1991-92 BUDGET
















Tuesday 20 August 1991

1991-92 budget

London Middlesex Taxpayers Coalition

Craig Stevens

London District Labour Council

United Food and Commercial Workers Canada

Sciencetech Inc

London Chamber of Commerce

United Church of Canada

N'Amerind (London) Friendship Centre

United Electrical, Radio and Machine Workers of Canada

Sexual Assault Centre London

London and District Construction Association

Women's Community House

Cross Cultural Learner Centre



Chair: Hansen, Ron (Lincoln NDP)

Vice-Chair: Sutherland, Kimble (Oxford NDP)

Christopherson, David (Hamilton Centre NDP)

Jamison, Norm (Norfolk NDP)

Kwinter, Monte (Wilson Heights L)

Phillips, Gerry (Scarborough-Agincourt L)

Sterling, Norman W. (Carleton PC)

Stockwell, Chris (Etobicoke West PC)

Sullivan, Barbara (Halton Centre L)

Ward, Brad (Brantford NDP)

Ward, Margery (Don Mills NDP)

Wiseman, Jim (Durham West NDP)


Cunningham, Dianne (London North PC) for Mr Sterling

Winninger, David (London South NDP) for Mr Wiseman

Clerk: Decker, Todd

Staff: Rampersad, David, Research Officer, Legislative Research Service

The committee met at 0902 in the Sheraton Armouries Hotel, London.

1991-92 BUDGET

Resuming consideration of the 1991-92 provincial budget.


The Chair: I would like to welcome the London Middlesex Taxpayers Coalition. Jim Montag is the chair. You will have 15 minutes for your presentation. Try to keep some time near the end for questions.

Mr Montag: I am Jim Montag, the chairman of the London Middlesex Taxpayers Coalition. Our coalition is not in favour of deficit spending. We believe all levels of government, federal, provincial and municipal, should operate on a pay-as-you-go basis and should not under any circumstances be permitted to enter into a program of spend now, pay later. If I personally spent 20% to 30% more per annum than I earned, I would be forced into bankruptcy in four or five years. How long can Ontario or Canada last? The Ontario government's deficit spending was used mainly to enhance social programs. This will provide some employment for the present working force. Very little money was spent to create new jobs. In times of recession and restraint, we feel nothing should be done to increase or enhance any program that is not directly intended to create new jobs. After all, if we must tighten our belts, we should all do it, not just the wage earners or taxpayers.

Free trade with Mexico and other countries is coming and is inevitable. It will happen either quickly, with the signing of an agreement, or slowly, with a gradual reduction of duties and tariffs, but it will surely happen. We have already lost many jobs with the implementation of the United States free trade agreement and will lose many more when Mexico is included, unless we do something positive about it now. Many United States cities are actively trying to entice Canadian manufacturers to relocate to their areas.

However, it is the present situation on the US-Mexican border that I feel is most threatening. When you travel from the United States to Mexico, you will find no restrictions at all on the Mexican side of the border. You can freely enter and leave these areas, called Maquiladoras, whenever you want to and bring into or take out of the country anything you choose. It is only when you travel another 10 to 20 miles further south on the north-south highway that you are stopped by the Mexican army, customs and immigration personnel and sometimes police. At that time you must provide passports, citizenship and travel papers and have your luggage and goods inspected.

In these Maquiladora areas, anything produced anywhere in Mexico can be purchased at very competitive prices. These products can usually be imported into the United States duty-free. Fortunately, the Canadian customs country-of-origin documentation prevents many of these goods from being imported into Canada at the present time. With a Mexican free trade agreement, duties and tariffs will cease to exist and we will be inundated by the flow of goods from Mexico.

It is this situation on the United States side of the border, however, that is presently affecting us very adversely. Every day from 7 am until 9:30 am there is a lineup that extends from the United States customs point across the bridge and for one or sometimes two city blocks into the Mexican border city. This lineup moves very quickly and is comprised of Mexican workers entering the United States to work for the day at their jobs in small factories and on farms.

Each of these workers has and presents a document permitting him to enter and travel in a limited area in the United States for the purpose of employment. In the evening, all of these workers return to their homes and families in Mexico. This situation exists at all border crossings -- Matamoros, Reynosa, Nuevo Laredo, Ciudad Juarez, Nogales and Tijuana. The goods these workers produce are presently entering Canada duty-free. This is a serious problem and can only worsen with time.

The present taxation situation in Canada and Ontario appears to be that a government sets a spending budget and then raises taxes and creates deficits to match this spending. There seems to be no effort made to cut spending. When you raise taxes, our industry becomes less competitive and the exodus to the United States and Mexico is accelerated. Jobs are lost and wage earners who were taxpayers are now shifted to the unemployment programs and welfare programs where they become an expense to the system. This results in increasing expenses and a decreasing taxation base, with resultant loss of tax revenue. Inevitably this results in still higher rates of taxation and bigger deficits.

The position of the London Middlesex Taxpayers Coalition is that if the governments lowered the taxation rates to businesses and industry, then these institutions would be more competitive and in a much better position to meet the challenges of free trade. Their success would result in more jobs for Canadians, an increase in the number of taxpayers and therefore an increase in the tax revenues. The present fiscal policies of our government are self-destructive and can only result in bankruptcy. This is a terrible legacy to leave to our children and grandchildren. These fiscal policies should be thrown out and replaced with ones that are regenerative and job-creating. Thank you.

Mr Kwinter: I missed the first part of your presentation, but I was quite taken with your emphasis on the problems that could emanate from the Canada-US-Mexico free trade agreement and the threat of the absence of regulations and controls in Mexico and what the impact is going to be in Canada. I would be curious to get your reaction. At the present time trade between Canada and Mexico is negligible, it really is. Statistically it is really of no import.

There is no restriction against people going to Mexico right now. As a matter of fact, a company from the London area went to Mexico and is operating there, Fleck Industries. The Maquiladora areas are operating, but that is not really where we are getting our competition. Our competition is coming from West Germany, it is coming from Japan. They are major players in the North American economy and they are both high-wage countries. They are countries that have a very sophisticated social system. That is where we are getting our competition. How do you address that? I mean, when you single out Mexico, what about Taiwan, Thailand, Singapore, Hong Kong, Brazil, Poland, all of these places that have very inexpensive labour and are not really impacting on us to the same effect as West Germany and Japan?


Mr Montag: I was not going to agree with you that it was the European countries that are providing the most competition to us. I was going to point out that, unlike the Near East -- or the Far East, whatever you want to call it, Hong Kong, Taiwan, Korea, Japan -- my feeling is that with a free trade agreement with Mexico, at least we will be keeping the money in this hemisphere. The Mexicans are very willing to trade with us for our heavy-industry products: railroad locomotives, buses, automobiles, trucks, things like that which they do not produce. When you deal with the Orient, some money is gone that will never ever come back into this country.

Now, this would not be the situation with Mexico. The money would stay in this hemisphere and it would be spent back in Canada, very likely at a greater rate than the Orient is doing now. The only thing the Orient wants from us is our raw materials, but Mexico is willing to buy a lot more than raw materials.

I do feel there is a definite threat, with the implementation of free trade, of very cheap labour in Mexico. This is where I feel we should look at this situation now and be prepared for it -- it is already affecting us slightly; it will affect us much more in the future -- so that we can keep our jobs here. Whenever a factory leaves here, you lose a job, you lose a taxpayer and you have to increase taxes to make up for that loss of revenue. If the jobs are kept here or created here, you have more taxpayers and more revenue.

Mr Sutherland: First of all, you said that government should not run a deficit unless it is creating new jobs. Given the extent of this recession, this budget is designed to maintain and create up to 70,000 jobs. Would you not agree that in a recession there is also an obligation to try and retain jobs because, as you pointed out, if we did not make some efforts to maintain those jobs, those people would be going on the welfare rolls as well?

Mr Montag: Yes, there is a reason to maintain jobs as well as to create new jobs. It all works towards the same purpose. What I am saying is that in times of recession we should all take a step back. Most of the budgetary deficit that has been proposed now is to enhance social programs. I do not agree with that. Why should one group gain while other groups lose? I think the money should have been spent, as you say, to maintain and create new jobs.

Mr Sutherland: Mr Montag, the majority of the budget deficit is to maintain the current level of the programs, in most cases. Up to $8.2 billion of the $9.7-billion deficit is to maintain the level of the programs. That is what we are attempting to do with this budget.

I just want to ask you one other question, since you talked about free trade with Mexico. You said they are very willing to want to buy our products. I would like to know how the average Mexican worker is going to be able to afford to buy Canadian products when he is only making $5 a day?

Mr Montag: They are doing it now. They are buying most of their railroad locomotives from this country. GM Diesel in London here produces an awful lot of them. They are buying their heavy earthmoving machinery. When they start building subway systems there, I am sure MLW in Montreal will be able to compete very favourably. This is the type of material they will buy from us. It will be heavy-industry rather than small-industry products. If they have money, which they do not have at the present time --

[Failure of sound system]

Mr Montag: I do not agree with that. I think if you have more jobs, you have more taxpayers and then you have more tax revenue. If you lose jobs, those persons become welfare recipients or unemployment insurance recipients and do not pay many taxes any more. You have lost that tax revenue; but if you keep the man working at a good wage, at a good job, he is earning money, he is paying taxes and your tax revenue will increase. Jobs will increase tax revenue; a loss of jobs will decrease it.

Mr Kwinter: Just for a matter of information for members on this committee, if you were to go to Mexico and walk into their shopping centres, which are as good as Yorkdale or anything else, you will see thousands of people, not wealthy but not poor, wandering around buying from stores just like you see in our shopping centres. Mexico City has a population of somewhere around 20 million. When you drive around, everybody seems to be driving cars. There is a misconception that Mexicans are towing their little burros and living in little mud huts and have no money. Let me tell you, there are 85 million people in Mexico and they have a pile of them that are poor in the same way as we have a pile of people in Canada who are poor, but they have a vibrant middle class and a working class. There are more people in Mexico who have buying power than there are in Canada. They may not have the same level, but there are more numerically. Proportionally it is a relatively small number, but if you ever saw them, it would totally change your impression of it.

Ms M. Ward: How do you know nobody has?


The Chair: The next person to appear as a witness is Mr Craig Stevens. You will have 15 minutes for the presentation.

Mr Stevens: I appreciate this opportunity to present my views from the standpoint of a middle-class Canadian, an Ontarian and a family man with three children and a gross income of approximately $50,000 a year. My wife has a part-time job; she makes about $5,000 a year. It may sound like a lot of money but it is not when you struggle to raise a family.

None the less, as a middle-class salary earner I feel most alarmed and threatened with the spending practices of all levels of government. I am a proud Canadian. I feel blessed to have been born in this country. There is a tendency to knock this country a lot and I think we should all strive to improve it and contribute in our own way to do something, and that is why I sit before this committee.

As is typical of many families, I attempt to harness both my mental and physical energies to provide and better the quality of life for my family. I believe there is no higher calling in this world than to bring young people into the world, raise them and see them become productive, educated citizens. The many complexities of daily living make this pursuit most difficult, to say the least. To varying degrees, everyone's quality of living is inextricably linked to their ability to generate money relative to their own personal consumption habits. Depending on the individual or family income, we can all adjust our consumption patterns to responsibly reflect earned income. To do otherwise would jeopardize and threaten the current and long-term economic stability necessary to maintain and improve standards of living.

The most recent provincial budget, reflecting a $9.7-billion deficit, clearly does stand alone as an example of irresponsible spending. However, in the realm of partisan politics it is quite tempting to focus on the incumbent government and label it the all-time reckless spender. To a limited extent this is unfair. Any deficit budget is reckless, some more, some less, as determined by levels of incoming revenue to outgoing expenditures.

Over the past 10 years Ontario has been governed by all three of the mainstream political parties at one time or another. During that time, Ontario's provincial debt has risen from a level of approximately $21 billion in fiscal year 1981-82 to a projected $51.7 billion for 1991-92, an increase of some $30 billion. You could spend a day discussing previous government spending practices and what not, but I choose not to do that. However, I want to note that there should be some commonly shared guilt here, that all three parties can be painted with the same brush when it comes to unbalanced budgets.

The present provincial government has no business telling Ontarians that by 1998 we will have no deficit for operating expenses. There are just too many variables over too long a time to make such a prediction. Likewise, just as Ottawa spends 34 cents of every tax dollar to support interest payments, we see here in Ontario a movement of close to 12 cents of every tax dollar to support interest payments, and with the most recent budget deficit this has moved up from a level of 9.9 cents. This is very disturbing and, quite sadly, I think we are embarking upon the same journey towards smothering interest payments that we see at the federal level of government.


The likelihood of reversing institutionalized deficits is remote. Any government attempting to do so would have to be willing to commit political suicide to reverse the spending practices. Once the electorate has tasted the benefits of any new or enhanced program, the weaning process is made immeasurably more difficult. The capacity of a society to fund those less fortunate is limited. Ultimately, overtaxation will lead to lessened individual and business initiative, resulting in fewer jobs and a reduced tax base. The long-term viability of any government wishing to maintain a more caring and compassionate society would then be threatened. Political opportunism could very well mean short-term gain for long-term pain.

As previously mentioned, individual and societal wellbeing can in part be controlled by living within one's means. Government should be no different. Overtaxation by reactive, spendthrift governments does everyone harm. Individuals, businesses and government should collectively seek non-partisan ways, as equal partners, to responsibly control spending. Accordingly, I wish to offer the following thoughts accommodating the aforementioned objective.

First, all Canadians, not only Ontarians, must lessen their expectations of government. The correlation of program spending and cost must be impacted on the taxpayer. In part this could be achieved through an active, ongoing education program promoted through the media and funded by government. I think this one is extremely important. Canadians do not have that correlation between actual spending in dollars and cents and the programs they are getting. We can see one of the fallouts from this attitude or this ignorance simply being the level of cross-border shopping and how significantly it has increased. Ultimately, if this continues onward and escalates, we are going to have a tremendous number of retailers and other small businesses that generate income in this country going across the border. If it does continue unabated, they will not even be able to afford the gas to go across the border. Ultimately, it is going to cut off the hand that feeds a lot of Canadians and Ontarians.

Second, something I feel very strongly about is the curriculum in the education system. I believe today's students at the secondary level must be provided mandatory studies in the area of political science that deal with and examine the roles of government and spending. This will provide future generations of Canadians with better insight as to how the political system in this country works. We could see the spectacle of federal government as led by Joe Clark, who effectively was turfed out of power because he could not co-ordinate his arms and his legs when walking. Canadians were not captivated by a person who was non-charismatic but who had sound policies to offer to Canadians.

Basically, in our democracy our vote is perhaps the most precious gem we have and, given the high level of apathy and indifference to looking into issues and platforms and the qualities of individuals running for office, we can see inexplicable turf-outs of incumbent individuals and parties. I think the education system is a significant contributor to a lot of the apathy and malaise we have in the electorate in our society. A lot of this has to start right now in the education system with province-wide, consistent, standardized courses. That is a starting point right now. The present generation, I think, you might have to pretty well just write off.

Third, nominal user fees must be implemented in the health care system. The health care system demands approximately one third of the provincial budget. Any such fees should, however, be of secondary importance to the concept of heightened cost awareness. The usage of any such user fee could impact negatively upon low-income individuals. However, there could be a rebate program or something to give the $2, $3 or $5 back. The point is that if you have something there, the patient would be a little more willing to gain some insight and see what it actually costs for his or her visitation. If you do not want to have a user fee, let them be a co-signer to the OHIP remittance forms with the doctor. The patient could see that his or her visitation may have cost $22 or whatever it might be. It is a reasonable request to be a co-signatory to any such form. Once again, it is educating the individual, the patient, as to what the cost of the visit might be. Quite frankly, I think we are all aware of the ever-smothering cost of providing health care in this province, and it is certainly going to get worse if we do not do something pretty soon with it. I feel it is a most reasonable request.

Fourth, I feel the accounting practices of government departments should be changed so as to list revenues first, then expenditures. I suppose it sounds like a simple solution to a lot of woes, listing revenues first and then adjusting expenditures, but that is what the private sector is all about and we have greater efficiencies and cost accountabilities as a result of that. It would be a major overhaul for all government to do something such as that, but none the less I feel a certain emphasis should be placed upon the accounting practices of government.

Fifth, legislative devices must somehow be utilized so as to remove the creation of deficits from the political arena. I am not a politician. I think I can understand people, however. It is very tempting to spend funds that are not there in order to maintain and create employment during times of economic downturn, Mr Sutherland said that this is most essential. However, I become most alarmed when I look back to the Liberal administration of Mr Peterson and see that in a two-year period it had record revenues that generated some $2.5 billion during healthy times, when things were good. Then all of a sudden, when our NDP government came into office, that money was gone and there is still a shortfall of another couple of billion dollars. Here we have people saying, "Wait until we return to the good times and things will straighten themselves out." We bloody well did have some good times under the Liberal administration and we are left worse off than ever.

This brings into focus the whole point of deficit budgets. I believe our current Treasurer, Mr Laughren, has stated, "We'll get back on the road to good times and don't be overly concerned about this." That is a bunch of hogwash; I can tell you that right now. Once you have them you are never going to get rid of them. Quite frankly, I feel that my family and myself are suffering as a result of these smothering levels of taxation.

Number six is very significant. The cost of education in Ontario for 1991 will approximate some $13,125,200,000. That is a lot of money to be funding the public education system. There are a lot of entrenched practices in the education system and a lot of misconceptions that should be cleared up. I had a discussion some two months ago with the Minister of Education, Marion Boyd, and discussed a number of things. One of those things I mentioned to her was, "Did you know the local director of education makes $115,000 and that in all likelihood he makes considerably more than you as the Minister of Education?" She said, "Yes, you're probably correct on that." I got the information from one of her aides in Toronto and sure enough, excluding her allowance of $14,000 the minister makes some $76,000, and here we have local directors of education at $115,000 and program superintendents at $101,000 to $102,000. This is out of whack.

Boards of education conveniently blame higher levels of municipal taxes on downloading of funding from the federal government to the province and from the province to the local school boards. There are a lot of issues that have nothing to do with downloading when it comes to local education costs. Primarily, one of the most significant contributors to high education costs is the number of teachers and this is an issue that is negotiated annually. It has nothing whatsoever to do with downloading.

A lot of mandated government programs in the education system are not mandatory. Government will offer little incentives, startup grants, and local boards have to realize that the time comes when they have to be weaned from these grants and supported from the local tax base.

Teachers have the right to withdraw services under Bill 100. In today's society, parents would just shudder at the prospect of ever having the school system shut down and what to do with their children. So, effectively, local boards, when it comes to negotiations, have a loaded gun to their head should ever the local teachers strike, whatever panel it might be, the elementary or secondary panel, and they are just not on a level playing field when it comes to the negotiation process with the teachers. The Ontario Teachers' Federation is extremely powerful in this province. Their numbers exceed some 126,000 people. They have a budget in excess of $70 million. The Ontario Secondary School Teachers' Federation have their own Cheyenne jet to take them around the province.


The Chair: I hate to cut you off, but your 15 minutes are up. There will not be enough time for any questions.

Mr Stevens: I think I have aired most of my concerns, and I appreciate the opportunity.


The Chair: The next group is the London District Labour Council. Please identify yourself for the purposes of Hansard.

Mr Ashton: My name is Jim Ashton. I am president of the London District Labour Council. As you probably noticed, I do not have a written brief, and I apologize for that. Unfortunately I have not had the time or the opportunity to put one together, but I certainly will give you the views of labour as we see the budget.

I think it will come as no surprise to those in the business community, my friends out there on the right-wing side of politics, that we at the labour council believe that the government has taken the right direction. I would add that we would have liked to see the government move a little bit farther than it has; but, given the hysteria that has evolved around this budget from various groups in the business community and others, it did as much as it could.

I find it somewhat interesting that those who so vehemently oppose increased government spending have forced us all to sit here this morning while we travel across the province spending more of the taxpayers' money.

I am not going to get into facts and figures and numbers today because I think, quite frankly, that does not serve any purpose, but I would like to talk about the budget and particularly those who oppose the budget. I find it somewhat interesting that those around this province who supported the free trade agreement, for example, which has put thousands of Canadian workers out of work -- and I think it is basic economics and understanding that when people do not work they do not pay taxes, and revenues go down and of course the deficit goes up -- these same people have supported, I would say, the insane economic policies of this federal government, such as high interest rates, which have led to a high dollar; and certainly those of us in labour know what that has done in terms of our manufacturing sector in the province of Ontario. It has put thousands of our workers out of work. Again, when our workers do not work, they do not pay taxes and again revenues go down. They also require social assistance, something that again costs the taxpayer money and increases the deficit. I have difficulty understanding why, when they take the positions they have taken in the past, they now sit here today and say: "Gee, the deficit's too high. We're going to blame this government." I find it, to say the least, somewhat hypocritical.

These are the same people who supported the Mulroney government's cut on transfer payments to the provinces. I believe, in this budget, it is somewhere in the area of $2 billion to $3 billion that the province of Ontario is losing. Again, they supported these policies. I find it very hypocritical that while this government has provided more money for social assistance as a result of, I say again, the economic policies of the federal government, many of these same people are lined up in Ottawa and in Queen's Park asking for corporate tax cuts. I do not know how one causes a deficit and the other does not, although I know there is the argument out there that the less taxes the corporations pay -- and I am surprised because so many of them do not -- somehow by not paying taxes we are going to create jobs. I have heard that argument. If one looks over the last 40 years as corporations have continued to pay less and less of a share of tax revenues in this country, one has to wonder where that argument has led, because today we look at the thousands of people who are not employed. If you took that argument to its illogical conclusion, I suppose if nobody paid taxes we might all have a job but then we would not have medicare, we would not have social assistance, we would not have roads, we would not have firefighters, we would not have police departments and so on. So I find it somewhat hypocritical when they take that position.

When the government put out seed money for farmers I suppose that caused the deficit, and yet these same people are in Queen's Park and Ottawa asking for subsidies and grants for business and for corporations. Again, they want money. When the government has spent more money on housing for low-income people across this province -- and that is one of the areas I would certainly like to have seen more done in, no question; at least in the Toronto area we have a major housing crisis -- again those people have opposed that yet those same people, whether it is in London or whether it is in Toronto, are out asking for government money so we can build convention centres, art centres, opera houses. Does that not cause a deficit? I find it again very hypocritical.

If one looks at the issue in front of us as well, I find it hard to understand, as I said earlier, the hysteria that has surrounded this budget. I look at Alberta, which has a higher deficit per capita than we do, and there has not been the outrage there has been here; at Saskatchewan, where the per capita deficit is much higher; at Ottawa. Granted, in Ottawa there has been much discussion to a degree around the deficit, but not anything like it has been in Ontario, and one has to note the coincidence of three Conservative governments supported, I would say, by the people who are today screaming about the deficit in the province of Ontario.

As for the issue of the deficit itself, it has been used by those in this society who would like to change the direction that those of us in labour would like to see and the type of society we would like to see. It has been the old sword of Damocles hanging over our heads for the last 10 years. It has become a major political issue. I think if one looks back and is old enough to remember, from the late 1940s to the mid-1950s North America experienced one of its greatest economic boom periods in history, and we were running deficits twice as high as we are today. The sky has not fallen. In those same years we made major improvements in social programs.

I think as well that the people I represent and working people across this province, although none of them are economists, understand the importance to some degree of going into debt. I think we all realize that if tomorrow we did away with credit cards, bank loans, mortgage payments, new car loans, etc, this economy would collapse like a house of cards. People know that if they have to have a house, they have to go into a great deal of debt to buy it; they know if they have to have a new car, in some cases they have to go into a fair amount of debt to buy it.

