1991-92 BUDGET

















Thursday 22 August 1991

1991-92 budget

Regional Municipality of Hamilton-Wentworth

Wally Lucente

Community Opportunities Development Association

Retail, Wholesale and Department Store Union

Stephen Hershey

Brantford Chamber of Commerce

Chris Mewhort

Alex Michalos

Onward Willow Centre

Wellington Ad Hoc Committee Against Bill C-69.

Brantford and District Labour Council

Ontario Flue-Cured Tobacco Growers' Marketing Board

Ontario Psychiatric Survivors' Alliance

Ontario Women's Action Coalition


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)

Substitution: Carr, Gary (Oakville South PC) for Mr Sterling

Clerk: Decker, Todd

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

The committee met at 0903 in the Quality Inn, Brantford.

1991-92 BUDGET

Resuming consideration of the 1991-92 provincial budget.


The Chair: I would like to welcome everybody this morning to the standing committee on finance and economic affairs. We will resume our hearings on the budget review. To start off, we have the health and social services committee of the regional municipality of Hamilton-Wentworth. Would the gentleman please come and identify himself and his position for the purposes of Hansard. You may begin and you have 15 minutes.

Mr Agostino: Thank you, Mr Chairman. I am Dominic Agostino, chairman of the health and social services committee, regional municipality of Hamilton-Wentworth. I thank the committee for the opportunity to be here today to speak on some impacts and effects of the budget, particularly from the health and social services perspective in the region of Hamilton-Wentworth and on our local taxpayers.

I appeared before the standing committee on finance and economic affairs on January 22, 1991. At that time, I made a number of suggestions and gave some input as to what we would like to see in the budget. Unfortunately, the majority of those areas that we had talked about, particularly from the perspective of municipal cost-sharing, did not come through to our satisfaction and clearly to the satisfaction, I believe, of the majority of taxpayers in Hamilton-Wentworth.

I am going to briefly, first of all, address the health care end of it. In Hamilton-Wentworth, per capita health spending by the province is one of the lowest in Ontario. The range is from $47.60 per person in the city of Toronto to a low of $16.71 in Peel. We are $19.95 per capita.

We have many special needs in our community: socioeconomic concerns, environmental and multicultural issues as well as a number of institutions in need of assistance. Our concern focuses in on our funding primarily for the new mandatory programs which were introduced in 1989 on a three-year schedule which allowed local option approval by council to implement those programs as quickly as we possibly could in a three-year period.

In 1990, regional council approved 30 new positions under the Ministry of Health funding. Out of those, 15 were approved by the province. In 1991, regional council, in a very tough economic time and a very difficult budget period, budgeted our share of 28 new positions. Only 4.5 of those positions were approved by the province and by the Ministry of Health, which is absolutely ridiculous from our point of view. We were able to come through with the 28 positions. Our cost-sharing was just 25%. We were badly let down in regard to the response from the province in this area.

We certainly will not be in full compliance with all mandatory programs by 1992. It is totally out of the question from a financial point of view since we have not had the provincial support to phase in the programs we needed. We are, as I mentioned, one of the lower-funded health units with higher health problems than many municipalities across this province.

Reports from governments, including the Premier's Council on Health Strategy, have emphasized health promotion, prevention, local decision-making and a shift to community-based services. Unfortunately, Ministry of Health funding for public health services does not seem consistent with these directions. We believe the Ministry of Health budget must reflect the shift to community-based services by increasing the funding available for cost-shared mandatory programs and funding all public health programs which receive local approval.

Another area of concern is the funding for second-level lodging home programs. The second-level lodging home program provides health promotion and protection services to residents of second-level lodging homes. This is not considered mandatory by the public health branch, the Lightman commission has concluded. It is now reviewing the legislation and funding of rest and retirement homes. There is presently no identified funding source for this vital community health program. It is clearly important to our community. We had a task force chaired by then Alderman Christopherson, a member of this committee, that put together what was a first-class report and what the implementation of these programs is really waiting for is clearly provincial funding.

We recommend and hope that the ministry identify funding sources for the second-level lodging home program through either long-term care, the Lightman commission or the community mental health programs and provide sufficient resources for this program at a 100% level.

I would like to focus the rest of my presentation primarily on an area which is of a major concern to us, and that is general welfare assistance in our municipality and primarily the cost-sharing. Our presentation we made in January emphasized that we felt there must be a significant shift in the cost-sharing formula between municipal and provincial governments in this province.

I can tell you that our committee is disappointed with what came through the budget and the follow-up funding that has resulted. In January, when I made the presentation, general welfare cases in our region were 9,845 cases. We projected 11,000 on average for 1991. As of the end of July, we had reached a high of 12,690 cases. We expect this to keep rising. It is approximately a 62% increase from last year, and the disturbing aspect is that between now and April of next year we expect over 22,000 individuals to come off the UI rolls in Hamilton-Wentworth and approximately 4,000 of those people are expected to come on to the welfare rolls in our region. This is going to again cause an explosion in our numbers and it is going to once again cause major financial difficulties for Hamilton-Wentworth. We clearly see a possible crisis coming financially as well as economically in the area of social services in our region.

We were hoping that the budget would help our municipalities in that aspect. It has not. It has been a major disappointment. The funding formula has been shifted slightly to increase funding from 90% instead of 80% on 4% of the total case load. That is of some help to us but the financial impact is minimal compared to the money we desperately need.

First of all, on the positive side, I think the province should be congratulated for the initiatives regarding the job creation fund. Our municipality is one of the first to receive assistance. There is $1 million that has been put into programs, through the Ministry of Community and Social Services, for job creation for general welfare recipients. It will create about 150 positions for a six-month period. This is very positive and these are the types of initiatives we need and will continue to need in Hamilton-Wentworth and right across Ontario.


However, I must go back to the fundamental issue, and that is the cost-sharing. Recommendation 197 of the Transitions report states: "The full financial responsibility for social assistance allowance and benefits should rest with the senior levels of government." The emphasis of those recommendations was, I believe, adopted by all three parties in the House, clearly the government of the day. However, the reality has not met those expectations that we had.

We have over $17 million of Hamilton-Wentworth taxpayers' money budgeted in to general welfare assistance for 1991. This will increase as a result of the increasing case load. I clearly understand the restrictions on the provincial government as a result particularly of the latest court decision and the Mulroney government's idiotic decision to cap to 5% per year the growth on social welfare transfers to the provinces. Ontario is going to be particularly hard hit. We fully understand and we fully support the efforts of the Premier to use everything possible to get the Mulroney government to change that decision and to put in a formula that is realistic and reflects the economic needs.

Clearly, there is a hidden agenda here. It is to destroy social programs and social welfare right across this country. We cannot let them get away with that. But at the same time, we at the municipal level cannot be the victims of this fight between the provinces and the federal government. We need the help, we need the financial assistance, and this may take years to resolve.

The reality of the situation is going to be that our region is now going to be facing some very difficult decisions.

First, we are in a position right now to review, and we will start reviewing, what we call discretionary programs in Hamilton-Wentworth. These are programs that are not mandated by the province but clearly of extreme importance, items such as dental care for seniors and children, eyeglasses, cribs, beds, kitchen appliances for people who are welfare, prosthetic devices, clearly essentials but programs that are not regarded as mandatory.

At this point the region has budgeted $1.1 million and will probably spend in excess of that in 1991. Those programs are under review and will be under serious consideration for total elimination or cutbacks in the next few months unless we get some financial help. We are in a desperate situation. These are programs that we are not mandated to carry out and that many municipalities across Ontario do not carry out. We feel we are further ahead as a result of these programs, but we do not have the financial ability to continue to carry out these programs. Those decisions may have devastating impact on people in our community. However, at the municipal level we feel we have no choice.

Second, I will ask our region in the next few months, unless there is a clear shift in the funding formula, to very seriously consider sending the whole responsibility of general welfare programs back to the province. Clearly we are not in the financial position to continue to carry out those programs that are mandated and legislated by the province unless we get the 100% funding that we should get, that has been recommended and that clearly has been identified as a provincial responsibility. We cannot continue to carry the load of a provincial program that should be fully funded by the other two levels of government on the backs of the people of Hamilton-Wentworth and the home owners who have to pay through their taxes for these programs. That decision, again, will have to be made by the committee and council, but clearly, unless there is a formula in place and a change very quickly in the funding formula, we will make that decision and the province can do what it likes -- take us to court, challenge us or anything else on it.

I think the time has come for us to get serious at the municipal level and I think you are going to see clearly a revolt right across Ontario of municipal governments saying, "Enough is enough and we cannot continue to pay for programs that clearly do not belong in our lap." I do not think anyone can question that. The welfare programs are not a municipal funding responsibility. We will carry it out at the municipal level. We are the best able to do it because we are on the front line, we understand the needs of our community much better. But carrying out the programs is one thing. Having to pay for them unfairly is another, and we will not continue to do that.

These are drastic measures that our region will have to consider in the next few months, but obviously these are tough times. These are tough times for our taxpayers and we must be accountable to them and carry out the programs we are mandated to do at the municipal level. Welfare is not one of them, in my view, to be paid for by the taxpayers who can no longer afford it, who have been hit from all sides. Our region will make those decisions in the next few months and will obviously then have to deal with the ramifications at the provincial level of those decisions we do make.

I want to address very briefly the issue of day care subsidy, which is a concern to us, and the issue of profit and non-profit or commercial centres. We are concerned that the direction of the government is going to mean an increase, particularly in the number of commercial centres that will be forced out of business. The slack will then have to be picked up by the non-profit centres, which will mean, in our view, an increase in capital funding, an increase in spending, in order to ensure the spaces are available in our community. Approximately one third of the day care spaces are in the commercial sector. It works well and we urge the government that there is equal funding for profit and non-profit centres. We do not have a problem in Hamilton-Wentworth in that area. The level of care is relatively equal and we want to continue to give residents in our community that choice. If you remove that choice, I think you are going to see an increase in the cost of providing day care services, because clearly the non-profit sector will have to pick up the 30% or so that is now in the commercial sector, which in our view will slowly go out of business as a result of this type of legislation.

I am hopeful that this presentation will emphasize the seriousness of our situation in Hamilton-Wentworth, the problems we are facing and the fact that unless we get some help very quickly, we certainly will be one of the first municipalities across Ontario to lead what I believe will be a municipal revolt, having to pay a welfare cost that clearly does not belong in our lap.

Mr Phillips: I appreciate very much your presentation. I think the whole future of dealing with issues like those you have raised depends on our ability to develop economic activity. Our biggest concern about the budget is that, in our opinion, it does not generate the necessary economic activity to be able to fund the sorts of things you have talked about.

Because you are very close, obviously, to the situation in Hamilton in terms of the impact of this budget -- and I guess the other big thing for Hamilton probably was the Red Hill Creek expressway -- I would be interested in your opinion of what this budget will do for economic activity in Hamilton that will fund the sorts of things you are talking about, and maybe just tangentially the sort of impact the Red Hill expressway might have on economic activity as well.

Mr Agostino: Clearly the decision to cancel this project has had a devastating impact on our community. Clearly, jobs have been lost. There has been nothing to replace those jobs that have been lost. There has been nothing to replace the plans we had talked about in building the expressway. This is in the short term.

The long-term impact is still difficult to assess because of the lack of incentive, because of the lack of a transportation network to entice business to move to and grow in Hamilton-Wentworth. There is a short-term loss of thousands of jobs that has been well documented, and a long-term loss of many other jobs and lack of business interest in Hamilton-Wentworth as a result of the decision to cancel the expressway.

The job creation fund has helped minimally, with general welfare assistance, but generally we have not had the type of infusion of dollars I believe we need to help Hamilton-Wentworth get out of its recession. We are facing an almost 11% unemployment rate, very difficult times in our community and clearly job creation has not come our way. Maybe other communities have seen it. Hamilton-Wentworth has not been a great benefactor of that to date.

Mr Carr: Thank you very much for a fine presentation. It was interesting that you talked about the taxpayers and about how much you needed more money for the various programs. As you may be aware, the province is in a deficit position right now. You are going to be here about 15 minutes making your presentation. During that period the province will spend $195,000, not for the health care, not for social assistance or whatever, but just to pay the interest on the provincial debt alone. That works out to $13,000 a minute, so in the time you are here we are going to spend almost $200,000. What do you say to those taxpayers who say spending $200,000 just to pay the interest in 15 minutes is an absolute waste of money?

