Can we have a copy of the business plan? And all of this again, frankly, Minister, could have been presented to us in writing. I put you and your officials on notice with regard to this question and you certainly knew that this question was going to come up. It really does not bode very well for the remaining four hours that we already have such a very hard time to get any kind of information -- substantive information, not feelings, Minister, not what you sense the federal government is doing. I sense what the NDP government is doing. Of course I sense certain things, but after all, there are certain partisan considerations here. We want the facts. We want to know what you have done with regard to your own commitment to present a business plan.
Hon Mr Pouliot: Before I turn it over to Mr Guscott, you will please allow me to clarify. We are committed to the 416. We have never mentioned the infrastructure program, for we know what the rules are. It is our federal counterpart that seems to be getting cold feet. They are the ones who are saying there is no new money, it would have to come out of the infrastructure program, which is already fully committed both in round one and, if there are any leftovers, in round two.
The Chair: Mr Guscott, you've been introduced already and you've been here for the question. Please proceed.
Mr David Guscott: Further elaboration on the question of Mr Daigeler: There is a second issue with respect to the difficulty of using the Canada-Ontario infrastructure works program to fund this highway over and above the one the minister's already mentioned, which is that the rules say that it's to be one third from the local municipalities. That is, it's a program with only a two-year window, and effectively the first year is virtually closed when it comes to highway construction. It would be very difficult to expend those moneys on a shared basis in the one building season remaining under that particular program.
Over and above that, the business plan which you referred to and which we are in fact working on has not been presented to the federal government as yet because that business plan had not to do with where the source of funds was but rather how the funds would flow, other sources of revenue etc associated with the project. Since we have not been able to get over the very first hurdle of whether their funds are in fact available and will be applied to the project, we have not advanced that aspect.
However, we have begun work on the traffic projections for that highway and that section of the highway, which is an integral part of that. We've continued with the ministry's work in the design of the program and the purchase of lands associated with the highway. So we're doing as much as we can to keep it on schedule and to keep the window open for this opportunity when the federal funds materialize.
Mr Daigeler: Well, I'm not reassured at all that the province is doing what it can, saying that you're waiting for the federal government. The federal government has clearly said it is going to assume a major portion of the cost of this project. It is now up to the province to put forward a very clear plan as to how this is going to be done, and clearly the initiative has to come from the province. After all, this is a provincial major highway, and the fact that the federal government is entering is just an added bonus, which probably -- yes, and I take credit for it -- related to the last federal election.
So when we have that opening, that window of opportunity, we're looking to the province, we're looking to you, Mr Pouliot, as the Minister of Transportation, to aggressively pursue this dossier, to put forward a clear plan. I have spoken and my office has been in touch as late as this morning with Mr Eggleton's office. Clearly, they are waiting for a proposal from you. Don't worry where they're going to find the money and whether they're going to find it from this pot or that pot. Hold them to their commitment and you put forward what your plan is.
I mean, if you are saying, "We want to see first what the federal government is doing," we are going to wait for ever. I'm saying to you, where's your plan? Come forward with a very clear and precise proposal to the federal government, and I'm sure, with the support from the local members both provincially and federally, you will find the federal government extremely receptive, as long as your business plan is acceptable to the community, and of course there I'm not sure. I heard Mr Guscott make reference, I thought, to the concept of tolls. I would like you to address that again, whether that still is in the plan, or is this now hopefully gone by the wayside in the way you were quoted a couple of weeks ago in the Ottawa area press?
Hon Mr Pouliot: Let's get this clear, and please bear with me. With respect, Mr Daigeler, I will present you some one-liners that are just the facts; they're nothing more than that.
Ontario is the only jurisdiction in Canada that doesn't receive a dime, a nickel or a cent, nothing, from the federal government. Ontario contributes, by way of taxes on gasoline, more than $1.2 billion each year to the coffers of the federal government.
In this case, we are paying two thirds; we wish to pay two thirds. We're not here to play ping-pong. We don't wish to engage in any sort of contest with the feds as to what jurisdiction. We want to see the colour of the money. Put the cheque into the envelope.
It is our jurisdiction. We're not ruling out tolls, part of it as user-pay. It's not automatically in. The catalyst here is to have the money flowing, not to agonize over which program it belongs to. We're used to building highways in the province of Ontario. We've always done it alone. Let's not play games here. Somebody put both feet in it by saying, "We will contribute $60 million." We have our $120 million. We're used to that. Where is the other $60 million? And let's not agonize over a business plan. A business plan that satisfies Ontario, all Ontarians, all motorists in Ontario who will use it, for the 416 is good enough for the country as well as it's good enough for Ontario.
What we're saying is, let's not play small, infantile games on the backs of motorists and on the backs of workers who wish to have the 416 accelerated. We have our money. Where is your money if you want to play poker with us? The business plan is perfectly acceptable. We're willing to make some amends to it, but we have some criteria as well, for we must pay the debenture holders. Mr Turnbull surely understands that. So if we can have user-pay to an acceptable extent, let's not let that be the catalyst so that you have an opportunity to say no to the project. When did you start to care about the motorists in Ontario? On the road to Damascus?
Mr Daigeler: If I understood you right, you're saying that you are still considering the 416 as a toll road.
Hon Mr Pouliot: We're not ruling out the toll road. Our focus is money. If we can enact some recuperation by way of tolls, so be it. It's not a deterrent to participation. It's not the halo of sanctity, the mother and father of every motorist. That's not what is at stake here. What is at stake is a partnership: $60 million/$120 million. That's where the focus is; that's the only focus. The mechanism is secondary. That's a sideshow.
Mr Daigeler: For the people in eastern Ontario, the toll is not a sideshow. They have been waiting for this road for a very, very long time and they see absolutely no reason why the only major connection to the 401 should be a toll road for them. But be that as it may, that is a decision that I respect. If you want to make that decision, that is yours. It would not be mine.
But tell me, where is that at? That's probably what the federal government is waiting for. If you're saying you're putting tolls on, where are the negotiations with these famous private funders? Have they led anywhere? Where is it at at the present time? It's all big words and I still have not received any concrete indication that you have done your share of the work.
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Mr Guscott: The business case around a toll facility starts with the revenue projections, which are directly correlated to the way people value the road; in other words, what they're willing to pay for the ability to use a better link between Ottawa and the 401.
Those studies, which in the case of Highway 407 took 10 months to complete and for which there were no Canadian firms experienced in that topic, have begun in the case of Highway 416 with a Canadian firm which was an understudy to the 407 toll revenue firm. So we are still developing what the revenue sources could be. As you can imagine, the value of time varies according to the purpose of the trip, according to the alternatives etc. We want to make certain, as we evaluate tolling as one option for funding Highway 416, that we put an appropriate value on the revenue that might be obtained from that source. Those are the studies that are under way now. They are the ones that take the longest. They involve looking at what our free flow projections would be, looking at traffic volumes on alternative routes, other arterial roads, and over and above that, public surveys of the value of the time saved.
Mr Daigeler: Okay, now we've got the first indication that you are still carrying out these studies in terms of the revenue potential through tolls and that these studies haven't been completed yet and therefore you can't fully make a proposal to the federal government. Well, that makes sense. I understand that. But don't go around saying it's the federal government that is not ready to put its cheque in the mail. If that's what you're saying, put your own cheque in the mail. You are not ready to put the cheque in the mail.
I understand that perhaps it takes time to assess the revenue potential. But my question is, how much more time? Can you give any kind of estimate as to when these studies will be completed and you will be in a position to make a proposal to the cabinet to say either, "We're going to fund it out of the general revenue" or "We're going to go for the toll approach," as an NDP platform?
Hon Mr Pouliot: Mr Daigeler, with respect, not so quickly. Pre-design work is basically complete. Property acquisition is ongoing. We're ready to go to tender right now on a large portion of Highway 416. Hence the dilemma. Time is of the essence. We're willing to proceed, we wish to go to tender now, but you have to pay the people. We cannot go to tender if we don't have the commitment of the one-third participation from the federal government.
But let's make one thing clear: It's not a matter of time. We're willing to proceed right now. We have enough on our plate that we can have a shovel in the ground, a large portion of the 416 south.
The Chair: Thank you very much, Minister. Mr Turnbull.
Mr Turnbull: Minister, is it true that MTO's advisers, Wood Gundy and Goldman Sachs, with respect to the 407, were wrong in their advice that this financing could be done off balance sheet through OTC?
Hon Mr Pouliot: Mr Davies, please.
Mr Davies: It is our expectation and it is our hope that it can be done off balance sheet and off book. That is a function of the traffic forecast, and our forecast at the present time indicates a certain level of traffic and revenue. We have a fixed price for the construction of Highway 407 and we have a fixed cost for the provision of the tolling system. The only other variable that we face now is, at the time when the borrowing takes place, what is the interest rate going to be? Based on the interest rate at the time the decision was made, in April, it was Wood Gundy's expectation, along with Goldman Sachs', that the toll revenues from 407 could fully support the cost of 407.
Mr Turnbull: Is it not correct that in fact the rating agencies have told the government that this would not be considered off book because the Ontario Transportation Capital Corp has no track record? It's not like Ontario Hydro, which has a proven revenue flow.
Mr Davies: I'm not aware of that allegation.
Mr Turnbull: Perhaps I'll put on order now that I would like to be made aware of any advice that the government has been given by the main rating agencies that in fact they don't consider this to be off book.
My next question is, I'm hearing rumours that perhaps MTO has decided to get CHIC to do the financing. Is there any validity to that rumour?
Mr Davies: No.
Mr Turnbull: Okay.
Mr Davies: We always remain open to anyone who wishes to lend to 407 on favourable terms, with the benchmark being what the cost of borrowing would be if the government were to arrange the financing directly. So anyone who wishes to approach the government to lend money to the Ontario Transportation Capital Corp for 407 is perfectly free to come forward.
Mr Turnbull: But you're saying unequivocally that CHIC is not being asked to now do the financing?
Mr Davies: CHIC made a financing offer and, as we indicated to you in the last meeting of this committee, the benefits were not commensurate with the risks and the costs to government, and we therefore opted to arrange for the financing directly.
Mr Turnbull: Was their financing package an index-linked financing or was it recourse, and if it was recourse, what percentage recourse?
Mr Davies: I have signed a confidentiality agreement, as you're aware. It was at a cost that would have had to involve a call on the government, based on our forecasting scenarios, and therefore was unacceptable.
Mr Turnbull: But, in essence, was it 100% guaranteed by the government as a result of that? I know we went through this before, but --
Mr Davies: We were asked to provide -- I'm now getting into detail. There was a level of guarantee that we were being asked to bear that could have been called upon, depending on what scenarios one faced in the financing markets at the time, and so it varied with those conditions.
Mr Turnbull: As a result of the government's decision to go with financing at that time, then, I'm not aware that you have raised the money. The proposal, I believe, of both consortiums was to raise the money up front. Have we missed an opportunity to do cheaper financing? I mean, given the rates that we now have for financing, is the government in effect going to pay more because it will be raising the money later rather than going through the two consortia who were going to raise it immediately at a lower rate?
Mr Davies: I won't comment on what the details were of the financing proposals that came forward from the two competitors, but I will offer a general observation that until the legal agreements are in place with both the civil consortium and the tolling consortium and there has been an orderly presentation of the project, along with the forecasters, to the financial intermediaries, no one would be in any position to raise all of the capital up front.
Mr Turnbull: Well, Deputy, the point here is that I have been told by the winning consortium themselves, by the president, that in fact they intended to raise all of the money up front. So it seems to me, as a lay person in financing, that there is going to be an increased cost to the government as a result of raising it later unless interest rates are to go down substantially, to be able to get back to the level -- even allowing for the differential between what the government raises money at and what the consortium would raise money at, it seems to me that we've lost an opportunity here.
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Hon Mr Pouliot: Mr Turnbull -- and I don't wish to impute motive, hindsight -- maybe rates will be going down. These rates are volatile and they fluctuate daily. But on any given day, the ability of a government such as the one in Ontario almost inevitably has broader shoulders than --
Mr Turnbull: Okay, Minister --
Hon Mr Pouliot: It's anywhere between 50 and 75 basis points, whether it's last week, last month or next month. When you tap the market, we have broader shoulders than the Prime Minister.
Mr Turnbull: Minister, are you saying that if you raised the money today, you could raise it for less money than the winning consortium could have raised it for at the time that they were going to raise it?
Hon Mr Pouliot: I was not a party to the process. In fact, it was made very, very clear as part of the negotiations among both consortiums, and ethics was supervised by Price Waterhouse. But as a matter of fact, those tend to be reflected in the contract. There are no secrets here, and the bottom line is often reflected, if not in the base contract, by way of contingencies. No one escapes. The fact is that 50 to 75 basis points cheaper any time you tap the marketplace for a loan, or for a debenture, if you will --
Mr Turnbull: Minister, either you're deliberately playing peekaboo or you really don't understand this question, and you should. My question was very simple. I'm saying if you, the government, raise the money today at the current interest rates, is it not true that you will pay more than the winning consortium would have paid at the time, given the fact -- and you don't have to hide behind the privacy of the agreement. The fact is, the president of the winning consortium has told me that they were going to raise the money up front. So I am asking you, is it not true that there is a penalty involved to the government for not having gone that route?
Mr Pouliot: That one I will not question. I fully understand the question --
Mr Turnbull: Well, is the answer to the question yes or no?
Hon Mr Pouliot: I've lost a small fortune over the years to understand those questions nowadays. If you front-end, be it a lower rate, or if you borrow as you go along -- like I've said, it depends on the marketplace of the day, but inevitably it is cheaper for the government to borrow money than in this case it was, because you're looking at amounts surpassing $1 billion. That's really the focus of your question, David.
Mr Turnbull: Let me move to the deputy. I would like to move on unless you have a very quick remark on that.
Mr Davies: If we just look at the issue of timing, I think the question you're asking is, was it cheaper to borrow in May than it would be to borrow in October? I think it's largely an academic question, because we were being asked as a government, under that proposal, to provide a guarantee. Prospectuses have to be prepared. As you know, that usually takes anywhere from two to three months, so that regardless of whether the government was doing the borrowing or the private sector was doing the borrowing, we both would be going out to the market under either of those scenarios at about the same time.
It is our expectation that we will be borrowing up front, because it provides a level of certainty, but it will happen when the financial advisers tell us what the most favourable interest rate scenario is.
Mr Turnbull: Okay. Let me move on and ask whether MTO has adjusted the PQA ratings of the winning consortium.
Mr Davies: We continue to rate the capabilities of our bidders based on what we consider those capabilities to be. We are no longer in a situation where we rotate work around to keep everybody busy. They are required to be --
Mr Turnbull: Are you saying you've abandoned PQA ratings for the province?
Mr Davies: We continue to do our quality rating. If I may, I would like to ask Carl Vervoort to comment in more detail.
Mr Carl Vervoort: The current process the ministry uses continues to be in place for qualifications of contractors. You may appreciate that that process is in fact a self-declaration requirement for the contractor to advise us of the number of contracts and the amount of obligation they have with respect to contracts with parties other than the Ministry of Transportation. That would include the Ministry --
Mr Turnbull: Okay, but my question is, have you adjusted the PQA rating?
Mr Vervoort: No. To my knowledge, not. I'm not aware that any formal submission had been received from either the consortium or the members of it.
Mr Turnbull: Are you telling me that this winning consortium, which has taken on the largest contract in Ontario road building history, isn't having its PQA rating adjusted and that it's free to continue to take on jobs just as if it didn't have these obligations to build this?
Mr Vervoort: I'm indicating that I am not aware that those adjustments have been made.
Mr Turnbull: Whose responsibility is it to adjust the PQA ratings?
Mr Vervoort: That's made within the financial component of our Ministry of Transportation. We have a qualifications office that manages those processes.
Mr Turnbull: I would submit, Minister, that in view of the fact that you've thrown out the normal bidding process in this, we've got complete secrecy so the public doesn't know whether it got the right value for money, you might as well throw out the PQA ratings as well, given the fact that you've allowed a company, or group of companies, to take on this massive project, and you're saying: "Oh, it doesn't matter. It's as if that doesn't exist. You're still open to take on the same amount of business." That seems to me to undermine the whole concept of the government having people working on that process.
Moving on, some of the contractors in the winning consortium continue to report losses in the press, I believe. Armbro, Dufferin and Agra report losses. What happens if this consortium becomes insolvent, Minister?
Mr Davies: We have full bonding, so the province is fully covered.
Mr Turnbull: The three unions -- and I alluded to this in the first set of questioning and I wasn't too happy with the answers. Of course, we didn't get any answers back as a result of the questions that we put on notice, and I am quite displeased about that.
Can you assure me, Minister, that the agreement between the three unions and the winning consortium will not lead to other workers being shut out of work? Specifically, I will ask you this question because I've been approached by several electrical contractors who've suggested they believe the Labourers' union is under the impression that it's going to do a substantial amount of the electrical work on the 407, maybe not the final connection, but can you assure me that is not the case?
Mr Davies: The issue of the labour agreements for this project is one that was dealt with between Canadian Highways International, as the contractor, and its labour representatives. My understanding, assurances I've received from Canadian Highways International, is that any firm that wishes to work, regardless of whether they're union or not, provided it abides by that agreement -- in other words, it pays the rates -- is free to work.
Mr Turnbull: So another organization has to pay the same rate as they're paying to the Labourers' International, for example?
Mr Davies: That is my understanding from Canadian Highways International.
Mr Turnbull: Perhaps you could get that information to me.
When was the decision made that the group of deputy ministers would make the decision on 407? Is it correct, as reported in the press, that it was the day before the fund-raising event for the NDP?
Minister, I think it's more appropriate that you answer that question.