I think the people I represent, their concern is not so much with the deficit as it is with how their tax dollars are being spent. It is hard to understand why those who oppose the government do not recognize the necessity at times for a deficit. I have to question the two opposition parties who are now screaming about the deficit because the working people, the people I represent, if we have a strike coming, if we know that there are going to be layoffs, most people put a little money away. When times are good, you save a little money and when times are bad you have to spend it. The two previous parties that have been in power have gone through very good times and yet the cupboard is bare. Now whose fault is it? They say it is the fault of the government that came into power.

I think, quite frankly, the argument about the deficit and this government's budget is more about the type of society that we wish to see as labour people versus the type of society envisioned by those who support the idea of no deficit, competitiveness and so on in this country. Theirs is a different vision. I would say that I applaud this government's direction. As I said before, it has not gone far enough. But I think they have done well. I think they have made the right move. I am not an economist, but I spent a year in university taking economics, and I know that for every dollar invested, $5 to $7 are created. Certainly in the greatest recession we have had since the Great Depression, I find it difficult that those who have supported so many policies that have gotten us there do not understand it.


I do have one concern with the budget. That is in particular the 3.4-cent increase on diesel fuel. I am not concerned about those who buy imported Mercedes and BMWs because they are not part of the solution; they are part of the problem. I do not really care how much they pay on diesel fuel, but I do have some concern with the truckers and what is happening to the trucking industry. I recognize that one can lay almost the entire blame for that mess at the doorstep of the federal government in Ottawa. But I do not think that because a boat is sinking we ought to throw an extra anchor in it.

I do not have any solutions to the problem other than to say that I would hope that this government and both parties would take a look at doing something in regard to that tax, whether it be some form of rebate to Ontario truckers, on a quarterly or six-month basis. As I say, I do not have the answers but I think something has to be done to assist those people. Certainly there is the question of the environment, but I do not think it matters whether it is Ontario truckers or American truckers who are polluting because, one way or the other, we are going to have those people on the highways.

Again, let me say that I do applaud the government's position overall. I think you have taken the proper position. I think you have moved in the right direction. I think so many economists across this country and around the world have said that you are in fact not going the wrong way; you are going in the right direction. I think you have taken the position of people over things. I think you have taken the position of compassion over cold-heartedness and I think you have taken the position of fairness over injustice in dealing with the people of our province.

We do not want a society where people are left to live on the streets. We do not want a society where they cannot feed their children because there is not increased social assistance there for them. I believe 40% of welfare recipients are children. I think what our society ought to be about is making things better for everyone, not making things better for those who already have and taking away from those who have not, because any attack on this budget and the changes that were made would do that.

Mrs Cunningham: As always, it is interesting to hear you, Jim. I just returned from Victoria, British Columbia, where even the views of your own party would not be shared by the NDP candidates who are using the Ontario budget as an example of what should not happen. I think their great concern is, first, if I can paraphrase them appropriately, the lack of consideration for good management and for the streamlining of programs and the gearing of programs to the needs, especially of young people in the workplace. I am now talking about training programs.

The other one was the fact that out there they are very much aware that the wage growth has increased about 1% to 2% faster for a number of years in Ontario than in our competing nations, basically the Americans in the United States. They were talking there about wage growth, especially in Ontario and especially in the civil service. I was very interested to hear this of course because I have been there for the last five days and I just wondered if you would like to comment on both efficiency and wage growth increases from your point of view, considering what I heard.

Mr Ashton: I cannot speak to what is going on in British Columbia. I have been too busy running around trying to solve the problems of workers who have lost their jobs, and closed plants, and unemployment problems and so on. But beyond that, wage growth certainly is not a concern. I believe the provincial government acted in good faith and did what other governments should be doing.

It is always the public sector that is the scapegoat for either deficits or government spending or whatever. I think we all know the numbers behind that, that really they play a small part in any overall deficit. I do not agree with that position.

Your other question was -- sorry.

Mrs Cunningham: Streamlining and efficiency in government.

Mr Ashton: I do not know how you answer that question. Of course we would all like to see things run as efficiently as possible. I do not know that I agree with you that that is not being done. Again, I say look back over the last 10 years when we had the Conservative Party and the Liberal Party in power. Obviously, you could not have streamlined things too well because had this government done nothing we would have had the largest deficit in history.

I do not know that is a partisan thing. I think it is a thing maybe all three parties should be somewhat concerned with, but I do not think you can point fingers in this case.

Mr Stockwell: What about the competitiveness argument that is being made with respect to our industries? Our industries are closing. Some are saying the tax rates are too high, personal tax rates, corporate tax rates. We are not competitive with neighbouring states and neighbouring provinces. Clearly, there is an exodus out of Ontario.

How do you argue that? What is your point of view on that?

Mr Ashton: One has to start with whether you agreed with free trade, which to a large degree put us into this situation of having to be directly competitive with wages in North Carolina, Tennessee, or somewhere else, where historically wages have been far lower than ours. Again, the competitive argument, I do not know. Now we are talking about free trade with Mexico where workers make $3 a day. I do not know how we compete with that. Is there anybody here who would like to work for $3 a day? I do not think so. We are obviously moving from Mexico -- we will end up in Guatemala.

Mr Stockwell: I do not want to discuss wages. I was asking about the taxes, the tax rates, where the studies have been done and show we are totally uncompetitive.

Mr Ashton: You are talking about competitiveness.

Mr Stockwell: How do you argue that when you are suggesting that this kind of $10-billion deficit is acceptable? We are already uncompetitive when it comes to tax rates. This is just basically hiking the budget some 13% or 14%. Where is the competitiveness argument in that? How do you argue against that?

Mr Ashton: It is the same argument we always get. We cut taxes in Ontario; they cut taxes in New York. As far as I am concerned, quite frankly, since 1940 or 1951, look at the drop in corporate tax rates. Let's be realistic about it. That is what has been happening. Corporations have continued to pay less and less. We look across the country. How many corporations and businesses made money last year and did not pay any taxes? I do not know, how much more competitive can you get than that?

Mr Stockwell: You are suggesting we are competitive.

Mr Ashton: I am suggesting that I agree that the direction that this country has taken, the fact that those in Ottawa have decided to sell this country out is something I can fight, because if we were not in that situation --

Mr Stockwell: You are suggesting that we are competitive and we are being sold out?

Mr Ashton: I believe we are competitive. I can give you examples in my local, the autoworkers in the city, where we have to compete against plants in Kentucky where the wage rate is far less than ours, and we do it because Canadians, damn it, are good workers. Canadians work hard. They put out a good quality product.

Mr Stockwell: Not many people agree with you though on that. The studies do not come out that way. I do not know. Have you got any evidence to prove this? Or is this just your own personal opinion?

Mr Ashton: I am the president of the Canadian Auto Workers in London. I am giving you an example of one of my plants. They are very competitive.

Mrs Cunningham: I just want to ask one more question. I am not saying that you or I can solve all the problems, but I represent London North and I am down there to find solutions. I am absolutely sick of people moaning and groaning about this great country. I am here to help this government find solutions. I think that is what it is all about, not partisan politics -- and I have said this in this committee before and I mean it -- we all have to work together to find solutions and stop taking pokes at each other. By the way, I have heard you speak before and I have seen you give solutions to problems so I am not aiming this at you.

But one of the concerns that was really brought home, on the west coast and in Ontario at these hearings we learned that about $50 billion of our debt is actually owned, in a sense, by the Japanese. When I heard the other figures, it was even more shocking. This country is not even capable of paying its own debt in any way, even if we take a look at our own institutions, our banks and what not. It is pretty frightening.

The solution I think we are all looking for is to get out of debt. It certainly does not give a lot of hope to our young people. I am just wondering what kind of statement you make about that great concern that young people have. This was at the University of Victoria where the representatives came from all over Canada and they were very concerned.

Mr Ashton: I do not think there is any question everybody is somewhat concerned about debt. But I am saying, if you look at 1947, the debt was 106% of the GNP. I do not know, did the people in 1947 say, "My God, my kids are ruined." Obviously, they were not. I grew up in a generation that benefited because of the 1950s and the 1940s.

I agree with you, everybody would prefer not to have a debt. Who wants a debt? I agree that there are things that can be done. Unfortunately, some of the solutions I have are not the solutions that, say, you would agree with.

The Chair: I have to go on to the government.

Mrs Cunningham: It relates to my point. It does relate to the interest rate, and it is unanimous. That is what I would think about.

The Chair: I am sorry.

Mr Christopherson: We follow the rules, Dianne.

Mrs Cunningham: I am going to finish my sentence no matter what.

Mr Christopherson: Ron, the hammer stops when time is up. It does not matter who it is.

Mrs Cunningham: I will keep talking until I end my sentence every time.

Mr Christopherson: But if you were Chris, your sentence would be an hour long.

Mr Ashton: Do you want me to leave? Will you guys work this out or what?


Mr Christopherson: I think it is interesting that some of the questions from the Progressive Conservative Party talk about the deficit when just last week we saw that the federal government is now suggesting that instead of a $30-billion deficit it may have a $40-billion deficit. That miscalculation alone is greater than the entire deficit that we have projected. And, I might add, our projections so far are all but dead on in terms of the way the economy is unfolding. I think things need to be put in their proper context and that needs to be said.

On the issue of competitiveness, I think it is interesting that, again, as the federal government takes all of us into trilateral free trade discussions with the United States and now Mexico, when the issue of competitiveness comes up it seems to want to define it by determining who will take the lowest wages. They want to compete to see which nation and which workers will take the lowest wages, which nation and which workers will have the lowest quality of life, which communities will have the lowest environmental standards, which workplaces will have the lowest health and safety standards. That is their definition of competitiveness.

What we have projected and what we have said in this province is that type of competitiveness is not for us. For Ontarian workers to try to compete in that kind of scenario is a loss for us, and it is defeatist for a provincial government or a national government to follow down that road. What we have said is that we need to identify areas where high value-added makes us competitive, where you cannot do anything as well as us because of our education system, because of the skills of our workers, because of the infrastructure of our municipalities, our health system, our education system. All of those things combined will make us competitive. That is where we will shine.

What kind of restructuring are we seeing here in London and how is the economy changing for workers, and where do you see London's ability to compete in that high value-added type of competitiveness rather than the one that says, "Let's compete for the lowest standard of living"?

Mr Ashton: First of all, we in London have suffered somewhat. I would say we have suffered more at this point. It is all linked together, because indirectly the high dollar is tied into the free trade agreement and the high interest rate policy. So it is hard to say which is which.

There is no question, if you talk to employers in this city -- at least I have talked to a number of employers; we represent over 5,000 workers in 25 plants in London and area -- so many of them will say it is the high dollar. It is not a problem with the work, it is not a problem with the quality; we could be competitive if the dollar was not artificially high. How do we compete with $3-a-day wages, no health and safety legislation, where the unions negotiate cardboard boxes and tin as wage increases there -- government unions, I might add. I do not know how we could possibly be competitive in the long run.

Certainly, there is no question that unskilled jobs are going to come into a great deal of difficulty, as they already are, and increasingly so. We are going to lose most of those if the free trade agreement with Mexico goes through, no question. How can we be competitive? The only way you can be competitive, I suppose, is if you work for $3 a day. It is absolutely insane. It cannot happen.

I would like to respond to something else too. The point was made to me about the debt. In Ottawa, they come through with this interest rate policy which not only puts us out of work because of the high dollar, but costs the taxpayer hundreds of millions of dollars a year in extra debt financing, and at the same time they are telling us, "Well, we're doing all these other things to lower the debt." I find it absolutely insane.

I also find, if we want to talk about competitiveness, that the corporations in this country are not interested in research and development. If you look at the amount of money they spend in a year, it does not even equal what General Motors spends, and they expect the government --

Mrs Cunningham: Do you want to see what the government spends? You should see what the government spends, Jim. You would be shocked.

Mr Jamison: During your presentation you talked about housing and how you wish there was more done. Part of our budget contained provisions for new co-op and non-profit housing starts. In talking about that in previous presentations both from the construction workers union and the construction associations -- and I notice we will be talking to the London and District Construction Association this afternoon -- they have indicated that this was very helpful at this time for two reasons: Co-op housing in good times is very hard to start because construction on other homes and other housing is running at a good pace; but they have said to us that it has been a real boost for them, it has actually turned their figures around for people working in the industry.

I just want your opinion if you see it that way, because part of your presentation dealt with that.

Ms Ashton: I agree with the extra emphasis the government has put on housing. I would like to see more, but I also recognize the restraints the government is under. The labour council has just begun work on co-op housing in east London, hopefully not just to provide that kind of housing but to help revitalize that area of town which both municipally and otherwise has been ignored.

I agree it is easier to get construction companies involved in that when the business is not out there. But I do think more and more of it has to be done. It is not really true, but there is this image of London having all kinds of money, where never is heard a discouraging word and everybody is fine. More and more now in London, just like on Yonge Street in Toronto, you see people on the streets, you see people with nowhere to go. I think it has to be one of the major priorities of the 1990s to find housing for people, food and shelter.

Mr Kwinter: The government has said that it chose to fight the recession and not the deficit, and nearly every single group that has come forward supportive of the government's program has said -- you just said it about 30 seconds ago -- that more money should be spent on housing. Every group that comes forward says: "You should be spending more money on my particular program, but I understand that times are tough. I applaud the government for running up this very large deficit, because this is the time to do it. When times are good they'll bring it down."

How do you reconcile the fact that if we come out of the recession and things start to get better, people will come forward and say: "Now that we're out of the recession, you've got to make good on your promises. We want more money for this and we want more money for housing. We want more money for day care. We want more money for all these things." The government is then caught in a situation where it has no money to pay down the deficit. In fact, the pressures are going to be even greater to provide more programming, because "How can you deny us when times are good when you said you couldn't do it when times are bad?" How do you reconcile that?

Mr Ashton: I am trying to take a basic working man's approach to it on the basis that one recognizes that even working people, when times are good, spend a little more money. But they also have the opportunity to save a little more money. I recognize that you have a double situation there. Programs that were promises are going to be expected to be implemented. But there is also the opportunity to put away some money for the future.

You look at the unemployment insurance system. When times are good, you could sit on unemployment and nobody chases you. When times are bad, they have you running into that office inside out and backwards, and you cannot find a job. Does that make any sense? It certainly does not to me. I was going to have a criticism there. Why are you not scrutinizing more when times are good? I recognize what you are saying, but I also think it is important that the people who are talking about this deficit -- everybody is here with their individual thing.

I do not represent the housing industry, but damn it, everybody in this province and everybody in this country ought to have shelter. I do not represent anybody from the food banks, but everybody ought to have food. Everything I have talked about today, I do not think once I have mentioned any kind of expenditure that has been made on "labour groups." I believe we have to represent people, whether they are union or non-union. I think this province has certain obligations, and I do not care how far in debt it is. Damn it, I am not going to see people sleep in the streets and I am not going to see people go hungry and children not have the proper clothing and everything else.

I think that has to be a basic tenet of any society. We have to start saying, "We are a community." We're not out for who can get the best, who can do this the best. I think we are here as a community and that is the direction every government should be moving in.

Mr Phillips: I appreciate the comments of the labour council. My father worked his whole life about 100 yards from here in Wright Lithographing. He was a lithographer, so I have a little bit of that feeling for the London area. As I have said to groups like yours coming and saying: "This is a great budget," and to other groups who say: "This is a terrible budget," we will only know probably in a year, a year and a half, maybe a couple of years from now. Clearly, the concerns that many of us have are around the future: deficits forever. The deficit in this budget never gets below $6 billion. There is some creative accounting that says it does, but it does not. They are going to put it all into debt. Hydro is being asked to pick up a whole bunch of government expenses.

My question really is this. Good times, supposedly, are coming as a result of this budget, but the unemployment rate never gets below the 9% level. I am always surprised labour councils are not in here railing at the level of unemployment. I would ask you to be a little bit cautious about blaming the federal government. That is fun but the fact is, Ontario had the lowest unemployment rate in the country a year ago. Today, one year later, we have the fifth lowest. In other words, we have gone from having the best, the lowest unemployment rate, to now being fifth. So it cannot all be the federal government. My question to the labour council is -- because I keep all these briefs and I remember these things -- a year from now when we are meeting with you, what will be your expectation about unemployment, and if it is not that bad, what will you be saying to the government?

Mr Ashton: It is hard to say. The government has been trying to tell us from Ottawa the recession is over. I do not know. It is hard for me to tell my workers who are still out on the street that it is over.

Mr Phillips: I think the Premier said the recession is over.

Mr Ashton: With regard to what you are saying, I do not know. You are saying that the unemployment rate in Ontario is now down to fifth, or whatever. If we want to argue that one out, I suppose I could blame that on the Liberal government, because most economic policies take time to filter through the system. I do not know if I want to blame you either. I will go back to what you said. I am going to make it quite clear. My view is that it is the federal government that has caused this disaster. If you ask me what is going to happen a year from now -- I do not know if they are going to negotiate a Mexican free trade agreement. No question, if they do, it is going to be worse. I have heard from Statscan that if you work an hour you are considered employed. Is that what they are doing out there? You can juggle stats too. I do not disagree with you. We are losing a lot of manufacturing in this province and we are losing it because of the high dollar and, to some degree, the free trade agreement; or tie them in together. I do not know where else to lay the blame.


The Chair: We will call on the United Food and Commercial Workers. You have one half-hour for a presentation. Try to leave some time at the end for a question-and-answer period. Please identify yourself for the purposes of Hansard.

Mr Catherwood: Thank you very much. We are pleased to have this opportunity to come to London to make our organization's presentation on the Ontario budget. With me today are my colleagues Maureen McCarthy, representative with Local 175/633, which is the largest local union in Ontario and perhaps the largest local union of any organization in North America; and Bryan Neath, international representative with UFCW Canada. I am Tim Catherwood, assistant to the Canadian director of the UFCW.

We would like to have Maureen go through our presentation and then we would enjoy the opportunity to have a discussion with you about some of the issues raised in our brief and some of the things we just heard raised with our colleagues from the labour council.

Ms McCarthy: Mr Chair, members of the committee, the UFCW is Canada's largest private sector union, representing some 175,000 members in this country. UFCW Canada members are employed in more than 20 sectors of the economy, including the retail, service, meat packing, food processing, brewing and beverage production and distribution, fishing, general merchandising, health care, shoe and leather manufacturing and banking industries. The UFCW represents more than 70,000 men and women in Ontario.

In this presentation UFCW Canada wishes to review the conditions facing our members and other working people in Ontario and discuss how the budget presented by the Treasurer of Ontario, the Honourable Floyd Laughren, will serve to improve these conditions and place the economy on a track toward a faster and a more durable recovery. UFCW Canada supports the Ontario government's budget and believes it represents the right approach at the right time.

During the past year the people of Ontario have suffered through the worst recession since the 1930s. For Ontario this recession has been more severe than the recession of 1981-82 and its effects have been felt throughout the province in all sectors and in all communities. Ontario has lost more than 250,000 jobs since February of 1990. This job loss has occurred in virtually all sectors of the economy, manufacturing, retail, food processing, service, transportation, construction and so on. The unemployment rate has risen to exceed 10% and, in many communities, it has soared to the unthinkable levels of 50% or 60%. We are told by economic forecasters that this high unemployment will continue for the foreseeable future.

UFCW Canada members have suffered through the recession and from the results of unprecedented change impacting on the economy and the labour market. Our union has been hit by many layoffs and plant closures: Nabisco, Heinz, Hoffman's, Neilson's, Thompson Transport, Canada Packers, Lancia Bravo, Hunt Wesson, J.B. Foods, Simpsons, Dr Ballard's and Taggart. These are just 12 of the many closures that have robbed more than 5,000 UFCW members of their jobs.

The recession has not been the only cause of these job losses. Many can be attributed to a series of misdirected policies coming from the federal government. This disastrous agenda has included: high interest rates; the overvalued Canadian dollar; the Canada-US free trade agreement; deregulation; high and unfair taxation including the GST; cuts to transfer payments for education, health care and social services which are threatening medicare and other valued social programs; privatization; and cuts to the unemployment insurance program.

Rather than building this country to meet the challenges of a rapidly changing world, the government in Ottawa has placed our country on a divisive and backwards course. We have been weakened, left ill-prepared and ill-equipped to deal with the changes occurring around us and to build on our considerable strengths as a nation.

The Ontario budget represents a large step forward for the people of this province and for Canadians. The budget represents a vote of confidence in Ontario and in our ability to pull together to build a strong and prosperous economy and a better future for all. Contrary to the policies of the federal government and its belt tightening, which has been a major cause of the recession, the Ontario government has moved in the opposite direction. Ontario is fighting these hard economic times by working with the people of Ontario and taking action to help the victims of the recession.

Ontario has been one of the provinces hardest hit by the recession and the economic damage caused by federal government policies. The first year of the recession cost the province 250,000 jobs. This is over twice the number of jobs lost in the 1981-82 recession. Of the job losses in Canada, 80% were in Ontario. Also, 53% of the increase in bankruptcies occurred in Ontario. The federal government's spending cuts will cost Ontario $1.6 billion this year alone. Over the next five years, the province will lose $3.5 billion in federal transfer payments, more than any other province. Ontario has less money coming in and must spend more to keep social programs at their current levels.

The Ontario government could have done what the governments in other provinces did. They could have cut spending on education, health care and social services. Instead, they have recognized the needs of those who have suddenly found themselves unemployed and have moved to help these people.

The government of Ontario has cast a strong vote of confidence in the people of Ontario. This is the right approach. The Conference Board of Canada, in fact, predicts that because of this recession-fighter budget, Ontario will lead the country in economic growth in 1992.

The budget focuses on recovery. By building on our strengths and addressing the needs of working people and their families, the government has put the well-being of the people of Ontario before the deficit. The government has put into place a plan for stronger growth which will improve Ontario's economic as well as fiscal position.

Ontario, unlike the federal government, has not picked the pockets of workers. Ontario has put money into the hands of working people and their families. Ontario understands that if people have no disposable income, they cannot spend and there is no growth in the economy. Unlike some other provinces, they did not piggyback the provincial sales tax on top of the GST. This alone leaves an additional $470 million in the hands of consumers.

The federal government has placed its taxes on those with the least ability to pay. Ontario, on the other hand, has initiated a major improvement in the Ontario tax reduction program. As a result, more low income earners will be exempt or see reductions in their taxes. For example, a single mother with two children will no longer pay provincial income tax if she earns less than $22,500. The government of Ontario is showing that you do not have to fight a recession by putting people out of work and slashing social programs.

Ontario is investing in the future and, at the same time, is creating 70,000 jobs by building roads, bridges, hospitals, schools and affordable housing. Jobs will be created in environmental conservation efficiency and recycling. Funding will be available for retraining and adjustment to those who have lost their jobs due to layoffs and plant closures. The long-neglected areas of labour adjustment, social assistance reform, affordable housing, the environment and pay equity are finally receiving priority treatment.

In response to the increased burden on municipalities caused by a combination of cuts in transfer payments and increased need for social assistance, food banks and affordable housing, the budget provides for increased spending on social assistance and infrastructure improvement and development. When combined with the contribution of local governments and agencies, the government's $700-million anti-recession program will be worth more than $900 million.