Mr Agostino: Clearly we are not happy with it. Anyone would not be happy. We all have a choice. We would prefer this province to be in a non-deficit position. We would prefer the federal government to be in a non-deficit position. The reality is that we are going to have government deficits. I guess the question is, where are the priorities for that money to go into? I say to my taxpayers, "Should you be carrying that deficit further on your backs under the most regressive system of taxation you have, which is property taxes?" I do not believe that is the case and this is adding insult to injury. Not only are we getting hit with having to pay for the deficit on one hand, but then the home owner who is barely making ends meet in our community has to pay again. It is a double whammy and they are hit right between the eyes.


Mr Christopherson: Dominic, it is nice to see you again at one of our hearings. You have talked about a lot of the needs, mandatory programs, the second-level lodging homes, transfer payments, GWA, Transitions and all the things that I was with you in dealing with at the municipal level. You use terms like "desperate situation" and "devastating impact." The opposition parties, including members of your own party, have been making the case that the deficit is far too high and that this is not the direction to go in. The alternative, as you know, would be to go down the road of a Mulroney-type budget, which cuts back particularly in areas of social spending. I would be interested in your opinion on how Hamilton-Wentworth would have fared had we not at least made the transfer payments and the kinds of commitments to the social programs we did? In other words, if we had gone down the Mulroney road and not down the road we had, what would the impact on our community have been?

Mr Agostino: As I mentioned, clearly we did benefit from some of the programs, like the job creation fund and some of the other benefits that welfare recipients in our community have made. Frankly, I think a decision to cancel the expressway undermined by a wide margin any other efforts that came forward. If you weigh the net loss and the net gain, we clearly came out on the short end of that part of it. We have lost a lot more than we have gained as a result of the decisions that have been made by the provincial government and in our own region and, as I stated earlier, the municipal funding formula has not been addressed in any way by this government and the local taxpayers are going to be the big losers of that. We have made some gains, but I think the losses have by far outstretched the gains because the expressway was one decision that would have had an absolutely positive, continued effect on our community. We are reeling and will continue to reel very badly as a result of that one government decision, and it is going to take a great deal to make up for the loss of jobs, confidence in our economy and basically confidence in our own ability to carry out our programs in the region. Regardless of political affiliation, we all understand the need for a strong economy and the need for business to grow and prosper in order to pay for those social programs. You cannot have one without the other.

We are having a great deal of improvement in the area of social services in regard to benefits to recipients and so on. We acknowledge that, but unless the economy is allowed to grow and prosper and the incentives are there for this economy and this province, you cannot continue to pay for those social programs fairly and distribute that fairly across so that people are able to afford it. Unfortunately we have not seen enough of the other end, and maybe that is one of the reasons why the money is not available at the provincial level to help out municipalities and we continue to pay the bill for something we should not be paying.

The Chair: Mr Agostino, thank you for appearing before this committee, and I believe you have brought some different points forward that have not been brought across the province so far. We appreciate your attendance here at this hearing.

Mr Agostino: Thank you very much, Mr Chairman, and members of the committee.

Mr Sutherland: As you know, Mr Chair, not all the groups that had wanted to make presentations were able to appear because of the limited time we have. One of those groups that also wanted to appear was from the Oxford Regional Labour Council, in conjunction with the CAW Local 636. They were not put on the list. However, they did drop off briefs at my office, and while I am not sure if there are enough copies here for everyone, I would like to table the brief with the committee and hopefully, if the clerk could get some extra copies, have that circulated to all members.


The Chair: The next gentleman to appear before the committee is Mr Wally Lucente. Welcome to the committee. You have 15 minutes for your presentation.

Mr Lucente: I will try to get organized here. Mr Chairman and committee members, let me just start off by advising you that I am speaking as an individual first, and also speaking as an alderman representing the city of Brantford. Let me start off by thanking you, the committee, for attending here today. I cannot recall if a legislative committee has ever attended Brantford. I thank you very much for making Brantford one of your stops. It is very important for me, an individual and also a member of council, and for the province to feel that this city is an important stop throughout the deliberations across the province.

I want to talk first about the recession we are going through and the impact it is having on this city. Historically, Brantford has always been hit when it comes to a recession, hit hard and hit fast. A number of examples as a result of recent recessions -- and you are probably aware of the plant closures -- are Massey-Ferguson, White Farms and Fruehauf. Brantford is always hit first with respect to recessions, and our infamous federal member of Parliament, Derek Blackburn, has always referred to Brantford as a microcosm of the economy, or of things to come, and that certainly has been evident with this recession as it was in the last recession.

I want to talk about the current impact the recession has had on this municipality at this point. Unemployment is in the double-digit figures, certainly larger than the national average. Inflation has been devastating in this municipality as well, and the welfare costs have been staggering in this municipality. As the previous speaker has alluded to from another municipality, I just want to touch on some of the figures with respect to welfare costs in this municipality, just to give you an idea of the kinds of increases we face and the kinds of expenditures we as a city and a county have been faced with when going through our budget proceedings as a city.

In 1989 our welfare costs were $8.7 million, in 1990 they were $12.6 million and in 1991 the projected costs, if we continue at the rate we are going, will be $24 million. That is approximately the projected costs for the end of the year. It is almost double from last year and this has a significant impact when we, as a council or as a city, have gone through our budget process. Let me just start off by applauding the current government with respect to its announcement of Back on Track, which allows some relief to the municipality if we go over a certain level. Our figure, as I understand it, is approximately $25 million. If we as a city and county meet that level at the end of the year, there is an opportunity for some reimbursement. That is important and it may lessen the impact with respect to the budget we have just gone through this year.

With respect to building activity, again just some figures to give you an idea of what has happened in the last few years: In 1988 Brantford was in a boom, so to speak. There were approximately $109 million issued with respect to building permits. In 1989 it was $119 million, probably one of our best years. In 1990 that shrank to $70 million, and this year the projected cost, actually up to July of this year, is only $36 million. If you project that through to the activity we are at right now, it will be only $54 million with respect to building permits being issued. You can see the impact, or the downturn, in the local economy here. The city, I may add, is just strained and that is evident through the budget process we went through that I am sure you also went through.

Just with respect to debt, at this point the city has incurred $60 million worth of debt -- $40 million in principal and $20 million in interest projected. These are the capital costs, because of course municipalities do not have the opportunity to incur deficits as provincial and federal governments do. Let me just say that from a municipal point of view we just cannot afford any further debt.


Taxation has had a significant impact on the municipality as well. The market value assessment has cost us increases in some situations up to 100% for certain individuals, and that is evident by the kind of activity and anger that exists in this municipality and throughout the province with respect to taxation. So I think it is important to recognize that from a city's point of view or a city ratepayer's point of view, they cannot afford any further increases because it is the most difficult year as far as taxes are concerned, and the ratepayers of this city are always the front runners, as the impact is felt first at the municipal level.

I just want to explain to you my point of view with the recession and perhaps talk about the difference between this recession and the 1981-82 recession that the city was faced with. There is a difference between the two recessions in that with this recession the difference is that jobs are not just being deferred or people are not just being laid off. The jobs are gone, and I am submitting to you that the causes of some of these jobs being gone, among other things, is the federal Tory restrictive policies that they have adopted under Mr Mulroney.

The free trade agreement is the biggest example. Those advocating against the free trade agreement in the past -- unfortunately their predictions have come true because they argued against it suggesting it would have a devastating effect. Jobs would be lost. Plants would be shutting down and jobs would be going down to the States. Unfortunately for this municipality and this province, that has come to fruition because that is exactly what is happening. Brantford is the greatest example of the effects of that policy, or that directive, or that decision made by Mr Mulroney and his friends in Ottawa.

The goods and services tax is also contrary to those who argued against it. It has caused a devastating effect, and it has contributed, in my opinion, to the recession because it has impacted on consumer spending and attitude. That is evident by shoppers today. They are all going down to the States, crossing the border, because it is cheaper in the States to buy certain goods than it is in Brantford. You cannot blame individuals for taking that attitude because the amount of taxation is just ridiculous. Just in talking to people on the streets, when you talk about provincial sales tax and the goods and services tax, that is the straw that broke the camel's back; of course, with the tight monetary policies that were adopted by Mr Mulroney and his Tories as well.

I want to touch on the actual budget itself now. Let me just start off by suggesting that fundamentally I am against deficit spending. I think we are all against deficit spending as individuals and I am sure, as a provincial government, they are against deficit spending. However, in view of this recession -- and as I understand it, it is one of the worst recessions since the Depression of the 1930s; certainly worse, from my point of view, than the recession of 1981-82.

There were two options I am suggesting the provincial government could have pursued. The one option is the federal Tory approach, and I call that the do-nothing approach. It is a restrictive type of approach. It restricts assistance to individuals. It restricts job creation programs. A prime example is the worker adjustment programs that Mr Mulroney suggested would take place when the free trade agreement occurred. He talked about that, and those who were averse to the free trade agreement argued the amount of jobs that would be lost, and Mr Mulroney responded by saying there would be worker adjustment programs that would take place. Well, certainly those worker adjustment programs did not take place or have not taken place from a federal point of view.

The only worker adjustment programs that have taken place are from the provincial government, and Brantford was first to receive that assistance whereby certain provincial moneys came forward to Brantford, and it was instrumental in assisting us to set up the program through the unemployment service centre in Brantford. I applaud the provincial government for doing the job that should have been created by the federal government as a result of the free trade agreement.

Another policy or another method, if you had gone the do-nothing approach or the federal Tory approach, is to place certain restrictions on the province. Nothing is more evident than the recent Supreme Court decision to uphold the federal govenment's decision to rescind transfer payments to the province, amounting to something in the effect of $1 billion with respect to welfare payments. That is $1 billion that was added on to the deficit of $9.7 billion or whatever figure it is. In other words, if the federal government had not adopted this restrictive policy and had come good with the transfer payments, that would have been $1 billion off the deficit as well.

In short, the federal approach was a do-nothing approach, a cutback approach, a no-assistance approach, and their only approach was to increase taxation during very difficult recessionary times. Unfortunately, that sort of approach impacts the most on those who can least afford it, certainly not on those who can most afford it, which is usually the Tory approach anyway.

The other option is the provincial approach. This approach, I may add, is the approach that I certainly support, and that is a do-something approach or a proactive approach as I would call it, and the assistance has come to Brantford with respect to that approach. As a representative of ward 5, which is across the road from where we sit right now and includes a number of older neighbourhoods in this municipality, certain work, certain projects were definitely necessary. The biggest example that I applaud the provincial government for was the anti-recession moneys that came to Brantford, or a series of moneys through a package; $4.6 million flowed into Brantford for a number of different sectors.

In education there were improvements to three high schools. In health we have had improvements to hospitals. One example, the Brantford General Hospital, unfortunately it came to their attention that certain parts of the hospital had asbestos that had to be removed. You cannot really budget for something like that, and when you are running a really restrictive budget from a hospital point of view you just do not have those moneys. So part of the moneys that came as a result of our anti-recession package helped finance the removal of that asbestos, certainly moneys that were not budgeted for, and the hospitals did not have moneys for it. St Joseph's Hospital also received moneys. There were moneys made available through housing. Additional provincial dollars have flowed through to the new Brantford Public Library that is being built, and I can remember our representative Mr Ward attending and making the presentation on behalf of the minister responsible.

Sanitary sewers: The city, especially the older sections, are in desperate need of repairs in their infrastructure. These sorts of moneys have gone towards capital projects. Road reconstruction: a series of roads being rebuilt in the older sections and throughout the municipality. This reconstruction, in my point of view, would not have gone ahead this year if not for the assistance of the province, if not for the support of the province. These were activities, these were capital construction projects that were scheduled but certainly, in view of the budget that we have gone through this year, there is no way that we as a municipality would have afforded that kind of activity if not for the assistance.

There are a number of spinoffs that are created as a result of doing the work now during this recessionary time because it maintains employment firstly. It maintains employment from the municipality as one of the largest employers remaining. It also issues work to contractors, to businesses, to developers as well. In short, during recessionary times, it is important to inject assistance. It is instrumental, from my point of view, to help cushion or curtail the effects of a recession, and that is certainly important to the people of Brantford and certainly important to the municipality.


When I said earlier it is a pro-active approach, the biggest example that I can think of is: I remember sitting around the council table, and one of the resolutions that came forward was as a result of certain PRIDE moneys being made available; so we had a letter in front of us from the then Minister of Municipal Affairs, the Honourable David Cooke, saying, "Here's $400,000 anti-recession money. Here's upfront PRIDE money. If you have projects on the books that need to be done now, then these moneys will be instrumental in assisting it."