Hon Mr Pouliot: Well, do you wish to make a contribution?
Mr Turnbull: No, I don't.
Hon Mr Pouliot: You know very --
Mr Turnbull: I want to have some information, Minister.
Hon Mr Pouliot: Mr Chairman, I'm really appalled and shocked --
Mr Turnbull: I'm asking, was the decision --
The Chair: Could we have one at a time, please.
Mr Turnbull: -- that the deputies would make that decision made the day before that fund-raising event, as reported in the press? Yes or no? It's not a complicated question.
Hon Mr Pouliot: With respect, I fail to see the validity of the question. What is the relationship between an arrangement with the winning consortium, with a contract, and a political fund-raising?
Mr Turnbull: Thank you, Minister. That's exactly what I'm trying to find out.
Hon Mr Pouliot: What is the validity? I don't see any --
Mr Turnbull: That's exactly the point of the question.
Mr Noel Duignan (Halton North): Ask him what's the difference in the --
The Chair: Mr Duignan, your comments are not appropriate on matters around --
Mr Turnbull: I'm asking, was it made the day before the fund-raising event?
Interjection.
The Chair: Mr Duignan, you're out of order.
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Mr Turnbull: Specifically, what was the date that the decision was made?
Hon Mr Pouliot: We don't know. We see no reason to remember.
Mr Turnbull: I beg your pardon? You're a minister of the crown. The estimates process is so that there can be open accountability to the taxpayer. Minister, I will give you another opportunity to answer that question: When was the date the decision was made?
Hon Mr Pouliot: I'm sure we can find the date where the final agreement was --
Mr Turnbull: Perhaps Mr Davies knows the date.
Mr Davies: The date when it was proposed was in December. The date when cabinet made the decision was in January.
Mr Turnbull: January the --
Mr Davies: I do not have the date in front of me, sir, and I will endeavour to get it for you.
Mr Turnbull: I would like the date.
Moving on to the trucking industry: Minister, you've been on record as saying that you're in favour of shared trucker and shipper responsibility for loading of trucks. Why have you taken no action to date?
Hon Mr Pouliot: The shared onus is by way of a private member's bill and it's in the House at present.
Mr Turnbull: No, no, excuse me, Minister. You made a commitment to bring forward government legislation. It isn't appropriate that this should be done by way of private members' bills. You quite well know that. You committed to bringing forward legislation a long time ago. Why didn't you bring it forward?
Hon Mr Pouliot: Well, it's being brought forward by way of a private member's bill and it's fully in keeping with our pastoral, Jeffersonian democracy. There's nothing wrong with a private member's bill. A bill does not have to be sponsored by government, as long as the bill is progressing.
You know, sometimes, and you can share this with me, if you do so by way of omnibus -- government sponsors a bill; it has many housekeeping opportunities in it. Unless we move closure, unless we push the bill through, it's very difficult to fast-track because the opposition -- and that's okay -- will pick and choose and get rid of the omnibus provisions and make tradeoffs. Then the rest of it, you have to go and grab a number and convince your House leader and compete with other prioritized issues. That's the way it's done.
If, by way of an opportunity, you can lend support to a private member's bill, then it's one more opportunity to get this through.
Mr Turnbull: I'm shocked that you don't give more priority to government business which is of a safety nature.
So far as the absolutely appalling record of truck inspections this year, what action have you taken?
Hon Mr Pouliot: Our safety record during our mandate is second to none. We're quite proud of our safety initiative. What we're not proud of, and you're right -- shocking, appalling -- is the statistic that tells us that more than one third of the trucks are not roadworthy, mostly by way of brake failure or inefficient braking system.
Mr Turnbull: What are you doing about it?
Hon Mr Pouliot: What we're doing about it: We're monitoring compliance; we're being more diligent; we're leaning, we're fining people, we're hitting them in the pocketbook. We're working very closely with the Ontario Trucking Association through education, through partnership at our weigh scale, at our inspection station. We're doing all we can. We have more people doing that work, and our inspectors lead the way. They go beyond --
Mr Turnbull: You're saying you have more people. How many more people have you got this year?
Hon Mr Pouliot: I don't know the exact number but, Mr Turnbull, I'll get that to you pronto. Kim?
The Chair: Please introduce yourself for Hansard.
Mr Kim Devooght: I'm Kim Devooght. I'm the assistant deputy minister, safety and regulation. I wasn't here the first half.
Just a little bit of background in terms of the numbers: I believe the committee did ask for some elaboration of the 42% out-of-service rate, so I've got a little more for you here.
Certainly we too were shocked with those numbers, and the minister was as well. We found that of the 42% out-of-service rate, the following is a breakdown of those numbers: 37.6% of the air brake systems were found to reach the out-of-service criteria; 12.75% of tires; steering systems 9.75%; hydraulic brake systems 5.5%; and light systems 3.9%.
Mr Turnbull: Are you pulling these trucks off the road?
Mr Devooght: All of those numbers come from where those systems reached the out-of-service criteria and therefore the vehicle is unsafe to continue.
Mr Turnbull: So you did pull them off the road.
Mr Devooght: We pulled them off the road, yes. To answer your questions, first of all, how many additional staff have we brought on board, as you are probably aware, the ministry had a hiring freeze in place for a number of months. We have since moved on a number of vacancies. We have filled 13 positions as facility auditors, and those are the individuals who go right to the truckers' facilities and audit vehicles for safety inspections.
We have also commenced a competitive process to fill 46 enforcement officer vacancies. That will make a significant contribution to on-road enforcement.
Mr Turnbull: Are these people who work at weigh scales?
Mr Devooght: That's correct, weigh scales and green and white cruisers; they're our on-road officers. So between those two, we have 59 officers that have either been hired or are in the process of being hired right now.
Mr Turnbull: I want to say that in discussions with Ontario Trucking Association executives, they have emphasized that they're shocked at this situation and they have no sympathy for the trucks that are unsafe, because they give the industry a bad name. They want to see these people --
Mr Devooght: We agree with you 100%, because, as I say, the numbers were a surprise to us as well, the significant size of the number. The first thing we did -- and we did approach the minister and get his concurrence in this -- is that we now have zero tolerance for safety violations. In the past the ministry had a policy where if in fact a vehicle was detained for a safety violation and took quick action to correct it and had a positive record as a carrier, we allowed the company to fix it and continue on its way without a charge being laid. There would be an inspection report completed and it would sit on the carrier's commercial vehicle operator record as a safety violation, but no charge would be laid. We have now in fact begun laying charges in those cases. We realize that will cost us court time, but in fact it sends a strong message to the industry.
The second thing we've done is, we are going to place much more emphasis on the commercial vehicle operator's registration, CVOR, sanctioning process. So where in fact companies have an accumulation of safety violations, we'll be looking at them much earlier. We're looking at the penalty structures to see whether in fact the right deterrent systems are in place.
As far as the one problematic area, the one we've had the most difficulty with, as you can see, in over one third of the vehicles that we stop, air brakes are out of adjustment. That's primarily the problem, that air brake systems get out of adjustment. Right now there are prohibitions from drivers making adjustments themselves to air brakes. They're not allowed to do that. Only a certified mechanic can do that. So we --
Mr Turnbull: Is that something that in the past was done by them?
Mr Devooght: No, it's been a problem all the years along. Certainly numbers for air brakes out of adjustment have fluctuated between 25% and 35% for as long as I've been involved in this program.
Mr Turnbull: Excuse my ignorance --
The Chair: This will be the last question in this round.
Mr Turnbull: Tell me about air brakes. Are all trucks fitted with air brakes, essentially?
Mr Devooght: Certainly large vehicles, yes. Tractor-trailer vehicles are equipped with air brakes. We're discussing with the Ministry of Labour and the Ministry of Education and Training a variety of alternatives, with the objective of perhaps allowing drivers to make those adjustments themselves. It would mean changing the examination process for testing, and we're looking at that. We're looking at various technological solutions, including devices known as automatic slack adjusters which allow air brakes to self-adjust. So there are technological solutions, but they're some distance in the future.
Mr Turnbull: Thank you very much.
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The Chair: Mr Wiseman.
Mr Jim Wiseman (Durham West): If you're doing the safety stuff, don't run away. I'd like to talk a little bit about the trucks with respect to the brackets or the bumpers that could be placed on the back of trucks to prevent cars from sliding underneath them, and perhaps making the backs of trucks a little safer. I understood that we were trying to do something like that. I'm just wondering what the status is and what kind of compliance time frame we have on that.
Mr Devooght: Certainly for any new vehicles, the 53-foot trailers that are recently moving into the province, they are required to have the low underride protection, as well as proper conspicuity packages for visibility purposes.
Mr Wiseman: Is there anything to retrofit the trucks that are on the road now? There are an awful lot of them, and people are dying.
Mr Devooght: I'm not aware of any specific action other than us discussing it with industry. There's no legislative plan at this point that I'm aware of to retrofit those vehicles.
Mr Wiseman: Also, what about reflective surfaces on the sides of trucks?
Mr Devooght: Well, that's what I mentioned as far as the 53-foot trailers are concerned. They are required to have the conspicuity package, which is the reflective tape and lights of an increased nature, as far as those vehicles are concerned.
Mr Wiseman: And there's nothing to retrofit them.
Mr Devooght: No legislative requirements. Certainly we're talking with industry about standards and coming up with model programs for those kinds of things, but no legislative requirement at this point that I'm aware of.
Mr Wiseman: Minister, I guess one of the questions I would have is the proposal for the 401-407 link in Whitby. The regional municipality of Durham has suggested that it might be an alternative not to build that link but to move the transportation corridor over to the Courtice area. I'm just wondering, what's the status of the discussions and the proposal with Durham? Do we have any idea of what kind of cost implications that would have in terms of either cancelling it or just simply not doing it?
Hon Mr Pouliot: You will of course understand that when you live at 60 Neebig in Manitouwadge, you're not always as familiar as you should be with Courtice streets. We have both Mr Guscott and Mr Vervoort who will answer that. They'll give you the answer that you deserve, because I know it's very important to your special part of Ontario and you want an update of where it's at.
Mr Wiseman: Thank you, and I do know Manitouwadge.
The Chair: Welcome back, gentlemen. You've both been introduced for the record.
Mr Guscott: I'll begin and Carl will fill in on some of the details. As we look at the way 407 is to be used in a system-wide sense, one of the problems we have is the lack of connections between 407 and 401. In fact, Highway 404 is really the last freeway-to-freeway link in that scheme, and we are stretching these interchanges out to a considerable extent.
As we study the trip movements and most particularly those that involve industry and manufacturing, there is a considerable flow of goods between the Whitby area and Oshawa, most particularly the Autoplex, and we've been ensuring in our studies that we don't lose the option of meeting that need.
Having said that, we are aware of the opposition in the Whitby area to the link in the vicinity of regional road 23, and while we have not given up on finding a route there by any means, because we do want to pursue that, we as well may need a link in the Courtice Road area.
Mr Vervoort: Just let me add that in fact what David just mentioned with respect to a review of the specific alternatives that are located within the regional road 23 corridor, there has been agreement recently at the staff level, discussed with both the local municipalities in the region of Durham, that the efforts that went into the analysis of those alternatives would be revisited to allow the parties to ensure that all of their interests have been given due consideration.
Beyond that, as was indicated by David, we are taking a step back and taking a broader view of the overall network configuration associated with Highway 407 as it goes easterly from its current approved terminus in the vicinity of Highway 48. We'll be undertaking that broader network analysis to better inform us about the staging of easterly extensions and the options for north-south connections which are beyond the two that have been studied to date. There has been, as I said, discussion at the staff level that this work ought to commence, and it will commence shortly.
With respect to advising the local government, Mr Herrema, as I'm sure you might appreciate, has recently been quite ill and time has not permitted efforts to bring him up to date on the matters which have just been discussed.
Mr Wiseman: Could you give me some description of what you mean by saying that the analysis of the documentation that brought you to this point will be revisited with specific reference to the 401-407 link?
Mr Vervoort: On my references to the north-south link in the vicinity of regional road 23, as you may recall or may be familiar, there are several different alignment alternatives that vary within a substantial east-west distance surrounding regional road 23.
Each of those basic alternatives had a lot of subalternatives associated with it in terms of various connections to avoid specific environmental, historical or land use issues, and what was termed the "technical preferred route" was a route selected among all of those basic alternatives plus the various permutations and combinations of them.
That analysis is the analysis that I made reference to. The view by the town of Whitby is that not sufficient weight was given to land use considerations in the composite analysis of all of the overlapping interests in that area. So we wish to simply review that work to ensure that proper weight was given to the factors to see if we can build a better consensus around a preferred route.
Mr Wiseman: If we can pursue that for a minute then, if you went into the original environmental assessments of this with a prescribed weight and you change the weight now, that means that you have to go back and redo it all over again. Is that correct?
Mr Vervoort: I don't think it's a matter of altering prescribed weights; it's a matter of ensuring that the analysis of the factors is accurate. For example, and this is only by way of example, it would not be applicable to the specific corridor and site, but if there was a factor associated with environmental impact on wetlands and there was doubt about the accuracy of the assessment of the condition of those wetlands and the merits of the retention or preservation of those wetlands, those are the types of issues that would be revisited.
The environmental approval process has in fact not culminated. We are still in the midst of doing the work which will result in the documentation of that work for submission of an environmental assessment report. So there is no environmental approval associated with any of the work done thus far. It is in fact work in progress.
Mr Wiseman: What would be the cost of this reassessment in dollars and cents?
Mr Vervoort: I don't have a precise number for you. I'll endeavour to provide you with an estimate, but it would be relatively modest in so far as the base information does exist and is available to the planners involved. It would be relatively modest, by which I mean that I would suspect -- I had best not venture, I guess, but it would be relatively modest.
Mr Wiseman: In today's dollar terms, what would it cost to build the 401-407 link on the technically preferred route?
Mr Vervoort: I don't have that number. I can have a discussion with a colleague and provide you with that number momentarily.
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Mr Wiseman: Have you eliminated any of the other routes? How are you doing this last stage of the evaluation?
Mr Vervoort: No routes have been eliminated thus far, in the sense that the matter is still before the planners involved in the work. It would be fair to say, however, that there are some alternatives among the mix and there is consensus around this being less preferred. So while there is not consensus on the preferred route, there is perhaps consensus on some areas that ought to be excluded.
But again, that final decision has not been made. In the work that I've been referring to, once it reaches a conclusion, the technically preferred route plus its eventual implementation would still be subject to the environmental assessment report completion, submission to the Ministry of Environment and Energy and approval by that ministry before any efforts to do detailed design or property acquisition could commence. Clearly there is no exclusion of any of the options at this point.
Mr Wiseman: With respect to Durham road 23, it's Whitby's political desire to have the 401-407 link go up Durham road 23. It would seem to me, from what the technically preferred route and the assessments are, that Durham road 23 would be the least preferable option, and that all of what you're undertaking here, these reviews and so on, are at the political desire of the town of Whitby as opposed to what is required under the environmental assessment.
Can you give me some kind of assurance that the route that is going to be determined is not going to be made because the town of Whitby politically doesn't like it, but that it is in fact the environmentally most preferred route, that all of the studies which now amount to a pile about yea big are not going to be just cast aside simply because the mayor of the town of Whitby and a few councillors don't think it's a very good place to put a link?
Mr Vervoort: It wouldn't be appropriate for me to comment on which of the alternatives -- regardless of which interest groups might support it -- will be the successful alternative to be implemented. The integrity of the process depends on it being open, available to all to express and have their interests heard, for those interests to be assessed. It's the obligation of the Ministry of Transportation to make a recommendation on what it feels, on the balance of all of the information before it, is the best alternative. That is our responsibility.
It then falls to the Ministry of Environment and Energy to review that recommendation, the strength and the integrity of the processes that were used to arrive at that, to ensure that it is satisfied that the recommended alternative is the most appropriate. I simply say to the committee that all interests are equally weighed.
Mr Wiseman: We'll leave that. If my committee members have nothing, I will continue.
The next question I have has to do with the 401. You made a comment that the 407 would be useful because of the volume of goods that is transported between Whitby and the Oshawa GM plant. If that's the case, then why are you building the 407 in Durham when a widening of the 401 would be more appropriate given that the traffic flow is to the south?
Mr Guscott: My comment was with reference to total traffic movements. Traffic which is not bound to Whitby from Oshawa but rather is either destined for Toronto or to bypass Toronto would have an option. Therefore, you'd have less volume on that portion of 401, and therefore, just-in-time deliveries would be better able to meet their targets.
Mr Wiseman: Then the question that I have is, given the 401-407 link and given that the volumes are already extremely heavy on the 401, what are the plans to expand the 401 in those areas, because the volume of traffic coming down the 401-407 into that corridor where there are only six lanes, three in either direction, would really overburden that system if the 401-407 link is built there. And it doesn't make a lot of sense, at least to me, that you would want to really increase the volume of cars and the volume of trucks at that 401-407 linkage at the 401.
Mr Guscott: I guess they come together or go apart, depending on which direction you're heading to begin with. So in actual fact, it can lessen the car and truck traffic in a westerly direction. But the factors that you're describing are exactly what goes into highway planning. Those are the aspects that we model to ensure that we have adequate capacity to meet anticipated needs. And they are cast well out into the future, into the 20-year time horizon.
Mr Vervoort: Let me just add two points to what Mr Guscott has said, and that is that the analysis of the north-south connections between 401 and 407 include in them the appropriate improvements necessary on 401 -- for example, the type of interchange configuration that would be appropriate to make that particular connection work effectively.