The Ontario government has introduced a number of policies that are right for Ontario, including some of the following: a $215-million social assistance reform package will assist municipalities by helping people get into or re-enter the workforce and provide fair and accessible services and benefits for those whose needs are the greatest; $125 million in funding will be made available to help with the cost of pay equity programs, hospitals, school boards, universities and colleges; $8 million will be spent to expand services to women and children victimized by sexual assault; $12 million will provide new shelter beds for women and children who are victims of sexual assault; $150 million in annual operating subsidies for 10,000 new non-profit housing units, when completed, will bring the level of provincially supported housing activity to an all-time high; $48 million will initiate self-government and resolution of native land claims. And $5 million will go to provide for child-care spaces on reserves, and $20 million will be for community projects such as water and sewage systems.

All this will be done while maintaining health care and education at their current levels, despite federal cutbacks. The Ontario government believes in the people of Ontario and is working to address the needs of these people and to build a strong future for all.

During recent months, the Ontario budget and, in particular, the deficit

contained in the budget have drawn a lot of criticism from some elements of the business community. Some of this criticism has reached the level of hysteria. This criticism is unfounded, not supported by the facts and represents a negative and questionable view of the world.

UFCW members understand the economy of Ontario. They live it. Our members know that the Ontario budget represents an investment in the future of the province and an effort to bring everyone into the process of building that future. Our members are not concerned that Ontario's budget runs counter to the policies of the federal government. They do not feel that a Prime Minister with less than 15% support has much to teach the Ontario government about economics or anything else.

UFCW members know it was the federal government's own policies that caused the lion's share of the recession and the damage that has befallen the economy. Our members are living through the effects of federal policies that gave us: high interest rates; an overvalued Canadian dollar; high and unfair taxes, including an unprecedented shift of the tax burden on to working men and women, and the GST; cuts to the unemployment insurance program combined with excessive premium rate increases; the Canada-US free trade agreement and, more recently, movement towards a trilateral deal including Mexico; and cuts to transfer payments supporting education, health care and social services.

These kinds of policies have placed our economy on a backward course. They are regressive and destructive and run counter to what Ontario and Canada really need: a progressive thrust and an investment in the future.

A lot of people who know what is really going on are saying the Ontario budget represents the right course of action. John Kenneth Galbraith, one of the leading economists of our time, has said that "the Ontario government is leading the way" by reviving the economy with greater public investment. To the critics of the deficit, Galbraith answers: "Of course, greater public investment stands accused of burdening government with unnecessary debt. So, as a bow to fiscal conservatism, perhaps we should finance the process with a tax increase in the higher income brackets. The expansive effect of the large expenditure would far offset any restraining effect of the tax. The important thing is to get all levels of government off the deflationary track. They are supposed to be the guardians of the public well-being. At present, they seem intent on making things worse."

UFCW members know that there is a right time to invest and that if you want to move ahead sometimes you have to be bold. For UFCW Canada the time to move forward is now.

The Conference Board of Canada is another supporter of the budget. The Conference Board notes that very little of the deficit has come from new spending -- $640,000,000 -- and that the deficit could serve as a confidence builder spurring more growth throughout the economy.

It is important to consider where the $9.7 billion deficit came from, for it is not primarily a result of the actions or decisions of the current Ontario government. In fact, it is estimated that a $2.5 billion deficit was left by the previous Liberal government. The federal government's unilateral cutbacks in transfer payments have had a cumulative cost so far of $3 billion on the Ontario Treasury, including $1.6 billion in 1991 to 1992. Federal high interest rate policies have raised the cost of servicing government debt, drowned -- not just dampened -- consumer and business spending and been a major cause of the recession. The recession has had the twin effect of reducing provincial tax revenues and forcing higher costs in terms of assistance to Ontario companies and workers. Federal government cuts to the unemployment insurance program have contributed to increased social assistance costs for Ontario. Social services costs will rise to over $5 billion from $2.5 billion two years ago, with 40% of all those on social assistance being children.

The deficit is not extreme and is, in fact, low when measured in terms of total spending, gross domestic product and per capita. The deficit is much lower in all of these measures than the federal government's deficit. And Ontario's public debt charges are not only low, but are projected to stay well under control.

Ontario is well positioned to invest in the future. Government spending will serve to stimulate economic growth, help companies and workers in Ontario out of the recession and through difficult economic times, and create new jobs. The budget is itself an eloquent statement of the government's caring, its commitment and its confidence in the future.

In conclusion, UFCW Canada would like to thank the standing committee for touring Ontario to hear the views of organizations such as ours. It is sometimes good to get a perspective on matters such as the economy from outside of downtown Toronto. UFCW members understand the economy and they know that the budget represents the right course of action for Ontario. They see it as a demonstration of the government's confidence in Ontario and as an investment in our collective future.


As a union, UFCW Canada believes in and is committed to progress and to moving ahead. We think the budget will work in favour of the future and progress and that it will serve to lay the groundwork for a strong economic recovery and sustained prosperity. In this effort the government has our full support.

Mr Christopherson: My thanks to Ms McCarthy and the delegation for an excellent comprehensive presentation. I see that in Ontario you represent 70,000 workers. I think you have articulated quite effectively the direction that we have gone as a government, why we have gone in that direction, and the kind of results we are hoping and expecting to see in the years to come. We had two choices: to go down the road that we did with the budget, or to go down the Mulroney road and fight the deficit. If we had chosen the latter as opposed to the road that we did take, how do you feel that would impact on the 70,000 people you represent and the communities they live in across the province?

Mr Catherwood: We think that making this kind of investment at this point in time is a right thing, both for economic and let us call them psychological reasons. We really have to turn a corner in this country where we are starting to talk about building things up rather than tearing things down. In terms of direct effect, a lot of our industries are being very badly hit by a number of things happening in the economy, some of which can be controlled within Ontario and some of which none of us could ever control, regardless of what we wanted to do. But when you look at doing things in terms of training and labour adjustment and trying to get some more assistance to industries, these are the kinds of things that we support because they maintain and create jobs. That is what we are here for: to make sure that our membership can get stability of employment, that our industries are stable, and that we are able to move forward.

In recent times, we have had an awful lot of discussions with other governments besides the Ontario government, with a great number of our business people, with our employers and business associations, talking about just exactly how we turn the corner in this country and start to build on what we have got and start to do better at what we are trying to do. We think the whole thing is really the right thrust. We are really happy to see somebody going out and standing up for Ontario and for Canada and, most of all, standing up for our members who have had one awful hard time. Those 5,000 jobs we mentioned are just the ones in Ontario, and do not include the ones in other parts of Canada. They are very, very serious. Our organization is spending a lot of time and a lot of money right now trying to deal with the closure problem. If you want, at some point, I could sit down with you and tell you the whole thrust of what we are doing in training adjustment; but that is not the subject of this particular committee.

Mrs Sullivan: One of the things that has been a matter of great concern in relationship to this budget, is the clear evidence of lack of investor confidence after the budget came out. There has been grave concern by financial analysts, not only in this country but elsewhere, by people who were looking at investing, at putting in capital investment for expansion or location of operations in this province. Other decisions have been made now. Indeed, we are seeing our own companies moving elsewhere or closing down.

It seems to me that while you spoke at some length in your presentation to us about where you see positive aspects of the budget, you have left out one of the very, very serious consequences of the issuing of this budget. That is, the capitalist fluid that the lack of investor confidence means -- that indeed we will not be attracting investment that will allow for expansion and job creation in the next immediate period of time in Ontario. Surely, that by itself is a major reason to condemn this budget.

Mr Catherwood: I hear what you are saying. We as an organization have had a number of talks in the last two months with large employers of ours. Just last week we sat down with the grocery products manufacturing industry and one of the things that was on the agenda was exactly that question. I think that what has to be done is groups like ours and the employers sitting down and talking about our different points of view. They talked about this thing called a capital strike. And we talked about how we do not think a capital strike is necessary or a good thing. By talking about the causes of the investors' concerns, we have moved that type of thing forward quite a way.

From our end, we talked about the importance of the dollar. If the dollar were not where it is, we would be an awful lot more competitive. Their reply was, well there is $100 million of Canadian debt floating out there. How do you lower interest rates, lower the dollar without affecting interest rates and causing an outflow of money? I do not know the answer to that. The only way we can find solutions to the problems is by sitting down and talking, by breaking down that wall between the big companies and our organizations and trying to get the facts on the table and get a good discussion of them. I really believe that as we get into the fall and as things get a little stronger in the economy, you will see a lot of that concern go away.

I do not think this budget alone, or any specific policy that came out of Ottawa or Alberta, or anything else, is the single and only cause of this overall concern in the country. I think the business community has a right to be concerned. But I know that our members have got an awful lot of concerns too. These are the kinds of things we try to put forward, not only in this presentation, but in our discussions with you, discussions with other governments, and more importantly, our discussions with the employers. You have got to bring these things to the table and get some solutions.

We have an awful long way to go to come back in this country. I recall we had something like this discussion a couple of months ago on the problem of cross-border shopping. We have gone away and Bryan, in particular, has done a lot of work on that. You know, we have got a long way to go, but I think that what we like the most about this budget is that it stands up for the future. It stands up for going forward.

Mr Phillips: Really?

Mr Catherwood: I really believe it does.

Mr Stockwell: If you had a $10-billion deficit this year, I could almost swallow that if it was accepted as a recession budget. I do not know that I would, but I am certain the response from the general public would be less. And the capital investors certainly would not be as animated as they have been. Except for the fact that you are suggesting you are moving to the future -- "We are building for the future." -- which in my opinion is such shortsighted pap. It is hogwash. How can you tell me we are building for the future when we are running a $10-billion deficit this fiscal year and when for the next three years we are nearly matching that number? Where is the consumer confidence, the capital confidence, for anyone to invest in a province that is prepared to double its debt in four years? Explain that one away. That just boggles my mind -- how they can go about running those kind of deficits and then get upset when the private sector, the capital investors, say, "Hold the phone, folks, you people are spending money like water."

Mr Catherwood: I am not so sure I know what the answer is to the $10 billion. We sat down and looked at what we thought were the causes of it and we gave them to you. I do not know how you go back and turn some of those back. We were in a recession and --

Mr Stockwell: But that is not the question, and I would appreciate a response.

Mr Catherwood: But you are not letting me answer it. We had a recession and that caused a big chunk of it. We have had this transfer of deficit from the federal government to the Ontario government through the transfer payments, which is something that I think we need to take up with Mazankowski, not with you. I think interest rates have hurt the overall fiscal position of the government. The other thing is, look at what is being spent out there. I have yet to have anyone on our side or on the business side tell me where exactly it is that we are going to be cutting these things. I do not want to see a long-term run-up of the deficit or the debt in Ontario, but my understanding of it is that our debt position in Ontario, probably because of good management before, is quite solid. I do not think our numbers are projected to run up -- the percentage of GDP or any of these other ratios that you measure debt by -- to unmanageable proportions. That is not my understanding.


Mr Stockwell: I will tell you, you are wrong.

Mr B. Ward: In your opinion.

Mr Stockwell: No, not in my opinion. In fact, you are looking at an increase of at least 2% in the GDP as compared to your budget and deficit figures. There is no question it is running up. The question stands, though: How can you achieve a healthy, prosperous economy when you are running these kinds of deficits? And you are saying "building for the future." Even you or your group cannot buy into the theory that running these kinds of deficit figures for the next four years is going to be a healthy approach for the Ontario economy. Even you cannot accept that, I would think.

Mr Catherwood: I do not know what you mean by "even" me.

Mr Stockwell: I have heard that a lot of your groups have been standing up and supporting this budget.

Mr Catherwood: Yes, and we do. But you are treating us like we are off in some sort of corner. We are not. I just told you we are concerned about the idea that the debt would run up in the long term. But I also believe that if we can get some other things going in this province -- for example, training and adjustment, where we get people back into the workforce faster, where we are not dumping people out when we have to make changes in the workplace -- in the long term we will be able to build this economy up.

I happen to think the Ontario economy is one of the strongest in North America, and I do not know how you could possibly disagree with me on that. But you know, we have to find a fundamentally different way of dealing with the changes that are going on. This absolutely has to be done, and if we can do that we are going to have a strong economy. But you cannot say the deficit alone is causing people to run out of this province.

Mrs Cunningham: It is the projected deficit that people are worried about.

Mr B. Ward: Good presentation.


The Chair: The next group we have is called Sciencetech. You have one half-hour. Try to save some time for the three parties here to ask questions of your presentation and your opinions. Please identify yourself for Hansard.

Mr Lazure: My name is Robert Lazure. I am operations manager for Sciencetech Inc, a small high-tech business situated here in London.

Sciencetech was born and raised here in London about five years ago. It began with four friends, three of whom once worked at PRA International, a London company that used to make lasers. In its first months, Sciencetech Consultants Inc, as it was then called, was but a part-time business for all involved. In 1986, I became the first to take this on as a full-time position, working out of my home, as do many small businesses. In 1987, we moved to the London Small Business Centre on Oxford Street, and with the help of manager George Stuart we developed a short- and long-term business plan and settled in a 1,200-square-foot space. By the time we left three years later, we occupied 1,800 square feet and had eight people on staff.

Today, Sciencetech designs and produces custom optical systems for medicine, research and industry, specializing in the fields of spectroscopy, lasers, biotechnology and holography. We have made instruments for many Canadian universities and companies. We export to the US, Mexico and Argentina. We have an engineering and production group in the south of London at a 5,000-square-foot facility. We have a research group in Hamilton located on campus at McMaster University, and a sales office in Georgetown serving the Toronto area. Of a staff of 13, more than 50% are physicists, engineers or technicians.

I would like to address three areas in the 1991 Ontario budget which strongly affect Sciencetech, both now and in the future. These areas are, first: education and training for jobs; second, research and innovation; and third, manufacturing recovery.

First, education and training for jobs: Sciencetech welcomes Ontario's commitment to quality education. In the years to come, Sciencetech will be looking for technical people with various backgrounds. It is good to hear that spending increases will occur in this area. The effects of education are difficult to gauge in the short term. It is only with a commitment to the future that our expectations are realized. With over 50% of our staff in technical areas, education is the gateway to innovation and the future of our industry.

Second, research and innovation: These two words are key to Sciencetech. We know that today's research project will become tomorrow's production. To date, we have made an extra effort to maintain an internal level of R&D so that we can face tomorrow's marketplace. We are glad to see that this government thinks the same way in providing $131 million for research, development and technology diffusion in 1991-92.

As do all new and growing high-tech companies, Sciencetech suffers from the shortage of investment capital. We welcome the increase of funds to support these activities, in particular the increase to $21 million for the Innovation Ontario Corp. We especially appreciate the raising of the ceiling for individual investments from $350,000 to $1 million. Sciencetech is in favour of the government's spending in this area, which will provide new job markets and industries in Ontario.

Third, manufacturing recovery: Sciencetech realized from its infancy that developing single-item projects would not sustain its future. We have slowly been trying to develop a production group to better attract customers in providing a total product from concept to prototype to production.

Growth in the area of manufacturing is difficult and requires loans which banks are reluctant to provide in these difficult economic times. Sciencetech is happy to see that small and medium-sized companies have been considered in this budget, with up to $57 million in financial assistance in the form of loans and loan guarantees.

These three areas -- education and training for jobs, research and innovation, and manufacturing recovery -- are all closely related. They are the process for a better Sciencetech and a better Ontario, all at the price of commitment.

Mr Chairman, I will leave you with a gift I received not too long ago. It is not gift-wrapped because I have been using it, but I feel it would be more beneficial to this committee. It is a nice stainless steel letter opener that I received from the Buffalo Economic Development group. It came with a nice letter offering low taxes, cheap electricity and other incentives should we consider moving our operations that way.

If we do not think of Ontario's future, who will?

Mr Phillips: That is a letter opener?

Mr Lazure: It is a letter opener.

The Chair: We will use that as an exhibit.

Mrs Cunningham: It has made its point at least, for the moment.

The Chair: I thought there was a double edge on it.

Mr Kwinter: Thank you very much for your presentation. At the present time, the average amount of gross domestic product that is dedicated to research and development in Canada is 1.3%. Ontario does a little better; it is at 1.7%. You can imagine where the rest of the country would be without Ontario's 1.7%.

Our major competitors, the United States and Japan, have set a target. Right now Japan is at about 3% and the United States at about 2.8%. They have set a target that by the year 2000 -- certainly Japan hopes to be at about 4.5%. We as a government, when we were in power, tried to get the federal government to go to 2.5% as a target; not as an actual, but as a target. We could not get them to agree to it.

How do you feel about the commitment to research and development by all levels of government? What impact is that having on you?


Mr Lazure: As you know, manufacturing is difficult in Ontario. The automotive is a very tight market -- not that I know much about it -- but we certainly need to look to other alternatives. Other industries must be explored.

I have always been in the high-technology field and I think it is an area that has not been explored that much. I am in optics design. That area is really quite a minimal part of Ontario and Canada. As far as I know, there is only one university that offers a course in optics in Canada. Optics is really the way a lot of things are going -- such as communications; it services many industries. I think all levels of government should look at it a bit more seriously.

Mr Kwinter: We are pretty well considered worldwide when it comes to laser technology. We have Geraldine Kenney-Wallace, who has done a lot of work in that. She is now the president of McMaster University. What kind of environment allowed that to happen, and do you feel it is not continuing?

Mr Lazure: I do not have a good answer for that. Maybe you know of a few examples, but I think it could be helped out more. I do not think there are enough industries that have developed around those kinds of innovations.

Mr Kwinter: What about the centres of excellence program, the one particularly in that area? Has that impacted on you at all?

Mr Lazure: I think it is a good intention, but it has not really developed into something everybody could use.

Mr Kwinter: Do you have any suggestions as to how it can be improved?

Mr Lazure: I think they need to go to all the small companies and offer ways to help them. Really, it has been something further away that not everybody could use. I feel the same way about the centre of excellence for computer-aided design/computer-aided manufacturing technology. That has somewhat petered out and is not available now. It lasted for five years or something like that. Now when I need CAD-CAM and computerized numerical control capability, it is not there for me.

Mr Kwinter: You have to understand that was a seed program. That was when CAD-CAM was a new technology and the idea of computer-aided design and computer-aided manufacturing had to be introduced. Now it is state of the art and CAD-CAM is routine in any company that is involved in any kind of high-technology production, even the smallest. You walk into any small firm and the first thing they do is show you their CAD-CAM operation. As a result, there was no need to keep funding that, because it was really seed money to get Canadian industry aware of the CAD-CAM potential. Now, of course, if you need it, there are people in the private sector who offer it. That is really why it was discontinued. It is certainly available; it just is not available from the government.

Mr Phillips: I appreciate your comments. I think many people now think the future of our value-added products rests in many more people being interested in the skilled trades and science and technology, and yet I think enrolment is dropping. Certainly in science and technology, I think we are headed in the opposite direction.

One of the conclusions of the Premier's Council was that we must get more people into science and technology. But if you go around the room, everybody is advising their sons and daughters to go into law and medicine and that sort of stuff. We cannot just say, "Do it." How do we change things so people actually want to go into science and technology, do go into it and do thrive in it?

Mr Lazure: That is a good question. I do not have an answer for that. I think it is probably the high school teachers. If there are enough who are excited about science, it is something that stimulates people to go into it as a career. There are certainly plenty of challenges these days with pollution control, new methods to take care of PCBs and chemical breakdowns and the ultraviolet concentration we are exposed to. There are plenty of problems. We just have to make it exciting enough for young people to go into it.

Mr Kwinter: I think the key is not the excitement, it is the remuneration.

Mr Lazure: Yes.

Mr Kwinter: Students are becoming very aware of their economic prospects. What they want is something that is going to get them a good, fast return on their investment in education and they do not see it in the science area. I think that is the key.

Mr Phillips: You know this field better, but in Canada we have an entrepreneur who has a really good new idea, gets it rolling to a certain stage and then I sense that an awful lot sell out to a larger US corporation for whatever reason: a threat, time to cash in, "I'm tired," or whatever it is. Is my sense reality? If it is reality, what do we do about it?

Mr Lazure: It is a very good question. I do not have an answer.

Mr Phillips: Darn it, we are looking for answers.

Mr Lazure: I just have an opinion.

Mrs Cunningham: You are here as part of a very exciting, innovative centre in London, Ontario, a small business centre, and you started all this on your own. I am wondering if you would like to tell the committee about the centre itself, how it got started, whether there are government funds in it and just how it works.

Mr Lazure: The small business centre situated in London probably started around 1987. I think I was one of the first tenants there. It is funded in part by many groups, the Ministry of Industry, Trade and Technology, the city of London, the University of Western Ontario, Fanshawe College and possibly the London Chamber of Commerce. There might be others that I have left out.

It is situated in an old building on Oxford Street in the west end near Fanshawe College. It used to be an old Proto Tool plant. They cleared it all out and started building walls and different sections. There is a managerial office. George Stewart is the manager there and he takes care of tenants coming in. It is a fairly decent rent. He forces you to make a business plan and to go before a board to justify your existence in his place.

There is a library facility there. All government publications at all levels are there, different groups that can help you out with planning, computerizing your accounting and that sort of stuff. It is a very worthwhile project. I believe it is ongoing and it is full now. Businesses come out of it -- I think their maturing rate is three years; the rent gets a little higher in the third year and a little higher still in the fourth year, so it is an encouragement to get out of there and do it on your own, and it has been beneficial to us.

Mrs Cunningham: Where do you see the future of your company?

Mr Lazure: Our markets are pretty well worldwide. London is good to us because we grew out of another company. Our ties are here, certainly in the engineering and production area, but we have to keep in touch with universities. That is why we went to the McMaster University tie. You cannot be a high-technology company on your own. You have to have links with industry and universities. We are committed to Ontario. We are all Canadian in the company and want to grow here.

Mrs Cunningham: I think it is interesting that the grants that go to universities and colleges and to municipalities -- some of that money is filtered down into business. Not a lot of it; basically it is self-sufficient but I think it is a great prototype for our government to be looking at with regard to how things get started and how people get excited.

Right now we are looking at our school students. We are looking at a very large project where they can work with these small companies in order to become even more excited, so that they are not just depending on teachers in the classroom but on actual people like yourself who, I think, motivate young people. So far there is not a lot of support for that kind of thing basically because school systems are threatened by it, so we have more work to do.

I did not miss your "low taxes-cheaper electricity" shot. That is why I asked the question. We are here to talk about the competitiveness thing, but I think it is a perfect example. I certainly know that three of the ministers are coming down to visit the centre and I am very pleased that you are here today. How did you choose to come before this committee?

Mr Lazure: The president of the company was asked to talk and I am taking his place because he is on holidays.

Mrs Cunningham: You have done a great job and I think he should possibly be the great manager of Ontario because he manages like we probably would like to see this province managed. Thank you very much for being here today. I hope my colleagues will take advantage of your presentation and listen as Mr Winninger and I present your institution as a prototype of what we would like to see in training and research and development.


Mr Winninger: Mr Lazure, you seem to be doing everything right. You started your undertaking five years ago, invested in high technology and are increasing your employees virtually by the month. I understand you are turning away business because you cannot handle it all. You have been able to use government and private funding to push your project ahead. You are doing environmentally relevant things like breaking down PCBs and trying to control zebra mussels.

You seem to be a real success story and able to live with the budget and thrive on the money that is being invested in research and development; as you mentioned, the $130 million. I am just wondering how you can be so successful and vibrant and relevant and progressive and productive and competitive and other businesses are coming to us and saying, "We just can't survive in this economy you've created in Ontario." Are you not a model for these other businesses?

Mr Lazure: Thank you for the compliments. I do not know why other businesses cannot do it. I know we sacrificed both time and money to make this work. We have done that since the start and we are dedicated to a future in Ontario. I just think it is hard work that gets you there.