The Chair: I am sorry. I have to cut you short.

Mr Lucente: We are running out of time.

The Chair: You have used your 15 minutes on your presentation. The Conservative Business Association of Kitchener-Waterloo has cancelled out. Being the Chairman, I look for direction from the committee. If every party would like to have one question of this man, we have enough time, or we will just wind up keeping to our schedule which was already pre-arranged. What is it? We stay to our schedule?

Mr Kwinter: Let's have one question.

The Chair: Okay, we will start off with Mr Carr. One short question.

Mr Carr: Thank you very much and we appreciate your presentation. As you know, there are two ways of helping out during a recession. There is one where the government continues to tax and then turns around and hands the money back in terms of programs, which is what this government did, and we heard the other chap earlier say that it created 150 jobs for six months and then they gave him $1 million. There is another way of doing it and that would be to offer some type of tax relief, whether it be on the provincial sales tax or to reduce the tax on auto sales to spur that. That would presumably get more people to buy cars that, in his area, would help the steel industry and so on. So there are two ways of doing it.

This government took the approach where the people in Toronto will tax the money. They will then decide what municipalities get money. What is your feeling about the other method of letting -- for want of a better word -- the consumer decide? You know in your area here that one of the big reasons for some of the losses -- people like Massey and so on -- was the tax situation, because there was no duty on their product with the free trade agreement. It came across the border duty-free anyway. So what is your feeling? Why go this route where the people in Toronto make the decisions as opposed to letting the consumers do it with some type of tax relief to citizens who, you know as an alderman, feel totally taxed out.

Mr Lucente: The rebate method is a good one. Sorry, I did not get to finish my presentation. I go on at length, but the rebate issue is a good one, and the example that comes to mind and I alluded to previously was the recent tax relief provided by the current government with respect to welfare payments. If this municipality goes over a certain level, then certain moneys will flow back to the municipalities so it will lessen the impact on the municipality for next year. That will be the relief. So instead of coming in at a budget at a certain percentage, it will be a better year, and that will be the relief to the ratepayers. That is the approach I would prefer.

Mr B. Ward: Thank you for your presentation. One of the initiatives of this budget was to increase transfer payments to the municipalities rather than flat-line them as has happened in the past, and this was a cost to the government, but it was a decision we made to assist municipalities in their property tax revenue. Recognizing the city of Brantford had a tough time with the municipal budget in the spring -- and I believe there was still a 6% or 7% increase over and above last year even with these transfer payments -- without them, if it was flat-lined as it was in the previous year, could you ballpark what would the impact be on the property tax and the ratepayers of the city of Brantford?

Mr Lucente: Yes, it would obviously have been significantly greater if not for a lot of the programs that we had on the books, especially for infrastructure repairs and reconstruction of roads and so on and so forth -- that sort of activity. There is no way we could have afforded a lot of the projects this year. And as I suggested earlier, there is a spinoff effect. By doing that construction now, you maintain certain levels of employment within a municipality. You also increase activity for developers, for local contractors. That sort of spinoff activity is the result of doing the work now. So if not for some of the programs or assistance, we would not have been able to do some of the programs and the effects would have been even more devastating. I dare say that the mill rate that we set this year probably would have been significantly greater.

Mrs Sullivan: I am interested in your view about the impact of the $4.6 million which came into your community. There are a couple of things that stand out to me in terms of that kind of money coming in. One of them is that they are clearly very short-term jobs. There is no long-term job creation package involved in that kind of influx.

The second thing is that you have talked about sanitary sewers. Brantford clearly has had a problem for a long time with water and sewage infrastructure and clearly needs a major influx of funding in that area. One of the things that this government has done is to eliminate the continuation of the water and sewage corporation, which would, in fact, have levered funding to ensure that long-term water and sewage projects could have gone ahead. That would have done a couple of things -- provide environmental protection and provide long-term job creation. We have not seen that happening.

The other thing you left out was how much money had to be provided by the community for these short-term job creation projects. In the case of the anti-recession funds, most municipalities have not been able to take up the funding because they cannot afford to come up with their share of the deal. I wonder if you would just like to comment on those observations.

Mr Lucente: First, with respect to creating long-term jobs, one of the points I made earlier was that as a result of freeing up certain dollars, we were able to go ahead with certain capital projects. As I suggested before, it gave us the opportunity to maintain the level of work activity within the municipality. In other words, it did not result in any layoffs. I do not think anybody was laid off from this municipality because a lot of the capital works projects and the works that we were doing in this municipality were done by city forces. A certain amount were contracted out. It kept contractors busy. Contractors in turn have employees. It maintained a certain level of activity. So I am suggesting to you that there are some long-term jobs being created as a result of the influx of money -- long-term in the sense that we are able to protect the jobs within this municipality.

You alluded to the sanitary sewers. Some of the moneys that were freed up out of that program enabled us to do some of this capital work. So if we get to do the work this year, and the work --

Mrs Sullivan: You need millions of dollars. You only got $4.6 million for everything.

The Chair: I would like to thank you for appearing before the committee. We ran overtime a little bit --

Mr Lucente: Sorry, I did not finish. I had about another five minutes but --

The Chair: If you have it written, would you hand it to the clerk so it can be put in the report.

Mr Phillips: That would be great. I would like these notes for next year.

The Chair: Fine. Thank you for attending the committee hearings.

Mr Lucente: Thanks again for coming and making Brantford one of your stops along the way.

Mr Phillips: Mike Harris's idea.

Mr B. Ward: And he is not even here.

The Chair: We are ahead a little bit, so we will take a 10-minute recess.

The committee recessed at 0950.



The Chair: The next group to come forward is the Community Opportunities Development Association. Mr Paul Born is executive director. For your presentation you have one half-hour. I would like to welcome you here to the committee. In that half-hour, if you could leave some time at the end for a question and answer period so the three parties can ask questions on your presentation. You may begin.

Mr Born: I want to thank you for giving me this opportunity to discuss the 1991 Ontario budget delivered by Ontario Treasurer Floyd Laughren. It is important for you to understand that I am not an economist and that I come to this discussion as the director of an agency involved in community economic development. CODA, or the Community Opportunities Development Association, is a non-profit community-based charitable organization serving more than 4,000 economically disadvantaged individuals in the Waterloo-Wellington region.

We have seen first hand the effects of the recession on the lives of the many workers and on the communities we serve. Many thousands of jobs have been lost permanently over the past year in our region. We are concerned about the significant number of people on unemployment insurance and, more recently, the significant number of people who will be exhausting their unemployment insurance benefits. We are concerned about the number of people collecting social assistance, many of whom are there for the first time. We are concerned about the extreme pressures that the recession is having on the social services network.

I come here today to impress upon all those present that this recession is very real, that many thousands of people are hurting in Ontario. I have come to stress that since January 1990, nearly 28,000 jobs have been lost in Ontario due to partial or complete company closures. These are jobs that will never come back again. In Ontario there are 527,000 people unemployed. This is an increase of 249,000 more people unemployed in June 1991 than there were in June 1990.

As an organization, we are struggling to deal with a strategic plan that looked at somewhere in the area of 6% and 7% unemployment. We are now fighting 11% unemployment in our region. So where do we go? What do we do? In the communities we serve, nearly 20,000 people are without jobs. I need to also stress that these are only the official numbers. It does not account for the many nameless thousands not represented by these statistics.

Behind each of the statistics I have presented to you today there are individuals in need of hope that the government they have elected is doing something to strengthen the economy, hope that there will be strong social networks to assist them during their time of economic transition.

The 1991 Ontario budget, in my personal opinion, represents a number of significant hopes for the many individuals, families and communities affected by this recession.

The $700-million anti-recession program is one of these hopes. In Cambridge, Ontario, this has meant additions to two libraries and financial assistance towards the revitalization of the economically depressed Hespeler area of Cambridge. It has meant a program to assist employees affected by small company closures. Each of these initiatives represents solid community development which provide jobs for the unemployed and significantly increases the quality of life for the residents of Cambridge.

Social assistance reform and the $215 million committed towards this provides another hope. The Transitions Report of the Social Assistance Review Committee must be implemented. A recent report, Back on Track, is definitely a step in the right direction towards its implementation. The 1991 Ontario budget will provide hope to the many individuals forced to live on social assistance. New programs such as Opportunities Planning are now in the process of becoming a reality. Programs already in place, such as the municipal employment program, social services employment programs 1 and 2 and community economic development initiatives, will be strengthened because of the 1991 Ontario budget.

More affordable housing, expanded training for unemployed workers, a strong health-care system, enhanced services for women who are victims of domestic violence, and other important and expanded services to help those affected by the recession, give hope to the people we serve.

I am not an economist and therefore cannot comment on the issues of spending cuts, transfer payments, tax increases and deficits. As an individual involved in community economic development, I can, though, comment on the issues of vision and hope and their importance on the health of a community. I have already seen how the 1991 Ontario budget has fostered hope for many of the people we serve. This hope has focused visions which I believe will bring us out of this recession.

Mr Sutherland: Thank you for coming forward today to make your presentation. I think you have outlined in a very brief and succinct manner the impact of the recession. We have been hearing in other communities from other organizations like yours what the impact of this recession has been on people. While this budget has started the process of trying to meet some of the needs, there is still a lot more to be done. I was just wondering if, for the committee and for those of us who are not as familiar with your organization, you could just elaborate a little more on how your organization operates, what its specific mandate is, what the clientele is. Do you do the same thing as the unemployment help centre? Do you work with them?

Mr Born: That is a big question. How long do you have? Has anybody got any money? I can really do a sales pitch here.

The Chair: I might say that your handout to the Chairman is very informative. If there is a possibility of getting more copies for the rest of the committee here, it will give them a good insight into exactly what your group is doing. Your brief did not lay out, as Mr Sutherland was talking about, exactly all your involvement in the community. I just noticed here your Christmas party and the 1991 donors. It seems to be a joint effort with the whole community.

Mr Born: If I could just possibly give you a brief, precise overview of what we do. I also have two annual reports, if people want to pass those around. They give you some more specific statistics.

Community Opportunities Development Association was formed in 1984. Coming out of the last recession, we had a tremendous rate of unemployment in Cambridge, Ontario, running around 22%. At that point, the centre was set up just to help these people get through the tremendous problems they had with unemployment insurance, with welfare, that sort of thing. Since then, we have grown to encompass many other programs, 14 in all right now. We have a staff of 24 people and a budget of just under $1.5 million.

Our mandate is to help the unemployed and underemployed and to provide them with social and economic opportunities. We also do community-based economic development. We have the Cambridge job centre, which is very similar to an unemployment help centre. We have expanded our mandate and also run municipal employment programs for the provincial government and the region of Waterloo, which help social assistance recipients get back into the workforce. We are running at about a 70% success rate, which is a very high success rate in terms of bringing people who have been long-term unemployed back into the workforce. We have also developed quite an extensive career resource area. We run career programs, helping people to make career changes.

Essentially then, the whole setup of this division is that we are helping people in economic transition. We know that people go through economic transition three, four, five times in their lives. Recessions are not the only times of economic transition for people.

Second, we run family support services. We have initiated a program called Books for Birthdays, which is our literacy initiative, and funded by local charitable groups -- this one in particular by the Kinsmen. What we do is, about a month before a child's birthday, a parent can come in, pick up about $20 worth of Canadian children's literature and give it to their child on their birthday.

We have a children's Christmas party, which had 402 children at it last year and about 300 adults. There were 700 people on the morning of Christmas Eve who had just one great time. Again, it is for people who are low-income, who are struggling. It particularly also replaces that company Christmas party that very few low-income people now have and which they used to have when they were working.


We run a program called the summer swim tickets program, where we give free swim tickets to children during the summer, keeping them off the streets and away from the television when they are out of school. We also administer reduced-fare bus tickets for the city.

In addition to that, we run a Cambridge housing access program, where we help low-income people to find affordable housing. Last year, we served just over 200 people in the first year of the program. In the first quarter, we are at 170 already. Housing is a desperate situation. We implemented the program because we found out that in our job centre program 40% of the people had housing-related barriers to employment.

Last, we operate self-employment business resources, called the self-start centre. The self-start centre operates a number of programs. In one we just finished we had 10 Irish entrepreneurs, five from southern Ireland, five from northern Ireland, on an exchange program. We talked to them about entrepreneurship, put them into place with a number of business people locally. They trained them.