Secondly, you asked a question pertaining to our current plans for the widening of Highway 401. At the present time, we have in our five-year capital construction programs plans to widen Highway 401 easterly to Brock Road. We have no commitments or plans at the present time for widenings or improvements to 401 beyond Brock. The planning work, however, that would cause any proposed improvements to Highway 401 would emerge in part from the two pieces of work I referred to earlier: the network overview as well as the review of the north-south link in the vicinity of regional road 23.
Mr Wiseman: In terms of time frames on your expansion of the 401, are they being met or are you ahead or behind or on schedule with the expansion of the 401 over the Rouge and the building of the bridges and, of course, the taking out of that whole bridge section at Rougemount?
Mr Vervoort: Yes; in fact, if you've driven there in the last week --
Mr Wiseman: How about this morning?
Mr Vervoort: -- the bridge at Morningside came down last week and it is clear through there. Traffic has been moved over in the eastbound direction on what is part of the new collector system right from Neilson Road easterly to a point just west of Highway 2 at the Rouge. Construction is proceeding. We had a delay initially in the award of the contract for the building of the bridges across the Rouge. We had anticipated that that work would be approximately three seasons long. The current prognosis is that the pace of construction is faster and we may recover the time that we had lost due to the delays in the environmental approvals in the award of that contract.
Overall, we are going to be challenged to meet our date of 1997 and are currently in particular looking at the modifications necessary to allow us to sustain that delivery date. We're not prepared at this point to alter that date. But we do appreciate that it is going to be a challenge to meet it.
The Vice-Chair (Mr Ted Arnott): Thank you. The time for the New Democrat caucus has expired and I now turn to the Liberal caucus. Mr Daigeler.
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Mr Daigeler: I just briefly would like to pursue that question of the truck safety that was raised by my colleague from the Conservative Party because I think we too are very concerned about what appears to be a very significant failure of certain truckers and certain truck companies to look after the safety of their own vehicles.
I understand, however, and perhaps the minister can correct me if I'm wrong, that trucks that looked unsafe were pulled off the road. In other words, the high percentage of safety failures is somewhat influenced by the fact that you were already targeting on a group that wasn't looking too good. Obviously, if you use a select group that looks suspicious from the beginning, you're going to get a higher failure rate than if you take the general population of truck drivers. So perhaps this could be explained to me.
Hon Mr Pouliot: Mr Daigeler, there are specific criteria that are attached to our database: how we function, how we do business, what motivates us into pulling trucks over. Kim, in a broadly summarized form, would you please benefit us with your expertise? What happens and what are the criteria?
Mr Devooght: Certainly during normal periods of operation or during targeted blitz operations we may do that, but the specific numbers that we referred to, the 42% out-of-service criteria, came during a North American-wide exercise called Roadcheck '94, and I'm sure you're familiar with that. There are agreed-to standards as part of the Commercial Vehicle Safety Alliance, which is a North American-wide organization that we belong to, and part of that is, in order to ensure that we have good, solid baseline data year over year, the inspections must be completely random.
Mr Daigeler: Completely random.
Mr Devooght: They're completely random. Basically, the way it works, certainly in large truck-inspection stations, is that when a vehicle is completed and sent out of the station, the next vehicle is pulled in, regardless of condition; as simple as that.
Mr Daigeler: That's the answer I was looking for, and frankly it disturbs me greatly, because really the high percentage is then based on, as you say, random selection. That is something that I do hope the ministry will continue to pursue aggressively, because the public will not tolerate these kinds of figures.
I would nevertheless like to ask, because some of the truckers have complained about the accuracy of these figures: How do these figures relate to other provinces and perhaps to other states?
Mr Devooght: I don't have data for other jurisdictions other than a complete picture for all of North America. So I don't have figures for Quebec or any corresponding US jurisdictions, but I can tell you that during the Roadcheck '94 exercise, there were approximately 3,000 state, provincial and local officials who took part, inspections were conducted at over 300 sites and 46,373 vehicles were checked. Of all of those, 11,546 vehicles, which is 25%, were placed out of service. So it's a significantly lower percentage than the Ontario data, and we ourselves tried to understand why that is. I think there are a couple of reasons.
The first reason is that I believe, and I think we believe, our officers right now are probably more highly trained than any other inspection force in North America. They've gone through two years of recurring training, they know what they're looking for and their ability to spot mechanical defects I think is significantly higher than in other corresponding jurisdictions. A number of those places have not completed CVSA training at all. So we know that some jurisdictions, for example, did in the range of 2,000 or 3,000 inspections and had an out-of-service rate of 2%. Well, you know that can't possibly be possible. It's the same vehicles running back and forth. So it's a question of training on the part of the others. So we're not sure that we place a lot of validity in anybody's data but our own as far as this is concerned, because everybody has different testing criteria.
Be that as it may, when you look at Ontario's results from past years and Ontario's results from this year, we are quite disturbed by that -- more than quite disturbed; alarmed is a good way to characterize it. As the minister has said, we have had discussions with the trucking industry. We've been quite blunt with them about what we intend to do. We've taken action on the staffing front, taken action on the technology front and are looking at the sanctions process as well. So we're moving on a number of fronts to turn those numbers around.
Mr Daigeler: Just one final question on that truck safety issue: Do you have any kind of figures on the origin of the offending truckers or the offending trucks? Are all of them Ontario-based, or are they US-based?
Mr Devooght: I haven't seen that level of analysis yet. We can get that to you, just by jurisdiction.
Mr Daigeler: I'd be interested in that.
Mr Devooght: One thing I can tell you is that there is a general correlation between the age of the vehicle and the percentage out-of-service criteria. That would seem to be obvious, but what that tells us -- and I don't have those data in front of me, but we have a chart that we could provide to you; I just saw it last week -- is that companies are not paying the attention to routine maintenance that they should be. There's no reason why a 1985 vehicle shouldn't be as safe as a 1995 vehicle. So we believe that's a significant issue. We can share those data with you.
Mr Daigeler: I'd certainly appreciate anything in writing that you can share with us. That's not a thick book, but nevertheless that --
Mr Devooght: We're still completing the analysis of the data ourselves in terms of figuring out what other clues are contained therein and what else we can do in terms of targeting specific programs.
Mr Daigeler: That would be useful, and perhaps in writing, although presumably we're going to get the Hansard for it, as to the province's own actions, as to how you're dealing with this matter. I think this would be useful, so thank you very much.
Pursuing some other questions, the next question that I had put on the record the last time we met: Minister, you said in your opening statement that spending on highway construction in Ontario has increased by 35% and capital spending for municipal roads is also up this year by some 37%. These are some pretty big figures. At the time, I asked whether that includes the federal infrastructure contributions or whether that figure of a 35% increase is really just provincial money, and frankly I doubt that very much.
Hon Mr Pouliot: I'd like Mr Davies to help us with capital spending.
Mr Davies: I'm going to give a general response to your question and then I can turn it over to Carl to give you some more detail.
The increase that the minister referred to is a combination of both what is in the printed estimates as well as the off-budget spending that is now occurring on Highway 407. Because there is revenue associated with Highway 407, it is legitimate for it to be budgeted in a different way. The expected spending by both the ministry, because we had started a number of the structures directly as a ministry, and by the private consortium which is now undertaking a very ambitious, fast-paced construction program for Highway 407, is $300 million in this fiscal year. So you can see how adding that $300 million on to the ministry capital base --
Mr Daigeler: So the 35% increase, then, represents the provincial money and the private money and the federal money?
Mr Davies: There is almost no federal money that will be coming in other than through the strategic infrastructure program, where there is approximately $20 million that I believe we expect this year, and some of that is going into grade-level crossings.
Mr Daigeler: There's certainly money, for example, in the Ottawa area spent on the Hunt Club --
Mr Davies: That is part of the $20 million we are receiving from the federal government through the strategic infrastructure program.
Mr Daigeler: So again, all of these contributions from the other partners are calculated into this figure of an increase of 35%, obviously the point being that I think it's somewhat unfair for the province to say, "We're increasing our spending by 35%," when really the money is coming from several other partners.
Hon Mr Pouliot: A buck's a buck.
Mr Daigeler: Yes, a buck is a buck, quite correct, Minister, but I think the reporting of the buck so that our electorate knows properly where the money is coming from is important. I think we should be very careful in the way we will go around, I guess. Probably in the next election they'll say, "We increased provincial spending by 35%." I do hope you will indicate that this includes several other partners, where the funding is coming from.
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Mr Davies: Could I ask Carl Vervoort to provide you with some more detail on that breakdown?
Mr Vervoort: Mr Daigeler, the number you referred to is indeed 35%, and that does include recognition of a number of different programs, not only under the Ministry of Transportation but also investments in transportation under the estimates of the Ministry of Northern Development and Mines.
Mr Daigeler: This sheet is getting better by the minute.
Mr Vervoort: The numbers, generally speaking, are that last year, using similar categories, the expenditures on roads and highways would be $1.17 billion; for the 1994-95 year they would $1.378 billion. The extent of federal contribution in those numbers is $80 million. So notwithstanding the comments made earlier --
Mr Daigeler: So it wasn't $20 million; it was $80 million all of a sudden.
Mr Vervoort: -- the percentage is, by and large, closer to the 35% even if the federal participation were discounted.
Mr Daigeler: Would you repeat that last comment?
Mr Vervoort: The federal participation in the numbers that I gave was in the order of $80 million.
Mr Daigeler: You said something that 35% --
Mr Vervoort: I'm saying that if one were to remove the federal government participation in the numbers, the numbers would change modestly. As I said, for the purposes of comparison, last year was $1.17 billion; 1994-95 would be $1.378 billion. From the $1.378 billion one would subtract about $80 million to come up with a number excluding federal participation. So it would be a comparison, roughly, of $1.0 billion to $1.3 billion, still a 30% increase in investment activity by the provincial and municipal levels.
Mr Daigeler: Okay, thank you very much. The deputy minister just indicated, and this was also mentioned in the minister's statement, with regard to the 407, that $300 million -- in the statement the minister said "could" be spent on the project this year. I think the deputy minister just said "is" being spent or "has been" spent. Could you clarify that a little bit for me, as to whether this amount will be spent this year or approximately what kind of amount will be spent on the 407 this year?
Mr Davies: We are anticipating that $300 million will be spent this fiscal year, and that includes the expenditure that's taking place on eight Ministry of Transportation contracts. I believe the figure for the eight contracts for structures plus the cost of some of the remaining land acquisition -- almost all the land has been acquired over the years -- this year is approximately $120 million or so, give or take $10 million. I'd better be more careful with my figures or I'll have an ADM correcting me.
Mr Daigeler: So there is no indication at all that there would be any kind of snag.
Mr Davies: No. The last report I had on Friday was that the project is fully on schedule and that we will see the first 36 kilometres of Highway 407 open as a toll road by December 1996, so we're 27 months away.
Mr Daigeler: Again, the minister referred to a saving of $300 million through the new funding arrangement, through the private consortium. Could you put on the record again what that $300 million saving entails?
Hon Mr Pouliot: The $300 million saving or thereabouts was said grosso modo. Its main component is economy of scale. The bigger the contract, the more opportunities for saving, and also value engineering. But to detail those two components, and there are others of lesser importance, I'd like to ask our assistant deputy minister, Carl Guscott, to tell us how you save close to $300 million on the 407.
Mr Vervoort: My colleague Dave Guscott and I will respond. Let me begin.
There are a number of features associated with the design of Highway 407, as initially conceived, that were reviewed. In one instance we took a look at both the number and timing of interchanges that were located along its entire length, and there were some adjustments made to the nature and timing of construction of some of those interchanges. There was a review done of some of the horizontal and vertical profiles associated with the road. There were changes made to the nature and extent of illumination that would be located along Highway 407. There were changes made to the actual configuration of interchanges themselves, a principal contributor to savings being the ability to remove structures or bridges separating roads where they were being replaced by loops at a more economical cost. Those constituted the principal areas that savings were achieved. There were a number of other ones as well, but those were the principal ones.
Mr Daigeler: Is it really fair, however, to name as saving what you just described? I think from what you're saying, these are really design changes, and if we would have designed them differently in the first place obviously it would have cost us less money. We're building fewer interchanges and we're doing the interchanges differently. From what you seem to say, we're cutting out some lighting and therefore it costs us less money. I'm a bit concerned that the political argument was that this private consortium is going to build this, up front, for $300 million less and therefore it's so much better. But the reality, if I understand it right, is that they've been asked to build less and therefore it costs less.
Mr Vervoort: We believe it is fair to attribute that as a saving because those expenditures would not be made. The analysis relates to the appropriate timing of improvements in a manner that is supportable by the revenues that would be generated by the traffic attracted to the facility. In that sense, with the toll being a new factor in the construction of Highway 407, it becomes an important dimension in terms of the economic payback to, in this case, the consortium which is the builder of that facility. So we believe the character of the facility being different is a direct consequence of it being changed from a straight highway to being a toll highway, having to support and attract revenues from those tolls at a time that those revenues would be coming consistent with minimizing the cost of actually building the highway.
Mr Daigeler: A different question now, because there are obviously quite a few things and we only get a few chances to ask questions: I had mentioned the last time we met that I would like to hear a little bit more about the relationship between your ministry and the new Ontario Transportation Capital Corp. What is the exact process? Also, since we have the House leader here, perhaps at one point we will have to take a look at how, for example, the Ontario Transportation Capital Corp fits into the estimates process, what's the reporting relationship and how often do they report to you? If you can enlighten me in this regard, I'd appreciate it.
Hon Mr Pouliot: Yes, indeed, and in the right order. So does Mr Davies, and he will guide us through the exciting and relatively new Ontario Transportation Capital Corp. Also, it's certainly a privilege, if you will allow me, Mr Chairman, briefly to welcome none other than Murray Elston.
Mr Murray J. Elston (Bruce): It's always a pleasure.
Hon Mr Pouliot: It's a renewed pleasure indeed. It's been over two months and it's been our loss, so it's nice to see you, Murray. We hope that the summer has been most profitable.
The Chair: I was just going to indicate that when Mr Elston was the minister, I always got straight answers from him. I always like to see him at estimates.
Mr Elston: I was actually quite pleased. I've been doing almost a month and a half of driving now to see what photo-radar is really like, only I've been very temperate on the thoroughfares.
Mr Daigeler: We'll get to that later.
Mr Elston: I'm hoping that we get a chance to examine that later, and I thank the minister for welcoming me.
The Chair: I respect that this is your caucus's time at the moment, but are you comfortable with the three minutes remaining?
Mr Daigeler: There was still an answer coming from Mr Davies.
Mr Davies: Not only do I serve as deputy minister, but I am also the acting chair of the Ontario Transportation Capital Corp board. We have an interim board that is in place under the memorandum of understanding that we have between ourselves and treasury board and Management Board. We're responsible for providing reports to the minister on a quarterly basis, but of course as chair I ensure that he is also informed of any developments as they occur on a regular basis. We have day-to-day contact.
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The minister, as you know from the legislation, is responsible for the corporation and can provide policy direction to the board at any time that the minister judges fit. The corporation is a schedule 4 corporation. The employees of the corporation are public servants. We have seconded a handful of people into the corporation to serve as staff and we have some people directly on contract as well. In addition, the corporation acquires expertise as it sees fit in carrying out its responsibilities. We're also into the final stages of recruitment of a CEO for the corporation, and I would hope to put the minister in a position where he'll be able to report on that within the next month or so.
We are also, with the minister's assistance, actively trying to recruit private sector members for the board, although quite frankly it's difficult to find people with experience in the transportation sector who do not have some conflict of interest, because most of these people have maintained their involvement in the transportation sector. So the interim board at the present time is exclusively public servants.
I'm here to answer any specific questions that you may have of the corporation, either directly or through the minister.
Mr Daigeler: So you are the acting chairman of the board?
Mr Davies: Yes, I am.
Mr Daigeler: How long is that planned for? Is there a search as well for a regular chairman of the board? How does that work?
Mr Davies: It is an order-in-council appointment and therefore it is up to the Lieutenant Governor in Council to replace me. I must say the CEO is also an order-in-council appointment, but I have instructions to head up a search board to find that individual and that's what we are now doing.
Mr Turnbull: Minister, did MTO provide CHIC with all of the interim financing for the 407?
Hon Mr Pouliot: Mr Davies, on the 407.
Mr Davies: The interim financing for 407 that is now being provided is by the Ontario Transportation Capital Corp and it is being raised through the Ontario Financing Authority. So there are decisions of the board of directors of the OTCC --
Mr Turnbull: Have they received funds so far?
Mr Davies: Yes, they have.
Mr Turnbull: How much have they received so far?
Mr Davies: There is a $75-million advance that was part of the contract and they're drawing on that.
Mr Turnbull: Are you raising bonds to finance this?
Mr Davies: This is being financed on the advice of the Ontario Financing Authority; it's short-term paper at the present time. I believe the last approval that we gave went out at 6.02% for 30 days.
Mr Turnbull: This is short-term paper that --
Mr Davies: Yes, it is.
Mr Turnbull: -- the Ontario Transportation Capital Corp has raised itself.
Mr Davies: The board makes the decision on the recommendation that the Ontario Financing Authority arranges for the financing. So they are constantly reporting to us what the current interest rate levels are that they would charge for our borrowing and they advise us on whether we should be borrowing short, medium or long.
Mr Turnbull: Who are you borrowing from at this moment?
Mr Davies: It's all part of the consolidated portfolio of borrowing that the Ontario Financing Authority arranges for. So if your specific question is -- no, there have been no bonds and there has been no borrowing done in the name of the Ontario Transportation Capital Corp that would appear on a piece of paper, nor have we issued any bonds as 407 bonds, per se.
Mr Turnbull: So has this money that's been advanced in fact come from general revenue at this moment?