Mr Winninger: Do you find anything objectionable about spending money during the recession to create jobs, retrain workers and improve job skills and technology?

Mr Lazure: I do not. I think it is a wise move. We are doing similar things because the market is going to be very tough out there. When things get good we are going to be left behind if we do not, so we have to get ready for it. Canada is going to have to get ready for the Mexico free trade agreement, which is coming whether we like it or not. We definitely have to prepare for that, and the European market -- it is a world market out there. You are not competing against your neighbour any more. You are not isolated. You have to get ready for much tougher times coming.

Mr Winninger: How has the recession affected your particular enterprise?

Mr Lazure: It has been difficult, but of course we have spent a lot of time working on marketing the company and getting other customers. It is difficult but the payoffs are good.

Ms M. Ward: Thank you for your presentation. I was reading an article the other day about research and development. Everyone talks about R&D and how Canada is lacking in this area. The argument of this particular article is that our problem is not in research, that there is not a lack of basic research in Canada but really in the development and further on down the road. The ideas are there and maybe the technical knowhow but the problem is getting those ideas into production. That is where we fall down. Do you have any views on that?

Mr Lazure: I agree with that. Certainly our universities are full of basic research and many professors are involved in all kinds of very good problem-solving things. Definitely the problem is in getting that into industry and that is probably the difficulty of many research and development companies. They do not last because they cannot make a dollar on that.

Ms M. Ward: Different skills are needed, as you have proven.

Mr Lazure: It is a difficulty because every development guy wants to do the best job possible, which ends up costing a fortune, so those kinds of projects run wild without funding and will never make it to product if they do not live through that stage. We have recognized that and that is why we are definitely looking towards a production facility. As we bring our products through the prototype stage and work out all the bugs, that is the expensive part. Then you get it into production, which is another job to do, but you need to get through that. That is certainly where government can help industry bridge that gap and get into the new industries.

Ms M. Ward: How does your link with McMaster University work? Could you describe that briefly?

Mr Lazure: It is very nice. If we could have the same link with the University of Western Ontario, it would be good but maybe it is something you could look into. Industries definitely need the link with universities. The nice thing about this is that you get a university account and have fantastic facilities. You can use the machine shops -- not that we do not have our own -- X-ray technology, CAT scans and all sorts of development tools that are not available to you as a little company. It is a terrific foot in the door. I can get all kinds of tubing, Teflon tubing and all kinds of stuff there. I would have to buy $100 minimum if I bought it in any other store at a reasonable price. They are all little things but they add up to a really winning combination in making a company.

Ms M. Ward: So that is something we should pursue.

The Chair: I would like to thank you for appearing before this committee and for the insight you have given us on your company and how it is performing here in Ontario. The committee will recess for five minutes.

The committee recessed at 1057.



The Chair: We will resume with the London Chamber of Commerce. As all members have your written brief in front of them please leave some time at the end of your half-hour presentation for questions. For the purposes of Hansard, please identify yourselves.

Mr Thomas: My name is Bryan Thomas. I am the past chairman of the board of the London Chamber of Commerce and here today with me is Jim Etherington, the current chairman of the board. On behalf of our more than 2,000 members of the London business community and our board of directors, we thank the committee for this opportunity to have our views regarding the Ontario budget heard.

The London Chamber of Commerce has some very grave concerns about the Ontario budget for fiscal 1992. These concerns centre on the size of the proposed deficit. The announced $9.7-billion deficit in fiscal 1992, when combined with projected sizeable deficits in the following fiscal years, we believe will add up to financial chaos for our province.

Mr Laughren's recession-fighting approach, as he has called it, rather than a fiscally responsible one, could not be in our view further off the mark. The more the government attempts to fight this recession by injecting capital which it clearly does not have, the slower will be the recovery from this recession. Certainly the lesson learned by the federal government in the early 1970s and 1980s should be heeded. It is well known that governments which attempt to spend their way out of recessions simply leave a debt-ridden legacy.

The Ontario government is demonstrating that it has little understanding of the emerging one-world marketplace and the need for Ontario to be competitive in that marketplace. This budget is accelerating the perception in international circles that Ontario is a poor place to conduct business. By creating a business climate that is not conducive to generating a reasonable profit, the result will be less investment from companies already located in Ontario and certainly much less from companies considering Ontario as a place to invest. Down the road this clearly means fewer jobs for all.

In particular, we believe the timing of this budget is poor. The business community here in London is well on the road to recovery from the recent recession -- and you notice I said "recent"; we believe there are significant signs that we are recovering -- by means of normal economic processes. This budget has been a kick in the stomach to that recovery, in our view. Just as business confidence was growing, uncertainty regarding the future business climate has returned.

Perhaps the most startling of all is the government's apparent inability to understand the simple realities of the world of the 1990s. It seems to think we can build a wall around Ontario and exist in a vacuum. In our view, what the government must do is provide an economic environment which is conducive to attracting investment from around the world. Instead, it is virtually saying, "Please take your money elsewhere, we don't want you in Ontario."

At a time when most other governments in the world are moving towards a society of individual freedom and responsibility -- save the USSR as of yesterday, I might add -- in Ontario we seem to be moving towards greater and greater government control. In this climate business will surely look elsewhere. I think there has been lots of evidence of that since the government brought down its budget. Jobs will continue to disappear.

The London Chamber of Commerce believes the Ontario government will be forced both to significantly raise taxes in the coming years -- that is, existing taxes -- as well as to create new taxes to achieve the objectives outlined in the budget. Unquestionably, its economic growth projections are too optimistic given the aforementioned climate. Already, both individuals and corporations are taxed too highly in this province. We find it difficult to compete with companies from the US and elsewhere. Our citizens continue to shop in the US because Ontario goods are too highly taxed. Until we can bring our taxes in line with our other major international competitors we will simply continue to lose market share and I think you know what that means for all people in this province.

Those are some general comments. Let me give you some specific items contained in the budget that we have some concerns with.

1. We calculate expenditures up over 13%. Throwing money at our problems is not the answer.

2. We estimate the real deficit to be in excess of $10 billion, possibly much higher if the optimistic growth goals are not met. This is assuming normal accounting procedures are followed and capital expenditure costs for those are included in the current budget.

Mr Stockwell: Do not assume that.

Mr Thomas: All right.

3. It will be impossible to lower the deficit to $7.8 billion by 1994-95 as originally announced without significant tax increases and new taxes.

4. Incentives for investment in manufacturing will be removed in December of this year by the removal of the Ontario current cost adjustment. This will be a further disincentive to private sector productivity improvement and to investment in Ontario.

5. The budget alludes to several retroactive pieces of legislation such as the wage protection fund and rent control legislation. Ladies and gentlemen, changing the rules long after the game has been played further adds to the sense of uncertainty of doing business in Ontario. Every time the government does this kind of thing you create uncertainty and you are adding to the climate that people will continue to develop of saying, "Let's go elsewhere, south of the border." It will surely scare more business from the province.

6. The fiscal irresponsibility displayed in the budget has added a huge extra burden on taxpayers due to the loss of our triple A credit rating and, of course, the resulting significant increase in carrying costs.

7. The budget assumes the protection or creation of 70,000 jobs. We estimate that less than 1,000 of these will be new jobs; the rest are what are being called protected jobs. These few jobs will be created at a very significant cost indeed.

8. The 40% increase in surtax on higher incomes is a strong incentive to be less productive for many Ontarians.

9. The 1.7 cents per litre tax increase on gas, which has already happened, and then the same increase in January, is certainly the final blow to the trucking industry in this province and a slap in the face to all drivers in Ontario. It surely has exacerbated the existing transborder shopping problem as well.

10. The tobacco tax increase of 1.67 cents per cigarette is a further blow to an industry that is already crippled. We certainly understand the health-related reasons but on the economic side it is a blow.

11. The increase in the gas guzzler tax, which we know has been amended since it was first tabled, will still hurt area manufacturers such as the Ford Talbotville plant, although we know it will be to a lesser degree than originally announced.

12. We believe that funding for Ontario's technology fund, the R&D superallowance and the manufacturing recovery program are bones thrown to the manufacturing community, the business community. Candidly, if we thought the government would use this money to pay down the deficit we would ask you to keep it.


13. The surtax on corporate profits over $200,000 in January 1992 is an incentive to be less profitable, once again providing incentive to lower productivity rather than to improve it.

14. Changes to the Mining Tax Act will discourage new mining ventures.

15. The significant increase in spending on numerous social programs is simply not the answer to the social problems of the province. A better course of action would be to create a positive business climate which would result in growth, the creation of new jobs and more prosperity for all.

In conclusion, the London Chamber of Commerce believes that the government's goal of sustainable prosperity is simply a pipedream, there will be less prosperity for all in Ontario. If the government wants more jobs, which is one goal we certainly have in common, then they must give us the freedom and the level playing field to produce and to compete with our international competitors. Given this incentive, the business community will grow and it will produce more jobs for this province.

In short, for the sake of all Ontarians, the Ontario government should keep its hands off the system of free enterprise that has made this province prosperous, one that used to be the admiration of the rest of the world. In the strongest of terms we urge the government to rethink this budget and to submit a balanced budget, a real balanced budget for this current fiscal year. Driving us further into debt is surely neither the answer to our current economic problems nor the foundation upon which a prosperous future is built.

That concludes our formal presentation. We would be very happy to enter into a discussion with the committee.

Mr Stockwell: There is one comment from the government benches about the high credit rating and the high dollar. I would like your thoughts on my thinking that it is related directly to the amount of debt or the amount of borrowing any government or province must incur. It seems to me that if we are always going offshore to borrow we must keep our interest rates higher to get the money. If we are keeping our interest rates higher it simply drives up the value of the dollar, and by going further into debt you are simply, using some of your terms, exacerbating the high interest rate/high dollar problem.

Mr Thomas: We could not agree with you more, Mr Stockwell. We believe that at the root of all evil, in terms of our economic problems, are the high amounts of debt governments at all levels are carrying. For God's sake, let us look at the federal government, the kind of spending that went on in the 1970s and 1980s.

You know that 38 to 40 cents on every tax dollar collected by the feds is going to pay for the deficit. I know the Ontario situation is far less than that, but all we are doing is pushing the panic button saying, "If you stay on this course you will never be able to afford the payments in the future. You will be as bad as the feds." Nobody wants to be caught in that situation. Their hands are completely tied, they do not have the cash flow now to do the kinds of things they would dearly love to do for the citizens of this country. If you go on spending more than you take in you are going to drive this province into that very situation.

Mrs Cunningham: On your last statement, Mr Thomas -- either you or Mr Etherington -- my colleagues on the other side of the room are going to be absolutely furious with you for talking about balancing the budget. What kind of things, let us say to manage in a more responsible way, can the government do? What kind of solutions do you have? At the same time I would like you to talk about social programs because some of us, not myself, but certainly others, get accused of not caring. Perhaps you can talk about balanced budgets and just what kinds of things we should be looking at in the year to come.

Mr Thomas: Let me first respond by saying that we believe the balanced budget is a must across all sectors, including social programs, but also those things given to the business community. I talked about some of the incentives in our presentation being offered to the business community. Fine, cut those as well, but we would like to see cuts across the board.

In the area of social programs, I think many times the business community is unfairly felt to be heartless. That is not our view at all. We just believe in responsibility. We believe that if you have too much incentive for people to live off the social system, like all human beings we are going to try to take that course. We are very much in favour of a safety net there for people who genuinely need it. We do believe, however, that some of the requirements for getting funding from the government should be more stringent, that these things have to be more carefully looked at.

By no means are we advocating that those programs for poor people and the people who really are in temporary need of help should be affected. Should they be judiciously looked at to make sure only those that really need the support get the money? Yes, but we believe the opposite is happening: that a gravy train mentality, if you would, is being created. We are human beings; we are going to take more and more advantage of it, if we can, right across all sectors.

Jim, do you wish to comment?

Mr Etherington: Only that one of the ways of balancing budgets obviously is to reduce costs in many different areas. The cost of government is one that is of concern to all chambers in the country and to our chamber, and we look with interest at the plans by the federal government to cap increases in salaries. Over the past few years they have actually reduced the growth of government. But we do not see in the current budget any intention to reduce the size of the Ontario government or to cap the increases in costs of the provincial government. We think that was something that was missed and it should have been in there.

Mrs Cunningham: I have recently returned from Victoria, British Columbia, where there were great discussions about which countries we were going to be able to borrow from. The Japanese community was well represented and informed us that they own about $55 billion. I am just wondering what your thoughts are when it comes to interest rates. We keep hearing the criticism. How does it work? Would you like to enlighten us as to our federal debt, and what can be done about it other than cutting it and getting rid of it, and where do we get the money from to pay it back?

Mr Thomas: From taxpayers ultimately, and that is the real crime of what is happening at the federal level and why we so strongly believe the province has got to learn from that lesson in history. Clearly they cannot handle the amount of debt; they are going to have to keep borrowing.

If you look at a straight operating cost, minus the feds' carrying costs of their very large, approaching $400-billion debt they actually have about a $10-billion operating surplus, but it costs them about $40 billion in interest, thus the $30-billion publicized figure you hear so much about. That is going to happen to Ontario if we keep spending, spending. The only way to pay it is to borrow more. Sooner or later somebody has got to pay for it out of operating costs.

Mrs Cunningham: How do our interest rates go down then?

The Chair: Excuse me; I have got to go on to Mr Jamison.

Mrs Cunningham: I can fit it in somewhere else.

Mr Jamison: Thank you for taking the time and making the effort to come here today to make your presentation. You have given a very specific, physically responsible approach to the whole question of the budget here today, although I would like to point out that this government had an $8-billion shortfall without any new spending, and we are, in fact, in the worst recession in 50 years.

You have been in possession of the budget since, I would imagine, late April and obviously you have been studying it and you have made a number of recommendations in a general sense to us. You have also indicated in your document that, and I will read it back to you, "In the strongest of terms we urge the government to rethink this budget and submit a balanced budget for the current year."


It leads me to a question and I have asked this same question to a number of your colleagues who have represented chambers of commerce. I was saying that you have been in possession of the figures and so forth and you are calling for a balanced budget in the current year. It would mean a lessening of expenditures at this point of $9.7 billion. Seeing that you have the information and have had it since April, I would like you to be specific in where you, as a chamber of commerce, feel that $9.7 billion worth of cuts can be made.

Mr Thomas: I think, in the same answer I gave to Mrs Cunningham, that right across the board, in all areas, we are calling for the government to cut in all departments. We would like to see you start with reducing the number of civil servants, reducing the bureaucracy, all departments.

Mr Jamison: I understand that. I am sorry if I have left myself vague because I am asking for specifics here.

Mr Thomas: I am giving you a specific answer. You can take 10% right across the board in all departments. You see, governments love to grow. They love that power, but this money belongs to the people, all right? And the people are fed up with paying taxes right across, municipal, provincial and federal. What we are saying to you is start that ball rolling in reverse. It is a great big snowball rolling down the hill and if you do not start rolling it back the other way, it will keep getting bigger and bigger. Start with the business community, start taking some of the stuff away in your budget that you are offering to the business community. We will be first in line to take our cuts, but we want everyone else to take their cuts as well.

Mr Jamison: You are talking housing, you are talking everything.

Mr Thomas: Everything.

Mr Jamison: Okay. Would it be fair to say that the transfers that were paid to municipalities, which reflect very directly on your own members in the area of municipal taxes, is an area that should be cut by 10% and shifted again to the municipalities, because you have just finished saying, "across the board"?

Mr Thomas: I am very much aware that the federal government has reduced its transfer payments to the province and the province is therefore forced, unless it wishes to really increase taxes, to reduce payments to the municipalities. Yes, we are calling for all three government levels to stop having that ball get bigger and to start having it get smaller. Yes.

Mr Jamison: So you are asking for a 10% cut to municipal transfers. I just want to be clear on that.

Mr Thomas: As long as all other areas are also receiving cuts. I am not looking for selective cutting, Mr Jamison. We are looking for cuts across the board. So if you are saying, "The London Chamber of Commerce is in favour of cutting in one specific area," no; we are in favour of cutting in all areas.

Mr Jamison: Education?

Mr Jamison: Yes. Across the board, absolutely in education. We have made this presentation to the London board of education. They are also on a spiral of spending and an environment of increased students and less bucks coming from governments. They have to cut back too across the board. Yes.

Mr Winninger: Certainly the civil servants are productive members of the economy. They contribute to the economy in terms of the taxes they pay, and some people have argued that the US is following us in coming out of this recession because of the lack of public sector spending; but aside from all of that, in the short term, are you going to have hospital bed cuts? Are you going to have schools closed?

Mr Thomas: Yes.

Mr Winninger: Are you going to see municipal property taxes for people on fixed incomes go up if we adopt your model?

Mr Thomas: You see, we are all living beyond our means. That is exactly what we are saying. It is money that we do not have that you are spending. You are mortgaging the future to subsidize today's living. That is what we are opposed to. Yes, across the board, we all have to learn to live with less because it is not there.

Mr Winninger: It seems to work in Germany.

Mr Kwinter: Mr Thomas, in representations that have been made to us virtually every chamber of commerce has echoed to some extent what you have said. On the other hand, when labour and some of the other groups make their point, you are perceived to be the enemy. The feeling is that you are not paying your fair share of taxes, that in fact the taxes you are paying as a proportion have been reducing regularly. We heard that this morning. The feeling is that if business and the wealthy would pay their share, everything would be fine. What do you have to say about that?

Mr Thomas: Let me just say that the greater question is ability to compete. You can go ahead and put greater taxes on all the corporations in this country and in this province if you wish; all they will do is go elsewhere where there are safer tax havens, frankly. If you do not make Ontario a good place to make a profit for companies, they will go elsewhere. Candidly, that is what they will do. There will be those that stick around because they believe in this place. Like it or not, business is all about making a profit, and if they cannot make one in this province, they will go elsewhere.

Mr Etherington: Just to add to that, in my other life I work for London Life Insurance Co. We provide group benefit policies to about 16,000 businesses in Canada. The greater percentage of them are in Ontario. We are one of the first to be told if a company plans to cease doing business or to reduce its numbers of employees. We started noticing in January a dramatic increase in the numbers of companies that were notifying us that they no longer plan to continue doing business in Ontario. One of their first questions was: "Do you have a firm in Tennessee that you can refer us to? Do you have a firm in Buffalo you can refer us to?" So we started going back and questioning them: "Why are you closing down? Is this the free trade thing? What is kicking in here?" The answers were always three: increasing levels of taxes, increasing levels of government bureaucracy and increasing intrusion by the provincial government, and that is why they are leaving.

Nothing conclusive, of course. I know that the province of Ontario is doing studies, Stats Canada is doing studies, trying to isolate the absolute numbers of these movements taking place and the reasons why. We are convinced that the reasons we are hearing are the right reasons.

Mr Thomas: It is not just the companies; the citizens, the same people who are in here complaining to you that the corporations are not paying their fair share of taxes are off shopping in the States every weekend because they do not want to pay their taxes as well. Candidly, for all people, for so-called rich people, the poor people and everybody in between, we have to have a system here in which taxes are reduced so that they will buy products that are made in this province; they will not go across the border; companies will not be shipping off to Mexico or the US or elsewhere. That is what makes the world tick, folks.

Mrs Sullivan: I would like to proceed with another question. One of the things you have alluded to in your brief relates to the confidence for future investment that is undermined by this budget. You have mentioned a couple of areas where there has been enormous uncertainty created by this budget and by policies that flow through government action as a result of the budget. You have mentioned that the OCCA was changed in midstream without notice and without consultation and has directly affected manufacturing capital investment. You have talked about retroactive legislation in housing and labour.

One of the other areas that I see as environment critic for our party relates to environmental legislation and regulations which have either been postponed -- whether it is pollution control or waste management issues -- or there has been such uncertainty created that business people are not making decisions about adding pollution control equipment or their investment capital has been taken right off the table. I wonder if you could talk about how rules changing in midstream and the uncertainty that it has created has affected business and industry in your community.

Mr Thomas: Absolutely. Nothing could be more devastating. The business community thrives on knowing what the future is going be all about. They are not going to spend millions of dollars on new capital projects or get into whole new areas of any other kind until they can count on the future, 10 and 20 years down. That is how they get their money back. Take a look at what is happening in the stock markets and financial community today across the world because of what is happening in Russia. The instant things are uncertain, the business community stops everything because they know it takes 10 and 20 years to get their money back. Nothing could be more injurious to business than to change the rules retroactively, because suddenly you create a climate in which they say: "My gosh, I better not do this in Ontario. What kind of a law are they going to come up with now that will catch me for something that I thought was legal last year and now they are saying it wasn't?"


Mr Etherington: And new costs creep in. One that you perhaps are not familiar with is part of the Ontario auto insurance act which was passed last year. There was a clause put in -- and Mr Kwinter would be familiar with this one. To fund the cost of the new Ontario Insurance Commission there would be a levy placed on insurance companies. At that time it did not apply to life insurance companies, it only applied to the auto insurance companies as subject to the act.

In January this year the life insurance industry was notified that they too were to pay costs towards the Ontario Insurance Commission retroactive to last June, after budgets, of course, had been set for 1990 and the costs of product had been passed on to our customers. You add that to a number of other things and the point that we make is, please do not do that any more. It is difficult enough to stay in business without any more of this stuff.

The Chair: Your comments will be noted.


The Chair: The next group is Rev Susan Eagle and Rev Peter Scott. For the research staff, could you say if you are coming as individuals or representatives of the United Church? You have 15 minutes for your presentation. Leave some time at the end if you wish for questions from the three parties. Identify yourself for the purposes of Hansard.

Mr Stockwell: I take it you are Peter.

Mr Scott: I am Peter Scott. I will start the presentation. We represent today the London Conference Church in Society Committee of the United Church of Canada. Just quickly to explain what that means, the London conference of the United Church covers eight counties in southwestern Ontario plus the district of Algoma. Only God knows why the district of Algoma is connected to the eight counties down here, but anyway, eight counties starting with Essex, going west to Oxford, Perth, Huron, Lambton, etc, that chunk of property.

We are here to present a position based on policy of the United Church of Canada and the policies of the London conference. Those policies are arrived at through a representative democracy similar to the governments of Ontario and Canada. Local congregations elect representatives to presbyteries. Those presbyteries elect representatives to the annual meetings of the conference and the conferences elect representatives to the national body. Those elected representatives formulate the policy for the church.

I want to distribute some copies of policy on economics, both the national policy of the United Church of Canada and the regional policy of the United Church of Canada, one on one side, one on the other, that has been formulated over the last 59 or 60 years and reiterated from time to time. This is not to say that every member of the United Church would agree. As in any democracy, there are those who agree and those who disagree, but in the method that the church has chosen to formulate its policy, these are the policies that have been formulated by that procedure as I have outlined it.

I am not going to read what you have got; I am sure you can do that while I am talking. Being a preacher, I know people read while you talk. I will talk and give you a chance to read the stuff. During those years the United Church has gone on record calling for some of the following things that you will find outlined there: guaranteed annual adequate income, fair pay for a day's work, a just sharing of the country's resources, progressive taxes based on income and wealth rather than on consumption, full employment and job security. That is national policy. It has enunciated that and reiterated it over and over again since 1932.

Locally during the last 10 years meetings in the London conference have voted to support the social assistance rate being brought up to at least the poverty line and increases in the minimum wage so that those working at least make as much money as designated by the poverty line.

Ms Eagle: We make our presentation to you today with two very clear perspectives. One, that this is a tough economic time, that tough decisions have to be made economically; and second, that Canada and Ontario are a resource-rich land with much more than enough wealth to provide an adequate income and lifestyle for all its citizens.