We also operate a program called the community economic development initiative in which we help social assistance recipients -- this is welfare recipients -- to start their own small businesses. We helped 116; 47% of them are now in business; 22% are in jobs with a success rate of 79%. Again, they are people on social assistance, the majority of them being unemployed for more than a year and we are helping them to start their own small businesses.

We started a Waterloo-Wellington credit circle which is an innovative form of community-based lending. Because low-income people do not have collateral, we imported a program actually from Bangladesh, implemented it here in Canada, the first of its kind outside of native communities. What happens is five people co-sign each other's loans. So in lieu of collateral, the goodwill of five people is what is their collateral.

We have a loan fund of $305,000 that we give to low-income entrepreneurs. It has been in existence since 1988 and to date we have zero default. Again, it is a tremendous success and it is a tremendous statement for people on low incomes and the credit risk that they really are. I need to stress, "zero default." I think many banks would love to have that same statistic.

In general, that is what we do.

Mr B. Ward: Very quickly, your organization is on the front line working with underemployed and unemployed in the Cambridge area. Our government took some initiatives and we said we want to maintain our social programs during these tough economic times. We want to maintain our health standards. We have been criticized by some organizations for that stand. If we had not taken our initiatives, had we listened to our critics and cut back, what ramifications would that have for the people of Cambridge, based on your front-line relationship with the people of Cambridge?

Mr Born: First of all, I think you should be criticized. You are in power now. When you are in power, you are supposed to be criticized. That is just my personal opinion.

I think if a lot of cutbacks happened we could have had more of a serious situation. I am not sure exactly how you could have manoeuvred it any differently than has happened, particularly in terms of the way the recession has hit. The recession has been very devastating to many people, our area in particular. We have had somewhere in the area of 22 plants closed.

Prior to the Ontario budget, there was no money, anywhere. We have many contacts within government. There have been three different governments since we have existed and we have been able to work with all of them very successfully. But there just was nothing. We were saying: "We've got 20 plants closing, how can you tell us there's no money? We've got to do something with these people?" There were 2,000 people permanently losing their jobs. We had to do something.

After the Ontario budget came into play, there were dollars available to develop programs, particularly for plants that were closed.

Mr Phillips: I appreciate your comments and I am sure your organization does some really fabulous work.

The last sentence in your brief says, "This hope has focused visions which I believe will bring us out of this recession." I might say that the concern of the critics of the budget is that in terms of looking ahead, at creating the economic activity -- because the most important thing to your organization I think is the creation of job opportunity -- and as we look ahead at the budget, it is deficits forever, in the $7- to $8-billion range. It plans unemployment in the 9% to 10% range over the next three years, even in good times.

That is our concern. It is not the spending side of it. It is the economic activity side of it. We are frightened that a year from now the job creation has not gone on, the funds required to fund organizations like yours are more difficult to come by, and as I have said to many groups, we will not know for a year. That is our concern.

My question really to you is this, as you look ahead of the budget -- it is kind of an economic plan for the next four years -- are you satisfied it will create the kind of economic activity that will allow you to provide the real services you need to the people who come to you, helping them to find -- I think that is one of your key jobs -- meaningful, productive and satisfying employment?

Mr Born: That is a big question. I wish I could predict four years down the road. I wish I could understand the budget enough to be able to give you a concise answer. But what I can tell you is that today many people are being helped by the dollars made available.

By providing them with this help, we have been able to give an element of hope. Fewer people will go on to social assistance because of these programs, in the short term. I am not sure if you have ever been on social assistance. I am not sure if you know a lot of people who have --

Mr Phillips: Yes, I do.

Mr Born: -- but if you have ever followed someone going from losing a job to going on to unemployment insurance, the transition is no big deal, in most cases. It is hard; it is difficult; but in reality, it is an acceptable place to be in our society, in most cases, for short periods of time.

But then their unemployment insurance runs out. Watch someone go from unemployment insurance to social assistance. It is devastating. It is utterly devastating. I personally say, a big chunk of their soul is lost. It takes us more than twice as long to bring someone back, to give them the self-esteem and the energy, the drive -- we call it the spark in the eye -- that employers are looking for. When you are hiring, you look for that spark, you look for that person who is going to take the initiative. It takes us twice as long to get that back for that person when we have got them off social assistance.

So my answer to your question then, using that example, is that in some senses, yes, we have to look four years down the road, and I think you are right in saying that we really have to severely criticize the budget -- sorry, critique it, more so than criticize. Critiquing is more beneficial. But we have to because everyone has to be sure that four years down the road these things are going to happen. So we all have jobs to do in terms of making sure that does happen.

But in the meantime, if I can just finish, we must give people hope now. We have got to get people into -- even if they are temporary jobs in my opinion, to keep them from going on to social assistance. Do you realize that in our employment and immigration catchment area, we are predicting 600 people a week losing UIC benefits coming at the end of August, and 1,600 a week by the end of December?

Mr Phillips: But is not one of the keys, as you say, to create jobs? If you could wave a magic wand, is that not one of the absolute keys? And are you satisfied with the job creation potential of this budget?

Mr Born: No. No one is. The reality is that people's hands are tied. The job creation potential is directly, in my opinion, correlated to the amount of money that they have to spend. You can only spend so much money. There is only so much money in the pot. I think with what has been given, some significant things have been done.

Mr Phillips: Is job creation not related as much to individuals deciding that they will create an environment where they create jobs? Is that not what creates jobs, that individuals, men and women, say, "Listen, I've got an idea and I am going to develop it here, not in -- " A year ago, Ontario had the lowest unemployment rate in all of Canada. Now there are four provinces with better unemployment rates than Ontario, for a variety of reasons. But is it not creating the environment where somebody says: "Listen, I am going to build a business. I am going to expand my business"?


Mr Born: I am not sure. I used to think that, particularly when I was in business. But you see, the reality is, in our organization, that it is not only my initiative and the initiative of our board that makes us grow and strong, but it is my workers. It is the people who do the work. My fear is that if we create an environment in which it is only the entrepreneur, the person with the initiative, the business person for lack of better term, that enterprising individual -- if that is the only person that we are giving hope and vision to, then yes, we will create some jobs, but in the meantime, we also have to keep that hope and that vision and that strong work and the desire to work within the workers.

So we must give as much emphasis on keeping them employed and keeping them working and keeping them from getting that big chunk of their soul taken away as they get on to social assistance and the loss of that hope. So for every enterprising person, there are more enterprising people who are needed to make that enterprising person a success.

Mr Carr: Thank you very much for a fine presentation and also for the fine work that you do. As you know, there has been a lot of criticism of this budget by some of the groups that work with people on social assistance. I was reading one of the headlines here that says that the advocates of the poor were scathing in their criticism and the one chap at the food bank said they expected so much more and they were terribly disappointed. Another chap from the Rupert House said it is very much a stand-pat budget. The budget shows the NDP is throwing its entire election platform out the window and there is nothing left of it.

They were saying they wanted more money. One of the areas we could have gotten more money from -- and I was looking at your statement of revenue expenditures and you are not unlike the government -- one of the biggest expenditures is salaries and benefits. There have been those who have said, as other provinces have done, either hold the civil servants' salary at 2% or even freeze them. It would have freed up $1 billion.

In fact, if we had not added 10,000 civil servants over the last five years, we would have been talking billions -- not millions, but billions, with a "b." What is your feeling about having those who have what have been called recession-proof jobs in the government, people like ourselves, taking a bit of a break either at 2% or freezing salaries for the 90,000 people? Do you think that is a good idea?

Mr Born: It is an interesting concept. Yes, I read that article as well. You need people who are highly motivated, who are concerned, who are also feeling that they have an element of job security, which they do. You need to be able to reward people for their good work. To me it goes way beyond an issue of policy and doing an across-the-board, 2% freeze on everyone's salaries. You have to work with these people. It is easy to put legislation in place and say we are going to put a 2% freeze across, but you have to keep these 90,000 employees happy and you have to keep them motivated and you have to keep them working hard because they are an integral part to pulling this economy out of the recession.

Now, if these 90,000 employees, many of whom are unionized -- probably all of them are unionized, yes -- if they would then say we are willing to freeze our salaries at 2% for the betterment of Ontario, I would say, "Great. All power to you." Our staff have done that, not this year, but they have done it before and were frozen for that reason, for the benefit of the organization.

But it is hard to impose it. You see what is happening in the federal government where they have imposed that kind of legislation and look what has happened: the kind of discontent with the bureaucracy, with the government workers. The kind of productivity that you are getting is minimal in comparison to your saying: "Look, we're partners in this, we've got to work together. You're an integral part of the government team, and here are your salaries."

I think there has to be an element of co-operation, and I believe yes, if $1 billion could have been saved and the people on the front line would have voluntarily taken those cuts, I would say all the power to them. It would have made a tremendous statement to the people of Ontario, but at this point that has not happened. But I do not believe that we should legislate those sorts of things, because in a modern work environment it does not work. That is the honest truth. Co-operation and participation are the key.

Mr Carr: I would agree, because as you know, in Quebec they did do that willingly, and that will be an interesting question for the OPSEU people when they come through.

The second question that I have relates to the problem of getting people back to work. As you know, during the last recession we poured more money into social assistance programs, thinking it would be short-term, it would be temporary, and when the recession ended those people would come off the social assistance rolls.

Between 1985 and this last recession, in about five years, Canada had the strongest economic growth of all the industrialized world, with the exception of Japan. We outgrew the States, West Germany, Japan, France, Britain, but the social assistance rolls did not go down.

Many of the advocates say, "If we want to get people off social assistance, which is what most people want, then what we have do is give them training, retraining, apprenticeship programs, the skills that they need, because a lot of the people who are on there don't have the skills that are needed in an ever-changing global environment."

The criticism of this budget is saying we are throwing more money at those people with temporary jobs that will last six months, but long-term down the road, four years from now, what you need to do is give them training so that, whether it be a single mother who has not had a chance to go to university, she has skills that are needed to get a job; whether it be a Massey-Ferguson worker who has been laid off and who is 50 years old and does not have the skills to get another job, he will get them. If you really want to help people, what you have to do is give them the skills and the training.

The big criticism of this government's budget is that it threw money at it, but it did not put any into upgrading the skills and training. Do you agree with that? Of course that is essentially what you do. What else can we do to try and give these people the skills and the training that are needed so that we can keep them working long-term, not just have short-term make-work projects?

Mr Born: The single most important issue, in my opinion, around social assistance reform that your government is facing is implementing the SARC report. It is a report that was developed and gave tremendous hope to a tremendous amount of people. It was supported by all levels of individuals. Even Conrad Black, who is one of your greatest critics, fully supported the SARC report. It must be implemented. It is a humane document. It will create many jobs. But social assistance is a very complex issue, and the people who are on it are there for many complex reasons.

That is one of our specialties, taking people from social assistance into jobs. It is purposely one of our specialties, and we have many very highly qualified people who have years of training and experience working just with this population.

There are many problems that have to be dealt with, but I tell you, the SARC report is probably the most comprehensive document available to deal with that problem. When that is implemented, you will see one of the most progressive social welfare systems, I believe, in the world.

Mr Carr: Thank you and I agree with you.

The Chair: Sir, there are some other members, if you happen to have any extra copies. That is all you had?

Mr Born: I apologize. I brought 25 copies of the speech. I usually just bring one copy. I can sell them to you for $2 apiece. It cost us money.

The Chair: The clerk is going to make copies. I was just asking. He is going to make copies for all members of the committee on the background of your organization.

Mr Born: I would love it if they could. I would appreciate that.

The Chair: Okay, fine. Thank you.



The Chair: The next group is the Retail, Wholesale and Department Store Union, Mr Tom Collins, the Canadian director. Welcome to the standing committee of finance and economics and the budget review. You also have one half-hour for your presentation. At the end of your presentation, leave some time for questions and answers. You may begin.

Mr Collins: I am here as the Canadian director of the union to present some views on behalf of the members as we have discussed with them. I do not have a written report for you and this is the only presentation that our union will be making before the committee so that we can indicate to you how our members feel about the budget.

We represent a little over 20,000 members in the province of Ontario. Those members are in a number of the industries in the food distribution industry. They are in the bakeries and the dairies, they are in the retail department store sector and the retail food sector, a lot of independent operators, and one of the reasons I am presenting here in Brantford today is that we represent a lot of members in very small communities, whether it be small grocery stores, retail stores.

The effect of this current recession upon our people is as devastating as it is on any. We represent the lower-paid members in the service industry and society. These members are the ones who are affected by every glitch in the economy. Government statistics in previous years have shown that for every production job lost, that is, a good production job at good wages, there are approximately three service industry jobs that are lost as a result of that money not being in the economy and not out there to buy everything in the restaurants and the stores and all these supporting industries that are involved. So it is very important to us to say what we have to say about the budget.