Mr Davies: No. It's come from specific borrowing that -- well, I shouldn't say that. It's come from the Ontario Financing Authority, which is borrowing money for a variety of purposes.
Mr Turnbull: Is it borrowing from the sources of funds that CHIC had initially advanced?
Mr Davies: Money gets raised by whoever wishes to lend, so it wouldn't surprise me if the same people that CHIC would have arranged for money from are lending money to the province.
Mr Turnbull: Specifically what I'm asking is, it's my understanding that CHIC had some sort of contingency fee with the financing organizations where whether they drew it down or not they paid for it. What I'm asking is, are they avoiding paying this because in fact the government is borrowing through those sources and therefore CHIC doesn't have to come up with that contingent cost?
Mr Davies: The borrowing costs are being borne by the Ontario Transportation Capital Corp in the name of the project. They're not being borne by CHIC.
Mr Turnbull: I understand that, but I'm saying that whether they drew down the money or not, as they develop their proposal, my understanding is -- I may be wrong -- that in fact they would be liable for a certain fee for setting up that line of credit. Is that the case, because in that case you would be assisting them to be able to avoid paying that by drawing it down from those sources.
Mr Davies: Comparing what was proposed from them compared to what we are doing now is an academic comparison.
Mr Turnbull: Okay, let us move on. Turning to the question of subsidies for municipal transit, I note that there's been an increase of 1.4% over 1992-93 actuals, Minister. Now, I note that there's been a drop of ridership on municipal transit of some 20 million riders in the period from 1992 to 1993. There have been numerous studies which suggest that if transit operations were to be contracted out, there could be savings in the 20% to 40% area. Why has MTO not forced municipalities to put these systems out to tender to reduce the provincial costs?
Mr Pouliot: Mr Turnbull, we have involvement, we have participation, but we don't have jurisdiction. We can't lean; we can't squeeze. The objective at TTC, TTC being the largest of public transit systems across the province, is to raise 68% of operating costs through the fare box. We've long established a formula whereby for the difference there's a shared onus. The municipality of Toronto, or Metro, if you wish, and the province of Ontario will share the difference. Supplementary, rolling stocks and capital expenditure are funded to the tune of 75%-25%. We're endeavouring to monitor as much. Someone says, "The fellow behind the tree can do it at 25% to 40% cheaper" --
Mr Turnbull: Okay, well, Minister --
Hon Mr Pouliot: It's my understanding that you have a collective agreement in force. You also have people who have been impacted through the social contract and other money-saving measures, and the system is doing quite well. We're constantly looking for ways, in partnership, to offer first-class service with first-class people at the best possible rate to the taxpayers. My understanding is that that's been achieved, sir.
Mr Turnbull: Minister, the bottom line is that since your party has been in office, you've been running a deficit -- whether you admit it or not, the bond rating agencies point to it -- of close to $1 billion a month. The Ontario Motor Coach Association had a press conference in this building just a matter of weeks ago, and Brian Crow, the president, said that private companies can operate a bus for between $45 and $50 per hour, compared with the cost of publicly run companies in Kitchener at $61.80 an hour, Windsor at $54.73, Ottawa-Carleton at $84.63 and Hamilton-Wentworth at $66.95.
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You know, when you have deficits of this magnitude, in fact at any time, any government should be looking at ways of saving the taxpayers' money. It's quite a simple question: Why not ask for competitive quotes? And if the public sector can do it as cost-effectively, so be it. They should get the work. But in the interest of the taxpayers, should we not be forcing municipalities that get transfers from the province to at least have a go at finding what the best price would be? There are already municipalities in the province who do contract out their transit services. So why are you not mandating that they must at least put it out for tender?
Hon Mr Pouliot: Before I ask Mr Knox, let me, with respect, perhaps disagree as to what is the best philosophy. We operate from the motto, from the dictum, that if you can help provide a safe, efficient, reliable and consistent, affordable service accessible to all, and that vision is becoming reality more and more as we speak --
Mr Turnbull: Are you suggesting that the private sector can't do this?
Hon Mr Pouliot: Of course we are at times encouraging more participation in that newly found partnership with the private sector, better than was done under the tutelage of other administrations, I might add, via the 42 consecutive years of the Progressive Conservative Party, succeeded in 1985 by the Liberal Party.
Mr Turnbull: I guess that's why you found that we are $100 billion in debt in this province, because you've been so brilliant at managing.
Mr Duignan: Or like the Tories federally.
Hon Mr Pouliot: Well, I mean, that's not a --
The Chair: Order.
Mr Turnbull: Now, look. I'm asking why you are not mandating this. It's quite a simple question. Obviously you don't want to answer that. Let's move on to the next question.
The MTO was subsidizing Via Rail to operate commuter service to Brantford. There have been approximately 40 commuters a day using this service, and the subsidy has cost $350,000 a year. That's $8,000 per commuter. Now, in the 1994-95 estimates, I notice that this cost is not included. My question very simply to you is, have you hidden it or have you ended the subsidy?
Hon Mr Pouliot: Mr Guscott, have you ended the subsidy or hidden the subsidy?
Mr Guscott: The arrangement which had the Ontario government providing a subsidy to Via Rail for the Brantford service was intended over a three-year period to see that service grow. It did start off at a very low level. There were expectations in the community and on our part and on Via's part that the service would grow substantially in that three-year period. The growth did not take place, the three-year agreement expired December 31 and we're not paying the subsidy.
Mr Turnbull: Thank you. Another question on this anti-private-sector bias: The Wally Majesky report, which the government paid $170,000 for. My question is, why did MTO staff in the end write a substantial amount of the report?
Hon Mr Pouliot: I'm not aware that this was done. You're right, the Majesky report was commissioned by MTO. It was a relatively small, manageable amount of money and it was sole-sourced. I think we've been through that blow by blow. It was the first time, to my recollection, that division. The ideas, the recommendations from the union sector were sought.
Mr Turnbull: Minister, you're not answering my question.
Hon Mr Pouliot: Certainly we have welcomed it to seek equilibrium and achieve balance, as you know.
Mr Turnbull: Perhaps you could ask one of your staff to tell me whether it is correct that a substantial amount of the report was written by ministry staff.
Hon Mr Pouliot: Ken Knox?
Mr Ken Knox: The answer to that is no. We did have one Ministry of Transportation staff on the advisory committee to the report, who, along with other advisory committees, attended meetings and took part in that way, but --
Mr Turnbull: There was no ministry staff writing this report?
Mr Knox: There was no ministry staff writing this report.
Mr Wiseman: Do you believe him?
Mr Turnbull: You've got your opportunity to ask questions afterwards.
Hon Mr Pouliot: It's very well written, so I can understand.
Mr Turnbull: As you well know, there were several very derogatory cartoons in here which cast the private sector in a very bad light. The bus operators' association, the Ontario Motor Coach Association, has asked for a public apology for the bent of this. You've spent government money. It's filled with cartoons and rude remarks about the private sector. There's absolutely no substantiation whatsoever in here of the claims that they're making about what is wrong with the private sector, yet it is sanctioned by your ministry and paid for by the taxpayers of Ontario. Why? Why have you not issued a rejection of this?
Hon Mr Pouliot: You're quite right. In formulating our policy, when we seek balance, equilibrium, the opinion, the philosophy division from all who are active in our society, MTO will disregard the cartoons, and if they have offended your sensibilities, I'm sure the authors or the creators of those cartoons would apologize if they deemed so. But we're more intent on the written word, as, again, we come up with a balanced approach to transportation. It was an opinion that we sought, it's an opinion that we received and we ourselves paid little attention to cartoons. So if they have offended --
Mr Turnbull: Are you going to publicly apologize for this, for the appearance in this, that the taxpayers have paid for?
Hon Mr Pouliot: Oh yes. If at one time I find that an apology is necessitated, I will indeed.
Mr Turnbull: Well, you've been asked for that by the motor coach association.
Why did the ministry decide, after the contract had been given, to pay additional moneys for the printing and binding of this report?
Hon Mr Pouliot: Mr Knox?
Mr Knox: I don't have the detailed information on the timing sequence of that contract and the printing of it, but my understanding is that the contract that was let was to do the research and prepare a report and that it was felt that that should be broadly distributed, so copies of that were duplicated to send out. But I don't have the amount of money that was associated with that.
Mr Turnbull: It was several thousands of dollars, and it seems to me this is something the ministry should have control of when they give out contracts. It leaves a very bad taste in the taxpayers' mouth when they find after the fact that some of your union buddies are getting thousands of dollars extra.
Are you aware, Minister, that Gary Majesky, who is Wally's son and worked on this report and was paid for this, is using this material as part of his campaign for municipal office in Clarington?
Hon Mr Pouliot: No, I'm not aware. I have been asked to help run the affairs of Transportation Ontario, along with my colleagues, and we're far too busy to engage in witchhunts, to impute motives, to go to the municipal level, and people are plagiarizing, paraphrasing whatever ism. We're too busy at Transportation to dim the lights and to spook or scare one another. So I don't give full validity to that kind of question. It comes under ambiguous, nuance or whatever.
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Mr Turnbull: I see you're an awful lot more comfortable than when I was asking you questions about 407; maybe I should return to that. My suggestion to you is that when you have these reports which are made -- this was never tendered. It was Wally Majesky who suggested this report should be done and they went out and got a contract. As you say, we've been through this many times. He produced this report several months late -- many, many months late. You paid extra for the report to have it bound, which was not in the original contract, and it's very, very abusive of the private sector. In reading through it, forgetting the cartoons, it is very, very anti-private-sector, and for the government that wants to suggest that Ontario is open for business, boy are you sending the wrong message with this.
I would suggest that you should refute this report and say that Ontario is open for business and that you don't agree with the findings of this report and the rather offensive cartoons. I can tell you that people in the private sector transportation industry are very offended at cartoons like this, showing a bus being knocked off the road by a truck. The Ontario Trucking Association is a very responsible organization and absolutely refutes that suggestion, and pictures which suggest that somehow private carriers are evil and text that suggests that and suggests that they're taking shortcuts with safety are absolutely the wrong way of suggesting that this province is open for business.
Turning to the Ontario Transportation Capital Corp, your projections all showed that you would have revenues which would be generated through the corporation from vehicle licensing fees and various other fees: permits and so forth. It's quite obvious that the ministry's own statement of revenue and sources are declining. How will the Ontario Transportation Capital Corp become self-financing in this case?
Hon Mr Pouliot: You're interested in what portion is being dedicated, and maybe you would also like to see what the overall general fund sums are, one in relation to the other?
Mr Turnbull: Are you going to dedicate some of that revenue?
Hon Mr Pouliot: Who's funding? How is the Ontario corporation funding? Where is the money coming from? Mr Davies.
Mr Davies: There was a specific bill which provides for dedicated funding to the Ontario Transportation Capital Corp in addition to the funds that are earned from revenue-earning projects such as 407, and that bill received royal assent in the last week of June. So there is a portion of vehicle licence fees that are now being allocated to the transportation capital corporation sufficient to cover the carrying costs for the projects which the Ontario Transportation Capital Corp is being asked to undertake by the government.
Mr Turnbull: Has the Ontario Transportation Capital Corp completed its revenue projections?
Mr Davies: Yes. We have a business plan.
Mr Turnbull: Can we have those made available to us?
Mr Davies: I will undertake to do that.
Mr Turnbull: Of course this is somewhat repetitive of what I said before, but in view of what the bond rating agencies have said -- certainly reading the Globe last week the Dominion Bond Rating Service is not too enamoured by this province's state of financial affairs -- do you believe that you're going to have some difficulty in raising capital, because you have no track record in this corporation?
Mr Davies: Well, there's a significant difference between Highway 401 and Highway 407 in terms of how our rating agency would look at a provincial liability associated with those expenditures.
We felt that it was critically important for us to have a credible third party do the forecast of revenues on Highway 407. There are three internationally renowned forecasting firms that produce what are loosely termed bankable forecasts for these kinds of projects. They are all American companies. We held a competition, and as a result of that competition, it was Wilbur Smith that won the contract.
What we have is a forecast of revenues and traffic for Highway 407 that will be used, is being used, in the marketing of Highway 407 with the financial intermediaries and with the rating agencies, and so it is essentially that the Wilbur Smith -- that firm is Wilbur Smith and it'll be the Wilbur Smith certification of revenues. Therefore, the notion that somehow 407 is no different than Highway 401 and both of them should be lumped into consolidated provincial liabilities or consolidated provincial borrowing, I think is an incorrect notion. They are quite different.
So far, the Wilbur Smith forecast still shows that the cost of 407 compared to the revenues will result in sufficient revenues to cover those costs.
Mr Turnbull: Specifically then, deputy, in view of the fact that you said you weren't aware of any opinions of the bond rating agencies, will you undertake to discuss this issue with the bond rating agencies and get advice and get back to me on this as to whether in fact they accept that this is not part of the general liabilities of the government and off-book?
Mr Davies: I will endeavour to do that.
Mr Turnbull: I would like to see that within a reasonable timetable, because this is something which surely the government should have done before this point.
Mr Davies: Let me just say that the discussions that have been held between our financial advisers and the rating agencies have indicated every confidence in 407 as a new way of doing business and as a viable project, but until we are in a position where we are sitting down marketing a portfolio of investment instruments in 407, we are not going to get a clearly defined opinion from the rating agencies. Those discussions have yet to take place and, at this stage, we're only reaching the stage where those discussions are relevant. So for anyone to comment on the level of information they currently have on Highway 407, in terms of its rating, is premature.
Mr Turnbull: Turning to the question of the technology to be used for collecting the fares, so to speak, on 407, the winning consortium has, I understand, a significantly different technology from the losing consortium in terms of the technology where transponders will be used, and a different collection system. Could you comment on that?
Mr Davies: I will comment on the tentative award that we have made for the tolling station.
Mr Turnbull: I'm sorry, on the what?
Mr Davies: We have made a tentative award of the contract for the tolling system to a group which is providing an all-electronic tolling system which means that users of the highway will have a frictionless trip across 407. It's a system which will use transponders in the vehicle to signal the time and the length of the trip and the people subscribing to those transponders will be billed accordingly.
We anticipate that between 70% and 90% of the users of the highway will subscribe to a transponder system. The remaining people who use the highway have the opportunity of paying on a per-use basis.
Mr Turnbull: Will that be by way of toll booth?
Mr Davies: No, there will not be a toll booth, there will be an image registered of their licence where they got on and where they get off. That image will be translated to the address of the individual and they will receive a bill accordingly.
There will be a significant difference between the rate charged people who subscribe to the transponding via the electronic system versus the people who are occasional users and we have to go to the extra billing expense of locating them.
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Mr Turnbull: As it was described to me, it was essentially a fine that was levied on people who didn't have a transponder who used the --
Mr Davies: It's a fee that reflects the difference in costs between people who choose to use the all-electronic system versus the extra capital cost and the operating cost.
Mr Turnbull: What sort of order of magnitude are we talking about?
Mr Davies: In terms of the fee, as I mentioned at the last meeting, we're looking at a rate of between seven cents and nine cents per kilometre for the average user, depending on the time of day, who would be using the all-electronic system, and we're looking at a fee of between 50% and 75% higher or 11 cents to 12 cents a kilometre for people who would be just taking an occasional trip, with a minimum of 75 cents for the occasional user. I believe that's approximately, David.
Mr Turnbull: And the method by which this will be billed?
Mr Davies: The design of the specific billing system is being looked at now by the winning consortium. The winning consortium for the tolling system is Bell Canada, Bell Sygma, Hughes, and Mark IV. Bell Canada has a billing relationship with over 95% of the households in Ontario and therefore has the means to provide significant economies of scale in providing people with the bill.
Mr Turnbull: What will be Hughes's portion of the business?
The Chair: This has to be the last question in this round.
Mr Turnbull: I was just saying what Hughes's activity in this will be.
Mr Davies: Hughes is providing half of the transponders. They are providing much of the hardware and software, particularly the Hughes optical division in Midland. We have a commitment from them that they will be providing the optical system. But the lead in the tolling consortium is with Bell Canada, so Bell Canada is the overall project manager and is providing the financial guarantees of performance and the commitment to liquidated damages.
The Chair: I'm sorry, Mr Turnbull. We'll come back to that, but I have to move to Mr Lessard at the moment.
Mr Wayne Lessard (Windsor-Walkerville): My question has to do with roadside signage for tourism destinations. I became aware of this issue as a result of a request from a constituent in the Windsor area who was asking about placing a sign to direct customers to his pro golf academy near the city of Windsor. I thought that would be a simple matter of being able to place a sign along the road designating that. However, upon investigation I found that you could put a sign on the side of the road for golf courses but not other types of golfing-related institutions.
I was also advised that there was some work taking place with the Ministry of Culture, Tourism and Recreation to try and make it easier for people with tourism-related facilities or other types of recreational facilities to be able to have signs on the side of the road to direct customers to those places.
I wonder if you or someone here could provide me with some information about the progress that's being made to do this.
Hon Mr Pouliot: Very well. Mr Chairman, without bias, perhaps the most relevant question we've had so far. We can answer the question and the timing couldn't be better, Mr Lessard. We can answer the question in the general or in the specific. Both Mr Guscott and Carl have just stepped out. Mr Knox will deal with the general overall theme of signage.
Mr Knox: The situation with the signing on the specific golf facility that you're questioning, I understand, is a domed facility. There has been a policy jointly developed by the Ministry of Culture and Tourism and the Ministry of Transportation which deals with trying to ensure that tourism activities or facilities are recognized but yet there is some control over not having too much visual activity for the motorists to observe.