First, the economic reality: We acknowledge that the provincial government has a very difficult task in making budget decisions. Much of the present economic problem is a result of the current recession, cutbacks in federal transfer payments and the very unwise federal decision to give a further blow to the Canadian economy through the free trade policy and the GST. These problems have not been caused by the provincial government, so we sympathize with the provincial government in the decisions that it has to make.

On the other hand, we recognize that this is a country with resources and opportunities. As a church, our spiritual vision offers us the hope of a future with full employment, community-based economic development, adequate and secure incomes and shared benefit of resources that are protected and renewed, not squandered and exploited. Therefore, as a United Church delegation, we applaud and encourage those budget initiatives that are the means to support that vision.

Mr Scott: We affirm the philosophy underlying the provincial budget, at least I will quote a part of it that we want to affirm anyway, where it says on page 86: "The central goal of the Ontario government's economic strategy is sustainable prosperity.... A prosperous society must provide high levels of employment in well-paying, high quality jobs. Prosperity must be environmentally as well as economically sustainable. It must also be socially sustainable, which requires that the costs and benefits of economic change be shared fairly."

We affirm that. We affirm the budget's wage protection fund in this light and the increased spending for retraining and literacy programs, the funds directed to interest relief for farmers and the settling of land claims for aboriginal peoples. As the United Church, we support the additional initiatives of 10,000 new non-profit and co-op housing units and the additional funding for social assistance reform. We support the decision to increase the deficit rather than cut social programs during times of extreme economic hardship in the province. We do not see the advantage of making things worse.

Ms Eagle: We have said the things that we want to affirm, but there are a few other things that we would like to say that are concerns. As a national United Church, we are on record as supporting economic policies which place the needs for employment and wellbeing of people and sustainability of communities ahead of the free movement of capital. We therefore call on the provincial government not only to espouse the philosophy but to put in place economic policies which make the eradication of poverty and homelessness priorities in Ontario spending and social programs. I say that from the perspective too of being a community development worker working with families that are on social assistance and knowing that people do not make it to the end of the month on the incomes that they have.

Specifically, to put those policies in place would mean increases in social assistance that would bring rates to at least the poverty line and indexed to the cost of living. We just heard a presentation from a group that talked about some kind of gravy train. I do not know what kind of world they are living in, but there is no gravy train for those who are on social assistance. Social assistance is still way below the poverty line. Increases in social assistance have been to deal with the increased numbers, but they have not increased the number of dollars in people's hands who are on social assistance.

Further increases in minimum wage, fairly and justly recognizing the labour of workers but also addressing the gap that is continuing to grow between the richest and poorest of Canadians and Ontarians.

Another recommendation would be further increases in the provision of not-for-profit and co-op housing to address the real crisis in housing, one that is keeping people on waiting lists for two years at a time while thousands more are engaged in daily battles with cockroaches and landlords, not necessarily in that order.


We also propose a further involvement in job creation programs but through community-based economic initiatives that allow for new models of ownership and control including private, government, joint venture, employee and community owned.

And another recommendation that we make is a twinning of social policy and economic planning through cabinet committees, interministerial initiatives and with the inclusion of community people in that decision-making.

I want to say a word about revenue because I am sure someone is going to say, "Well, if we are going to do all that, where is the money going to come from?" Certainly, it should come from the rich, especially the ones that are getting richer all the time. We affirm the tax changes that have been made in the budget. The raising of taxes for those with incomes over $84,000, the dropping of taxes for those with the lowest incomes. We affirm the initiative the government has taken in setting up a tax reform commission, but we remind the government that the United Church, for many years, has been on record supporting progressivity of taxes based on income and wealth, rather than on consumption, so we would not support further increases in sales tax. We support the elimination of tax avoidance, the placing of a greater share of the tax load on corporations, and since 1982, our regional United Church conference has supported a policy of an excess profits tax on banks.

These are the matters we wish to bring to the committee. The two of us are here also as people who represent not only the United Church but those who personally work with those who are hurting, those who are struggling. We, through the church, have been pushing for increases in food banks, but knowing that is only a Band-Aid, that at some point somebody has to bite the bullet and take seriously the plight of the thousands of people in this province who are going down the tube.

We are a resource-rich country. We have the means to provide that kind of lifestyle for people, if we decide it is a political priority.

Mr Sutherland: It is a pleasure to see both of you here. I know both of you have been very active in the community in dealing with housing issues, poverty issues.

You were here for the previous presentation. They indicated that we should have balanced the budget. Could you give us what you think the impact would have been with the people you deal with on a daily basis if we had a balanced budget as the presentation had asked for.

Ms Eagle: Genocide. You would simply have people dying. I mean, you have people now who cannot feed their children at the end of the month. And also, if you do not provide the kind of income that people need in the first place to feed their children, then down the road you are paying huge increases in health costs, and all kinds of other costs to make up for the damage you have caused. There is no way to make up for the damage done to children who cannot eat, and I see them daily. They are not a figment of the imagination at all.

Mr Phillips: Back on the revenue side, what worries some people is the country: The federal government is bankrupt; like it or not, it is bankrupt. And there are some who worry that even to sustain our current level of services may be difficult unless we get economic activity going. I know it is fashionable to say, "Tax the corporations." But if you double the corporation taxes, take twice as much from them, it is still only, perhaps, $3 billion. Double the taxes and I am not sure that many corporations are left here. No one disputes the immense needs out there, but is the United Church at all concerned, perhaps, about the fundamental economic future of the country, and any recommendations you would have for us if you are concerned? If you are not, fine.

Mr Scott: Of course we are concerned about the economic future of the country. But economics is not separate from the human future of the country and the environmental future of the country, and we think that those things all have to be connected and worked on together.

Mr Phillips: Of course.

Mr Scott: And what we hope, what we pray for as a church, is that we do not lose the vision that we think this country once had of a place where we care for people -- not just poor people, all people; and that business and industry and everybody would share that vision and work toward that same goal. We are not discounting business or the needs of business. We want those people to be treated like people and have them treat everybody else like people.

Mr Stockwell: It is hard to know where to begin, actually. How can you suggest to me -- for social development and economic fairness or vision, I forget the words you used -- that you would increase the tax on corporations who feel they are being overtaxed right now? Create a tax that if you make too much money and become too efficient, you get taxed? Do you think, maybe, you are taking the incentive out of the economic, the free-market system to do business here?

Ms Eagle: No, not at all. I think if you look at some of the material that is being produced by the Fair Tax Commission, you will find they have well documented the fact that it does not take incentive away from business to be taxed. Neil Brooks has prepared numerous papers looking at just exactly that. To suggest that corporations are being unfairly taxed is not realistic.

We have a growing gap in this country between rich and poor. That also has been well documented. Those of us who have been out on the street for a number of years have seen it, but now the economists are documenting it. In the last 10 years Canada added eight more billionaires. We have one of the highest billionaires per capita rate of any western country. There is something very, very wrong with people who have affluence crying, when there is none to go around for those who cannot eat at the end of the month. Personally, I am getting awfully tired of being told that rich corporations cannot afford to share the wealth that they have unfairly taken from the rest of the members of this country.

Mr Stockwell: I guess I am personally getting offended by people suggesting that people who make money have unfairly taken it.

Ms Eagle: They have.

Mr Stockwell: That is bogus in my opinion and an argument that does not even deserve comment. Not being realistic? I think you are the one that is choosing not to be realistic. The next question --

The Chair: No, there is only one question there. I am sorry that the time has run out.

Mr Stockwell: Unfairly taken! What a bunch of bunk.

The Chair: We appreciate your presentation to this committee.

Mr Stockwell: It is like they stole it.


The Chair: The last group for this morning's session will be the N'Amerind (London) Friendship Centre. For the purposes of Hansard, please indentify yourself. You will have 15 minutes for your presentation. Try to save some time at the end, if you wish, to have the committee ask questions.

Mr Dockstader: My name is Thomas Dockstader. I am the executive director of the N'Amerind Friendship Centre, or the North American Indian friendship centre, in London. We are one of 24 native friendship centres throughout the province of Ontario and we belong to what is called the Ontario Federation of Indian Friendship Centres.

We are the largest native service agency in the city of London, meeting the needs of native people in the areas of community liaison, community development, day care, children's programs, criminal court work, family court work, and starting this fall, our own secondary school.


We support, and in most cases we assisted the startup of, all six of the following native agencies: Atenlos Native Women's Anti-abuse Centre; No Kee Kwe Occupational Skills Development Inc.; Native Inter Tribal Housing Co-operative; First Nations Housing Co-operative; and two native women's organizations in London.

We have a complement of 20 full-time staff members. With our summer youth employment programs, we employ up to 15 part-time staff members. Our core staff, the administrative arm of N'Amerind, employs six staff members, with funding coming from the Secretary of State of the federal government. Our program staff receive funding from two primary ministries of the Ontario government: the Ministry of Community and Social Services and the Ministry of the Attorney General.

For our newly-created secondary school, we are in a partnership agreement with the Ontario Federation of Indian Friendship Centres, the Ontario Ministry of Education, and the Board of Education City of London, under the direction of the secondary school pilot project of the Ministry of Education and the Ontario Federation of Indian Friendship Centres. Funding for the school has come from the London board of education and our own funding from the N'Amerind Friendship Centre, with a small grant from the native community branch of the Ministry of Citizenship, and that again comes through the Ontario Federation of Indian Friendship Centres.

N'Amerind is directly accountable to the entire London native community, which sanctions all programs and services annually with the election of a 12-person board of directors. Our annual operating budget is just under $1 million a year.

We are here today to speak in support of the London native community, which has a total population of approximately 7,000 native people. While many of us have citizenship in the eight first nations of southwestern Ontario, we are also comprised of Metis people and citizens of many other first nations, Inuit people, and what you call the non-status native people.

At N'Amerind we make no distinction among native people, except to state that we will serve all native people in London regardless of any government designations. Our people will eventually choose for themselves how they wish to be represented politically. That is for them to decide. The delivery of services is what our people expect of us at N'Amerind. All of our programs and services started because our people wanted and needed these programs and services. When other agencies became necessary, our people expected N'Amerind to help and assist in whatever way we could to create those agencies.

We have been in existence for 16 years. Today we are still in the process of creating new entities to serve our people. We at N'Amerind applaud the government of Ontario's continued and increased support for our people who have their homes in the city of London. We must implore you, though, to share more of the revenues which derive from our shared inhabitation of the land you call Ontario.

We are pleased about our shared experience called the Sweetgrass Secondary School, but N'Amerind had to borrow money to pay for the portable schoolroom which will shortly house 25 native students. To date, the Ministry of Education has contributed quite a bit of free advice, but no capital dollars and no operating dollars. We do not wish to dwell on the negative, but how does anyone say positively that native students attending schools in the London city schools have a dropout rate of 80%? We believe that Sweetgrass Secondary School will achieve better results. But it also takes dollars to build and operate a school.

We anticipate that with the purchase of the building, which we have done, plus the site plan preparation, which the city has imposed on us, we will require $150,000 in capital. We will need at least two native education support counsellors, plus operational support, totalling $200,000 annually.

The Ministry of Education simply has to do better. Before N'Amerind and our two sister friendship centres in Sudbury and Fort Erie even got consideration for funding for our secondary schools, the Ministry of Education committed over $500,000 of the $1 million in the demonstration pilot project fund to first nation territories.

We have no quarrel with first nation territories. We have a problem with designating your favourite Indians.

Let N'Amerind be clear here. We want Ontario to stop making the mistake of ignoring the needs of urban native people who, by the way, make up over one half of the total native population in Ontario.

In London alone, the aboriginal population is more than the combined population of all eight southwestern Ontario first nations. We must not be overlooked in the grand scheme of the Ontario government's statement of political relationship with first nations.

Likewise, our people are suffering from the lack of opportunity, and are in need of healing from their own people. So while the Canadian government discontinued our drug and alcohol abuse counselling unit, the government of Ontario has to consider what it costs to house and feed a native man or woman in its prisons, compared to funding N'Amerind and other friendship centres to help prevent our own people from sinking into despair that ultimately puts them in your costly and non-rehabilitative jails. Our drug and alcohol program would cost $90,000 annually and we pledge to serve our people and your people equitably and justly.

Finally, we have a joint proposal for consideration for your government from N'Amerind and Atenlos, the native women's anti-abuse agency. We propose to operate a native inmate liaison program totalling $129,000, to help our native brothers and sisters who are incarcerated have hope for the future so that we can save you some space and money by reducing the native population in your jails, which our people now inhabit to the point of over 50% of your jails' population. We can help our own people with trained native professionals in all fields, from administration and management to counselling to education to court workers and more.

If you are committed, as you say you are, to aboriginal peoples' right to self-determination, you can share the revenues which you reap from the resources which we share with you and dedicate those revenues to funding the efforts of native social agencies such as N'Amerind.

On behalf of N'Amerind Friendship Centre, we wish you the wisdom which the creator gave all of us to see some value in what we have shared with you.

Mr Kwinter: I just wanted a clarification. On the bottom of page 5, you say that the native population makes up over 50% of the total jail population. Is that accurate?

Mr Dockstader: Yes, it is.

Mr Kwinter: That is throughout Ontario?

Mr Dockstader: Yes. I believe 52% is actually what the stats point out. Your own government did a survey and looked at the population.

Mrs Cunningham: Thank you for your brief. It was most informative. You have updated me considerably as to the centre and what you are doing. Maybe it is off topic but I am wondering how successful your Sweetgrass preschool program has been -- the day care centre.

Mr Dockstader: We now have space for 32 kids. What separates it from other day cares is its unique resource centre, where the kids are taught their traditions. This is integrated into the system so that, in addition to them having their basic needs taken care of, they are also reinforcing their identity. Currently, Ojibway and Oneida are taught to them.

Mrs Cunningham: How many children are in there now?

Mr Dockstader: There are 19 right now.

Mr Winninger: You heard perhaps the chamber of commerce here earlier suggesting that we can wipe out spending, we can wipe out the deficit, we can wipe out the $48.5 million that we have allowed in the budget for settling land claims, for negotiating self-government and improving the quality of life for our reserve and off-reserve urban people.

I am just wondering, in terms of a statement of political relationship, what good that is if you do not get some kind of social and financial support to build your economic infrastructure for improving the quality of life of native people. Where would you be in terms of our recognition of your sovereignty and building up a state of independence if we were to wipe all that spending out?

Mr Dockstader: We have been suffering that from the federal government also which argues the same basic thing: "Well, we can do all these wonderful things," but the bottom line is that when socioeconomics are affected, it affects our people first.

Whenever it comes time to talk about sovereignty, self-determination and self-government, our people are talked to last. In this particular case, it was very courageous on the part of the Ontario government to take the stand which it basically did, which was to support our people in the times when you also have that $9.3-billion deficit. That indicates to us there is some hope for our people in that we are mentioned first and foremost among top priority in the Ontario province at a time when it is not in your best interests to do that. It is probably relatively unprecedented and we are pleased with that initial effort.

However, there is obviously a long way to go because we need the support not only of government, we also need the support of industry, we need the support of chambers of commerce, to understand that our people are so far down on the socioeconomic scale that we have kids in this city of London living in the sewers. If you talk to me about your socioeconomics and how that is eventually going to lead to a wonderful re-emergence of business, more jobs and things like that, I will tell you that in good times and in bad times, we are still at the bottom and we need help. We need all the help we can get.

The Chair: Thank you for appearing before the committee. This committee will recess until 1 o'clock.

The committee recessed at 1203.


The committee resumed at 1305.


The Chair: We would like to call on the United Electrical, Radio and Machine Workers of Canada to come forward. You have one half-hour. Try to leave a few minutes at the end for each party to ask questions on your brief. If you would identify yourself for Hansard, then you can begin.

Mr Barry: I am Dick Barry, national president of the electrical workers union. Grigg Snyder is chief steward at the ABB plant here in London. Jim McCurdy is president of the local here in London at the ABB plant and a member of our national executive board. We represent the United Electrical, Radio and Machine Workers of Canada.

We are a national Canadian union of some 12,000 members, most of whom live in southern Ontario, but with membership in Quebec and Alberta as well. UE represents workers in the electrical and electronic industries as well as a broad range of other manufacturing segments. Our members produce products ranging from small and major appliances to heavy electrical industrial equipment, small to heavy electrical power equipment right from switches to large motors, turbines and power transformers.

In fact, our membership here in London at ABB produces a range of electrical power transformers and capacitors for industry and Ontario Hydro. We also represent workers producing electrical wire, communication equipment, air conditioning, foam and plastic products, as well as steel products from auto parts and drive shafts right up to the largest diameter pipe for the oil and gas industry.

The Ontario government had a choice in the last budget. The options were clear: to back the monetarist, anti-working people policies of the federal government or to provide some relief from those policies. We believe the government has made the right choice: to fight this made-in-Canada recession and provide some small measure of protection for the workers who are the victims of both this cyclical downturn in the economy and the federal government's disastrous economic policies.

We think this budget, and in particular the deficit, must be seen in the context of the current economic situation. This recession is undoubtedly the worst to hit the province since the Depression of the 1930s. Job losses in the province have totalled 214,000 in the first year, two and a half times the number of jobs lost in the first year of the 1981-82 recession. Ontario's rate of job loss has been over twice that of the national average. In fact, Ontario job losses account for 80% of the national job losses.

Unlike previous recessions, this time the majority of the job losses are permanent and due to the decisions of United States corporations to partially or completely close down their operations here on a permanent basis. The manufacturing sector has been particularly hard hit.

This comes as no surprise to us, since we, along with the rest of the labour movement and our allies, predicted that the free trade agreement would have that effect. In the absence of tariff barriers and faced with an over-valued Canadian dollar, the head offices of many transnationals have reduced or eliminated their Canadian operations. They have relocated their production closest to their largest market or in places such as the Sunbelt or Mexico where they can profit from subsistence wages.

These pullouts have had predictable effects on many domestic small and medium-sized businesses. Business bankruptcies during the first five months of 1991 were up 116% compared to the same time in 1988, prior to free trade.

At the same time as they have created the conditions for massive job losses, the Tories have also cut back on transfer payments to the provinces. This year alone, the capping of transfer payments will cost Ontario $1.6 billion in direct revenue lost. As well, they have cut back the UI program so that many more people must resort to social welfare much sooner, after being laid off work, than before. The net effect increases the burden of social spending borne by the provincial government precisely at the time when provincial tax revenues are dropping due to the unemployment creation policies of the federal government.

The electrical products industries, in which most UE members work, have been particularly affected by the recession and the combination of economic policies imposed by the federal government. According to Statistics Canada figures, since June 1989 employment in Ontario's electrical products industries has dropped from about 81,600 people to 61,300, a drop of about 25%.

Due to the high value for weight, the small appliances segment is particularly vulnerable to free trade, since transportation costs do not significantly inhibit relocation of production. The figures above bear out this explanation. Similarly it is no coincidence that our wire and cable segment is not suffering as much, since wire is relatively heavy for its value; therefore, transportation costs significantly inhibit companies from taking full advantage of their liberties under the free trade agreement.

The job losses in the major appliance sector are due primarily to the high-interest-rate, monetarist policy of the Tories. About 40% of the market for new major appliances is tied to housing starts, which are highly sensitive to interest rates. Replacement of existing appliances accounts for the other 60%, and there too families hesitate to borrow the money needed to replace worn-out refrigerators and stoves when interest rates have been so high.

As well, imports as a percentage of the Canadian market have nearly doubled in the last two decades. The federal Ministry of Industry, Science and Technology estimated prior to the FTA that due to the shorter production runs in Canada, a tariff of 12.5% would be necessary to allow the Canadian industry to survive. With the lifting of the tariffs, job losses have occurred as predicted. On the other hand, the electrical industrial equipment segment has suffered somewhat, but not to the same degree, due to the relative stability of its major customer, Ontario Hydro.

We can see a definite pattern of job losses clearly related to the free trade agreement and to the monetarist policies of the Tories.

The recent job losses forced on working people in this province by the Tories must be put in the context of the previous massive job losses during the 1980s, stemming from corporate restructuring in the two companies then dominant in the electrical industry in Canada; that is, General Electric and Westinghouse. GE, for example, employed some 19,767 Canadians in 1979, the year its strategic plan was adopted. By 1986 this number had fallen to 11,480 and the most recent figure available is 9,911 for December 1990.

GE was not alone in reducing its workforce in Canada. Robertshaw, Sunbeam, Westinghouse and Fedders are but a few of the companies which have taken advantage of the unfettered access to the Canadian market granted them under the FTA to move their production to such places as Kentucky, Tennessee, the Mexican Maquiladora and Haiti.

It is in this context that UE looks at the budget of the New Democratic government of Ontario. We are pleased to say the budget does maintain a minimum level of social spending and provides some modest level of stimulus to the economy. We do not think the deficit is excessive, given the economic situation and Ontario's long-term economic potential. In fact, the deficit is low, relative to the share of spending, share of GDP and on a per capita basis, compared to other recent budgets of Conservative governments.

As a share of spending, Ontario's deficit is 18.6%, compared with 31.9% for the Alberta 1987 budget, 30.5% for the Saskatchewan 1986 budget and 20.2% for the federal 1991 budget. As a share of GDP, again, Ontario's deficit, at 3.4%, is lower than Alberta's was in 1987, which was 6.9%, or Saskatchewan's in 1986 at 7% or the last federal budget at 4.5%.

On a per capita basis, it is substantially lower than the previously cited examples of budgets in those Tory jurisdictions.

In effect, only about $640 million of the current projected deficit is a result of increased spending. The rest results from a combination of decreased tax revenue, both personal and corporate, and increased social welfare and health costs related to the recession.

Obviously, the provincial government cannot alter the decline in its tax revenues from personal or corporate income taxes without imposing major new taxation, something we feel would be counterproductive during a recession. Therefore, those who decry the budget deficit are essentially calling on the government to cut back on social spending.

To these corporate midwives of misery, we say, "Where would you cut?" Social welfare spending, which at its current levels only barely succeeds in protecting those most vulnerable from starvation or homelessness, and sometimes not even that? Or would you hack away at health care, thereby further eroding the quality of health services available in the province? Or would you have us cut further into education?

I know the corporate sector, in particular the corporate leaders who sit on the boards of governors of such universities as Queen's and Western, has been pressuring the government for some years now to increase university tuition, perhaps even create a two-tier university system similar to the US. Of course, they always add that supplemental student aid will be provided to "those in need." No doubt secondary education would be next on their list of targets.

We hope the government will continue to resist those suggestions and keep post-secondary education both accessible and affordable. It is important to working people and their children that a clear message be sent that post-secondary education is not only for the wealthy, and maybe a few token members of the deserving poor, but for anyone who has the desire for such education and the ability to participate in it. We support the Ontario Federation of Labour call for the government to eliminate tuition fees and to provide grants for necessary living expenses so that students do not graduate burdened by debt.

We are also pleased to see that the government has allocated some money for social assistance reform, which is urgently needed. Given the federal cuts to UI, more and more of our members have been forced on to the welfare rolls. Although the amounts allocated for reform are not huge, we know they are significantly more than what would have been allocated under either a Tory or Liberal government faced with the same situation.

UE members are also pleased to see the increased allocations for shelter beds and services for battered women and victims of sexual assault.

The allocations for pay equity in the public sector are also a welcome indication that the government is proceeding on its promises of equality for women. We hope the government will ensure that the private sector proceeds with pay equity promptly.