We also represent a large number of part-time workers in all of these retail operations who are students who are affected both by any cutbacks in education as well as their own ability to get hours and part-time jobs and finance themselves through the education system. We represent a large workforce of women. Over half of our workers are women workers in the workforce, and as a result we deal with all the problems that come with dual-income families and the necessity for those incomes to support those families.

It is our position that we want to congratulate the government on the fact that it has taken the position of that very radical theory that it takes some money to get things going. We believe that it takes money to get the economy going, and that particularly affects our members.

I am also here to represent taxi drivers. As you know, they are the economic barometer in society. Anybody knows, whether from Parliament Hill or otherwise, when you hop in that cab, particularly in Toronto these days, you will be talking to one of our unionized cab drivers, who will tell you all the same things I am telling you today.

But it is necessary to spend money. It is not a radical theory, and we believe that the government in proposing this budget has gone against the tide of what I know it fully expected would be some public opinion, but it is very necessary as we see it that the anti-recession program, the social assistance package that has been put together, the tax reductions for some of the poorer-income people and the non-profit housing are all necessary components to tide us over this period of time and to get us into a position for some kind of economic recovery.

I think it is quite clear to most people that the recession has been brought about by a number of federal government policies. I want to tell you what in effect they have done for our members and some of the things that are affecting our members and what potential damage has been done. The damage has been done, and the only way to deal with that is for the province to have some fight back and to try and hold the line in a number of areas and try to make sure that the economy continues to grow and goes forward in Ontario.

The cuts to federal transfer payments in health and education: Without the support necessary in Ontario, a lot of our programs would be affected and a lot of jobs in some of our sister unions would be affected. Of course, that means money that those persons are not able to spend in the service industries, money that those service industries are dependent upon. From our dealings in negotiations with the major retail employers, and we represent literally all of them somewhere, they have cutbacks this year somewhere around 10% in retail sales in the major department stores. We know that a number of those companies are not stable right now. The potential is there immediately for the loss of one or two or three of those players who will not be able to finance their businesses unless there is more money in the economy, more sales, more commodities able to be bought by the average working Canadian.

The high-interest-rate policies are affecting a lot of our smaller independent operators, who cannot get the type of loans they need at reasonable rates, cannot support themselves through those periods of time, and some of the government policies that have been brought through in this budget will help to alleviate some of that problem. We do not believe in any sense that that can be done by the provincial government alone, and certainly the federal government should take a look at the provincial program and should follow in kind some of the things that are happening.

The free trade deal in itself has probably done the most damage to our membership and to industry in Ontario. I am sure you have heard the figures over and over again, but I can tell you that the free trade deal in our industries, in food production and so on, has had a tremendous impact. It has meant that businesses, even though they are very profitable in this province, and production facilities, are being moved south. When I say south, I am saying to the United States, but also to Mexico and elsewhere. I have sat through discussions with major employers like Carnation, in a community not far from here, and Aylmer, which closed a plant, and closed it based upon the fact it was making $1 million a year on that plant and that was not enough, so it had to move that production to California. So the whole concept of free trade and loss of protection for our industries and production here by the federal government is having a devastating impact on our people.

The high-dollar policy is promoting and encouraging the cross-border shopping, which is affecting all of our communities in the border cities. You have to understand from our point of view, it is not the companies that are getting hurt, it is the people. It is the jobs we are losing as a result of that money not staying here, because, you know, an A&P store just builds another store in Detroit instead of building it in Windsor. It closes Farmer Jack's in Windsor and it opens an A&P in Detroit. They are going to make the money either way, those corporate entities. So those type of policies on the high dollar that make it easy for people to go across the border -- I think the statistics will show in the surveys that have been done that people are going over basically for price. That is what it is all about.

The GST as a federal program has had a devastating effect as well on our retail sales. Any of the retail employers will tell you that has been probably the major effect that has been upon the retail sales in this last year since January. Everybody expects that at some point they will come out of it; somebody has to buy a fridge again some day, somebody has to buy some more clothes some day, but that will be stretched out over a period of time, and certainly any reduction or any lack of provincial government initiatives to provide through the budget support for consumer sales will have an impact that is much greater than it is today.

Speaking to those questions, and I would invite from the committee any comments or questions you might have about our industries and the ones we represent, the people we represent in the retail and the service industry welcome the budget that has been brought forward by the government. I do not think anyone is under any illusion that it is going to do everything that is necessary to spur investment, but it is certainly going to provide more confidence to some of the employers we have to deal with, some of the ones in the medium range and small industries that may need some support in interest rates. It is going to provide more consumer dollars above all, and more consumer dollars will mean that there will be jobs created in a lot of those retail industries, jobs created that are necessary and jobs held that will be necessary.

Certainly any reduction in the budget and any loss of jobs that would be involved in the health care or other industries will be consumer dollars that are not available in the service industry. So from the point of view that we meet the consumer across the cash register, and that is where the dollars are spent in most families, that is where the effect is going to occur on our people. We welcome at least the effort by the government to not reduce, to not cut back, whether it be jobs or in dollars, for the purposes of somehow reducing the debt.

I invite any questions you might have.


Mr Kwinter: Thank you very much, Mr Collins. I was interested to hear some of your comments, and I have heard similar comments from other labour representatives. One of the major thrusts that they complain about is the high dollar, saying that it is making us uncompetitive. It sounds reasonable, but the other day I was listening to one of the presenters and it seemed to me that -- who is to say what the value of that dollar should be? In fact, labour is saying: "If we have a 20% subsidy, we can compete. If you put on a level playing field, we can't." I know you are going to say that is not true, but could you comment on this?

In 1971, exactly 20 years ago today, the Canadian dollar was at $1.01. Unemployment in Ontario was at 5.4%. We exported $17 billion worth of products and imported $15 billion worth of products. So we had a trade surplus, we had very low unemployment, interest rates were quite low and the dollar was at a premium. How do you respond to that?

Mr Collins: There are a lot of factors that have happened since 1971. I think you cannot address or attack without discussing the tax situation at that time; without discussing the trade situation at that time; without discussing, in particular, many of the protections that were in place at that time to protect some of the industries and growth of industries in this province -- and a larger tax base and based upon a lower unemployment. I think you have to take all of those into consideration.

I do not think we want to say, in itself, that a high dollar is going to address all the problems that are confronting this government or this economy, but it is one of them. To be specific to our industry, the retail industry, it is certainly one where we are sending those dollars across the border simply by the fact that we have the dollar where it is.

We are not talking about a country in which we are letting the dollar float to the other currencies. We are talking about a managed dollar. We are talking about one directed by government policy and the Bank of Canada, which is artificially set for whatever reasons of economic policy the federal government has.

Can I account for what happened in 1971? I would say we had a nation in 1971, as well, in which there was a lot more confidence in the economy, in which we had some faith in some of our federal institutions, and I think everybody was very much in a growth mode at that point in time.

I think the federal government policies have dramatically affected, since that time, the confidence in our economy, the confidence of our employers and the confidence of our workers. I think that will account for much of the change that has occurred since 1971.

Mr Kwinter: I would like to correct you. The interest rates are controlled by the government, not the dollar. The dollar is on the market and it is what people will pay for it. The government can support it a little bit if it feels it is dropping, but cannot really control the price of the dollar. All the government can do is keep the interest rates where they are, and that is what I want to talk to you about.

Interest rates have been falling steadily over the last several months, and most economists maintain that the reason our dollar is so high is because our interest rates were so high. Because people wanted to invest in Canada to get that rate of return, they had to buy Canadian dollars, which was keeping the value of the dollar up. We have a situation where the interest rates have been dropping rather dramatically over the last several months and the dollar has been rising. Do you have any explanation for that?

Mr Collins: No, I do not.

Mr Phillips: I was surprised that someone representing a major labour organization comes in and praises the budget that calls for the level of unemployment we are going to see over the next two to three years. I was curious about why you would not have commented on the fact that a year ago Ontario had the lowest unemployment rate in the country, where now four provinces are better than ours.

My question really is this. I think one of the challenges for the labour movement is going to be that first you, I think officially, support the NDP, the government, even with funds. You have a vested interest in them getting and staying elected. But you also represent your members, and there may be examples where those two are kind of incompatible. Certainly as I look at the budget, my concern is about job creation, economic activity, the thing that you have talked about of the employers being in an environment where they are going to create more jobs for your members.

I realize that at this stage, you congratulate the government. What happens when there is a conflict between the interests of your members and the government, particularly around the job creation area? How will you reconcile that?

Mr Collins: If there is a conflict, we will of course address it. Whether we are affiliated with the New Democratic Party or not, we have never been quiet about addressing our concerns on behalf of our members on any particular subject, so I do not fear that will occur.

Yes, we are concerned about unemployment. I think the consensus of the labour leadership is that we know where the unemployment is coming from and we are trying to get some of those federal government policies turned around, and the free trade agreement, so that we can help the situation.

I guess the provincial government could go into greater debt; it could do all kinds of things to promote jobs. I think you have to take a reasonable course, and I think they have taken one to support at least the existing jobs in some of the health care industries and so on that we have -- that there are not going to be cutbacks, which we know will result in some loss of jobs, whatever that is, and some loss of consumer dollars. I think there are forces, because of the free trade agreement in place, that are drawing so many jobs so quickly from the economy of Ontario that it is not likely, unless that policy is reversed, that we are not going to see a continued drain on the jobs in Ontario.

Mr Phillips: Did you have any criticism of the budget at all?

The Chair: Excuse me, I have to go on.

Mr Carr: Thank you very much for your presentation. I appreciate your coming here this morning. I, like you, am concerned about high interest rates. I have a family, and in case some of you did not notice, those three gorgeous little children who came back in just a few moments ago are my kids. In the early 1980s when our friend Mr Trudeau was Prime Minister, I renewed a mortgage at 21%. So if we think they are high now, we can remember what they were like during that period of time.

As you know, the big problem we have with a lot of the public expenditure right now is the interest on the debt alone. We have been here about two hours, I guess; since 9 o'clock, and we are coming up on 11 o'clock. In those two hours, we will spend -- it has been estimated conservatively at anywhere from $800,000 to $1 million an hour, 24 hours a day, seven days a week, 365 days a year, not to pay for social programs, health care, the environment, but just to pay the interest on the provincial debt alone. That is $13,000 a minute. As you know, being in the retail business, businesses cannot do that. Those that try to overextend themselves and do that end up like Robert Campeau. They go out of business. Businesses cannot do it; families cannot do it. I cannot go out and get a mortgage. But when it comes to governments, they can, because what they do is they pass the deficit on to their children.

My question to you is this: What do you say to those people -- and some of them may be people in your unions -- who say spending $13,000 a minute just to pay the interest on the provincial debt alone is a total and absolute waste of money?

Mr Collins: Well, I think I say to them something they already know, in the same fashion that you have talked about. You have a young family, so you go out and get a mortgage on a house and you prepare for an investment for the future. You pay tremendous amounts of interest on that mortgage for the purpose of having security in the long run, having the security of your family and having them looked after. That is the same approach the government is taking. We are at a bad time. We are planning for the future and not just today. And that is the purpose, as I understand it, of the budget: to get us over some of that period of time. That is how I would respond to my members.

My members understand that fundamentally, because they know the value that the programs in health and education have been to their families, and they know they do not want to give those up. They feel, in the long run, that this is the best approach at this point in time. I think beyond that, statistically, if I had to show them that, they would see that the amount paid towards debt in this province is much lower than it is in many others in terms of percentage. I think my members understand that, and they understand fundamentally, that if they do not have a job at all because there are no consumer dollars out there, that drain is going to occur on all of them.


Mr Carr: That is right. My wife, who is also here, might have wanted to get a home in Rosedale or a beautiful place in Oakville, but we could not do it. We knew we had to get something that was within reason, that we could pay back, and that is what we are saying is happening. You do not overextend yourself. You get something you can afford. And this budget -- you cannot afford it.

Specifically for your workers -- and Mr Phillips touched on the point of your responsibility being to your members, not to support this government. There are those who would say instead of spending $700,000 for a program that will buy infrastructure to put roads in communities, or whatever officials in Toronto will decide, if you really wanted to help your workers what you should be doing is pushing, for example, for a cut in the retail provincial sales tax. As you know, under the Liberals it went from 7% to 8%. That cost $1 billion to consumers, that 1% increase. It could have been done, to reduce that, to spur investment in your particular industry.