There are two aspects to this that are worthy of note. One is that we are currently experimenting with a new tourism signing policy in cooperation with the Ministry of Culture and Tourism, and not down in the southwestern part of the province but rather in the north and in the east, where we are looking at different kinds of signs available on the roadway and the amount -- there's research going on this summer and fall as to the extent or the number of signs that motorists can comprehend in going down a roadway, which can assist the tourist to find their destination. That's the sort of general comment that's going on.
There is through that process a committee that is trying to pursue what the policy would look like given the number of signs that might be available. Along with that, the creative option that both ministries put together was that we would engage the local tourist industry in helping to decide what the local criteria would be, so that's an added dimension depending on the local tourist industry as to what signs might be appropriate.
To more specifically talk about the Dome and the reason it currently doesn't comply with the policy, the policy states that there needs to be a minimum of nine holes of regulation golf in order for a facility to qualify to get a sign; that there must be a pro shop or rental shop associated with it; that they have some sort of building or lodge -- in other words, that there is some value added aspect to this at least nine-hole golf course in order to register for a sign; and that it be open to the general public during golf course operating hours. I'm sure this one would be open extended hours because they could operate longer than that, and also that they be listed in the Ministry of Culture and Tourism's golfing publication.
So the answer is, they don't currently qualify under the current signing policy, but I'm not sure the operator should be in dismay, because of the review that's going on and the research going on for an extended policy to cover a lot of tourist activities. Certainly we are well aware of the situation and also where, in other parts of the province, there are domed facilities which are a new venture but are also gaining in popularity which might, from the local tourist point of view, sort of change their perspective as to whether or not they might be acceptable locally.
The Vice-Chair: Thank you. Mr Dadamo, do you have a question?
Mr George Dadamo (Windsor-Sandwich): Yes, thank you very much. From golf we swing into photo-radar if that's okay, and absolutely no pun intended. I wanted to use the session in the next few minutes to not have specific type of questions, but to allow ministry people to come to the microphone if they would and sort of bring us up to date on the system; exactly what we've seen in the last three weeks or months since we've had implementation of photo-radar; what type of results have perhaps come back to the ministry etc.
Interjections.
Mr Dadamo: There are hecklers everywhere.
Hon Mr Pouliot: Thank you, Mr Dadamo. Mr Chairman, briefly, departing from protocol, but it's certainly in keeping with good ethics, I want to pay tribute to my colleague and a friend, George Dadamo. I'm not aware of anyone -- there were many -- who was more dedicated, more committed and has done more to --
Interjection: Photo-radar.
Hon Mr Pouliot: -- push forth safety initiatives -- you're right on, photo-radar is one of our safety initiatives. We're proud of it. It has changed the attitude of some. We're already noticing it on major highways. Fortunately, we're advised that it is not yielding the kind of money, but you will recall vividly that while the others choose to talk about money, we talked about lives and maybe that is what differentiates a commitment from an opportunity if you wish. We saw it in terms of a human dimension. Eleven hundred people lost their lives on the roads and highways in the province of Ontario last year, and fully one sixth was due to an accident -- people exceeding, surpassing the posted limit. We seized the opportunity and we're establishing a reputation for doing that. It's not a verbal pat on the back for saying you have the obligation, morally and otherwise, to initiate those initiatives.
More importantly, or more specifically, I'll ask him to share his expertise and what is the latest database on the 400 series.
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Mr Devooght: Mr Dadamo, all I can offer you at the moment is maybe some additional information from the project team and what the OPP are telling us anecdotally. We are getting our first set of live data from the integrated safety project team and the Ontario Provincial Police on September 15. We won't have that before then.
What I can tell you is that as far as the project team is concerned, I think in fact it was reported in the media as well, the first wave of tickets have been mailed out, and the equipment is working properly. In fact, the vast majority of individuals who are receiving these tickets are just paying them. I think there have been two charges that have been contested at this point and two individuals as well have asked to meet with the local prosecutor, which is their right under the new legislation. So that process appears to be tracking along and the project team seems to be quite happy with that.
In terms of numbers of offences that have been sent out so far, I have the same information that you probably have, which is that they're in the range of a number of hundreds of offences.
As far as the impact on speed and traffic is concerned, we have asked for data. We had loops and sensors installed in the roadways so we could monitor traffic before the photo-radar signage went up, when the signs went up and then after photo-radar was implemented. We don't have the results of that yet, although we expect it shortly. Granted, that will be operational data from the first few weeks, so I'm not sure you can draw a lot of safety conclusions from that, other than immediate impact of the implementation of photo-radar.
Anecdotally, what officers are telling us who've been on the roads is that the traffic is slowing down and it is having a significant impact.
Mr Dadamo: I've been driving from Windsor down the 401 quite frequently now so I'm noticing the slowing down as well and I'm becoming a little more cognizant too.
Mr Devooght: That seems to be the report from the officers on the road.
Mr Dadamo: But I'm not any different than anybody else in driving and sometimes over speed. When you see the signs, how soon after can we expect to see the system being set up? You see the signs and then you know exactly you're in the territory of photo-radar.
Mr Devooght: And that's all the signs are intended to do, because the whole provincial highway system is not being monitored by photo-radar. The idea of the signage was to indicate to individuals who are entering part of the pilot area where photo-radar is in use to provide people with that notification. There is more signage out there than would be expected with a province-wide system, though it can be anywhere from the time the signs are in place.
Mr Dadamo: I was reading in the Toronto Star this morning that people are on the lookout for grey Astro vans that are on the sides of the roads and if you have something that looks similar to an Astro van, look out. I've seen two, by the way.
Mr Devooght: It certainly seems to have become a sport for the Toronto media to try to spot these vans.
The Vice-Chair: Mrs MacKinnon, you have a question?
Mrs Ellen MacKinnon (Lambton): Yes. I don't think it's any secret to anybody about my passion to have the permanent raised pavement markers put on our highways, or Cat's-eyes, as we sometimes call them. My question is, what is the ministry doing about it and when can we expect to start seeing them on the highways of Ontario?
Mr Davies: I'm going to ask Carl Vervoort to comment in detail on this. We have conducted some 37 pilot sites using different kinds of pavement markers. We have a significant operational difficulty with the overall cost of this kind of pavement marker that has been developed to date. We are working closely with the industry in trying to produce a marker that is cheap to install, cheap to maintain and that does not cause a significant disruption to our snowplows in the wintertime.
We are working on eight new models. The ideal model would be one that would be sufficiently pliable that a plow can go by it without having the plow jump and cause a problem with the steering for the driver and that will stay in place no matter how cold and has a very high level of reflectivity. It's our hope that one of the eight models we have now moved on to try this particular winter will be successful. Carl will be able to give you a more specific response.
Mr Vervoort: My information is along essentially the same lines, Mrs MacKinnon, as the deputy has indicated. We are going through a process of ongoing evaluation of these products. There continue to be improvements made to them. As has been mentioned, one of our primary concerns is Ontario's climate and the snowplowing operations and the compatibility of having physical objects implanted on or below the road surface. As we get the results of our field testing, we'll be able to conclude the appropriate use of pavement markings, be they raised or flush with the pavement.
Mrs MacKinnon: It's my hope that the investigation into the way these are manufactured is very thorough, because as I understand it from my sources, these Cat's-eyes are becoming very, very sophisticated in that they are level and they withstand very cold temperatures. I understand in northern Michigan they're very prevalent and they don't have a lot of problems. I also understand that when they do become defective, it's just a case of prying them out and snapping in another one. It's my hope that we here in Ontario will be doing something about it, because I find driving with them extremely helpful.
I think we have to be very honest with ourselves, because I'm one of this particular crowd. Some of us are just a little older than some of the people sitting around this room today, and everything that you can put in a highway to help us keep safe and keep us safe from the other drivers would be very helpful and beneficial. So please don't give up on it.
Hon Mr Pouliot: I too value the experience of my distinguished colleague. Who's to refute the parallel, the analogy of northern Michigan, which has the same climatic condition as is experienced in Ontario? Their system isn't flawless. It has some pitfalls, some shortcomings associated with it. But anything that will improve safety, we're looking for a way to make it happen. A pilot project vis-à-vis safety for us is not whether you're going to do it or not, but how do you iron out the bugs and get it done?
Ken, would you like to shed some light on this issue?
Mr Knox: We have been doing research on what's commonly known as Cat's-eyes for a number of years and we're having difficulty in our environment with the snowplowing application. There are three things that are occurring. One is that when we apply sand and salt, as we do in Ontario, the sand and salt are getting into the lens area. Therefore, for the critical winter months, we're finding that visibility of the actual reflectant is diminished.
The other thing that is occurring is that there is snowplow damage to a percentage of those, and the statistics that I have seen indicate that it's not a simple matter of inserting a new one. There is an application process which requires the traffic to be altered in that part of the highway in order for workmen or women to put the new reflector in. There are also, in our research, as we're experimenting with different kinds of the reflectors, different applications that are available. That's indeed part of the research that we're doing, as to whether or not some are easier to replace than others.
Another aspect of this is snow removal. I haven't ridden in a snowplow as they have plowed a road with the Cat's-eyes on it, but we have seen a video that was placed in the cab of a truck and it does cause the snowplowing vehicle to slow to 35 kilometres an hour. Even though they're not up very much, there is enough of an indication there on the wing that it causes significant movement, in the cab of the truck, of the camera. We can plow on the roads where they are. We understand that. But we're slowing to 35 kilometres an hour, and I believe, Carl, the average speed of plowing is 70 kilometres an hour. It's sort of what we set for. So now we're into either plowing those areas more slowly or needing more trucks and drivers in order to clear the snow in a time frame that the driving public expects it to be cleared.
We are very much interested and continue to do research, and I believe there are five different models being experimented with during this coming winter. We're very hopeful that we'll be able to find something that's suitable to our winters and conditions here.
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Mrs MacKinnon: That's my hope too. Are you aware of some municipalities, and I know that some of them are right in my own riding, that are doing this on their own county roads? I was wondering if you are aware of them. If not, maybe you could gather some information from them, but perhaps you already know about it.
Mr Knox: Actually, we are aware that some municipalities are using them in critical areas, like around corners where there's significant concern about the delineation, but I think it's a point worth noting to gather that information because I'm not aware that we're including their data in our research, Carl, at this point. That's a point worth noting, and we both so note.
Mrs MacKinnon: I'd be only too happy to tell the municipalities at home that you would like that data. I will.
Mr Knox: Thank you.
Mr Vervoort: I might also add that while we are talking principally about permanent pavement markings, we do use those markers increasingly in summer conditions at our construction sites. You may have noticed in the last two summers in particular, particularly on Highway 401, that we have adopted increased use of pavement markers during detouring situations. So we believe there are appropriate uses for those particular devices.
Mrs MacKinnon: Yes, I have. Thank you very much. Have I any more time?
The Vice-Chair: You have about two minutes, Mrs MacKinnon, if you choose to exercise it.
Mrs MacKinnon: Further to all of the beautification that's being done along our highways and the volunteerism that's been involved in the various clubs or whatever you wish to call them that clean up the sides of the roads, and certainly that has been an extremely effective program, I was wondering if the ministry has any more initiatives in line in regard to volunteerism or beautification.
Mr Elston: We're looking for a volunteer minister and a volunteer deputy.
Hon Mr Pouliot: You're quite right that our efforts go somewhat beyond the adopt-a-highway, and now the well-known adopt-a-highway, program. We're constantly looking for ways, not to save money -- I think it's really secondary -- but to get more people involved. Not only are they paying our wages; people pay for everything, and it's by way of involvement that you make more people not only aware but believers. People are innovative, adaptable, imaginative, and the general public comes up with the vision regarding tomorrow's transportation policy. But I know you want details, you want direct action as to what is being done and what will be done in the future. Mr Knox.
Mr Knox: The adopt-a-highway program and use of volunteers, the volunteers being very active in that, has been something that we have worked very diligently with, and we are really pleased with the interest of the public in working to keep the highways clean. I think it would be worthy of note, Minister, to indicate that there are 373 groups involved in that program across the province. There are seven groups involved with tree and shrub and wildflower planting, which was sort of an adjunct to the original program, which was litter pickup and keeping the roadway clear. There's one group that's involved with vegetative control and management. There are over 5,000 volunteers in total working with that program, and we're really pleased at that. That involves over 1,500 kilometres of highway that is being worked with by the volunteers.
Another aspect of volunteerism that we're really pleased with is an example of joint cooperation between a municipality and volunteers, at a local level, and the Ministry of Transportation. I'm referring here to a project which has been successfully launched on Highway 6 called the "Safe on 6" project, which is in the Hamilton-Wentworth region. Sparked by local interest and volunteers, the province and the local municipality, including the law enforcement officers there, have installed signs which indicate -- it's similar to an experiment we did in the Belleville area on 401 where we installed a sign that indicates what the fine levels are for speeding through an area. In this case, the Ministry of Transportation has installed signs, the local law enforcement officers are aggressively pursuing those who break the law in that area, and the volunteers are ensuring that the public notice of that initiative is being well recognized by the public within the region. So there's a three-party -- in fact, there are four in that case, because some local businesses assisted in the cost of erecting the signs on the side of the road to help the taxpaying public in that regard. So that's another area of volunteerism.
The Vice-Chair: Thank you, Mr Knox. The time for the New Democrat caucus has expired, and I'm going to again return in rotation to the Liberal caucus.
Mr Daigeler: I'd like to pursue, as the first item, the photo-radar issue that was raised by Mr Dadamo. It seemed to me, from the comments that were made by the ministry officials, that safety is being defined in terms of a reduction of speed. I think that would be a rather simplistic approach. Frankly, I'm not sure at all whether we can simply say it's speed that is the problem. I think it's the driving that's the problem.
I would like to know how you do define safety and, more specifically, what kind of system you have in place to keep records, meaningful records, of hopefully greater safety results. I'm quite prepared, Minister, if you can put forward the figures that your photo-radar initiative leads to a significant reduction in accidents, that perhaps you're right. But I would like to know: How are you measuring safety and, in particular, how are you measuring the increased safety that you claim or you hope is going to happen through the photo-radar?
Hon Mr Pouliot: If we evaluate from the premise and if we believe that speed is a factor, that excessive speed kills, that you're less likely to be in full control at 150, 130, 120 than you are within the posted speed limit, then it reaches its natural conclusion. If we couple, if we choose to echo other statistics that tell us that accidents are on account of 85% driver error, a second becomes a fraction of that excessive speed. The faster you go, you begin to measure error on a different scale, rule of thumb: one out of six. And they all come from different sources, but there is a unanimity that you are more vulnerable, more prone, be it a combination of vehicle, of driver ability, of reaction time. When you speed, there's no getting around it. We all believe that.
What we do is we have deterrents, reminder and deterrents. Reminder by way of education, by way of ads. They're tell-tale, they're shocking, they're graphic. They're designed to be that way; they're fully impacting. Then you hit people in the pocketbook.
Mr Elston: Are you talking Rae days?
Hon Mr Pouliot: Not because -- well, take a Rae moment to reflect on the logic of that great safety initiative.
Mr Daigeler: I think we've had enough moments now, Minister, and I would like to ask some other questions as well.
Hon Mr Pouliot: I know. Take a moment, Mr Elston, with the highest of respect, to reflect on the safety initiative. This is not bad news. This is not a tax grab. This is not an invasion of privacy. It is catching up with modern technology. It gives us an opportunity to better display, to better spread, if you wish, our police force. These are difficult times. Radar has been around for years. Aircraft patrol has been around for some time. We all recall this, some of us very vividly. You're catching up. It's voluntary. You're not going to pay. Our focus is on making the roads in the province of Ontario the safest in North America, whatever it takes. We're not impeding the normal flow of traffic.
Mr Daigeler: All I wanted to know, Minister --
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Hon Mr Pouliot: Witnesses will attest, Mr Daigeler, by way of conclusion, that in fact it's more normal. You don't close lanes by way of accident. It's more regular, more regulated. People get from point A to point B in the same time. For sure, you don't get to make a contribution if you keep within the posted limit. I cannot do rounds. I cannot be ambiguous and ask any one of our citizens to break the law. Quite the contrary, we're here to --
Mr Daigeler: Thank you, Minister. I think the time for opening speeches was at the beginning of the estimates. I think now --
Hon Mr Pouliot: I'm just answering your questions.
Mr Daigeler: -- we're into questions and answers, and your answer seems to be that if you reduce speed, therefore you have safer roads. Frankly, I think that's simplistic. But, you know, you are spending so much time, because there are many other things. I would have liked your officials to tell me how they're measuring possible accident reductions, and I am prepared to be convinced. That's what I'm hoping to hear. What are you going to compare it with? Are you identifying certain roads? You have the accident statistics from the previous years. Are you going to compare this, let's say, after half a year and see what the accident reduction is where photo-radar was made? I think these are relatively straightforward and simple questions and I don't need a long speech to answer those.
Hon Mr Pouliot: Yes, yes, yes. You see, at the risk of having one of my distinguished colleagues engaged in competitive sameness by way of synonyms, I'd like to invite Kim to tell us about making our roads the safest in North America.
Mr Devooght: To try to address your question, maybe I was a little misleading before. We believe that speed is a contributing factor to collisions. There are many contributing factors, but speed is a contributing factor, and there are many road safety research studies that would show that speed is a contributing factor to 60% of collisions. We also know that, as the minister said, driver error is the cause of 85% of collisions out there. So we know that speed is a contributing factor. Now, how are we measuring the effectiveness of photo-radar?
We have collision data on every highway in the province. We know where every collision has occurred. So we have baseline data for this. We are measuring the success of this initiative in the same manner that we are measuring the success of all of the other initiatives that we've put into place over the last while; that is, the numbers of collisions, injury accidents and fatalities that occur per baseline population. The trouble of course is that it will take time to develop that kind of baseline data, so what you do in the short term is you look to other operational indicators to see whether it's having any kind of behavioral effect. I wasn't suggesting that speed alone is the only thing that we're interested in, because in the end what we're interested in strictly is fatalities.