As well, the government's decision not to cut back public service jobs and salaries sets an example to the private sector. It is a welcome indication of the NDP government's commitment to the working people of this province that it resisted the urgings of the corporate sector and their poodles in Ottawa and refused to dump the burden of the recession on to the backs of workers.

Our members are particularly pleased by the government's allocation of $700 million for an anti-recession program. The construction of roads and upgrading of public buildings will generate jobs in the electrical products industry.

We are also pleased to see the $48-million allocation for the Let's Move rapid transit program for the greater Toronto area. We anticipate this will improve the demand for electrical equipment, both directly as inputs to new vehicles and transit facilities and in the construction and manufacturing processes.

The $57-million manufacturing recovery program for small and medium-sized firms will also have a welcome impact on jobs in the electrical products industries, since many of the surviving Canadian-owned firms are small businesses.

Of particular significance to our members was the announcement of the 10,000 new non-profit housing units. Although by and large UE members do not live in non-profit housing, we expect this housing creation activity to bolster the demand for the products our members make -- motors, generators, electrical appliances, etc.

We would like to see the government maximize the job creation impact of its spending on housing by establishing a strong Canadian procurement policy for the electrical appliances, fixtures and wiring which goes into housing, as well as the machinery used to construct it. If the government stipulated that the appliances had to be energy-efficient, that would likely stimulate some specialization in that production at the Camco plant in Hamilton, as an example. This would also help position that plant to meet the anticipated increase in demand for energy-efficient appliances in the North American market as various jurisdictions take tougher energy conservation measures.

If the government is serious about promoting this type of industry, it should announce such a procurement policy as soon as possible, since the non-profit housing construction plans will have to take into account the fact that energy-efficient appliances -- for example, refrigerators -- require a differently shaped opening in the kitchen.

We are pleased to hear the Treasurer announce that health care and education spending would be maintained. In the health care sector, similar to the housing sector, we think the government should maximize the job creation potential of its own spending by having a strong procurement policy regarding medical devices. Both Quebec and the Maritimes have more aggressive programs to support the medical devices industries than does Ontario.

There is a total Canadian market of at least $2.5 billion, according to 1989-90 figures, in the medical devices sector, of which at least $1 billion is located here in Ontario. On average, 80% of this is spent on imported medical devices and equipment, and of that 70% is from the United States. That is a large chunk of money being spent which creates jobs in the US that we urgently need here.

Even if Ontario medical devices industries were to meet only the Ontario domestic market -- that is, not producing for other provinces or export -- we would stand to gain about 7,000 totally new manufacturing jobs as a result of such a procurement policy in Ontario. As well, other significant indirect job creation spinoffs from this expansion could be expected.

We have the skilled workers, many of whom are now unemployed. We have most of the necessary raw resources. We have the market base of a well-funded public health care system which is responsive to government decisions. We can expect an expanding market for medical devices due to the following factors: the aging population, the AIDS crisis and the trend to alternative site/home care. Why not make the effort to get the medical devices industries off the ground here in Ontario?


We think the steps involved would include the following:

1. Establishing a centralized purchasing system for medical devices for all hospitals and other public health facilities. Many Ontario hospitals have a Canadian procurement policy, but are unable to identify Canadian-made goods. They get no assistance in that effort by the American distribution companies which have a stranglehold on the Canadian hospital purchasing process, since those same American distribution companies are also competing producers of medical devices.

2. Establishing a rebate system, with a 10% to 15% year-end rebate to hospitals on medical devices produced here in Ontario. A 10% to 15% rebate provides a cushion sufficient to offset some of the economies of scale enjoyed by US manufacturers without making inefficient production too attractive.

3. Providing support and incentives to import substitution industries, both private and public sector.

4. Supporting research and development in this strategic area.

5. Insisting that any corporation which wishes to sell to Ontario publicly funded hospitals must locate a certain amount of production and R&D in Ontario.

Some may say such a procurement policy would contravene the FTA. However, currently Canada only exports to the US about $100 million in medical devices, whereas our imports of such from it total at least $851 million, perhaps as much as $1.5 billion. Therefore, even assuming a negative US reaction, we have more jobs to gain than lose by going this route and challenging the FTA.

The government should also establish a task force, with participation from labour and the public health care sector, Ontario medical devices manufacturers and health care research academics, to come up with a plan to get this sector off the ground.

It makes sense for the Ontario government to make every effort to ensure maximum job creation spinoffs in the province for the large sums of public money spent on public health care in Ontario.

We are pleased to see the government increase its allocation for various energy conservation and environmental protection programs, including the municipal 3Rs program: reuse, reduce and recycle. We hope the government will take a number of measures to encourage the expansion of the environmental protection equipment industry in Ontario. Aside from the obvious benefits to the environment, which are important to UE members and indeed every trade unionist in this province, such an expansion of this industry would also create new jobs, many of them skilled and potentially well-paying ones.

Having strict environmental standards is one way to encourage such industries to develop, since strict standards generate a need for various types of equipment and devices. The stricter Ontario standards are, the more likely it is that some Ontario manufacturer will identify a need for the product and produce that here. This will give Ontario manufacturers the edge in these products as other provinces and the US states enact tougher environmental standards.

The government should also provide supports and incentives to those industries. If necessary, the government should expand the mandate of Ontario Hydro to include production of energy conservation products if the private sector does not meet the challenge enthusiastically enough. Ontario should not forego the opportunity to have the jobs associated with the production of environmental protection devices and equipment merely because a domestic private sector manufacturer may not emerge to take on that role, perhaps due to lower profit margins than they have become accustomed to. Again, this is an area where concerted, swift action on the part of the government may both help us clean up the environment and create new, stable, socially useful jobs for Ontarians.

We also know that pressure is being exerted on a daily basis to force Ontario Hydro to drop its Canadian procurement policy. We want to take this opportunity to urge the government to remain firm. Ontario Hydro's procurement policy has been one of the stabilizing factors in maintaining what little remains of our electrical products industry. Although the on-site construction requirements of hydro generation facilities ensure that some production will always take place here, it is important that the government guarantee that the pre-manufactured inputs and parts used in Ontario Hydro facilities will also be produced here as much as possible. Most US utilities have similar procurement policies, which assist in the creation of vibrant electrical industrial equipment industries there.

In conclusion, no provincial government has the tools to totally neutralize the impact of the disastrous economic policies of the federal Tories on the working people in its jurisdiction. However, the Ontario government has at least taken a step in utilizing those powers it does have in a way which benefits the general population. It is a welcome indication of the government's understanding of the battering which working people of this province have been through in the last several years.

We look forward to the greater participation of working people in the government's decision-making process and to the kind of creative and committed government actions and budgets that will provide for greater economic democracy in the province. On behalf of my two brothers and our membership, I thank you.

Mrs Cunningham: We had a little bit of a talk before the lunch break. I would like to thank you for some of the constructive ideas you have put into your brief, especially with regard to the medical devices industry. I share your view on that. I am wondering if you can give us some more insight into perhaps some other areas where we can be more competitive with regard to your industry, given that you seem to know a lot about projecting the future here.

Mr Barry: As an example, we have put in the issue of procurement policies for Ontario Hydro. The facts are that Quebec has had a procurement policy in that province for a number of years, which has caused many of the electrical manufacturers to locate there in order to sell to the province of Quebec.

Mrs Cunningham: Could you give us an example of what you mean by the Quebec one?

Mr Barry: Turbines and generators. All the major manufacturers in the electrical industry have plants in Quebec. Whether it is Westinghouse, General Electric, Asea Brown Boveri, all of them are located there. As well, they have remnants of those plants here in Ontario. General Electric, as an example, used to employ some 5,000 people just in the Peterborough plant alone. They are now down to something like 2,000 people in total, including all their salaried staff. That is in the last 10 years. Westinghouse in Hamilton, which produced a wide range of products, had some 5,600 hourly rated employees. They are now down to 620.

Many of those products have simply disappeared or they have sold off chunks of their production to other companies, such as selling off all their power transformer businesses to Asea Brown Boveri. The electrical industry restructured prior to the free trade agreement. In preparation for it, General Electric, Westinghouse and others divvied up the market and decided who would produce which products and that they would not compete head to head, and they do not. Even though Westinghouse still has a motor company and General Electric has a motor company, they do not produce the same types of motors in competition with one another.

Mr Sutherland: Thank you, Mr Barry, for coming here. I was particularly intrigued by some of your suggestions in terms of medical devices, the Canadian procurement policy and how that would have an impact. It would certainly have an impact, I would say, on the community of London here in terms of the fine medical facilities we have here. It would seem to be a logical spot for putting them.

I want to get into the competition area, because I sat on the agencies, boards and commissions committee, which deals with public appointments. The president of General Electric talked about the difference between plants here and plants in Mexico, the two plants General Electric has. He cited the example of how they had difficulties getting the plant going in Mexico. If there was a dishwasher line, they could send the dishwasher down and make the same one time after time, but he said that here and in the plant they have in Montreal he could send eight different models down, one right after the other, and it still could be done. I was wondering if you could comment in terms of your membership as to where you see industry going related to that, in terms of maintaining jobs for your membership, retaining jobs in the electrical parts industry.

Mr Barry: As far as the appliance industry is concerned -- that is what you are alluding to with General Electric; it is the Camco plant we are talking about -- General Electric produces refrigerators in Hamilton and Stokes. They used to produce similar products here in London and they went out of that business. They concentrated their dishwashers and their laundry equipment in the Montreal plant.

You are quite correct. Jobs that are routine and can be done easily without training the Mexican workers will go to Mexico or they will go to the United States. That is exactly what the free trade agreement has allowed those companies to do. That is why those plants are established there now.

I am not putting the Mexican worker down. I think we also have to also elevate their standard of living. What we are concerned about is dragging our standard of living down to their level without at the same time increasing their standard of living. As those Mexican workers are trained, more and more of those products, even the eight production lines you are talking about, will be facilitated from Mexico, transmitted to the United States and then imported here into Canada. That will obviously have a negative impact on the jobs of our members.


Mrs Sullivan: I am interested in the comments you made in your presentation relating to environmental protection equipment. Clearly there is a sense that green can be gold and that there are real opportunities for the manufacturing of pollution control equipment and other devices.

One of the things that is problematical, however, is that the government in this budget has cancelled the Ontario current cost adjustment, which provided an incentive for the installation of pollution equipment devices, and has changed the way it approaches environmental legislation so that companies are highly reluctant to invest in the capital equipment required to make advances in the area. I wonder how you respond to those problems which have been created by the government, rather than moving forward in a way that could solve the problems.

Mr Barry: We are not suggesting the government has not done some things we are not in agreement with -- far from it -- but what we are saying is that we think the government should be encouraged to provide incentives to Canadian-based industry, and particularly Ontario-based industry, to facilitate production and to enable those companies to grow jobs here in Ontario.

As an example, a few years back under a Tory government when we were talking about a hydro line crossing Lake Erie, we intervened because at that point in time we were talking about exporting Ontario hydro across to the United States. At the present moment we are a net importer of hydro into Ontario. We get some from Michigan and we get some from the west as well, but overall we are a net importer of hydro. We also have the issue that within the next five-year period we are going to reach the crossover point where our consumption of hydro will outpace our ability to produce it.

Mrs Sullivan: Do you concur with the policy on the abandonment of nuclear?

The Chair: I am sorry, Mrs Sullivan, we have run out of time here. I would like to thank you for coming before this committee and we appreciate your comments.


The Chair: Charlene Foster, welcome. You have one half-hour for your presentation.

Ms Foster: I do not need one half-hour.

The Chair: If the three parties want to ask you questions up to that period of time, they have the right. Mrs Sullivan is already backed up with questions from the last presenter. Feel at ease and proceed with your presentation.

Ms Foster: I will be brief. On behalf of the Sexual Assault Centre London, I first want to say thank you to the NDP government for recognizing the need and the importance of services for those in our community who have been sexually assaulted. By increasing our funding from $80,000 to $340,000, we are beginning to be able to provide more of the services which are so sorely needed.

We have demonstrated in the past our ability to use funds wisely and to stretch them to amazing limits. Our direct service work has been done totally by trained volunteers, who work on our 24-hour crisis and support line, provide accompaniment to police, hospital or to court and provide in-person support for survivors of sexual assault and sexual abuse.

The most frustrating aspect of the work of our volunteers and other community workers is the dead end they run into when they need to refer clients for long-term counselling or therapy. For clients unable to afford the cost of private counselling, the availability of help is sorely lacking. The waiting lists are 6, 8 or 12 months for groups and even longer for individual counselling.

With our new increase in funding we have been able to hire a full-time counsellor who will facilitate two therapy groups as well as take on a full case load of individual clients. Our counsellor started a month ago. On her first day of work she was faced with a waiting list of over 40 women. She is now completely booked and the waiting list goes on. We will shortly hire a second counsellor, a public education outreach worker and a regional counsellor.

To accommodate our expanding staff and our clients' needs, we have been able to move within the last month to new office space which more accurately reflects the quality of the work we have always done and which finally legitimizes in a tangible way women's pain.

Again, I want to say thank you for recognizing the widespread incidence of sexual assault, sexual abuse and violence against women in general in our society, for recognizing the importance of the work sexual assault centres do and for giving us the opportunity to demonstrate our ability to use funds effectively.

We will be back when budget time comes again. This is only the beginning of the crucial work which needs to be done.

Mr Sutherland: We are very glad to have you here today to point out, as we have had pointed out in just about every community we have been in with these hearings, the great need in terms of providing resources, and how this is only a start on the process and is not going to meet all the needs.

Have you been able to access the current money already? We are finding out that is a bit of a problem. You said there was a waiting list of 40 before you hired the counsellor. Now you have the counsellor and there is still a waiting list. Where is the current waiting list at?

Ms Foster: I think she has only been able to take about 12 full-time, one-on-one clients, plus groups, but it increases every day. Every day we get more phone calls. I cannot say exactly what that waiting list is right now, but that is just our centre.

Mr Sutherland: Are some of those people on the waiting list being referred to other services, or do they all have waiting lists themselves?

Ms Foster: They are on other waiting lists at other places as well. Someone may have to wait only a couple of months to get into our centre; again, someone else may have to wait six. They may be on a waiting list at University Hospital for a year. It is on and on. The thing is that now we have a counsellor and are going to hire another one, we are almost afraid to let it out because we know we are going to be swamped with people saying: "You have a counsellor now. We can get in." The waiting list is just going to multiply as soon as people know we have anything at all.

Mrs Sullivan: I just want to clarify, Ms Foster, your opening statement. Did you say your budget has gone from $80,000 to $340,000? What is the source of your funding?

Ms Foster: The Ministry of the Solicitor General.

Mrs Sullivan: Your entire budget comes from Sol Gen? You get nothing from the region, nothing from the municipality?

Ms Foster: We have private donations. We do not get anything from United Way any more. We had some funding from United Way for three years, but we do not at the moment. That is our major funder. We have smaller donations from the community.

Mrs Sullivan: It has moved in proportion from $80,000 to $340,000 in one year.

Ms Foster: Yes.

Mrs Sullivan: What is the difference in your client intake?

Ms Foster: This has just started. The calls are increasing on the crisis line over the last year. There was an increase by 59% of the number of calls to the crisis line. We just got the money, so we have hired one full-time person and in the next six weeks we plan to hire two more and gradually increase our staff. So our intake has not increased immediately; it cannot just like that, but over the next year it will as we get more staff to handle more clients.

Mrs Cunningham: To pursue that particular line of questioning, although you have been promised $340,000, you really have not received it.

Ms Foster: We have some of it. We do not have the total $340,000.

Mrs Cunningham: How many staff did you have when you had $80,000 as your budget?

Ms Foster: We had two full-time staff.

Mrs Cunningham: What is your plan on staffing?

Ms Foster: We now have those same two. We have a full-time office administrator and a counsellor. We are hiring another counsellor, a public education outreach person, education person, and a regional counsellor as well.

Mrs Cunningham: So for $260,000 you are going to hire five people?

Ms Foster: Yes.

Mrs Cunningham: What will the rest of the money be spent on?

Ms Foster: Part of it is being spent on our new location.

Mrs Cunningham: That is what I needed to hear. You are paying rent out of that particular amount of money.

Ms Foster: Yes.

Mrs Cunningham: Are you going to be spending the money basically on counselling, since that is where your waiting list is and where your referrals are going?

Ms Foster: That is where most of the money will go, for services to survivors and for education.

Mrs Cunningham: What do you want me to do as a representative for London as a result of these hearings? What was the point? What are you coming here to tell us?

Ms Foster: To tell you that we appreciate what we have so far, that we will use the funds wisely and that we will need more to keep on with this work, that this is a beginning.

Mrs Cunningham: Do you work with other agencies in the city, like Women's Community House?

Ms Foster: Yes.

Mrs Cunningham: And you will be pooling your resources that way as well?

Ms Foster: Yes. We have referrals.

Mrs Cunningham: I notice we will be hearing from Women's Community House later on today and I think we are hearing from the London Family Court Clinic tomorrow. These are all psychologists. I thought there was another group as well, but anyway, thank you.

Ms Foster: We all work together and refer to each other. There is the London co-ordinating committee on violence against women.

Mrs Cunningham: I am interested in the money from the Solicitor General. You were quite successful. That is not where I would normally send people to get money, but you really did a good job on that one. From our point of view, I guess, and Kimble's and David's, maybe you could send us a copy of your presentation to the Solicitor General so we can help others.

The Chair: Thank you for coming before this committee. We will take a 15-minute recess.

The committee recessed at 1343.



The Chair: The next group we have is the London and District Construction Association. You have one half-hour for your presentation. Try to leave enough time for questions and answers from the three parties. To start off, identify yourselves for Hansard, then you may begin your presentation.

Mr Romanuk: My name is Ken Romanuk. I am president of the London and District Construction Association. I also have a small design and build general construction company.

Mr Dool: My name is Tom Dool. I am the general manager of the London and District Construction Association.

Mr Romanuk: The members of the London and District Construction Association extend to the task force their appreciation for allowing us this opportunity to make our presentation.

We believe something is fundamentally wrong with what is happening in Ontario and needs immediate correction. With regard to the budget, it does nothing to improve the competitive position of Ontario's businesses and only adds to an already bad situation by increasing taxes. Ontario is already the highest-taxed jurisdiction in North America.

It does nothing to help manufacturers of goods to be exported, a shortcoming for which the past Minister of Industry, Trade and Technology, Allan Pilkey, is partly to blame. The construction industry is the largest employer in the province, employing 12% of the workforce, and we could not get a meeting with our minister, Mr Pilkey.

Nothing in the budget improves productivity either inside or outside the public service. The public service did not get better or more efficient; it only got costlier. Less government is essential if we are to be competitive internationally.

Employers and employees, especially those in the construction industry, appear to be left out of the new partnership between business, government and labour.

The NDP government does not understand business and does not realize that Ontario's economy cannot absorb the social agenda Queen's Park has dictated.

The budget does nothing to stem the growing exodus of business out of Ontario and may be the final straw in a brain and talent drain that forces young entrepreneurs out of the province.

A $9.7-billion debt that will grow to $35 billion in four years represents future tax increases of such a magnitude that Ontario will evolve as a welfare state, a stagnant, non-producing environment.

The budget does nothing in terms of building and supporting enterprise, initiative, entrepreneurship and optimism for a stable future.

With respect, there is no hope of a sustainable prosperity through helping those who choose to do less than their best.

Let me attempt to make my point with a story involving my family. My father was a simple man. He worked hard every day and he provided for his family on his own. He believed in an hour's work for an hour's pay; simple. He spent only what he could afford. He did not ask for handouts from the government or anyone else for what he could not afford. My father was a union member and an NDP supporter. He and my mother lived in their own home until he died at age 87.

During his last years he became very confused about how the system rewarded scores of his work companions who had not saved. He saw those able and fit workers living off UIC. He saw people who could work choose to hold out their hand for others to fill. He saw them living in fully funded government seniors' homes.

Several years ago, because my parents were getting on in age, my father inquired about getting into this same old-age home. At the time, he could get in if he sold his home and turned the proceeds over for the government to draw off $100 a day until those proceeds were gone. Then, like the others, he could live off the government. He worked hard. He saved. The others did not. He had to pay. The others did not.

Is this approach a source of sustainable prosperity? The government's dedication to social assistance broke my father's spirit. The NDP's dedication to even greater social assistance is breaking the spirit of business people throughout the province. Why does the NDP strive to reward those who do not contribute? The youth of Ontario is quickly learning what it took my father 85 years to learn: Working hard and saving does not pay. These are sad lessons.

Prosperity begins in personal initiative. It grows in business allowed to profit and thrive and create more jobs and is sustained only if governments do not spend more than they earn so they do not have to tax the very breath out of the system.

Social societies are collapsing around the world. Are we in Ontario too blind to see the fallacy these countries have realized? Please, reward those who work. Reward initiative. Reward the discipline of those who want to save and look after themselves, who choose not to hold out their hand for governments to fill. This province's business people need private enterprise wind in their sails, and the mood has been stilled by the negative initiatives by government. Business is floundering. I hope you see our point.

Mr Kwinter: Mr Romanuk, as the president of the London and District Construction Association, how do you see the immediate future for your industry in this area?

Mr Romanuk: Right now we are probably running -- I do not have statistics, but from what we can gather we are probably running between 25% and 30% unemployment.

Mr Dool: We are running at about 30% unemployment at this point. I think the worst part of it, though, is we are running at about 40% capacity. In other words, our companies just do not have any work. There is no investment going on in this area. One of the problems is the recession, but the other one is the lack of confidence that has been created in the province. People are not parting with their money to put into business. It is okay to put money into schools, and that is all great and wonderful. It is a stopgap measure, and we appreciated every cent we got, believe me. But when that comes to an end, where is the rest of it? Nothing has been created. There is no spinoff from that kind of investment.

Mr Kwinter: What is your usual lead time between the time you know you are going to be working on a project and the project starts?

Mr Romanuk: I have been in the design-build business, and the average when I talk to somebody about building -- I built for small businesses -- generally was nine months, from my initial conversation to when we put a shovel in the ground.

Mr Kwinter: What I am trying to determine is you have about a nine-month lead time, and things are very slow right now. Nothing is going to happen for nine months to a year after it starts, because of that lead time that is required.

Mr Romanuk: Definitely, and I am talking about small businesses. Large business would be much longer.

Mr Kwinter: You do not see any impact from the supposed recovery?

Mr Romanuk: What I see now in my own personal business is that all the small businesses I have talked to have reduced inventories, have reduced people. They have empty space. There is going to be that lag time before they start to hire back the people to fill their factories and inventories to fill up the space they have, before they are going to need new space. We represent generally the commercial-industrial building business. Some of our members do work on high-rise buildings and parking garages and what have you. We look at the work we are losing now in the rental end where projects have been stopped. Items that need work in the apartment building business have closed down.

Mr Phillips: You have answered that you do no residential. Do you follow the co-op area at all? Do you know that?

Mr Romanuk: Yes.

Mr Phillips: There is one thing I would just like some confirmation of. In the budget there is a number that suggests that for each 10,000 units of co-op, and I gather the budget predicts they will construct 10,000 a year, there is an annual subsidy required by the government of $15,000 per unit each and every year for 10 or 15 or 20 years.

Interjection: It is 35.

Mr Phillips: Is that right?

Mr Romanuk: On the geared-to-income housing, as I understand it, on an interest rate that may be 12%, the government will subsidize that 12% down to 2%. So in effect everybody is picking up that 10%, plus there is the subsidy for the geared-to-income. I think there are people out there who do go out and work every day and work hard, but for whatever reason -- they had to leave school early to support their family. Who knows why? They should be helped. I think we should help people, but I think we are going overboard.