As you know, we had a chap in when your group made a presentation before the standing committee on administration of justice on Sunday shopping, and he said they are going across the border for three things. They are going across for booze, cigarettes and gas, all of which are increased in this last budget and for all of which the biggest factor in there is tax increases. It is the taxes on those things that are making them uncompetitive.

My question to you is, if you were really representing your particular workers, why would you not be advocating a reduction in sales tax that would help your particular workers, rather than coming here and supporting a government which is putting money into other programs which really will not help your workers?

Mr Collins: Without playing my own membership against each other, those infrastructures will be serviced by my cafeteria trucks, by my vending trucks, by all those other people in our industries that we represent. Anywhere that there are people who are going to work, it is going to affect our people, whether it be in retail or whether it be in trucking or warehousing or in service: in cafeterias, hotels, restaurants. So we are served by that notion in any event.

A reduction in sales tax is a noble concept, I think, and one that we would certainly support in times when it was beneficial to do so. But that would again mean a reduction in the revenues of the province and it would mean a reduction in jobs. They are directly related. So whether they were our jobs or somebody else's, if the guy down the street does not have a job because of a reduction in sales tax and he is not spending the money, we are not going to get the benefit of that, because they are not going to be spending those dollars.

Mr B. Ward: Mr Kwinter mentioned 20 years ago, 1971, about the economic times during that era. I would like to go back 60 years, to 1931, when we had little or no federal debt, the federal government was running balanced or surplus budgets and yet we were at the beginning of the worst depression that we have ever experienced in Canada. So it is very hard to relate different eras.

This is 1991. I would like to look to the future, and that is what our government is trying to do. We have had some criticism from groups lately that are expounding the virtues of a balanced budget during these tough times. From your perspective, to balance the budget, $9.7 billion would have to be taken out of the Ontario economy during these tough recessionary times. I know I am not an economist and I do not think you are, but from layman's terms, what do you think would happen if we withdrew that amount of revenue from the economy during these times?

Mr Collins: I can speak only in terms of our industry. There would be some major players in the industry go under. It would be as simple as that. I mean, there would be thousands of jobs lost in the service industries. Some of those that are borderline companies and big companies now would not be able to support without that level of retail sales that they need to project ahead and move ahead.

It is an obvious sort of thing that it takes money to run an economy. It takes money in the economy. It needs consumers. Particularly in our industries, we need consumers. The more money that can be spent on items other than the absolute necessities, the more that will spur on the demand for consumer products and the production and the warehousing and everything that goes with that. So I would say that at this point in time it would be disastrous for this province, knowing what we already know about the loss of jobs to free trade.

Mr B. Ward: One other question, and it is not really a budgetary item. Our government is attempting to develop new partnerships between labour, business and government, working together for the betterment of the province. We think that is the way to go in the future. It works in Germany; it should work in Ontario, and in Canada for that matter. Do you think that goal is achievable, or do you think that we are off base?

Mr Collins: Certainly it is achievable, and I think we are already seeing the signs of it. Without getting into a lot of details, our union is currently participating in some of the training moneys that have been available with some Canadian companies, in Ault's in the Labatt's organization, to try to upgrade skills and do sorts of things to protect the long-term interests of those jobs and those members. I think you will see a lot more of that as the government brings these parties together, because the co-operative aspect of it will be necessary.

If we cannot overcome some of the other policies that are out there, what companies we have left in this country will have to consolidate and compete for the purposes of what few commodities they are left to produce in this province. So I think, yes, those companies that intend to stay here and intend to work with the Ontario workers and the Ontario government will spend a lot more time in these co-operative ventures.

Mr Christopherson: I want to thank you very much for your presentation. It was very enjoyable, very thorough.

You talked about consumer confidence. I would like to just focus on that a bit. Before I do that, I would like to also mention that I found it interesting that Mr Phillips wanted to talk about political contributions from the labour movement to the NDP when it is well known about the political contributions by banks and the insurance companies and other major interests in the economy and their contributions to the other two major parties.

Anyway, my question to you is, you have talked about the fact that this budget is a bit of a consumer confidence-builder and that helps your membership, because it means that there are dollars out there, and you are certainly not alone. James Frank, chief economist for the Conference Board of Canada, has agreed that it is a confidence-builder with regard to consumers.

In light of the first piece of legislation we passed, which prevented provincial sales tax from being put on the GST and keeping about $500 million in the hands of Ontario consumers, do you believe, since your people are the end recipients of that economic activity, that that $500 million kept in the pockets of consumers during this recession was a good economic move in terms of maintaining jobs in the economy and providing some economic stimulation?

Mr Collins: You can directly translate that into sales dollars somewhere, and sales dollars will mean jobs and security. So, yes, there is no question.

Mr Jamison: This could take off on what Mr Ward had said. Certainly it has been a major effort on the part of this government to try to promote, where we can, the idea of partnerships in the future in areas where labour and business can work together, although, again, over the budget we seem to be hearing totally different views. I will give you an example and I will ask you how you would feel about this.

Just two days ago we were listening to the chamber of commerce from London and they wanted a balanced budget this year. They wanted restraint in spending to a very large degree and indicated that a 10% cut across the board in every ministry and in every area was what they would like to see. That would amount to about $5.2 billion. How would you feel about that if the government were to go in that direction?

Mr Collins: I would suspect in that case that chamber of commerce would not have to worry about some of its members very shortly thereafter, and particularly its independent members. They are dependent upon consumer dollars, and employees of the government have consumer dollars. I know enough about London to know that -- I have lived there and I have worked there for many years -- so I know also that there are a number of independent businesses that expressed even at this point in time how they will survive through the next six months or so without increased sales. So I would say to you, I think they have got the absolute wrong approach in terms of consumer dollars and in terms of their businesses.


The ones that will survive it -- and there are those that propose it -- will be the big ones. The big ones will survive off the money they have in New York or in Washington or Chicago or wherever, in the dollars they have to invest. Of course, their long-term goal is that if you put enough of the independents out of business then you are going to pick up their volume and their sales and that will be your profit and your dollars. We have dealt for a long time with too many large corporations to know that that is exactly the game plan. If you can squeeze out everybody else, then the bigger corporate entities will take over. In some, I would suspect in the chamber of commerce, that is in their interest.

The Chair: I would like to thank you, Mr Collins, for appearing before this committee.


The Chair: Mr Hershey is the next presenter. Would you come forward, please. Are you representing yourself?

Mr Hershey: Myself.

The Chair: Okay. You have 15 minutes, and I would like to welcome you here to the standing committee on finance and economic affairs on this budget review. In that 15-minute period, you can keep some time at the end for the three parties to ask questions on your presentation. You may begin.

Mr Hershey: Thank you very much. I appreciate the opportunity to appear before you. I am a United Church minister, until recently serving a small rural church outside of Simcoe, Ontario. I come also with a background as one who had some things to do with the forming of a food bank in Simcoe. Until the end of June, I served as the chair of the Haldimand-Norfolk Committee to End Violence Against Women, and presently I am serving as the supervisor of a program focused on street youth in Hamilton, a drop-in program that attempts to provide resources to people who find themselves literally living on the street.

Therefore, I come with a very specific kind of perspective, and it is a perspective that I find supported in the comments of John Kenneth Galbraith, who I anticipate has been oft quoted in the conversations about the budget, but again to review his introductory remarks in the article as it was reprinted in the Globe at the end of May:

"It is truly remarkable to encounter an issue of major popular concern and discover that almost everyone agrees on how to respond to it. That issue is the recession and what to do about it. The response by all levels of government is an array of measures designed to make it worse. With the notable exception of the province of Ontario, governments everywhere are tightening budgets, curtailing services, reducing payrolls, furloughing workers or promising to do so. Individuals immediately affected, needless to say, have their spending and resulting support to the economy promptly reduced. Many, under threat of unemployment, are impelled to retrench. So are those receiving welfare and other payments not being curtailed or threatened with curtailment."

There are essentially two comments that I wanted to make in response to the proposed budget. The first comment related to the kind of media fanfare that accompanied the recognition of the size of the deficit. I was greatly concerned that the size of that deficit was being identified but not the aspects of that deficit, not the realization that tax revenues are decreased, as we know by the recession, without the realization that federal revenue to the province was being decreased, and also the incredible increase in costs of social assistance as people moved first on to the unemployment rolls and then to social assistance rolls. The costs both to the municipalities and to the province were skyrocketing. I was, as you might imagine, greatly concerned with the federal budget direction of capping payments, certainly to the province of Ontario. Within Haldimand-Norfolk there certainly is no exception there. Mr Jamison, I suspect, would confirm, in probably more detail than I, the size of the increase that has been going out in social assistance. That is the focus of my first comment.

The second comment relates to those whom we term to be "marginalized." Those who are marginalized are those who, through a variety of circumstance, do not participate in the mainstream of our society, even of our communities. The ones we are talking about are those who are victims of abuse, be it sexual abuse, physical abuse, emotional abuse, be it abuse that has happened as children or abuse that has happened as they have come into adult life. But it, none the less, is abuse which within a person's psychology can create a sense of being a victim and, as victims, unable, unwilling to speak out on their own behalf.

I would want to identify further groupings within those who are unable to speak: those who suffer from psychiatric disorders who, because of previous governmental decisions, are not able to live in the kind of structured environment they need, but rather are sent to the street with their bottle of medicine and told, "Take one every day," but, by virtue of their disorder, are not always able to provide their own support to themselves.

We need to look at further groups, in which we might include those who are physically brain-damaged who, through no fault of their own, through a variety of accidents, find themselves with skills but not always just the correct skills to fit into the kinds of systems that we establish for education, for job training and so on.

Further are those who are developmentally delayed, what we formerly called the mentally retarded, and again the kinds of needs that they have and the ways in which they do not fit into the mainstream.

So to me it was critically important that in this budget proposal, as it was presented to the Legislature in April, not only were increases being given to the whole social assistance area, increases in excess of merely the rate of inflation -- because anyone who has had any involvement with the social assistance field will know that the present rates are far below any kind of need level -- but also that money was being put into, as one said, "Putting the Transitions report of the Social Assistance Review Committee back on track, recognizing and establishing that the system doesn't quite fit in a lot of ways, that there are a whole variety of people who don't quite fit into the sorts of definitions we make and the very broad sorts of systemic brush strokes in which we try to establish our assistance programs."

So to me it was critically important, as I say, that the government was willing to respond to fight the recession, to make that very conscious and, I would say, courageous choice rather than merely fighting the deficit. It is in these two areas that I would offer my comments in support of the budget as it was proposed.

Mr Carr: Thank you very much for your presentation. As you know, one of the concerns that has been leveled against this government is that there have been no controls in terms of the spending, and there have been examples. You may have heard about the chairman of TVOntario, who has nine TVs in his office and a chauffeur at $51,000. They spent $2,000 to send a Japanese businessman down to a Blue Jays game. Zanana Akande spent $54,000 for new carpets in her office. A lot of people are saying that rather than moaning and pointing to other levels of government about transfer payments you should look at your own house and see where the spending is going and where you can eliminate abuses.

What do you say to those people who say that instead of complaining about what the federal government is doing or the municipal government, you should get your own house in order and start to get rid of some of these abuses that have been laid out? What do you say to those people?

Mr Hershey: I do not want to sound flip, but I would agree, we all need to have our house in order. It was suggested to me that I could spend time on what has happened at the federal level, but it seemed to me that that was inappropriate.

Mr Carr: It is.

Mr Hershey: The reality is, this is the situation in which we are living, and my response is that then we respond to it. It was within the context of the capping of transfer payments that the budget was devised and designed in trying to respond to that reality. Yes, one of the consequences is an increased deficit, but none the less it does not remove the requirement that we respond to the individual needs of our communities.

Mr Jamison: Your presentation was very enlightening on the social side of things. I think it is very important that all of us as politicians here listening to the public at large understand the type of devastation going on, not just with people being laid off but the added pressures that are on all of our identifiable social groups that are there to try to assist. I wonder if you can expand for a moment and enlighten all of us here to the need that is ongoing and developing in probably all of our communities, in what you can put down in a number of words, in your experience, the effect on people's everyday lives this recession has caused.