Mr Daigeler: So you're keeping data on where the photo-radar was and then you will compare this, the accident statistics in that area. You'll have to keep the photo-radar, then, over a certain period within that area, presumably, in order to show with reasonable evidence that it was the photo-radar that reduced the accidents.
Mr Devooght: Yes.
Mr Daigeler: Is that what you're doing?
Mr Devooght: Well, I'm not sure you want to hear the whole research dissertation here, but one of the --
Mr Daigeler: Well, the minister's claiming it's a safety issue.
Hon Mr Pouliot: Not from me; from you, it's okay.
Mr Devooght: What we're interested in is behaviour modification, and whether the van happens to be sitting there at that particular point in time or not, that's not really the real issue. The real issue is whether the introduction of photo-radar on those highways has had an effect on behaviour and the result is that people have slowed down and been more careful and collisions and fatalities have been reduced as a result of that. Okay? So what we're concerned about is, which highways have been signed and what is the road safety experience within those routes during the period of time that they have been signed? That's what we're tracking.
Mr Daigeler: Thank you very much.
The next item, and I don't really want an answer right now -- I'd hope it would be provided in writing -- relates to alcohol-related collisions. The minister in his opening statement said that since 1982 there's been a reduction by 47%. I already asked that perhaps we could have some figures over the last five years to see whether that trend has continued. I just hope it has. So whatever information you have there, if you want to provide that in writing, I'd appreciate that.
An important concern that I do have -- and as you know, Minister, both Mr Turnbull and myself and both parties were very supportive of your graduated licensing project last year, and I should say again that I thought the initiative of holding those public hearings before the legislation was actually introduced was a good one, and I would hope some of the other ministers would follow the same example.
I was just involved with Mr Ramsay in a tour of northern Ontario on the forest management bill and frankly, I don't like that there is only one week between the public hearings and the clause-by-clause. It doesn't make sense. So in that regard, Minister, I do think you did the right thing to go out to the public, hear from them and then bring in legislation afterwards that perhaps reflected some of the things that were said by the public.
Nevertheless, can you tell me: How is the graduated licensing system working? Is it working as it was intended to be? I've heard very little at all in terms of the results so far. What are the snags? What are the problems? So if you can give me an update, I'd really appreciate it.
Hon Mr Pouliot: I very much appreciate, briefly, your comments. You're right, it was a collective effort and everyone thought it was commonsensical and certainly no one administration can take credit for graduated; that was an evolution and if it hadn't been for your help, maybe we'd still be waiting, so that's well taken.
The number of alcohol-related accidents over the past 10 years is 47% less than 10 years ago. That has been achieved gradually.
I've earned a reputation over the few short years to answer questions directly, for being to the point.
Mr Elston: It's been unfairly given.
Hon Mr Pouliot: And I only wish that the last question, as to an update on the graduated driver's licence -- but since I don't have all the latest details, and yet I want to be consistent with my reputation, if I may say so, in terms of being direct and to the point, I will ask Kim to give us some details to the question of Mr Daigeler.
Mr Devooght: The short answer is, fine; everything's going fine. In terms of timing, we did implement graduated on schedule in April and June. The only significant snag I would say we had, had to do with the numbers of individuals who thought they didn't really want to be part of graduated licensing and therefore visited our offices in droves prior to that period. So we had, as I'm sure everybody knows, quite a runup to the implementation dates.
We have since corrected those issues and those problems. Our waiting times for road tests are 35.8% lower than they were a year ago. The inventories are that much lower and the waiting times are down 45%, so we have restored the service levels and in fact, they're probably better than they've been in the last five years. So from a service point of view, we're well-positioned, and systems are working and the automated systems are in place and are running properly.
From a public awareness point of view, the ministry conducted some 525 -- I think that's the number -- public information sessions, primarily at the high schools, and spoke to over 150,000 people.
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Mr Daigeler: How about the exit test?
Mr Devooght: How about the exit test? The level 2 exit test has been designed and it's been field-tested now. All of the Ministry of Transportation driver examiners who will be doing the train-the-trainer on the level 2 exit test have been trained. We have done over 900 field tests. It's a question of validating the test and we've completed that process now, where half the population is experienced and half the population is inexperienced, so you determine the right Pascal criteria; and that work has been completed now.
I know you were involved in the hearing process so you'll have a sense of when the test in its full production mode will be required, and that is about 20 months from date of implementation, which was April 1994. The only people who need the level 2 exit test between now and November 1995 are new Canadians or people entering the province from a reciprocating jurisdiction. We do have an interim level 2 test that we put in place quickly in order to deal with those individuals.
So we have an interim test that's working, we have the advanced test that has been validated, and we're in the process now over the course of the next few months of bringing on board the additional staff and hiring them. We did not want to end up with people before we needed them. The wave of resource will come when the wave hits for level 2, which will be in late fall of 1995.
Mr Daigeler: I think Mr Elston has a question.
Mr Elston: I have a question on the application of graduated licences, particularly people who have suffered from cataract or other problems. I understand if they've had their licence taken away, they've had the operation and their vision is now correct and even if it's been for a very short time that they've been without their licence, they now are required to take on a graduated licence to get back into the system. Was that always anticipated? If that is not the case, then I have some people I guess I'd better tell that they've been treated unfairly.
Mr Devooght: There are no specific rules around individuals with medical conditions. The only criteria around which level you enter the licensing system at depends upon how long you've been active or inactive as a driver. If you have been inactive for five years then you do not have a driving history and then you end up back in as --
Mr Elston: The people I know have not been out for five years and they are now considered as graduated licence holders. What does that person do or the people I know do, who because of medical problems have been issued a graduated licence? Do I tell them to go down to their local MTO office and say: "I was without my licence for seven months and you gave me a graduated licence. Give me a full licence"? Surely they're not going to have to go through a whole appeal system.
Mr Devooght: I'm at a loss to explain the specifics of those, other than that from what you describe to me, that doesn't seem like the right answer from our folks. So all I can say is --
Mr Elston: So those people should contact -- who?
Mr Devooght: They should contact the ministry management in their local area and explain their situation.
Mr Elston: With a copy of this Hansard?
Mr Devooght: Well, yes. There's no --
Mr Elston: Somebody obviously believes that people who have been out for a period of time, in this case less than a year, are required to take graduated licences.
Mr Devooght: If you've been out for less than a year, you're not treated as a new driver.
Mr Elston: But if it's five years, certainly you've made a decision that you should be treated as a new driver.
Mr Devooght: That's right. And that rule is the same rule that's been in place for a long, long time. We didn't change that rule at all.
Mr Elston: But is there a discretion between five and one? Or why would these people say this person should -- a particular person whom I know, anyway -- have a graduated licence?
Mr Devooght: It doesn't sound correct to me. It sounds like somebody has misinterpreted something. So if there is a specific case, if you can provide the ministry with that information, we would endeavour to fix that. The easiest thing to do is just give it to us and we'll look into it.
Mr Elston: So there's no standard policy? That's the reason I asked.
Mr Devooght: There is a standard policy, but it does not have to with medical conditions; it has to do with time out of the system.
Mr Elston: That takes me to a second question, which is -- I'm not sure whether it's your area or not -- still the issue of medical conditions in driving when a person has gone to three different specialists, gotten a clean bill of health, and your medical person, who has never seen the individual before in his life, is still saying, "No, you can't drive." I've got one particular constituent now who, while he has appealed, can't even get back into the system for another six to eight weeks because the appeal system is backed up.
My concern is, how many people who have seen an individual have to attest to the fact that this person can drive safely to overcome one of your people who has never seen him and who has done nothing but look at X and Y on a piece of paper someplace and say, "No, I'm not going to give you permission"?
We put a pile of these people through the appeal system every year, and it seems to me somebody is not treating individuals in the field very fairly, because we have no way of dealing with these more administrative people. It's got to be solved. That's problem's got to be solved.
The Vice-Chair: A brief response, please, Minister.
Hon Mr Pouliot: Yes, thank you. The privilege afforded to individuals and the right of the collective: It's very difficult, Mr Elston, at the risk of boxing ourselves in, to address individual cases. You know that. When you were a minister of the crown in several portfolios -- and you've done a marvellous job -- you were always on top of each and every dossier, and that's something you'll always have to reconcile yourself. I recall some of the questions in the House were constantly searching, but you don't want anyone to be done in.
Mr Elston: I understand that.
Hon Mr Pouliot: There's no question that's the case, whether it's with respect to one of your constituents or not. If you have the case of a fictitious Harry Smith or Ms Jones, a valid driver's licence, and then you have a temporary aberration, be it by way of cataracts or not, if people will attest acquiescence that the situation has been corrected, my humble common sense would tell me, why can't the person just go to the nearest office, pick up her ticket, and life goes on as usual?
Mr Elston: But it doesn't happen.
The Vice-Chair: Thank you, Minister. The time for the Liberal caucus, for this round, has concluded. I'm now turning to the Conservative caucus.
Mr Turnbull: Minister, back to the subject that gives you apparently the most discomfort: 407. Casting your mind back to April 18 of this year, I asked you a question in the House relating to this infamous fund-raising event, where you will recall -- I'll read it back into the record just so I can refresh your memory -- there was this letter sent by the Labourers' International Union of North America urging people to attend this. They said:
"It's important that you personally apply yourself to making the evening a success by calling those contractors and influencing them as to the importance" -- and "importance" is in larger capital letters than the rest of the text -- "of the said evening in the purchasing of a table, a half-table etc -- as much as you can squeeze. Don't take no for an answer.
"I am sure I don't have to tell you that the prestige and the name of 183 is important and must be maintained for all future lobby efforts that benefits."
I asked in that question, and you certainly feigned that you were somewhat offended by it, if the $100,000 it raised for the party was now the going rate for government contracts. To quote what you said at the beginning of the answers, "I can assure the critic opposite that there is absolutely no link between a fund-raiser and the awarding of the contract."
It's interesting, the next day I asked you another question on the 407 and it was related to, are we getting value for money? I didn't ask anything about that fund-raiser. You started out by launching into saying: "emphatically -- not that it matters at all, but just a mise au point -- that I was not at the fund-raising dinner. I don't think it matters, but you had assumed, with respect, that I was there, but I wasn't."
I presume you still stick with that statement. This is your opportunity to suggest as to whether that was wrong, what you said at the time.
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Hon Mr Pouliot: If I may be so bold, heck, what is it you are talking about? You said, and I'm quoting verbatim, that one of the subjects that makes me -- who cares -- the most uncomfortable is that of the 407. Tales of Houdini. At times you talk about the 407, at other times you talk about fund-raising, and then you wish to establish an astrological connection, a sort of palm-reading behaviour. I know you're not a merchant of fear.
There were members of both consortia, I understand, at the dinner. My agenda has it that I was someplace else, but more importantly, fund-raising events are held by political parties at every level, by individual candidates of all stripes. You will say we're not quite used to it in our case. Of course, we have our limitations, but it's a matter of philosophy. I mean, you have a philosophy; you can relate to it. We happen to differ, but it's always with respect. I would imagine that all parties have a well-defined philosophy.
But fund-raising has no bearing -- you invite people. You soft-sell, I would imagine. That's the way I would do it. And people from all walks of life will come and attend the fund-raising, but oh my, the process is such here that it has absolutely no connection. Imagine if it were. We'd disassociate ourselves. It's a matter of ethics. I have some difficulties, and I know the exercise, and I value what you're saying, be it only a reminder that hypothetically a system like this may never exist. We don't even have a cup of coffee with people associated with the largest highway project in North America at present. You know, I will be among those who will die poor.
Mr Turnbull: Minister, would you like me to connect the dots a little bit for you?
Hon Mr Pouliot: The kind of connection, I'd like you to be more precise so we can help you. This is offending.
Mr Turnbull: Okay, let me connect the dots. The letter that I read from, which was signed by Michael Reilly, the business manager of Labourers' International Union, was dated the day that they concluded the no-strike, no-lockout agreement with the winning consortium. You're quite correct that there were members from both consortia at this dinner. You're absolutely correct.
My question to you was -- I suggested that you were at the dinner and you were most offended about that and came back the next day in an unrelated question -- well, related but certainly not on that issue -- and said, "I now have a copy of the dinner menu and the list of hosts." And to my surprise, after that answer you gave me, it lists under hosts -- not guests, hosts -- the Honourable Gilles Pouliot, MPP. What an amazing coincidence that it would be here when you didn't attend the dinner and you had nothing to do with it and you were offended.
So let me further connect the dots. The labourers' union, when they made the no-strike, no-lockout agreement, sent out this fund-raising letter that day, and lo and behold, the day before the fund-raising dinner, after they had put all of this pressure -- I mean, let's get the exact wording again: "As much as you can squeeze. Don't take no for an answer." -- after they'd sent this, the other consortium didn't sign this agreement. They trotted down and tried to get them to sign it.
And lo and behold, the day before the dinner, according to the press -- and I've asked for the date and you can't confirm it and this should be a pretty simple date given that it has been in the media within the last week or so, and yet you still can't recall the date, which is somewhat surprising to me. In the interim you could have easily found this out. The day before, lo and behold, at the 11th hour and the 55th minute, the deputies were given the job of deciding on the contract, according to the media. We know that it was very late in the process but according to the media, it was actually the day before the dinner that you gave the deputies this decision, and you're on the guest list.
I wonder if you want to reword your answer from Hansard, from earlier, or whether you want to suggest that there was some deliberate attempt to perhaps give us the wrong impression.
Hon Mr Pouliot: Thank you kindly, Mr Turnbull. My name might be on the list but certainly I wasn't on the menu. The cabinet decision to appoint the DMs was on, my notes that just reached me here tell me, January 19, 1994. When was the dinner held? Does it say on the menu?
Mr Turnbull: It was 10 days after the letter was sent, and that was January 10. Surprise, surprise, it was indeed the day before the dinner. How convenient. You know, when you've got a process that is no longer open, as it has been in the past, through successive political regimes since the early 1950s, that you've closed this down and then you do this, Minister, it leaves a distinct odour and it ain't good.
Hon Mr Pouliot: You're trying to make this the Last Supper.
Mr Turnbull: No, don't worry. You'll have the Last Supper early next year.
Hon Mr Pouliot: No, seriously, I won't encourage you any more than this, and with respect, you are imputing motives. You're searching for something among honourable members here. You won't go as far -- you have immunity here and you know darned well you're not going to put your seat on the line. No one is challenging you, but if you up the ante, I want you to keep in mind that unless you have preuve positive, we all have an obligation at least towards one another as colleagues, and I'm not being defensive.
Mr Turnbull: There's nothing I have said so far which is in any way slanderous, Minister.
Hon Mr Pouliot: You know we can try; we can swing that thing but --
The Chair: One at a time, Mr Turnbull.
Hon Mr Pouliot: Let's be careful here in terms of character or let's have the courage to go outside and say those things when people would have recourse. When you by innuendo, by nuance, by ambiguities impute motives as to the style of operation, a person should not be allowed, in a public forum, to do so or to get away without substance, because what you do hurts, it impacts people, it cuts deep and it's not entirely fair.
Mr Turnbull: Let me tell you, Minister, that the people of Ontario are disgusted at how they were lied to in the last election with that infamous document Agenda for People and with the ministerial guidelines that this Premier brought forward which he promptly forgot about. So if you want to talk about honour, I'll talk about honour. It's a long, hard story. Let's get on to other ministry business.
What action specifically have you taken to monitor the comparative accident and fatality rates during the photo-radar evaluation in the specific sections of road where this is being undertaken?
Hon Mr Pouliot: Kim?
The Chair: Welcome back, Mr Devooght.
Mr Devooght: I think, as I had indicated in a previous answer, we have --
Mr Daigeler: He wasn't here, so you have to repeat it.
Mr Devooght: I'm sorry. You're right. The first thing we had done as part of the highways that were selected for the photo-radar pilot, there were sensors installed in the pavement sections in order to be able to give us some indication of speeds, first of all, average speeds. There were data collected and there have been, actually, loops in pavement in various parts of the province over a number of years. We added additional ones so we will have data from before the photo-radar signs went up, when the signs were installed and after the date of implementation as well. We'll have operational data ongoing.
As we know, our view is that speed is a contributing factor to collisions. We have many road safety studies that indicate that speed is a contributing factor in approximately 60% of collisions. Our view is that driver behaviour is the cause of 85% of road collisions. So we will have that level of information.
In addition, we do know the position and relative position of every collision that's occurred, every significant reportable accident; we have the location of that. We have a collision database that tracks all of that information. So while speed is important from a research point of view, in the end what really matters and what we will measure is injury collisions and fatalities. We do have that information by roadway and we'll have it over time.
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Mr Turnbull: As you'll be aware, the data out of Calgary suggest that fatalities and accidents actually went up after they installed photo-radar. Can you comment on that?
Mr Devooght: No, I can't comment on that. Actually, that's a bit of a surprise, but I can't comment on how it may have been implemented in any other area. I can also tell you that in Australia, in combination with a number of other initiatives, collision and fatality rates were significantly reduced. So it depends on what other factors are occurring at any one time in any one specific location. I think our view is that it will make a significant difference. Time will tell about the level of that difference.
We will have our first set of operational data from the Ontario Provincial Police later this week. The 15th, I believe, is when they're going to first report to us. I can only tell you anecdotally what we have been hearing so far and that's that the system is working. The police officers who are on the street, whether they are operating the vans or whether they are in regular traffic patrol, are saying that traffic seems to be more orderly, I think is the phrase that they're using, and seems to be more closely complying with the speed limits.