Mr Dool: In the budget I think there was a $1.3 billion housing budget. This was an expenditure designed to encourage housing, to increase the housing market and create jobs and so on. But our calculations are very close to yours in that the $1.3 billion is going to create a $150-million bill every year that you are going to have to pay in taxes. That is what we find offensive. You have eliminated the private housing sector, which would not cost me or you or Joe Smith down the street a darned cent in taxes, because he is operating on a marketplace basis. He is going to charge what he can get. Yet the government in its wisdom has now taken over the whole housing market. We have co-op housing coming out the kazoo, but we are never going to stop paying for it. When is it going to stop?

Mr Phillips: I just did not know the numbers. The numbers in your opinion are correct. It is about $150 million a year for each 10,000 units and it goes on.

Mr Dool: Yes. Who is going to pay that?

Mr Phillips: This follows up with my colleague. As I have said to many groups, the comments on the budget are like forecasting the weather. Some groups say, "Listen, it's a problem." Others say, "It's a great budget." We will only know in about a year. I think the government is assuming the economy is starting to move, that we can sustain deficits ad infinitum.

Your organization -- you have partially answered this -- should be very close to the ground in terms of sensing an economic recovery. Are you beginning to see the turnaround? Are your clients beginning to talk to you now about building, albeit in a few months?

Mr Romanuk: No. I foresee this winter a lot of the industry's small firms that made it through last winter thinking that as always in spring construction was going to get better -- it has not got better. They are still struggling. I see them either closing the door or going bankrupt this fall.

Mr Stockwell: What I find most offensive about this budget -- I should not say "most offensive"; one of the most offensive items within the budget, besides the never-ending debt which they take pride in pointing to about fighting the recession and not the deficit, is their glorious projections of growth in this province in the next few years. I think 3.4% was the growth rate; inflation would be about the same. They are up around 7% in growth. Then they came in with a 10% increase in spending per year. What do you think about those kinds of numbers? If they are not achieved, then clearly you either increase the deficit even greater than they have called for or you increase taxes? I would just like to hear your comments on the growth rate that they are speaking about.

Mr Romanuk: I am not an economist by any means. Quite frankly I read the paper and see what I have and make my own judgements. Where we are in Ontario, we do have a very good workforce, a very productive workforce, but I cannot see with some of the policies that are being proposed that we are going to have businesses moving here to take advantage of our workforce and our standard of living, and we do have a good standard of living in Ontario.

Today when I picked up the Report on Business in the Globe and Mail, I read through it. I look at our partnership between what they call business, government and labour, and the taxes we are projecting, succession taxes and what have you, and turning over private enterprise to the workers. It reminds me of two things.

One, you people are all politicians and I admire you for being that, for doing that. A lot of time you take abuse and you also get a lot of pats on the back. But you are elected as leaders to run the country and the general public. Now owners of businesses run their businesses and they have employees working for them. They are there as the guiding principle of the business and they have employees work for them, similar to the government with the elected people, running it for the people.

What I see the NDP doing is that it is saying that in this partnership it is going to tax the living hell out of the owners, take the money and give it to the workers to operate better than the owners who were there in the first place. It reminds me of being in school -- it is the first time I thought about this; I have not had time to talk to Tom about it -- in one course, I think it was in philosophy, you had to read the book called Animal Farm, and boy, it is there working; right now we are living it.

Mr Stockwell: One quick question: That was a very good analogy. It should be required reading for the government. Why have you in your industry basically opted out of the rental market all together; as brief as you can get.

Mr Romanuk: I am not in that business, but I can see what --

Mr Stockwell: I assume you represent the construction association or the people who are in that business. Why has everyone opted out?

Mr Dool: Because you cannot make any money.

Mr Romanuk: If you cannot make a return on your investment and if buildings need repair and you have to repair them and you have to get your money back -- if you put money out, you want to get something back for it and you are just not getting anything back.

Mr Stockwell: And co-operatives have filled that void, I assume.

Mr Romanuk: I do not think so. We are talking about high-rise buildings.

Mrs Cunningham: I would like to ask a question with regard to the future. I am hoping something is going to happen. I do not know what it is. With regard to apprenticeship training in your industry, is there anything happening? Can people find placements? I have just come back from British Columbia where they have engaged in a very progressive program, totally changing their delivery system of education. I am wondering what you think here, what is happening.

Mr Romanuk: I will turn this over to Tom, because we have been working on this.

Mr Dool: They are in the process now of changing that delivery system in Ontario also, coming up with some very far-reaching and noble ideas based on the British Columbia system. The fact of the matter is, though, in relation to apprenticeship, the two programs they have introduced into the secondary system are all great and wonderful and will work in busy times where there are placement areas for those students to go to. Today there are no placement areas. I happen to be chairman of the local apprenticeship committee and I have 20 kids on my list. We refuse to take any more because we cannot give them any kind of reassurance that they will get to work. There are 20 kids on that list who have been on it for eight months and will continue to be on it for at least another six.

What the future holds in terms of apprenticeship for the majority of people in construction is they are now facing the employment equity program that you are bringing down. We will find that of the 20 people who applied, 18 will drop out because they cannot get an apprenticeship.

Mrs Cunningham: Which has been the pattern for about the last decade in Ontario.

Mr Dool: Fairly.

Mrs Cunningham: You talk about a vision. You should know the Toronto-Central Ontario Building and Construction Trades Council made a presentation to this committee. They were also talking about co-operative housing and the kind of incentives, but I should underline that it also said, "There is a very important role for the private housing market and the question of affordability is an issue that has to be addressed by this government and by the private housing sector."

They went on in section 7 of their brief -- you can have my copy if you want to see what your colleagues are saying. Their title was, "NDP Budget Good For Construction Workers." I said I came from London, Ontario, and I did not expect that was what I would hear, so you have not disappointed me. I am glad there are people on this committee from other parts of Ontario who know that things are not equal right across the province and that we in southwest Ontario are having a very difficult time in the construction field. I do not know about your company, but I bet it is not doing wonderfully well, Mr Romanuk.

Mr Romanuk: No, it is not. We have gone, probably in the last 16 months, from an average of 15 people we have had for a dozen years to three people.


Mr Sutherland: Thank you for coming before the committee today. I just want to address a couple of comments. First of all, you say that business is foundering and you leave the impression that business is foundering since the time of the budget. You talked about investment decisions. I think we had clearly seen a downturn in investment decisions long before the budget came down. We were in a recession caused by many factors. High interest rates and free trade certainly have to be included in the whole picture. You said you could not get a meeting with the former minister, Mr Pilkey. Are you referring to the London group or are you speaking of the Ontario group?

Mr Romanuk: I am talking about the Ontario group.

Mr Sutherland: Okay, the Ontario group.

Mr Romanuk: The Ontario representative, yes.

Mrs Cunningham: I am glad you asked, Kimble.

Mr Sutherland: I wanted to know that. I guess it is just the sense I get that your presentation is saying, "This budget is the one that is stopping all the development from going on," and I think we need to clarify that.

Mr Romanuk: No, you are wrong. It is not just your budget. All you are doing is piling on an already bad situation.

Mr Sutherland: Okay, so you are indicating that you think we are part of the problem.

Mr Romanuk: You are a part of it; you are not all by yourself.

Mr Sutherland: Are the anti-recession projects you mentioned providing some employment to some of your people here?

Mr Romanuk: Yes, they are.

Mr Dool: There is a small amount of employment going on here. We are one of the areas, though, that is declared as being well-off so we do not get a hell of a lot anyway, but we get a few.

Mr Romanuk: I am sitting here and I am saying, let's watch our spending. But quite frankly, if we did not have that work now, there would be a lot of other companies in a lot of dire straits.

Mr Sutherland: Despite what you think of the overall budget, is the anti-recession good for the time being?

Mr Dool: The $700-million anti-recession amount: Is that the amount you are referring to?

Mr Sutherland: Yes.

Mr Dool: That is broken up into some smaller numbers.

Mr Sutherland: That is right, over the entire --

Mr Dool: About 20% of that went to pay equity and employment equity programs, sir. Now that is counterproductive to anything.

Mr Sutherland: No.

Mr Dool: Yes sir, you check your numbers.

Mr Sutherland: No, the $175 million --

Mr Dool: No, not to finance the program, to finance employment equity within the projects.

Mr Romanuk: Let me just explain what has happened.

Mr Sutherland: Go ahead.

Mr Dool: There is $3 million going in our area alone that has employment equity attached to it. None of the contractors can bid for it because they cannot fill the bill.

Mr Romanuk: What we are saying and what Tom is saying is that these projects that require the employment equity are probably adding about 20% to the capital costs to get the employment equity to work. So if you have a company, to make it work -- mine worked great. I have a French Canadian, my wife.

Mr Sutherland: I would be interested in seeing any of the documents that came forward. I was not aware of this employment equity part as part of it. What was supposed to be part of it was high-priority projects that could get going right away in terms of the fact that they could be done this year to have the most impact in the worst time. That was the focus area for the priorities of the anti-recession. I am not aware of this other. I would be interested in seeing information on it.

Mr Dool: Most of which were education projects, correct?

Mr Sutherland: Education, colleges, hospitals, roads.

Mr Dool: Now you have said, "The money is there, but you won't get it till 1994." So I have to pay more education taxes locally to pay for the interest on that money; is that correct?

Mr Sutherland: No, sorry. That is separate. That is the Ministry of Education announcement for future expansion.

Mr Dool: Is that not a part of the $700 million?

Mr Sutherland: That is separate from the anti-recession, sir.

Mr Romanuk: The one thing I would like to point out is that for years and years the construction industry, the LDCA, the Council of Ontario Construction Associations, the road builders, have said to governments, not just yours, all governments: "Let's not spend money on government projects when the place is booming, because you're going to be paying top dollar. Spend your money on roads and on government buildings in commercial downturns." We have advocated that. We have said that for years.

Mr Sutherland: So I guess what you are saying is you would have wished that in the good times there had been some surplus so the money could go in right now and we would not have as high a deficit.

Mr Romanuk: Yes, you are quite correct there.

Mr Winninger: Just a very short question for clarification. I can accept that the construction industry depends on land prices and on interest rates and supply and demand. Obviously the recession would have quite a heavy effect on building. It is this intangible thing you call loss of confidence that I have a problem with. We have not heaped on taxes in this budget because it was a time of recession.

If you take our operating deficit compared to other provinces, hive off the capital deficit and just treat the operating deficit, we have the lowest per capita in Canada. In other countries such as Germany, Sweden, Japan, they have a very advanced and enhanced social safety net and worker protections and yet they are incredibly competitive and productive. So I am having difficulty knowing why, simply because we have enhanced our social programs to deal with recession, that somehow impacts on business confidence. The two can go hand in hand; they do not have to be exclusive.

Mr Romanuk: I am not sure I can answer your question the way you want an answer. Our debt is not as great as perhaps that of the other provinces; I do not know. I know we are going to be catching up to them very quickly at the rate we are going. You ask about business confidence. I will put my glasses on and go through my notes, but along with the budget some of the things that you are throwing at investors, like rent control, the labour law reform you are proposing, the minimum wage, tax reform, all of these things are, for someone investing or coming from out of country or wanting to invest newly, detrimental towards that.

Mr Winninger: We heard from the building trades council in Toronto yesterday and they said they are all ready to work.

Mr Romanuk: Sure they are ready to work, but there are no jobs.

Mr Winninger: Within the rent control.

Mr Dool: Mr Winninger, we need jobs to work at.

Mr Romanuk: I want to work.

Mr Dool: Our industry depends almost entirely on investment.

The Chair: I am sorry. Time has run out. We appreciate your attending this committee. Your remarks will be taken into our report.

Mr Romanuk: The only job I have now is I am taking a guy and reducing his business by two thirds. That is what has happened to his business.



The Chair: The next group we have coming forward is the Women's Community House; Ms Jan Richardson, executive director. Welcome to the committee. You will have one half-hour in your presentation. Try to keep some time at the end for questions and answers from the three parties.

Ms Richardson: Actually I only asked for 15 minutes, so wow.

The Chair: We can always go to that length.

Ms Richardson: Do not worry. I am just looking at my notes here and it is no problem.

I would like to thank you for the opportunity to present to you this afternoon. As I was introduced, I am the executive director of Women's Community House, which is London's transition house for abused women and their children. I have been with the agency serving as the executive director for the past seven years, and the shelter has provided service in our community since 1978.

As a way of introduction to what I would like to speak about today, I will apologize and say with regret that I am unable to speak towards the entire budget but will look specifically at the budget and the financial implications as they affect women in our community and specifically the issue of violence against women.

The provincial government, both past and current, has made a significant commitment to looking at wife assault services beginning in 1985. Those initiatives have been in the form of financial incentives to transition houses and other agencies operating in our community, as well as a significant increase in the funding available for public education and awareness. As was expected, this has meant a dramatic increase in the level of services required in our communities.

I think that certainly in 1985 the advocacy groups indicated that the funding available would not be enough to meet the needs in our community and that we really were opening Pandora's box by broadening the services available. That is exactly what has happened throughout the province and throughout the country. As the public awareness campaign and services have expanded, thousands of women are coming forward now indicating their victimization.

In addition to that, we have begun to become more aware of the impact of violence in the home, by the effects of violence on children who witnessed violence. We are looking more into the needs of the services required to assist the men who are being abusive, and in scratching the surface of this issue and in learning more and more about it we have begun to learn how to ask more questions of the victims and are coming up with more complex questions as women and men begin to speak about their experiences as adult survivors of childhood sexual abuse and their victimization through sexual abuse.

As a result of all that, we are at a place in our communities where we are virtually overwhelmed. Historically Women's Community House has turned away one woman for every one we have taken in, and that has been what we have operated on for many years now. At this point in time in our evolution, we are now turning away two women for every one we take in. When we say turn away, we do the best we can. We have a grant available from the Ministry of Community and Social Services to transport women to shelters outside the community, so we are not abandoning them to the city streets when they are fleeing violence. However, the eight shelters in our area have been full all summer and there is absolutely no place for these women to go.

Women's Community House several years ago recognized the need for an additional facility and has now embarked upon building a new transition house for London under the joint federal-provincial program called Project Haven. This program was intended to allow for capital financing through the federal government and operating financing through the provincial government.

The commitment that was made from the federal government was $480,000 to build a 30-bed new construction facility. The project right now is estimated at $1.6 million. There is just a little gap there. Our organization has launched a fairly significant fund-raising campaign that, in itself, is probably a little overeager.

I think the reason I am providing some of this history right now is to look specifically at the initiatives that were announced in the new budget and to look at some of the implications that will have, not only on the organization at Women's Community House but in an expanded sense.

In the announcement of May 8, 1991, of the wife assault initiatives we were pleased to see that transition houses would receive a significant increase directed to shelter services. I would like to point out that at this time, towards the end of August, we have not seen those increases and have had no indication from the Ministry of Community and Social Services as to when we will see those increases coming forward. Regrettably we based a lot of our financial calculations and services on the proposed increases and have yet to see those. I understand that will come forward, so I am optimistic that in the next two months we will see some of that $1.9 million being released to services. But in the interim I need to point out that this has caused significant difficulty for our own agencies as we implemented new services based on these increases.

In addition, specifically relating to the announcement that was made, it was announced that $12 million would be available for new shelter beds for battered women and their children. Again, this money has not been released to the public and there has been no indication as to how the money will be allocated.

For Women's Community House right now, we are at a point where we have to go to tender very soon. With a $1.6 million budget we were very hopeful, given this new announcement that was made in May, that there would be some recognition that the $480,000 allocated from the federal government was insignificant to meet the needs of a 30-bed facility, and that there would be some consideration and allocation to our shelter.

I would like to point out that regrettably we have had no response back from our communication to the ministry and continue to be asked to wait a little bit longer for the government to make some decision about how those funds will be allocated.

So hear my thanks for the announcement. I think the announcement indicates the commitment and awareness of the current government of the needs of our facilities. But also hear my plea to say that we would like to see how those funds are going to be allocated at a local level as soon as possible because it has a dramatic impact on our agency at this time.

Shelters are funded through what is called a stabilization funding formula through the Ministry of Community and Social Services. This funding formula was introduced through a review that took place in 1985 and is based on a ratio of number of beds-number of staff. I think it was a solid attempt back in 1985 to look at the ratio and the basic requirements, but I think it is also time to take a look at that funding formula and to look at what the realistic costs of running a transition house are.

Twenty-four hours a day, seven days a week means significant staffing costs. Women's Community House has a staff of 30 to accommodate the 30 beds and to do the outreach that is also part of our programming. The funding formula allows for 12 staff, so there continues to be a gap.

I also am not a strong advocate for 100% funding from the provincial government. I think there is responsibility at a municipal level to support transition houses. I think it is also imperative that the community offer some support. What I am really suggesting right now as a recommendation is that it is time to take a look at how the 85 shelters in this province are funded through that funding formula, time to take a look at the bed-staff ratio and at revisions to that to make the flow a little more -- more recognizing the needs that are in existence.

Another part of our funding, as I indicated, comes from the municipal government. The funding comes through per diem payments. How that happens generally is that the provincial government, through the Ministry of Community and Social Services, announces a recommended per diem rate which in turn, with how the caps work in terms of the 80-20 split, is taken into consideration by the municipalities when they set their own budgets from year to year.

It has always been a problem in terms of the timing. The municipalities generally begin their budget process in the fall, when we are asked to submit our budget requests, and then the administration go through their own calculations before they go to council in late winter and early spring.


The problem we have had over the years is that the recommended per diem rate from the provincial government typically comes along after the calculations and internal workings of administration in the municipality have occurred. As a result of that, if we look at what has happened with the shelters over the province, there is a significant split between what the provincial government is recommending the municipalities should be committing to in per diem payments and what we are actually receiving.

It would be great if the provincial government could release its recommended per diem rate to match the budget process the municipalities embark upon. For Women's Community House, it results in about $12,000 this year, that difference between the recommended per diem rate from the provincial government and what we will actually receive, based on a 4% increase, from the municipality. It is a small bit of money, but it makes a really big difference. For us, that is a half-time person, or fairly close to a half-time person, so it makes a significant difference to the level of service we are able to provide. I think it is really an internal timing issue.

The other comment I would like to make about the initiative allocation to wife assault programming is that there have been no new dollars allocated for treatment programs for abusers. Although Women's Community House does not provide service to batterers, we work very closely in our community with the Changing Ways program. We feel this service to the men who abuse women is critical if we are truly going to work towards change, and without an increase to the programs -- Changing Ways has a very lengthy waiting list. As the public awareness campaign increases, as judges become more aware of court-mandating men to treatment programs and more and more services are faced with very lengthy layoffs or waiting lists, we are not able to serve the men at a time when they are ready to be served. Therefore we are not changing anything.

I also recognize that there has been considerable controversy over the past several months about the men's programs. It is the position of the co-ordinating committee to end woman abuse in London that we must continue to provide programs for men. I think the jury is not in yet about the true success of the programs, but I think it is imperative that we continue to operate the programs and to set some kind of community accountability measures into them. It is important to recognize that there is another side to the controversy about treatment programs, which is that we have to provide something in our community to the women who wish to return to their partners and attempt to live a life free from violence. We also have to provide an alternative to the men who truly wish to end the violence they are perpetrating.

Another initiative that came forward was through the Ministry of Health, for long-term services for sexual assault. I understand this initiative came forward through the interministerial committee on sexual assault and that the funding is coming forward through the Ministry of Health and is to be distributed through local district health councils.

Over the past six weeks this community has had to undergo some very interesting negotiations and meetings in order to comply with the funding requirements. The district health council has indicated it is looking for one application to serve four communities: three counties and the city of London.

I would say that although it is very important to look at long-term services for sexual assault victims, including adult survivors of childhood sexual abuse, we also have to recognize the differences in how our communities develop and grow. To submit a joint application for three counties with very diverse needs and for the city of London, which has done some very progressive work in the area of violence against women, has severely compromised community integrity to a certain extent, in that we have really had to -- it has just been a very difficult process to look at a rural area such as Middlesex county, which does not even have a crisis line for victims of sexual assault, and then to the city of London, where we are now looking at introducing long-term services for adult survivors of childhood sexual abuse.

I applaud the government for introducing these new initiatives, but would also ask that consideration be given to how that money is distributed at a local level. It may be that the district health councils are the best avenue to do some local development, but I think it is important to also look at how individual communities develop and how rich and diverse we all are in terms of our rural needs and our cultural needs.

One of the other questions that I suppose has come into play over the years is how shelters should be funded. I think it is now recognized that shelters are here to stay, that more are going to be built in our communities and that they will become an integral part of our communities. I guess the question is whether or not we are at a point where we should be looking towards legislated dollars towards transition houses.

I know there are pros and cons to doing that. I think a con for an agency like ourselves is that it requires more accountability and controls imposed by the government, but I think it also gives us some sense of stability from year to year. I understand that there is a review coming up on the funding of transition houses, and I would hope that consideration and exploration of legislated dollars could be explored through that process.

This issue, as I indicated when I began, is a very complex one. It is not as simple as saying all we need are shelter beds or crisis services. I think we as a society have created a real mess in terms of violence against women. We cannot blame the government for its creation and we cannot blame men for its creation, we cannot blame women for its creation, but we are all responsible for what we did create. We are therefore all responsible for its solutions.

I think we are looking at very long-term solutions. It is not enough to provide shelter services where we are patching women up and putting them out into the community to hope they will do well. It is important to recognize the needs of long-term services, long-term counselling, programs available for our children, programs available in the school systems, programs for men, training in our judicial system to help them become more aware of the problems and the insidious nature of the abuse that is taking place. It is important to continually remain open to the multitude of solutions that are available to us.

In closing I would say that I recognize, in saying all that, that it is an expensive price tag, but the provincial government has begun, with a very significant annualized contribution of money beginning in 1985. We have heard there is a commitment to continue that money forward through some longer-term initiatives. I think we are basically at the beginning of the avalanche. As we continue with the public education, we will continue to see more victims coming forward, and the price tag, I believe, will continue to increase. I think it is just a reality we have to face, and there needs to be the commitment by all parties to continue to look towards solutions.


Mrs Cunningham: Thank you, Jan, for your presentation. I like the ending of it especially, for all of us to be looking towards solutions. We were curious this afternoon when the Sexual Assault Centre came in and said that its budget went from $80,000 up to $280,000 or something -- $340,000? I had the numbers written down and I cannot see them.

Mrs Sullivan: A quarter of a million dollars.

Mrs Cunningham: It was a lot of money, anyway; a quarter of a million dollars, my colleague advises me. When you made your presentation to the government this year, basically it was for the normal increase in your budget plus your capital dollars, I expect. You said you had not received the transfer payments yet. I am curious to know, is that on the normal part of your budget or is that the new program announcements that were made?

Ms Richardson: The per diem transfer payments? Is that what you mean? Mrs Cunningham: Yes.

Ms Richardson: The per diems are a part of our regular operating budget. We have a revenue section which includes funds received from provincial government and municipal government and our donations. We calculated what we anticipated we would receive in our annual operating budget, and it fell, based on the communication we had from the ministry in the fall, but the announcement from the ministry did not come forward till February, which was after the municipality had made its announcement. Did I make sense? Yes? Basically there were several months where local offices knew what they expected the increases to be, but the municipality was not willing to base its increases on anything short of a recommendation.

Mrs Cunningham: Have you received any of the 1991 transfer payment money yet?

Ms Richardson: No.