Mr Hershey: Certainly one of the areas in which I can provide a broad response is in terms of the food bank, Simcoe's Caring Cupboard, that was established this spring in the community of Simcoe. It was anticipated that this food bank would be responding to something in the order of 25 requests a week. The food bank was devised out of three churches coming together and wanting to provide a co-ordinated response. On the very first day we opened we had 29 families coming to us and the numbers continued to escalate, so that by the end of 9 or 10 weeks of operation we had responded to 400 families, substantially higher than our expectations. The expectations were not unreal, they were based on the experience of the three churches.

Within our experience of those families, we discovered on our second day the need to have a box of Kleenex sitting on the desk as people came into the Cupboard because of people's sense of embarrassment. They were brought up as children that you take care of yourself, you take care of your family and it is your job, in a privatized kind of way, to respond to the needs. They found themselves not able to respond and so were coming to us for an emergency supply of groceries.

More recently in my work in Hamilton with the street youth, one would anticipate that the social assistance system was somehow to be a co-operative kind of system, that somehow it was put in place to enable people to provide for their own means by the issuing of a cheque each month. One fellow with whom I have contact --

The Chair: I am sorry, I am going to have to cut you short on that answer and go to Mr Kwinter for a couple of minutes.

Mr Kwinter: Mr Hershey, you talked about your involvement in the food banks in Simcoe. I would like to read a quote from someone who is also involved in food banks and get your comment. This is from Gerard Kennedy, who runs the Daily Bread Food Bank in Toronto. He says -- this is his quote, by the way -- "This budget ignores the poor entirely. There is about $12 per person per month possible extra for people on social assistance, so the word for food banks is not very encouraging." Is your reaction the same?

Mr Hershey: I would not be quite so negative as Mr Kennedy. If I were to be given my biggest druther, my druther would be that substantially more would have happened. But I recognize also that we live in a reality in which there is a whole list of conflicting demands that require us to negotiate how we respond to a variety of situations. In one respect I would say food banks were given more work to do, but I would also want to acknowledge that the causes for that are more than merely within the mandate of a provincial government. I would also say that what could be done was done, again, given the list of conflicting demands.

The Chair: I would like to thank you for appearing before this committee.


The Chair: The next group is the Brantford Chamber of Commerce. Would they come forward, please? I would like to welcome you here before the standing committee on finance and economic affairs on the budget review. You have one half-hour for your presentation. You can leave some time near the end of your presentation for a question-and-answer period on your brief from the three parties. If you would identify yourself for the purposes of Hansard, and you may begin your presentation.

Mr Bateson: Thank you. My name is Terry Bateson. I am the treasurer of the local chamber. I guess my comments today are from the membership of the chamber, which is largely business-related. We are a group of small businessmen, and in some cases large businesses, in the Brantford area who have concerns essentially about the effect of this budget on business. But it goes beyond that, obviously, because what is good for the people is good for business, and what is good for business is good for the people, I guess. Based on that I have a few issues I would like to -- I am not really speaking to the individual items in the budget itself, but more the overall effect of this deficit. Brad and I have already squared off on this subject, he has his opinions and I have mine. I guess I have my --

Mr B. Ward: We agreed to disagree.

Mr Bateson: We agreed to disagree. So, I have my day in court here. Anyway, the biggest concern the chamber members have is the quantum of this deficit; $9.7 billion is a considerable quantum and I hear tell recently that this $9.7 billion may be a pipedream, that in fact it is probably going to be worse than that.

Obviously the government spending into a deficit of this magnitude is going to have an effect on the economy of Ontario. Obviously this spending has to put upward pressure on interest rates. I believe the marketplace is already feeling that upward pressure. What I read says that interest rates are headed upward in the short term and I suspect this government has contributed to some degree to that. Because of higher interest rates, or the potential for higher interest rates, we have also got to consider the effect that may have on inflation and that it will fuel inflation and will contribute to this recession.

Inflation, the federal government -- and I do not mean to quote them in front of you -- but we are talking nationally of an inflation rate of somewhere around 3%. That is a target. Whether we achieve it or not is another question but I say to you that this budget by itself is having a negative effect on that attempt to rein in inflation.

By virtue of creating this deficit, it has to be addressed at some point whether we are talking about the deficit itself or the interest on the deficit that will have to be added to the bill next year. No matter how you cut the mustard, ladies and gentlemen, you are going to have to increase taxes somewhere down the road with this spending. You have to in order to offset the debt that is being created. I understand the bulk of this debt is being created essentially through continued social spending. I do not know that the budget in itself said that X amount of money was going to be spent on programs, and certainly this was not $9.7 billion of new money being spent on new programs. I believe the $9.7 billion merely came through the increases in the existing programs or the cost of administering existing programs.


A great deal of this, of course, is social assistance which in a recession obviously has to increase. But if we talk about further increases in taxes, I suggest that the main beneficiaries of this budget are going to end up being the merchants of Buffalo and not the citizens of Ontario. Furthermore, again from a business standpoint, if we have higher taxes and if we have higher inflation, it certainly is going to cause us to be less competitive in world markets, which is where our business people have to compete.

I can also suggest that this method of handling finances, and by that I mean the statement that the NDP government is "going to spend its way out of this recession" -- and I will wrap quotation marks around that phrase because it was used -- I think it has been proven in world history that spending your way out of a recession does not work. I point to Sweden, I point to Britain and I point to France as examples of governments that have tried this type of program to spend their way out of a recession. It has not worked before and I do not think Ontario is any different. It is going to have essentially the same effect here.

There is, incidentally, in trying to get a grip on the budget's attempt to assist business -- I am not familiar with the exact numbers -- included in the provincial program an assistance program to struggling businesses. But it was noted, and I am speaking again on behalf of our members, that to qualify for this I believe you had to have sales in excess of $10 million. The number may be wrong, but it was certainly a fairly large number and you also had to have at least 50 employees before you qualified. I am quoting directly from some of our members when I say that the feeling now is that the NDP government is definitely in favour of labour, as long as it is large and it is organized. I am quoting from several people on that issue.

The deficit, furthermore -- we are talking $9.7 billion in the current year; we are talking a similar number next year and a similar number following and I understand that by the time we are all finished there is going to be an accumulative deficit of around $50 billion in this province. That is about five times the present number. I find that the mere numbers are staggering to a business person who has to balance revenues and expenses. You do not stick around for very long if you do not. Basically, the deficit that is going to be in place when we are finished with this program has to be borne by somebody. We are taxing future generations and I do not see that as being healthy economically.

Last, there has been talk of this deficit attempting to assist with job creation. The jobs being created, in my mind, are the types of jobs that -- and I call them phantom jobs -- are created and government-funded and they are only jobs as long as the government funding remains. As soon as you withdraw the funding the jobs evaporate. By that, I am talking about the proliferation of organizations, even out at Brantford, that are attempting to help and it is all by government funding. I say "attempting to help" whatever element of society, but there is certainly a lot of money being spent creating jobs that will not be here once the funding dries up and I will just leave it at that. That is essentially the extent of my comments and I will try to answer any questions.

Mr B. Ward: It is a pleasure to have you before us and to express the views of the chamber of commerce. We have had meetings in the past and I look forward to having more in the future, particularly the parliamentary assistant for the Ministry of Industry, Trade and Technology, Norm Jamison, whom you also will get to know in the very near future, the parliamentary assistant for small business and industry. We look forward to working with you, not only for encouraging investment in the areas of Simcoe-Brantford, but overall.

Brantford has received a large portion of government funding or government revenue over the years. In fact, some people say there is an overreliance on the city of Brantford to count on either the federal or provincial government. It always seems to be the pot of gold at the end of the rainbow. Is it the position of the chamber of commerce representing Brantford and area that government funding of the extension of Highway 403, which will cost $72 million over the next four or five years, the $800,000 for the sound barriers that will be presently constructed, the $4.6 million from the anti-recession package, which primarily went to private sector contractors -- I think of Shaver Construction, that received the contract to reconstruct Huron Street as a specific example -- as well as replacement of the boilers at St Joseph's Hospital, which is always attempting to fund-raise in the city of Brantford for additions etc, to better the health care service in the city, is the Chamber of Commerce representing Brantford and area opposed to that type of expenditure? During these tough times, should we be looking at cutting that aspect?

Mr Bateson: I am going to speak personally for a moment. You talk about that kind of expenditure. Let's face it, the government is a spender and a dispenser of services and owes its existence to the need to provide services. This community needs services the same as any other community and if anything, the Highway 403 extension is long overdue. I do not necessarily care what political party is in power; I say that is a service to this community and it is needed and therefore the money should be spent, when you keep in mind that this community in the past has not been on the receiving end of a great deal of government favour. It has not when you look at some communities, and I will speak specifically of Sudbury and the favour it got from the federal government and Kingston and the favour it got from the provincial government.

Mr Stockwell: Kapuskasing.

Mr Bateson: We can go on and on about the communities that received a real shot in the arm. I am talking about a real shot in the arm. The Revenue Canada office in Sudbury, look what it did to the community. There has never been anything like that happening in Brantford. There is money being spent on Highway 403; it is very nice. There was as gift to Communications, thank you very much; we do get some of it. I just say to you that governments can, and by themselves, give communities an enormous shot in the arm by doing things like bringing the communications department to Brantford in 1995.

Mr B. Ward: Constructing a new building.

Mr Bateson: Yes, all those things we are grateful for, but on the other hand we talk about budgeted deficits. The money has to be spent responsibly. You cannot just throw money at things in an attempt to solve the problems.

Mr B. Ward: By co-operating, like business, labour and government learning to work together locally, provincially and nationally, I think we can be more effective as government, rather than having all the groups fighting among each other. That is encouraging.

Mr Bateson: I hear that phrase and I see it quite a lot these days, co-operation between those three groups. It is not there yet, but ideally it will happen and if it does, God bless us all.

Mr B. Ward: My last question is a non-budgetary item: the issue of Sunday shopping. I believe the chamber of commerce locally has been opposed to it. Has that changed?

Mr Bateson: No, it has not.

Mr B. Ward: And the retailers have stuck together?

Mr Bateson: It is still essentially opposed to Sunday shopping.

Mr B. Ward: Okay, thank you.

Mr Phillips: Just a comment before the question. You indicate some concern about the $9.7-billion deficit. We heard yesterday, from no less an authority than the parliamentary assistant to the Treasurer himself, that things are right on track, that you should not worry about it and that it is the maximum deficit. I hope he is right.

I think the numbers may be even more troublesome to you than you are aware of because you said "spending our way out of recession." Our concern is not only spending during a recession but, when the recession is over, deficits ad infinitum. The deficit never gets below $6 billion or $7 billion. By the way, in three years it assumes $5 billion of new taxes just to get to that deficit of $7.5 billion. I do not want to alarm the chamber any more than it perhaps already is, but I think the numbers may be mildly worse than you think. That is our concern, just what kind of economic environment we are creating where we can attract individuals to create jobs.

We have heard conflicting evidence. We have heard: "The recession is now over. We're well on the way to economic recovery, and stop worrying." You are pretty close to the situation. How buoyant is that recovery, and will this budget help in that recovery or will it slow the recovery down?


Mr Bateson: I have already said that I think the budget by itself will have a negative impact on this recovery by virtue of what I have already said, and I will not repeat myself. You asked me, "Are there signs of recovery here?" I think there are signs that we may have seen the worst of it. Yes, there are some signs of a recovery. How long it is going to last is a serious question. The lost jobs we have witnessed in this community are not going to come back right away. It is going to be a slow, painful rise out of this recession.

We at the chamber believe we are becoming less and less competitive. A lot of the jobs we have lost in this community are to Tennessee and the Carolinas and the like. We hear about their wage rates and their benefits costs. I will speak specifically about workmen's compensation. That is becoming a serious issue. If we cannot compete with our neighbours, we are not going to be in the business very long.

There will always be an economy in this province because eight million people, or however many we have, are not all going to up and move in the next period of time. We are here and it will be an economy of one kind or another, but we are going to lose our manufacturing jobs to our neighbours if we are not competitive and I do not know how you replace that. I am not an economist.

Mrs Sullivan: The question I have really follows precisely on the train of thought so far. One of the things we have had some great concern about on this budget is that there is a measure of lack of confidence being evidenced throughout the business community from financial analysts and from people who are looking to business expansion or even to establishing business. What is being said is that this budget does not create the climate to attract new business investment in any way. We know that capital is fluid and that it can go anywhere in the world. What we do not see is any reason for it to be coming to Ontario.

The other aspect of that question, of course, is the uncertainty that is being created for the business community: the immediate cancellation of the Ontario current cost adjustment and the uncertainty surrounding environmental legislation where rules have changed midstream and so on, which are not specifically budgetary issues but have certainly added to the investment climate that is problematical. How do you see that kind of climate affecting long-term capital investment in Brantford? Do you see any signs of anything new coming on the horizon, or do you see this budget in any way helping or hindering capital investment in this area?