Now, it's the early days and we'll have to wait and see how this will affect the numbers over time, but we sincerely believe it will have a significant impact on collisions, injuries and fatalities.
Mr Turnbull: Regarding the exit test from the graduated licensing field, I am aware that the Road Safety Educators' Association and the Driving School Association of Ontario, that got together to work with the government, have been somewhat frustrated at the lack of consultation by the government on the exit test. Can you update this?
Specifically, they were frustrated with how long it was taking to get appointments with ministry officials. There's a turf war going on. I'm not for one minute suggesting that anybody should choose winners and losers. That's for them to sort out. The concern that has been expressed to me is that there has been more ready access to ministry officials -- perhaps to you, Minister, I don't know -- but certainly to ministry officials for this new competing group which is much smaller than the larger group. What is the story on this?
Mr Devooght: In fact, there are two issues here. First of all, the discussions that you're referring to between the Driving School Association of Ontario and the Road Safety Educators' Association and the newly formed Ontario college of driving schools, I believe is their name, have to do with the driver education standards, and what the course curriculum would look like for driver education in the future. That is a completely separate issue from the level 2 exit test.
In fact, the Driving School Association of Ontario, the Road Safety Educators' Association, the Ontario Safety League, the Young Drivers of Canada and a number of others -- I don't have the list in front of me -- were all heavily involved and were on the advisory committee for the development of the level 2 test.
Those meetings were scheduled on a regular basis. Engel and Townsend was the consulting firm on that. They in fact are a Toronto-based firm, the same firm that first developed the commercial drivers' test in the United States. That has been a successful process and the test has been field-tested, pass/fail levels have been validated and now we're into training and implementation for that test. They were involved in that.
The debate that you discussed, the issue that I think you raised is another one, which is, now that we have changed to the -- and I know this came up during your hearings.
Mr Turnbull: It's related to --
Mr Devooght: It is related to it, but it is a separate issue and I know it came up during your hearings around the province, and that is, what is the role of driver education and how in fact should we be dealing with that? So it was a completely separate issue and there are discussions under way between those two groups. As you know, we do not regulate driving schools. We regulate driving instructors. We do have criteria as part of graduated licensing that if you apply the following course curriculum -- and it's the same roadworthy curriculum at this point in time -- if you follow that curriculum and are from an approved school, then in fact you will be able to get a four-month credit on graduated licensing. That was the model that was proposed as part of the hearings and that's what we've implemented.
The discussion between those two groups is, what constitutes an approved school? I know we have an interest in, over the long haul, having a look at driver education and seeing whether the industry is positioned to step up to the standards that we've created for graduated licensing. We started those discussions with that group. The new group, we believe, has formed as a result of some differences of opinion within the Driving School Association of Ontario. I can't comment any further than that because there is a court proceeding under way right now between the two groups and we have to stay out of it.
Mr Turnbull: I will say that I've met with both groups and I've encouraged both of them to talk to one another. This was prior to the court case and obviously it wasn't successful.
Mr Devooght: I can tell you, Mr Turnbull, that I have met with both groups as well. In fact, I did that as recently as a week ago Friday and I know that the deputy minister has talked with them as well. We have offered to mediate those disputes, we have offered to sit down with them and they've chosen to take their case in front of the court system. So, until they resolve their internal differences, we stand ready, willing and able to assist, but if they choose that forum to fight, then there's not much we can do.
Mr Turnbull: How much time do I have, Mr Chair?
The Chair: Four minutes.
Mr Turnbull: I want to address myself to a question I raised in the previous session that we had. Specifically, why did the GO Transit sale and sale-back deal close in Bermuda? What did it cost the taxpayer to ship all of the officials down there? And am I correct in thinking it was so that the participants in the funding could avoid taxes in their home countries?
Hon Mr Pouliot: For the minister, no dinner and no Bermuda. I'd like to have Mr Hobbs answer the question, please.
Mr David Hobbs: I'm going to have David Aronoff, who's the director of finance of the Ministry of Transportation but who was the principal involved out of the Ministry of Finance at the time, describe the nature of the deal and then I'll pick up the other --
Mr Turnbull: Okay, specifically, first question, then, to reiterate it: Was it so that the participants in the funding could in fact avoid tax implications in their home countries?
Mr David Aronoff: From our perspective, we were offered a deal from a company that was based in Bermuda, so all we were ever looking for out of the deal was a transaction that offered us cheaper financing, period, versus conventional Ontario debt.
Mr Turnbull: Would it be your assumption, then, that those companies would avoid taxes as a result of concluding the deal in Bermuda?
Mr Aronoff: I was with the Ministry of Finance at the time. What the Minister of Finance came out with was very specific information in our tender that said: "We are looking for the cheapest deal possible. We will factor in all factors." In other words, if it was a Canadian deal and there was some sort of loss to the provincial treasury in taxes, we would include that, but we didn't include or exclude anyone from coming into the transaction specifically; so if there was a specific institution that came up with a transaction that was more cost-effective, that was up to them as to how they were going to do that. What we wanted to make sure was that the Canadian and provincial tax jurisdictions were protected from any loss to their treasuries.
Mr Turnbull: Had those companies been Canadian or Ontario-based, would there have been any tax implications that were not the case that you had to consider in this deal?
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Mr Aronoff: If they were Canadian and actually paid tax in Canada and were taxable, they would have had a potential Canadian tax loss if they were avoiding Canadian taxes. Again, our concern was any company that was part of the deal, if it was offering us savings at the expense of federal treasuries or Ontario treasury, then it really didn't pay, because the taxpayers of Canada and Ontario were being penalized and the savings weren't really there; they were just coming from another pocket. So anyone who had a transaction that had an erosion component to it from Canadian or provincial tax jurisdictions would have had that factored in. Their savings would have been reduced and they would not have won the deal.
Mr Turnbull: It's my understanding that one of the members of the consortium in fact was one of the major chartered banks of Canada, so I want to know specifically, was that factored in, in this case?
Mr Aronoff: I can get into the transaction details, but there are equity participants and debt participants to the deal. There were debt participants who were -- it's a leveraged financing, and there are participants who are just lending money into the deal, to the transaction, and there are no tax components to it; they're simply just lending money to the deal to leverage the people who are investing.
Mr Turnbull: Are there any Canadian equity --
Mr Aronoff: They were Canadian but there are no tax consequences of lending into the transaction. Only the equity participants could potentially have any of the tax consequences you're discussing, none of which were Canadian.
Mr Turnbull: Are the periodic payments subject to the 15% withholding tax?
Mr Aronoff: No, they're not.
Mr Turnbull: Could you explain why?
Mr Aronoff: The transaction is a refinancing. Canadian withholding tax applies solely to a lease transaction. This in fact, as it's been quoted in the press, is incorrect. It is not a sale and lease-back; it is a sale and conditional sale-back. That is the official term for it. It's very common in the private sector. It's pretty much how most commercial aircraft are financed worldwide, including Canadian and Air Canada. That's the way those transactions are done. It is a refinancing just as if you're refinancing your home. It might be done offshore in many cases, but the point being that federal law allows for no withholding tax on refinancing. As our debt does not attract withholding tax, this transaction does not attract withholding tax.
Mr Turnbull: I can't help myself from smiling a little bit because I'm always reminded of when the NDP would go on a rant and talk about the corporate welfare bums, and that term just jumps to mind.
The Chair: That would be your last question coming up, and then I have Mr Wiseman on my list.
Mr Turnbull: The transaction, how much did it cost to send our people down to Bermuda?
Mr Hobbs: I don't have the figures with me, but there were three people from GO Transit: myself, the managing director and the director of finance. There was one individual from the Ministry of Finance. Everyone else there represented banks or legal firms primarily from American, European and Japanese interests. We can get the costs of what the air fare was and the expenses for the individuals who travelled to Bermuda if you --
Mr Turnbull: Okay. That would be useful.
Mr Wiseman: I'd like to ask a couple of questions about the interface program and the amalgamation or integration of the transportation system of Durham with the surrounding transportation systems. I read somewhere a couple of weeks ago that there's a one-stop fare for Metro and Mississauga and I'd just like to know whether that was offered to Durham. If it wasn't, why wasn't it? If it was, why didn't it happen? And if it didn't happen, is it going to happen?
Hon Mr Pouliot: Sir, George Dadamo was the mover, the catalyst in putting that system through, but there were other people in terms of addressing what in some cases went as far -- or, by definition, being a fiefdom of 17 different transportation jurisdictions in and around Metro, and the operative here is to have a seamless system, we've moved, actually, by leaps and bounds. But what do we integrate now, David, five or six, and what are they under the $30 completely transferrable pass?
Mr Guscott: The Transit Integration Task Force involved the mayors of the surrounding municipalities around Toronto and did in fact include Pickering from Durham region. The transit integration initiative involved much more than just the GTA pass which was announced last week. It also involved coordination of service. It's going to lead in the very near future to a 1-800 number which you can call and determine connections and how to make your trip no matter whether it's on any of the different transit systems, and it will include GO Transit information as well.
Over and above that, the various transit properties under the umbrella of transit integration have cooperated to produce a transit map, which now appears in the new phone books and allows you to see at the same scale how the different transit systems fit and work. As you can appreciate, if you have pulled together transit maps from different jurisdictions, that can be a tremendous difficulty.
Over and above that, in the long-term we're looking for ways to fund capital as it crosses municipal boundaries and apportioning the costs for that.
With respect to your particular question about municipalities from Durham, Pickering currently has no connections with Metro. There are no buses that go from Metropolitan Toronto into Pickering, and consequently Pickering wasn't involved in the GTA transit pass. As to the question about whether they will be in the future, yes, as soon as there is a market demand and a desire on the part of Pickering Transit and Metro, there will be a municipal transit connection. The transit that now exists between Durham and Metropolitan Toronto is GO Transit.
Mr Wiseman: If I understand this correctly then, what we were talking about here is the bus system between Pickering and, say, Scarborough, and that because there are no buses going across this boundary, then it couldn't be done?
Mr Guscott: Exactly. There would have been no users.
Mr Wiseman: So the only means would have been through the GO train.
Mr Guscott: And there already are special fare arrangements between GO Transit and TTC.
Mr Wiseman: So what's the current status then of the negotiations to have buses transfer between Pickering and Scarborough? They could do it on Twyn Rivers Drive and Sheppard, they could do it on Highway 2, yet they don't. Is there something we can do about that, or is that something that is totally up to Pickering Transit to do?
Mr Guscott: It's totally up to the transit properties, which respond to their customers' needs. So I think it's a matter of users who would benefit, and there may well now be users who would benefit from such a system. Before the GTA pass, it wouldn't have been cost-effective for them to do that. They may now be interested, and it's a matter of them contacting their transit authority and advising them of the fact they'd like to see that similar service. It's not hard to extend it. It was worked out very amicably and, I might say, relatively easily, considering we tried this three times in the last 15 years. This is the first time it's come to fruition.
The Chair: I think there's been an agreement that I'll move directly to the official opposition at this time for about 14 minutes. Mr Daigeler.
Mr Daigeler: Mr Elston has a quick question.
The Chair: Oh, Mr Elston.
Mr Elston: Yes, just a couple of quick questions. I wonder firstly if I could actually get a response to the last question I'd asked before we were cut off, which was the issue of the medical review and what does an average citizen have to do when they go to see several specialists who say, "It's okay for you to drive now. Your condition is controlled," and the medical review office refuses them and it then takes six to eight weeks to get into an appeal mechanism. I've got a number of those people, and there's no way that we can get into the system to have anything done for those individuals who are told they're okay.
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Hon Mr Pouliot: I remind myself that danger is dangerous. I'll ask Kim to contribute his expertise.
Mr Elston: You've got all the easy parts in this ministry.
Mr Devooght: First of all, as you know, when we're making those judgements, we make them based on advice provided by the medical advisory committee, which is a committee of specialist physicians. They're the ones who review the complex cases.
Mr Elston: Generally one of those people looks at a file. Generally just one.
Mr Devooght: Sometimes yes and sometimes no. It also depends on the complexity of the case. If in fact there is more than one medical condition or there's a recurring history, the physicians will meet together. Generally speaking, we do have a cardiologist, a neurologist and other specialists who participate on that committee.
Also, I think it's important to remember that when the physicians are making their recommendations to the registrar, they make them based on the guidelines that are prepared by other physicians, the CMA guidelines on the right to drive. As I say, the Canadian Medical Association has constructed guidelines. We operate in accordance with those guidelines, and those guidelines are prepared by physicians who in fact are specialists in the relationship between medical conditions and the driving task. It's quite conceivable that you may have a specialist who is quite expert in a certain medical area but may not be spending a lot of time in the relationship between that medical condition and the driving task. The specific medical conditions that are most common have a set of standards around them that have been subject to a long debate and discussion within the medical community.
Overall, the numbers of cases that result in the kind of debate you are suggesting are percentagewise quite small. I don't have the numbers in front of me, but certainly the numbers of cases that end up before the Licence Suspension Appeal Board, which is the ultimate body where an individual can make a claim, is -- I don't know the numbers, but it's definitely like a few hundred a year at the most.
Mr Elston: So why is there such a long waiting time then?
Mr Devooght: Well, because the board itself is a part-time body. It's not just the case of the hearing officers themselves or the board members, but also the individuals and when in fact they can attend a hearing. There are lots of reasons why. We recognize that medical conditions are not anybody's fault. We're going to try as best we can to push these cases through as quickly as we can.
All I can say again is that if there are specifics of any one individual, they can be raised to our attention. We, I think, move to solve those things as quickly as possible. But certainly within the medical community the standards that are used have been based on a long debate and discussion within that community and are well supported by the Canadian Medical Association.
Mr Elston: Are those files by your medical review person, the practitioner, fully available without amendment or editing to the person who has been refused a licence on the basis of that judgement? They should be.
Mr Devooght: Generally speaking, yes. The only things that would not be released to them would be things subject to the Freedom of Information and Protection of Privacy Act.
Mr Elston: What could be subject to that if you're the person?
Mr Devooght: Well, third-party information that has been supplied where names have been deleted, for example.
Mr Elston: Yes, but it's my file. I mean, if I'm the person who needs the judgement, what could be in that file that wouldn't relate to me, because you've just said that I can't drive?
Mr Devooght: Generally speaking, it's where we go back to physicians and request -- I can only give you a for instance. If somebody is subject to a medical condition and the physician has suggested to us that certain information not be released to this individual because it may in fact be harmful to them, then we have to go back to the physician and say, "Do you agree in releasing this information or not?" So there are cases like that, for example.
Mr Elston: So in fact a person may never find out why in effect they have been refused their licence.
Mr Devooght: No, they'll find out why. What they may not find out is a particular name of an individual, a physician, for example.
The Chair: Thank you, Mr Devooght. I did have some additional questions. Mr Elston, were there many more?
Mr Elston: No. I just have one more -- not on this one. I'll give up on that.
I just want to know on the volunteer cleanup on the highways what the official reaction has been to the volunteers taking over the work of the union employees and if there has been any official agreement between the Ontario government, specifically MTO, and Fred Upshaw and his union personnel or any other union personnel who have been the persons who actually cleaned up before and in fact took care either of cutting the grass or picking up litter.
Hon Mr Pouliot: I sense Mr Elston is not a member of the adopt-a-highway brigade or a volunteer.
The Chair: And where's your particular stretch of highway, Minister?
Hon Mr Pouliot: We've got about 26% of the land mass in the overall province in our vast and magnificent special part of Ontario.
The Chair: That's one hell of an introduction, isn't it? In the interest of time, id we could maybe get an answer to that question.
Hon Mr Pouliot: Carl, will you please try to answer Mr Elston's question, for he wishes to join, and it's a normal reaction that before you do so you would get --
The Chair: Minister, we had an agreement about time here, and I'm trying to respect that. If we could --
Interjection.
The Chair: No, you're trying to give a bigger introduction than is necessary. Could I please get an answer, because Mr Daigeler has requested the floor back.
Mr Vervoort: There's no formal agreement with OPSEU members in respect to the adopt-a-highway program. There has been a general expression of concern about the impacts on employment by OPSEU and individual representatives of OPSEU at the ministry's employee relations committee. That concern, however, has not translated into any formal objection of the ministry conducting the adopt-a-highway program. There has been an expression of concern in terms of contracting out of other services, such as snowplow operations and a variety of winter maintenance operations, but no specific and formal concern or opposition registered with respect to the adopt-a-highway program.
Mr Daigeler: Mr Chairman, I presume we're going to follow the pattern of previous estimates committee meetings and that we can still put written questions on the record that the ministry will be answering in due course?
The Chair: Yes.
Mr Daigeler: Thank you. As I had indicated again some time ago, I was going to look at this famous green book that we're all about. I would like to address this to the deputy minister, who I'm sure will be able to provide those answers.
On page 10, you have a 95% increase in policy and planning. Why is that? You have a 31% reduction in program delivery, presumably because of the transportation capital corporation, if you could explain that.
Also, as a general comment, perhaps for next year, it would be useful, I find, if there are significant variations, let's say more than 30% over last year's, if there could be some explanation given automatically. I think this would really help the readers.
On page 12, there's a reduction of 41% in total Jobs Ontario Capital. This seems to be at variance with what you said was a 35% increase in the money you're spending. If you can just give me some explanations of all this. Also, on the same page, it seems that in the actuals, at least in the interim actuals, you spent almost $400 million less than you actually were going to spend according to your 1993-94 estimates. Were you allocated $400 million that you didn't spend, or what happened here? That would be a question.