Mrs Cunningham: We are six months into the year. I actually worked in that ministry at one time and those things used to happen. It does not make me feel very positive to see it happening again. I have always been a great critic of big government. I prefer to put money in the front line, and this is an example of big government. It cannot even get the transfer payments out to pay the staff who are there.

Ms Richardson: I should clarify in saying that what we are being funded on right now is last year's operating contract with the Ministry of Community and Social Services. It should be understood that we are receiving our quarterly payments from the government based on our contract of last year. We do have yet to sign our 1991-92 contract based on this announcement.

Mrs Cunningham: Right; I am clear on that.

Mr Stockwell: My question is a little broader, and maybe somewhat more blunt as well. No one is coming up to me and saying: "Gee, Chris, could you see about raising taxes? I'm looking forward to getting my next tax hike." Has any thought been given to alternative sources of revenue? I do not know how or what, but has any discussion taken place? If so, when would we see some kind of report? I am not downplaying the role or the job, but there comes a point when we run out of money, or we as the government would run out of money.

Ms Richardson: Yes, and I think I indicated that I do not believe the solution is with the provincial government.

Mr Stockwell: I heard that. That was good.

Ms Richardson: To answer your question about whether I think we should be looking towards taxes, maybe that is a possibility, but I would say what we have to ask ourselves in a broader sense -- it is a broad question -- is where the funding responsibility lies and proportionately how that funding responsibility lies. How much should we receive from the federal government? How much should we receive from the provincial government? How much should we receive through the municipalities through our tax base? I think those are important questions to ask ourselves, particularly as we become more complex in this issue, but I do not have an answer to that.

The other part of our reality is that I am turning two women away for every one I take in. I do not have time to talk about taxes. I am trying to find enough money to find a place for these women to stay.

Ms M. Ward: You touched briefly in the latter part of your presentation on what I was interested in. I guess I was sitting there thinking, is there any hope? How long in the future are we going to have this problem? Are we always going to have it? You are just seeing the tip of the iceberg still. You seemed to indicate that you think there are a lot of women out there who have not come forward or who are not coming forward. I wonder what you might have to tell us about what you think is needed in the way of preventive services. How much hope is there that there can be some change made through education? Should we be starting it in the schools?

Ms Richardson: We can look at this issue and the alarming numbers of women coming forward in two ways. We could say, "This is a tragic thing that is happening in our society," which it is, but we can also say: "How hopeful it is that, for every woman who comes into that shelter, she is making a choice. She has heard that message and she is making a decision to stop the violence."

In some respects, I think we are all to be applauded for the commitment we have made in finding more vehicles for women, men and children to come forward.

Although I think the numbers are staggering, a way to look at that is that when we first began talking about this issue, we used statistics of one out of every 10 women in this country was physically abused by her partner; The provincial government has now released figures that indicate one out of eight women in a relationship is physically abused. So I guess in some respects I would say that, to me, that is progress, because these women are not being violated as much as they were.

I think prevention is there. I think it is critical that we do public education. It is critical we get in and do the programs in the school systems to look at alternative conflict resolution to help children recognize that it is not the big family secret, that the services and system are in place and that the services and supports are available to the teachers who have to deal with that increased level of disclosure.

I would say we must continue on the path we are on, which does include getting into the schools and doing the work with the kids. They are truly remarkable in what they will disclose to us.

Ms M. Ward: You are talking about long-term services for sexual assault. These are not simply the victims in the homes, because women are victims throughout. Anywhere they go they are a potential victim. I believe Mrs Sullivan has the riding where the young woman was murdered in the last few weeks. This is happening with much too great a frequency for all of us. Some people view it as hatred against women from some segments of our society, so it is not just the family relationships we are looking at there, is it? It is a broader range of attitudes.

Ms Richardson: Yes, and when I talk about the fact that we as a society created this, you are right. We cannot be myopic in how we look at violence against women. We are talking about a society that has treated women as second-class citizens, and that is what it is about. That is why it is so hard to make the changes, because we are fundamentally looking at changes in how we function in our communities and in society. That is a very big problem and that is not one where we can have a project grant available to us to fix it. So we will take our Band-Aids, and in taking our Band-Aids, we will find our successes in changing that ripple of society.

I think we are making changes; little changes. I also think the incredible tragedies that women have experienced, the increased number of murders against women, will increase over the next 10 years. I think we will see an increase because we are scratching the surface, and that is annoying.


Mrs Sullivan: Much of what you had to say was really typical of what is occurring in my area as well. We are a community in Halton of approximately the same population, also looking for a second shelter and having a difficult time coming up with the gap in capital requirements. Similarly, on the funding formula, I could not agree more about the gap in time between the per diem rate from the province being announced later and so on.

I have a couple of questions that are really of some concern to me in this whole area of the funding of violence programs. I would like your opinion. I have appreciated your project.

It seems to me that we are funding sexual assault centres, rape crisis lines, transition houses and shelters, second-stage housing, programs for incest victims, programs for victims of family violence, all under different programs with different funding formulas, with little co-ordination between groups that are delivering the services, little cross-referencing between the agencies of skills required, and each agency is spending a great deal of time, probably a full staff person's time, on grantsmanship rather than on service delivery.

We heard earlier today what to me was, frankly, a shocking increase for one agency in one year -- and welcome to it. They must have done their grantsmanship very well. But boy, I am telling you, I am not seeing that in my community, and I am going to go back and find out why.

Do you see any hope for the combination or the working together of these agencies to streamline the service delivery and to make the dollars more effective as they move out into the community?

Ms Richardson: I recognize the shortness of time, but I think it is a complicated question and answer.

One of the things we have to recognize is that a woman who has been victimized by her husband is going to have different needs than somebody who has been raped by her father or a boy who has been sexually abused by someone in the community. I think the type of counselling needs that they have and the type of services that need to be in place are different. I think they truly are different, and we have enough experience in what has been available in our community services to have known that.

To me, I think the secret is in looking more at integrating through community co-ordinating committees. In London, we have the London co-ordinating committee to end woman abuse, which has very successfully demonstrated that type of co-ordination of service.

I am not convinced that the best answer is to have one big assault centre where all victims come in for their service, and there are a couple of reasons for that. One is that I think you limit your catchment area. One of the nice things about London is that we have people entering into our system from a variety of different points, and we would lose that through one centre. The other part is that we have to recognize how diverse the individual abuse that is experienced is.

I think maybe in the future we can go there, and maybe we can strive to get there through co-ordinating committees that can talk the same language and get rid of all the junk and rhetoric that blocks progress, but I think right now we have to remain autonomous. I know that is more expensive, but I do not think we are ready because we do not have all of the answers yet. I think it is a good vision maybe for 15 years down the road, or a decade down, but I do not think we know enough about what individual victim needs are right now to say that we can do it all under one roof.


The Chair: The next group is the Cross Cultural Learner Centre. Come forward, please. You many proceed.

Ms Amery: My name is Zainab Amery. I am the education co-ordinator of the London Cross Cultural Learner Centre. This is Nico Barrett, who is the librarian of the Cross Cultural Learner Centre.

The Cross Cultural Learner Centre would like to thank the provincial government for providing agencies such as ours with the opportunity to present our concerns and views on the first NDP budget and its impact on our community.

By maintaining social assistance programs and services while remaining committed to the economic development of the province during this time of a devastating international recession, the government has undertaken a brave stance in the face of corporate criticism.

The effects of the federal policies of free trade and the movement towards manufacturing southward, the GST and the reduction of transfer payments to the provinces have resulted in soaring unemployment, small business and individual bankruptcies, cross-border shopping and high interest rates. These issues have had a detrimental effect on this province, hurting mostly those in the manufacturing and working-class sectors. The government has been caught between a diminishing work force and tax base created by federal policies and a federal government which further seeks to place the burden of welfare costs on the province by drastically reducing transfer payments.

We believe this budget is investing in the future of Ontario and in the direction of recovery. In a number of areas, the budget brings into focus the need to increase community support mechanisms at this time. For example, literacy and labour adjustment initiatives are an investment in the province's economic future while serving to provide vital skills to those most affected and marginalized by the changing system.

The commitment and recognition of native rights, land claims and community development initiatives can only be lauded as part of an international movement to recognize indigenous peoples. Far from being a cynical move to bring about public support, this is truly an instance where government is supporting its policies with funding. However, it is essential that the government recognizes some of the negative climate around these issues within the public at large. We would encourage these initiatives be supported by increasing funding towards public awareness, education and sensitivity towards native issues.

Violence against women remains a major social problem that must be eliminated. Increased expenditures are essential to expand and enhance existing services to women and children who are victims of violence. In addition to this, we feel it is imperative to expand these services and to provide family-oriented counselling, including specialized programs for male members of families.

Given the changing demography of Canada, it is also necessary to recognize cultural barriers which contribute to family violence. In many instances, these barriers are culturally transmitted, and although behaviour modification must take place, we must recognize that newcomers' cultural belief structures may differ dramatically from Canadian laws. It is vital that certain funds be allocated to combating violence against women to develop specialized programs and services from a culturally specific perspective, with the objective of maintaining the family unit.

As the recession continues to have a devastating impact on our economy, individuals tend to blame their problems on newcomers, who are invariably members of minority groups. The multicultural demography cannot be changed into a single, homogenous grouping, so it is essential that programs that represent the restructuring of Ontario's economic growth provide for the funding and support of initiatives which represent our multicultural composition. Multiculturalism is not about songs and dances; it is about overcoming racism, prejudice and bigotry in order to achieve real acceptance and integration so all citizens in our community can share equitably in the benefits of economic growth.

The 1991 Ontario budget, while making great strides in fighting the recession and not the deficit, appears to be addressing minimally the need for expansion of education and sensitization through multicultural programs, which not only represent an essential component to the reduction of racist and discriminatory behaviour in our communities, but are directly linked to all major areas of our society, including education, health and employment equity.

We would encourage the provincial government to extend pay equity initiatives beyond women to the disabled, aboriginal peoples, minorities and newcomers. In addition, both pay equity and employment equity initiatives should seek to expand across the board and into the private sector.

Government budgets and policies have the potential to shape the quality of life for all members of our community.

Our newcomer clients represent a highly disadvantaged group. Although many members of this group are well-educated and skilled individuals, their low level of English literacy and the lack of support for professional or skilled recognition in Canada, or Ontario more specifically, undermine their ability to function fully within our community.

Manufacturing sectors, where we have seen the highest number of unemployed, have always employed a high number of newcomers with limited English literacy skills. There needs to be increased funding for specialized programs to assist these individuals in obtaining or upgrading language and job skills.

Every effort must be made to recognize the needs of already trained individuals and assist this group to obtain specialized apprenticeship training which makes use of their previous experience and skills. The most hated word by the newcomer, the one he or she learns almost immediately, is "Canadian experience."

We would like to emphasize that our objective of participating in this forum is to provide a voice for the community groups we represent to ensure that all newcomers and minority groups are empowered to participate actively and equitably within our society. Workplace training, employment equity and literacy programs are all good starting points to assist our constituents in developing the skills and adaptability to participate in the new economic structure of our province.

In conclusion, we thank the government of Ontario for holding the public hearings on the first budget and providing us with this opportunity to present our views on its impact on our community. It is essential to look to the future of this province and ensure that all members will share equitably in the benefits of our economy. In our view, the budget contains some major initiatives and investments in the people of Ontario. We applaud the efforts of the provincial government and encourage it to continue looking to the future of Ontario.

The Vice-Chair: Thank you very much for your presentation. We will start the questioning process with the government party.

Mr Winninger: I certainly appreciated your presentation. It sounds as if we are not spending enough for you. Is that true?

Ms Amery: From our perspective, we are not receiving enough for our constituents. We have been capped for a number of years through the Ministry of Citizenship for our organizations. We have assisted in developing projects for this past year for individual community groups for which we have been told there are no moneys available through the Ministry of Citizenship because of reductions.

Mr Winninger: I know that the Cross Cultural Learner Centre in London has a tremendous reputation and is a model for other municipalities to follow. A lot of your funding does come from the province, does it not, from Citizenship?

Ms Amery: Actually, no, most of our funding comes federally.

Mr Winninger: I see, so it is not a provincial funding problem you are addressing today.

Ms Amery: It is both; I think we are addressing both. From our perspective it is imperative that the two come together provincially and federally to most benefit the group of individuals we are representing. On the one hand, we are representing everyone, and on the other hand, we are representing newcomers, because unless the climate is accepting within our communities, the newcomers we are bringing into our communities will not be accepted. If we are going to bring them, then we have a responsibility to ensure that they can participate in our community. Whether that is from the provincial or federal government's perspective, it should be a joint effort because they are living in both communities. At the present time they are being disadvantaged by both sides.

Mr Winninger: Some of your clients certainly are new immigrants to Canada and many of them require education and health care assistance before they become landed immigrants, right?

Ms Amery: Yes.


Mr Winninger: I understand this is where government money plays a very important role.

Ms Amery: It definitely does. Language training has become one of the greatest problems, not only in terms of language training for basic language skills but in terms of finding a job. We have a number of people, for example, from within the Cambodian-Vietnamese community who were employed by several of the plants closed throughout London and St Thomas. Many of them came several years ago and did not receive language training. As a result of job losses, we find a huge client group that does not have the English literacy skills to move into another sector. They do not have any other skills to move into the language sector and they are basically floating around lost at this point. Not only do they require language training, but they also require job retraining to get into another field where they can work.

Mr Winninger: There were some delegations before us today that suggested we should not be spending any of this money and that we have to cut back on programs and pare down our deficit. What impact would this have on your clients and your agency? I realize you say you get most of your funding federally, but there is some from the Ministry of Citizenship.

Ms Amery: We get approximately $73,000 from the Ministry of Citizenship in OSAP funds.

Mr Winninger: What percentage of your total budget would that represent?

Ms Amery: It is probably about 4% of our total budget.

Mr Winninger: If we took away the $73,000 for your agency alone, would that have some impact on you?

Ms Amery: It would have a great impact on us.

Mr Kwinter: It would not have any. That was a trick question.

Mr Winninger: I think she should be allowed to answer the question without her time being used up.

Ms Amery: I do not have a problem with that in your question. I should make it clear that the funding we receive federally is from a number of different projects and is attached to a number of different projects. The OSAP funding we receive is the only money we are eligible for to do education, workshops and leadership development with the communities we are dealing with. It is one of the only sources of funding available to do that with, provincially as well as federally. The Secretary of State has also changed its mandate. It does not provide as much funding towards educational processes under the multicultural area. There is a greater focus towards specialized racism programs, but geared away through the educational programs within the schools within the individual communities we deal with.

Mr Winninger: There are clients of yours who are sponsored immigrants and people here, their hosts, have undertaken to support them for a fixed period. Sometimes those sponsors pull out for one reason or another and the relationship breaks down. In the past these people have been denied social housing and social assistance. What would you like to see happen in this regard?

Ms Amery: I have had to deal with a number of cases where I have seen people turned down for low-income housing and welfare benefits who have been placed in a position where the host families have had to pull back either because of a breakdown in the agreement, in the arrangement, or because the host family was no longer able to support itself, let alone its sponsorees. I think we should be open to assessing eligibility on a case-to-case basis on that format. I feel very badly for people who are turned down automatically and not given the opportunity to receive some of those benefits, so that when they are brought to the country, they really have nothing to do with what the relationship ends up being. Unless you can force the host family to care, in some way or another, for the people they brought in, it is not fair to penalize the group that has come to Canada and wants to participate in the community.

Mr Winninger: That would require provincial funding.

Mr Phillips: Thank you for your thoughtful presentation. I particularly like the line you had, which I cannot quite remember now, which was something like multiculturalism not being about song and dance but about access. I am paraphrasing a bit. I totally agree with that. I think one of the challenges with multiculturalism right now is that it is subject to grave misinterpretation. I like your definition of it.

I think the concern about the budget is real for some of us. My question is about getting the economy going. I think some of us are deadly worried that a year or two from now, not only will it be difficult to sustain organizations like yours, but if there are not the funds, it may be tough just to keep at your current level, coupled with some real concerns some of us have about job creation and creating the environment where many of the people you are servicing can be best helped by a quality job. We understand the recession is ending and that one of the reasons the government brought this budget was in the expectation that the economy was recovering. Are you beginning to see the economic recovery with your clients? How is that manifesting itself?

Ms Amery: I do not think we are beginning to see it. In fact, in most cases I think we are seeing a perspective where the students themselves are feeling they are not treated as if they belong in Canada. When I say "Canadian experience," it follows through on almost all aspects of their lives. It has become one of the most difficult ideologies to deal with, with the newcomers, because they do not know how to respond. How do you respond to an employer who says, "We know you have 20 years working as a welder, but you have no Canadian experience and you have minimal English"? Six months of language training? How do you argue your point? How do you say to that person, "It's against the law for you to discriminate on the basis that I don't have Canadian experience"?

Because of our recession, we are seeing more of a backlash towards them. We are not seeing improved relations. We are seeing more people addressing the issues that people do not like them because they have an accent or because they are not from Canada. It seems to be on the increase rather than on the decrease.

Mr Phillips: That is surprising, because I thought we were coming out of the recession and that you might have seen that in the months behind us.

Ms Amery: It is unfortunate, but once attitudes change and people have found their scapegoats, it then takes a process of re-education to get the general public to be accepting of the newcomers and provide them with opportunities, when they are seen as taking jobs from the Canadians.

Mr Phillips: One of the thing that worries me a lot is this youth unemployment. I have spoken of this many times. Two years ago and one year ago youth unemployment was 8%; it is 16% now. Do you have many young people -- by "young" I mean in the 15 to 25 age bracket -- who are clients of your organization? Do you see anything in particular, one way or the other, that changed with young people over the last few months versus what might have been the case one, two or three ago?

Ms Amery: With students in the 15 to 18 age range, the children of newcomers, we generally see that they will go through the educational system and many of them tend to go into the post-secondary sector as well. However, we are also seeing a number of people coming into the country in the 20 to 25 age range. A number of them will not go into the post-secondary sector unless they have had previous educational experiences that were incomplete. Even then, they will go into the employment sector initially because they must acquire enough English to write a TOEFL or test of English as a foreign language exam, which usually takes them between one to two years.


Mr Phillips: In terms of the demands on your organization, I am trying to get a feeling for what the demands would be today versus a year ago and two years ago. Have the needs changed in any area? Are you putting more focus on something now that you would not have a year or two ago and less in other areas?

Ms Amery: We are putting more focus right now into outreach into existing communities, because as I said, we have seen an increase in racism in terms of how people are settling into the community. Where prior to a year ago we dealt primarily through our settlement services with government-sponsored refugees or church-sponsored refugees, we are now in a process of reaching out to the culturally specific communities in general. We have also submitted to the Secretary of State a three-year plan to do institutional change within some of the private and business sector areas in the London community, because we are finding that is one of the areas where we have to make a change in order to get some of our clients into those employable positions.

Mr Phillips: That is a sort of a cloudstorm on the horizon for us, I think, what you just said. You perceive an increase in racism?

Ms Amery: Over the last six to eight months, we have already seen an increase in racism. One of the examples I can give you is that throughout the Gulf war what we saw in a number of the schools, because London has a very large Arabic community in certain sectors of the city, was a high incidence where it was necessary for the people from the centre to go and do work with the school boards. We joined forces to develop resource lists and provide resources, but we saw quite a number of instances just over a three- to four-week period.

Mrs Cunningham: This is an appropriate time for me to jump in because I was one of the founding members of the Cross Cultural Learner Centre. It is interesting to see how you have kept your main focus but changed some programs as the needs of our community have demanded.

I would like to clarify a couple of things. When the school boards were asking for your help, it was basically as a prevention thing, was it not? Teachers, as always, are looking for ways of dealing with situations, so I think it was a preventive, knowledge-based kind of thing. At least, the committee report I read from the school board said that.

Ms Amery: There were two instances. In one instance, we were asked to go in as a preventive measure. We addressed the principals and we provided them with resources. In the other instance, it was because of a response to incidents that had happened in one of the schools.

Mrs Cunningham: Perhaps it was whatever you provided them with that I was reading, as a result of the program committee, which I thought was a great use of your resource, because initially the Cross Cultural Learner Centre started to assist teachers in curriculum, if you can believe it, so we have come a long way.

I was going to ask some specific questions. Perhaps down the road and after this meeting, I can be of some assistance to you, because it has been a year since I talked to your director with regard to his needs, so you are presenting what he would normally present, I think, in my office.

When you talk about talking to the Secretary of State, right now the money for the literacy and labour adjustment is with the Department of Employment and Immigration. There is a lot of money and Ontario has not tapped into it yet; other provinces have. I am not quite certain, although I am speaking to our minister as well who is involved in the skills development part, with regard to how we are going to access that money. As soon as I find out what it is, or if I can influence it in any way, certainly feel free to get in touch with my office, because it is brand-new for Ontario.

Ms Amery: Can I just address it to you?

Mrs Cunningham: Dianne Cunningham, London North. I have a card. We will see you afterwards.

The point I am trying to make is that there are so many institutions involved in the literacy part of your work just here in London. Mr Sutherland and I have had some extensive discussions around what we would like to see happen and how we can support it after talking to the groups. We have not chatted with your group yet, but I think it is an issue for your organization because of the many areas you touch upon. Certainly G. A. Wheable Centre for Adult Education must be something you work with, as well as the churches, in the provision of programming.

Ms Amery: We participated in the meeting with the labour adjustment board when it came to discuss the process and how it was going to develop.

Mrs Cunningham: Good.

Ms Amery: My understanding is that nothing has come into existence yet.

Mrs Cunningham: That is right.

Ms Amery: We are hoping that will develop and help some of the individuals who will need its assistance. My understanding, though, from the individuals who presented at the forum in London, was that it probably would not affect those individuals who had already received a layoff or who were not already in the workplace and were going to be laid off.

Mrs Cunningham: My job is to make certain that the agencies in London get the money they want. We can talk about that down the road. We are not aware just what the ground rules are in Ontario. We do know that other provinces have their money and we do not, so we are interested in getting as much as we can.

I am interested also when you talk about this Canadian experience. Certainly in my office when I get young people in -- I did not know that number was 16% youth unemployment; I knew it was more than 10%, but I did not realize it was 16% -- we are seeing it. I think Dr Pedersen will be here tomorrow to talk about the University of Western Ontario and I am sure it will be one of the things he will tell us, that we see students going back to school. Are you having that phenomenon within the group of students you deal with? Are they going back for other degrees or graduate degrees?

Ms Amery: They are not really going back for other degrees. What we are seeing is people coming out of programs like Fanshawe College or Wheable and going into another program. For example, they may go for six months' language training at Fanshawe and immediately to Wheable or the Centre for Lifelong Learning simply because they cannot get into an employment program and they cannot get into the employment workforce. They are stranded in between and they go for language training, they go for computer upgrading or business courses, but they go where they do not have to pay and they go where they can learn English. They do not normally go into, as I said, the post-secondary sector unless they have had some previous professional experience.

Mrs Cunningham: When you said OSAP, I thought there was something I did not know there. That is for the others who are specific to the university or to the colleges.

Ms Amery: Right.

Mrs Cunningham: You have been most helpful, but I think our discussion has just begun.

The Chair: I would like to thank you for appearing before the committee. The Registered Nurses' Association of Ontario is not present as yet. I guess we are going to have to take a break until they get here.

The committee recessed at 1528.


The Chair: Talking to the three parties here, as it is getting on to 3:45 and the Registered Nurses' Association of Ontario has not appeared yet before this committee and its time is running out, we will accept its written submission to the committee. It is unanimous that we adjourn for the day and meet again tomorrow at 9 o'clock in this room.

The committee adjourned at 1544.