Page 16, basically all of these here I would like some answers on. You do have a reduction -- I was surprised to see that -- in your estimates under vehicle fees, licences and permits, quite a significant one over last year's. Sales and rentals, you had estimates in 1993-94 of $36 million. The actual was $13 million and your estimate now is $19 million. Could you explain this, and what's behind sales and rentals? Vehicle system improvement project, $10 million. What is this? Basically, all of the right of way service access, $19 million compared to $5 million before, if you could explain all of that to me.
Page 17, in the main office, ministry administration, an increase of 22%. Why is that? Also, on page 20, again a 72% increase in ministry administration program, from $14 million to $34 million. What's behind this, in the short time that's available, if the deputy minister could at least start the process of giving some answers to that.
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Hon Mr Pouliot: Before I ask Mary Proc to present explanation, you're right. I remember when I was sitting there, and I have to work hard at these things, if there's something which is a significant discrepancy -- there's not an anomaly but either a significant increase or decrease -- surely, only by way of courtesy, but for expediency also, you memo it. You know, it becomes extraordinary, if you wish, and if it's in the order of 20%, 30%, your point is well taken, and I'll ask our officials. This will be done, because it saves time and you get straight to the point. That point is well taken.
On the one-liners, vis-à-vis what happened here, can we proceed with this, Mary?
Ms Mary Proc: Yes. Mr Daigeler, I'll address a few of your questions. First of all, you point to a 31% decrease in program delivery, and you're correct. That does represent capital expenditure decreases, actually capital expenditure transfers over to the Ontario Transportation Capital Corp, so you're correct there.
With respect to policy and planning, that represents a $20.8 million flow-through from the Ontario Financing Authority through to the OTCC, $20.8 million that needed to be flowed through the ministry, so it was just parked there in the policy and planning division before going on to the OTCC. Without it, the policy and planning division actually downsized and is living with an allocation that is 16% less than last year.
Mr Daigeler: I'm not quite sure whether I understand that explanation, but certainly that's the type of thing that would be useful to have in there and perhaps in writing, because obviously it distracts you right away. Why was this necessary this year and wasn't done before? What's the reason behind this? Why all of a sudden now and it wasn't done before? It certainly looks rather strange to see a 95% increase over last year. So if you can try in writing.
How about the 41% expenditure reduction? Is that moved over to the transportation capital corporation?
Mr Davies: In the capital costs?
Mr Daigeler: Yes, capital summary, Jobs Ontario, page 12.
Mr Davies: That difference relates to the amount of money that is legitimately off book as a result of 407. I don't have the specific breakdown here. I will endeavour to give you the specific breakdown of how much of that money appears on the accounts of the transportation capital corporation and what amount is off book and off budget.
Mr Daigeler: Okay, and then a quick one, since the Chairman is signalling to me that my time is almost up. Page 16: Can you briefly go to some of these things that I mentioned, very significant variations?
Mr Davies: Okay. Kim Devooght has the specific breakdown on what is happening with our fee revenues. Partly that is related to the cycle of renewal and moving from a one-year to a two-year vehicle renewal fee and in moving to a five-year renewal cycle for drivers' licences. Kim?
Mr Devooght: Precisely, George. The big change between the 1993-94 and 1994-95 estimates around vehicle fees and licences looks like about $50 million. That is the change from the three to five-year driver's licence renewal cycle, and it's up one year and down the next. In the interests of time, we can show you how those projections work out over time, but this was fully anticipated a couple of years ago in terms of revenue spiking.
Mr Daigeler: What's "sales and rentals"? What's this and the variations here?
Mr Devooght: That's not mine.
Mr Davies: A major portion of that is related to the collection of funds for the service centres, but I cannot account for the difference and I'll have to take that in -- Dave, are you prepared to explain that?
Mr Daigeler: Frankly, Deputy, I'm a bit disappointed at that because I did put all these questions specifically on the record on June 22. I have the Hansard in front of me and I pointed out the pages, I gave them as a courtesy to you, the pages where I was expecting some detailed answers, and I would have hoped that these answers would have been available today.
Mr Davies: We will provide that now.
The Chair: You're going to provide it now or are you going to --
Mr Davies: Or do you want it in writing?
Mr Daigeler: My time is out, so --
The Chair: The time is out, and I think the understanding was that it would have been helpful if we could have received some of this material in writing. Now it's clear that it's going to be required in writing.
Mr Turnbull has 14 minutes.
Mr Turnbull: I'd like to ask some questions about the relocation of the ministry offices to St Catharines. Perhaps we could get the ADM up here who's involved. Could you tell me how many jobs are due to move to St Catharines?
Ms Margaret Kelch: My name is Margaret Kelch, assistant deputy minister for relocation. One thousand positions of the Ministry of Transportation's head office are moving to St Catharines.
Mr Turnbull: What percentage of the total ministry is that?
Ms Kelch: I guess the ministry numbers -- Mary Proc may correct me if I'm wrong -- are around 8,800 or 8,900 now as we speak. Is that correct?
Ms Proc: Actually, much lower; around 7,900.
Ms Kelch: Seventy-nine hundred. So it's 1,000 of about 8,000.
Mr Turnbull: Okay. Of those jobs that you're moving, how many employees do you expect will actually move with the job?
Ms Kelch: You may be aware, Mr Turnbull, that we are moving in two phases. In the first phase we did give our individuals notice this past summer and that was the first 325 positions. Of those, we're aware that 71% of those individuals have said that they are going to join their positions in St Catharines. The second phase is in fact a similar kind of process. We will be giving notice to employees in the spring of next year and we're not yet clearly aware of what the numbers will be there.
Mr Turnbull: I presume that you have some expertise relating to other ministry moves and in terms of costs. One of the hidden costs of a move of a ministry outside of Metro is clearly the amount of commuting done by the ministry staff coming back for various meetings, the cost of housing them, the travel and expenses related to that and in fact lost time. In any of your studies of this, have you in fact attempted to cost those factors in?
Ms Kelch: I guess we're taking a slightly broader view, and that is that rather than assume that those costs are inevitable, for our move to St Catharines we're doing, I believe, some very creative work in terms of how we minimize the need for that move to take place at all. So the new facility in St Catharines is going to have state-of-the-art video conferencing ability. Already there is a variety of ministries in the Ontario government, most notably MNR, Natural Resources, and Agriculture, Food and Rural Affairs, which in fact are already testing this equipment and are having some very good success with it. We are going to be part of the final stages of that pilot, so we will be working very hard to ensure that we're using the technological solution rather than the moving-of-the-bodies type of solution.
Mr Turnbull: Good. That's excellent. It will certainly avoid having to rent rooms in the SkyDome for meetings.
1650
Interjection.
Mr Turnbull: You have to get those in; you have to have some fun. How much do you think you're going to save out of this move?
Mr Elston: You call this fun?
Mr Turnbull: It's amazing; they pay us to do this.
Ms Kelch: Save in what respect, Mr Turnbull? I'm not sure I understand your question.
Mr Turnbull: Well, there must be some cost saving associated with this move; otherwise, why is it being done? Or is that not the case?
Ms Kelch: No, I think that all three governments, as they talk about these particular moves and putting them in place, the larger objective truly is to ensure that for those parts of the province that are having some challenges around employment and economic development, there's a role that the provincial government can play there. In St Catharines and the Niagara Peninsula generally there is a very real challenge in terms of high unemployment rates, and I believe that both our move as well as the move of the Ministry of Culture, Tourism and Recreation, should have a significant positive effect.
Mr Turnbull: Is it presumed that you will be able to pay people less for positions in St Catharines since the cost of living is less?
Ms Kelch: No, that's not the objective of the government. The rate that we currently compensate people at is consistent across the province, whether the employee happens to work in Bancroft or Thunder Bay or Thorold or St Catharines. If in fact you're meeting the specifications of that particular assignment, you would be paid at that rate.
Mr Turnbull: Tell me about the timetable of this. Are you on time? When would you imagine you'll have the whole process finished?
Ms Kelch: Yes, we're very much on time. As I mentioned, the first phase of notifying employees has in fact occurred and that met the timetable we had established for it. The building itself is being completed in two phases, which is why the people are being notified in two phases. The building is very much on schedule. We've had a very good construction year. No different from our road construction season, we've had a very good building construction season this past summer. We are about a month ahead of schedule at the moment. We're up at street level and we expect to be able to maintain that level of activity through the fall and through next year.
The first two aspects of the building will be ready for individuals to occupy them by the late summer of 1995 and then the second phase of employees should be moving in in the spring of 1996. So we see full occupancy by the summer of 1996.
Mr Turnbull: Thank you very much.
Minister, the state of our roads -- and I certainly don't blame your government entirely for this -- is deplorable. I was speaking to one of my constituents recently who drove up from the US and noticed as soon as he got off the US interstates how the deterioration of roads existed in Ontario. I remember shortly after coming to live in Canada going to Quebec and remarking at the time how awful their roads were in comparison with the excellent roads in Ontario, but that is no longer the case.
Are you undertaking any program to ensure that roads don't get to the state that they have to be completely rebuilt? There is a critical point in road engineering, and I believe many of these roads have passed that point, which places extra burden on the ministry to rebuild these. Can you tell me about what you're doing there?
Hon Mr Pouliot: I certainly welcome the question. I used to mention the luxury of people in southern Ontario, that they were concerned about soft shoulders, paving and bicycling tracks, and where I live in northern Ontario we were concerned about the section between the soft shoulders.
We have 23,000 kilometres of highways in the province of Ontario. We have a little more than one tenth the population and we have climatic conditions that are different from the US. We have a different relationship with people within municipalities. When we make a comparison with Highway 75 in the States and we look at our terrain and at the length of the Trans-Canada Highway, and trans-Ontario highway, of course at times, with some portions, you can't begin to really compare.
Mr Turnbull: Well, let's compare with places like Michigan.
Hon Mr Pouliot: They have a phone every two miles.
Mr Turnbull: The minister isn't being very responsive.
Hon Mr Pouliot: Let me answer, David; I'm being candid here. But once you go inside the municipality, then you notice, if you go to Detroit or Buffalo, that Toronto is better, but that's because of the relationship between the state and the federal participation, which differs from ours. They have very little money.
We're doing a lot. We're spending more money on capital -- we took a hit on operating, of course -- than ever before. We are building the 407, but on the other hand we are rehabilitating --
Mr Turnbull: No, no, no. I'm not talking about building the 407. We're talking about maintenance.
Mr Duignan: Is that the 401 maintenance?
Mr Turnbull: Let me ask you, on the 401 -- you mentioned the 401 -- the lighting is in a deplorable state. I drove the 401 recently and I was trying to get some sense of how many lights were out because I saw how dark some patches were. It's very difficult when you're driving at night to be able to count them exactly, but there were some stretches where five lights in a row were out.
Mr Elston: That's between Woodstock and London.
Hon Mr Pouliot: There's a lot of good work --
Mr Turnbull: And that's in Metro.
Hon Mr Pouliot: -- being done, as you have mentioned, no doubt. There's a lot of good work being done. We have a responsibility to strike a balance between what is new and what is being rehabilitated. Everybody likes blacktop, and you are right, especially from here to -- not especially, but very noticeably from here to Hamilton, for instance, it's not conducive to the best order and we're endeavouring little by little with the money available to rectify it.
Mr Turnbull: I would suggest that lighting is more vital than bilingual signs in Metro, Minister. I know that my colleague the Chair of this committee would like to ask a few questions.
Hon Mr Pouliot: What is this? I recognize the tone. What the heck are you --
The Chair: Mr Minister --
Hon Mr Pouliot: Excuse me, I'll answer that man here. What is it that you're saying about the bilingual signs?
Mr Turnbull: I would suggest --
Hon Mr Pouliot: I'm minister responsible for francophone affairs.
The Chair: Point of order?
Hon Mr Pouliot: Do you want the sign policy that the province of Quebec has?
Mr Turnbull: I'm simply saying that your priorities are wrong.
The Chair: Mr Turnbull, please.
Interjections.
Mr Duignan: Go back in your hole again.
The Chair: Please, please.
Hon Mr Pouliot: I've heard that tone for 350 years to my ancestry, so don't try it, buddy.
Mr Turnbull: Oh, don't give me this.
Hon Mr Pouliot: Go back to the dark ages.
Mr Duignan: Crawl back in your hole again and stay there.
Hon Mr Pouliot: You'll get part of your answers tomorrow.
The Chair: Mr Duignan, would you like to withdraw that comment?
Mr Duignan: No, I wouldn't.
The Chair: Then I would sincerely appreciate some modicum of decency in the tone of your voice.
Hon Mr Pouliot: The Anglo attitude --
The Chair: That's completely uncalled for, Mr Duignan.
Hon Mr Pouliot: Well, he's absolutely right. Look at the tone of your colleague.
Mr Duignan: Exactly.
Hon Mr Pouliot: You think we can't read between the lines?
The Chair: He asked a question.
Hon Mr Pouliot: Come on, come on.
Mr Turnbull: I was expressing the opinion of my constituents.
Hon Mr Pouliot: Yes, that's right. What is the opinion of your constituents about, what, bilingual signs --
The Chair: Minister, this is not the --
Hon Mr Pouliot: -- about giving them a share --
The Chair: Order.
Hon Mr Pouliot: You're about this close from bigotry.
Interjections.
Hon Mr Pouliot: Oh, go and take that somewhere. Take it to the Reform place where you belong.
Mr Turnbull: Don't give me that guff.
The Chair: Minister, I still have 15 minutes remaining in estimates. My colleague has indicated that with the support of the committee I would be permitted to ask a quick question on my colleague's time. If there's no problem, I won't leave the chair.
Mr Wiseman: The maximum is five minutes.
The Chair: No, I just want to put a question on the record, that's all, if I may.
Mr Elston: Go ahead.
The Chair: The question that I'd like to put for the ministry's consideration has to do with a recent proposal before Ancaster council to use crumb rubber or used tires as abutment road fill for the first time in Ontario's history, and I have a series of questions of the Ministry of Transportation, which is sponsoring the project, if it could respond subsequent to estimates with regard to matters around the rubber-modified asphalt program of your ministry, to what extent that program is still a viable program or if in fact the ministry is refocusing its priorities into burying raw rubber and not modified asphalt product.
Concern has been expressed about this, and in particular we'd like to know what studies have been done to indicate that shred rubber mixed with soil is appropriate for landfill on the 403 in Hamilton-Wentworth region and why no public hearings.
Will the Ministry of Transportation and/or the Ministry of Environment and Energy offer to the municipality of Ancaster a save harmless agreement in perpetuity in the event that the experiment contains leachate and contamination and do the cleanup at public expense; what correspondence may have occurred between Dr Kennepohl of the Ministry of Transportation and Eileen Smith of the Ministry of Environment; if any agreements, either formal or informal, have occurred between the two ministries with respect to the corroboration in this project and if in fact the purpose of the project is to force a determined policy statement about where used tires may or may not be buried within the province of Ontario?
The Ministry of Transportation, I understand, is the lead in the project. Had there been more full time, I would have liked to have pursued those questions more directly, but I believe we would like to know which ministry is driving this road modification plan, which essentially on the surface of it appears to be a form of landfill using tires.
Mr Elston: So which one of those questions is the quick one you wanted to pose?
The Chair: The one about the save harmless agreement given to the municipality of Ancaster if there is leachate as a result of this Ministry of Transportation project on the 403 overpass. Time won't allow for a fulsome response. I'd like it, but my colleague yielded me only two minutes. I've put the questions on the record and I thank the committee's indulgence.
Mr Turnbull: Mr Chair, in view of the minister's outburst when I made my comments about priorities, I think I'm going to insist that the record show that there may be people --
Mr Daigeler: Mr Chair, this is not appropriate.
Mr Turnbull: Excuse me, Mr Daigeler, this is rather important.
Mr Daigeler: We're not in any kind of new rotation.
The Chair: The Chair will entertain a point of order, but the Chair is --
Mr Turnbull: This is outrageous.
The Chair: Mr Turnbull, please.
Mr Turnbull: The minister said that --
The Chair: Mr Turnbull, please, I'm trying to give you the floor properly. I recognize Mr Turnbull.
Interjection.
The Chair: I did not hear a point of order. Mr Daigeler, you're out of order.
Mr Daigeler: Under what rule are you giving Mr Turnbull the floor?
The Chair: Mr Turnbull still had a few moments left of his time. He has almost completed his time, and I did not hear a point of order. Mr Turnbull, your time has pretty well expired.
Mr Turnbull: Mr Chairman, I did not make in any way, shape or form a remark that could be considered to be racist, to be biased against francophones, because I can tell you, I am a great supporter of francophones. Laughter.
Mr Turnbull: How dare you laugh at that? The fabric of Canada is that much the better for having the multicultural aspect. But I will tell you that the constituents I have are telling me that the priorities are wrong when you spend millions on bilingual signs in Metropolitan Toronto and in Hamilton, where I have never heard of anybody getting lost because they didn't have a French-language sign, while at the same time lights are out five in a row on the 401. You want to talk about safety? That's safety.
I would ask you to retract your derogatory remarks, which were totally uncalled for.
The Chair: I would indicate that this is the conclusion of the comments around the estimates, by agreement. The Chair, at least, is ready to call the vote.
Shall the 1994-95 estimates of the Ministry of Transportation, vote 2901, be approved? All those in favour? Opposed, if any? Carried.
Shall vote 2902 be approved? All those in favour? Opposed? Carried.
Shall vote 2903 of the Ministry of Transportation be approved? All those in favour? Opposed? Carried.
Shall vote 2904, estimates of the Ministry of Transportation, be approved? All those in favour? Opposed? Carried.
Shall the 1994-95 complete estimates of the Ministry of Transportation be approved? All those in favour? Opposed? Carried. Shall the estimates be reported to the House? All those in favour? Opposed? Carried.
This meeting stands adjourned.
The committee adjourned at 1705.