Mr Bateson: That is a pretty broad question. I do not know that this budget by itself is having an impact. It is having an impact provincially, I think, and therefore by deduction it affects this community. I cannot speak of specific issues there.

I am sort of a consultant to business, so beyond my treasury role at the chamber I sort of have my ear close to the ground, if you will. I see evidence of businessmen who are relieved a little at the fact that the economy is not getting any worse, but I do not see them rushing out to make capital investment as you talk about. There is no one I know who is out borrowing money these days on the concept that this economy is turning around and that there is going to be a shortage of capacity in the near term. There is not. I think that lends credence to what I said earlier, that it is going to be a slow, painful recovery out of this recession. There is no business confidence out there, just none.

Mr Kwinter: I would like to get your comment, Mr Bateson, on sort of an impression I have been getting during these hearings, that the government is saying it wants to have a partnership among business, labour and government. On the other hand a lot of the labour representation, a lot of the people representing social welfare organizations, come forward and they see business as being the culprit, the enemy, the reason for a lot of their problems and that if it were not for the greed and the profits of businessmen and the wealthy, everything would be a lot better. How do you respond to that?

Mr Bateson: Have we got an hour?

The Chair: You have 20 seconds.

Mr Bateson: There is a marketplace out there that prevents any individual from making a killing at anything. The marketplace is a great leveller. If an individual is profiteering today, he is probably not profiteering tomorrow because there are five or six people who jumped on the same bandwagon. That is true of any industry. I witness, for instance, the video stores today. There is no one company controlling that.

The Chair: Excuse me, I have to go on to Mr Stockwell. Maybe he can ask the same question and use his seven minutes up.

Mr Stockwell: No, I do not want the answer, actually. The previous deputant said there was a lot of focus on the $9.7-billion deficit and that concerned them. In a way it concerns me as well. Just as a note that you could take back to your chamber, the concern I have is the deficit. It is large. It is going to be cumbersome. I think it is irresponsible, etc. The other things that are built into this budget -- and I am not sure that you know them or your chamber knows them, but it is good that you would -- the $8 billion in new taxes over the next four years. The $8 billion is a significant amount to impact on the community and the province of Ontario. That is a lot of money. In my opinion it is going to have a negative effect on business, on all kinds of people.

The $35-billion deficit that they will incur in the next four years: People do not seem to understand that in the first 125 years of this province we incurred $35 billion in debt. In the next four years, under the socialists, we are going to double that debt. The totally inflated growth numbers that they have included -- which means that if they do not achieve these totally inflated growth numbers, I think it is $3.5 billion the first and second years, then that means either the taxes must go up or the deficit must rise above what the projections are and they are already projecting $35 billion more.

Have you reviewed the budget to such a degree that you have seen these kind of figures and, if so, if you could comment on them, what kind of things are you hearing from the private sector, the capital investors, the risk-takers, the venture capitalists? What are you hearing from them and where are they going? Are they staying, are they biding their time or are they fleeing?

Mr Bateson: I think, to answer your last question, most people are taking a wait-and-see attitude. I think, to some degree, this $9.7-billion deficit is an estimate. We have not seen a final accounting yet, although it is going to be there; that is a given. It just may be quite a bit larger. I think most people are taking a wait-and-see attitude at the moment. There is not a mass migration, if you will, of businessmen.

There is certainly disillusioned business out there. I am going to go beyond this deficit. The disillusion currently is over the other items of legislation that are put on the table that are anti-business. I will just call them that outright: anti-business. It is creating a climate in this province that is not very nice for people in business. I do not know how you can resign your directorships fast enough in this province right now because of the liability. I do know I attended a conference recently on how to insure myself against this potential liability, and I should not have to do that.

Mr Stockwell: If this is adopted, if this mistake -- it is the big mistake in my opinion -- if this big mistake is adopted and implemented over the next four years, what do you believe the reaction of business will be? I personally think they are going to leave, frankly. Any risk capital is going to leave simply because there are greener pastures out there. What do you think? If this $9.7 billion, $35 billion over four years, $8 billion in new taxes, etc, etc, is adopted, what do you see happening?

Mr Bateson: When you say "a flight of capital," I do not think we will witness a flight of capital. I think you will see that people will see better opportunities elsewhere and what you will get is stagnation within this province. People cannot really just pull up and take a walk right now. They cannot do it because you would have to liquidate and you would liquidate into the worst marketplace in the last 10 years. So there is not going to be a flight of capital. I do not think you will see that. But I think the people who end up having capital for one reason or another will probably put it somewhere else because the opportunities will be better.

Mr Carr: I had our friends in legislative research prepare what the interest payments will be on the provincial debt; so it is non-partisan. They used the Treasury figures. This was done even before the downgrading of our credit rating. Just so you know, it is going to cost us by the end of the mandate $7.8 billion a year, or $583 million a month, $134 million a week, $19 million a day, $800,000 an hour and $13,000 a minute. The government says, based on the revenues, that is manageable. As a business person looking at $13,000 a minute, 24 hours a day, seven days a week, not to pay for health care, not to pay for the environment, just to pay the interest on the provincial debt alone, is it manageable?


Mr Bateson: I think the answer to your question is in the question itself, is it not? I mean, the numbers there -- they are staggering. The federal government has a bigger problem, but that is because of, I think, 30 years of bad management.

We in this province have had good management and now we are looking at bad management, and that is how I perceive it. I just hope that we have the visibility to see down the road and that this deficit thinking changes in the next budget, at least in the next budget.

Mr Carr: One of the other things that I wanted to ask you about was the Agenda for the People. It was interesting; it was written August 18, 1990, almost a year ago. In it they said they were going to spend, over two years, $1.8 billion and that was going to include funding to 60% and all the social programs. Instead, over two years, instead of increased spending of $1.8 billion of course we have an $18-billion deficit. That was only one year ago, to show how far they were out.

A lot of people have said, "If you were going to do this, if you were going to run up the deficit, you at least should have had the political courage to say it one year ago." What would your comment be about that, about a government that one year ago did not tell us it was going to do it and now one year later instead of $1.8 billion we have an $18-billion deficit over two years? What do you say to the government?

Mr Stockwell: You wouldn't have voted for them.

Mr Carr: Brad just lost a vote.

Mr Bateson: Well done, Brad. I mean, what do you say? I think I have said it here for the last 30 minutes. I am opposed to this deficit financing. It is for all the wrong reasons and if you are going to spend the money you have to raise it. You have to pay as you go.

Mr Christopherson: I thank you, Mr Bateson, for your presentation. I do not always agree, but I always enjoy the presentations of the chambers. They are always well thought out and very sincere.

I find it curious and continue to find it curious that there are a lot of terms -- today you used the term "staggering" when talking about the deficit, and yet last week we saw in the news projections that the $30-billion deficit of the federal government, the annual deficit of their budget, will possibly be as much as $40 billion, which means that the miscalculation alone by the federal government is greater than the entire deficit that we have projected. I think it is important to note that right now our budget projections are dead on target. There is very little difference between what we have projected and what the real numbers are right now.

I know that chambers of commerce and other business groups have said, "We've opposed the federal government's deficit spending in the past," but I think it is fair to say that the volume of opposition by business is nothing like what we have seen here in Ontario. We hear a couple of little comments at the time a federal budget comes out, but we have seen demonstrations, we have seen fax machines sending out messages. The difference in volume alone, I think, says a heck of a story about some of business's approach to this deficit and I, quite frankly, make the case, and make no bones about it, that I think some of it may be political and ideological as opposed to just being a fair objective analysis. Now, that is a biased approach.

I would ask you a question, and I know you would like to comment on that. The question would be, the $0.5 billion that we did not take out of the consumers' pockets by putting the provincial sales tax on the GST, do you believe that had any kind of a positive effect on the economy -- here in Brantford, I mean?

Mr Bateson: No, I cannot say that. I do not think that the man on the street really is even aware of that accounting function that is going on. All they know is that they go to buy something for $10, it ends up costing them $11.50, and they are angry.

The Chair: I would like to thank you for appearing before this committee.

The committee recessed at 1145.


The committee resumed at 1302.


The Chair: The first person we have on the agenda this afternoon is Mr Chris Mewhort. Would you come forward, please? Welcome to the standing committee on finance and economics. You will have 15 minutes for your presentation. Within that period try to leave some time at the end for questions by the three parties here. You may begin.

Mr Mewhort: Thank you very much for giving me the opportunity to present my views on the Ontario budget. I am a small businessman. My gut may be large, but my business is small. I operate a bookkeeping service in Guelph. I do routine bookkeeping, year-ends, this sort of thing, for business clients, and I do a lot of income tax for individuals.

That mix of clients has given me a real opportunity to look at some things in the Ontario economy and the Ontario budget. My conclusions, based upon a study of my clients' records, are that poor people are much worse off than usually portrayed and are not really being helped by the present budget. The main beneficiaries of the deficit are Ontario business people.

I will present two examples from my files. I have a semi-client. She is a 30-year-old single parent. She has a two-year-old child, Stephanie, I believe. Her total income from all sources -- her job, her family allowance and some social assistance -- in 1990 was $4,038.35. That is it; total; kaput. She is surviving on charity of friends and relatives and food bank handouts, this sort of thing.

I have to ask myself, why are she and her child on the edge of starvation all the time? It is not because she lacks skills or ambition. She is a secretary, she has a post-secondary diploma, she has excellent references, she has standing offers of jobs, she has got a really good work record and she wants to work. Child care; there is the problem. She just does not have anywhere to put the kid. She does not have ready cash to hire anyone to look after the kid, and she certainly has not been able to convince the government of Ontario that she deserves any subsidy. If she was successful in convincing the government that she deserves a subsidy, that really would not help her either. She would simply join a long list of approved applicants.

What I say to that is, so much for this government's boasting about what it was going to do for women and children.

Meanwhile, we taxpayers and everyone in Ontario made quite an investment in her training and her potential and that is being wasted; her earning power is being wasted. She is doing nothing to increase consumer demand in Ontario. I am not ashamed to say that I would like everybody like that to come running to me with their money and spend a little bit on me, but if they do not have it, they cannot spend it.

My second example is a 35-year-old guy, a single father. He is in university full-time, he has a 14-year-old daughter, he is the sole support, he is on social assistance, he runs a part-time job weekends, he gets family allowance. He has $14,483.26. With this he manages to pay the rent, tuition, all his books, food and clothing for him and the child.

What has the government of Ontario done for this case? It raised his tuition. It seems that we can always stand there and slash university funding, simply because the long-term results of that are not going to show up until after the next election. We drive more and more other people out of the province for higher education and technical training, and we are chasing research and development out of Ontario. That is just horrendous. It seems to me that the vision of this government hardly extends past next week.

It seems to me that pronouncements about both the generosity and the abuse of our welfare system are misplaced. My clients who receive social assistance do not shop in the United States. They have no way of getting there if they wanted to. They spend all of their assistance immediately, without saving any, purchasing goods and services, primarily rent and food, from Ontario business people. Any provincial tax money or borrowed revenue spent in support of these people is immediately recycled back into the local economy.

I make the observation then that the provincial deficit is primarily a subsidy of Ontario business people. We have already lost a couple of hundred thousand jobs during this recession. That is a couple of hundred thousand paycheques that just are not there any more. That loss of consumer spending is hurting us Ontario business people. None of us like to lay people off when businesses go broke. The owners are not wealthy and we are often not -- the guy or the lady who loses her business, she has no UIC, she has no nothing. She is worse off than the employees who lose their jobs.

These paycheques that are not there; that is consumer spending. That is what we businessmen live on. The budget was borrowing money to inject into the economy. That is money that is going to come to us. My business clients struggle and scrounge for every nickel, and none of them refuse to sell any goods or services in exchange for money that has been generated somehow by deficit spending.

I do, however, see major flaws in the way the deficit was spent. That money is like whitewashing a fence in a high wind. It was spread very thinly over a very large area. The Ontario business people have discussed for years the need for increasing worker training and improving our education, vocational training, the need to increase productivity, the need to become more competitive. The budget should have focused on at least one of these specific areas, and it still could have protected individuals and it could have still pumped money into the Ontario economy if that was what was wanted, while still approaching some sort of changes.

I think to make a difference in any one of these areas, that is a structural change in the Ontario economy, and we cannot avoid those structural changes for ever. This budget should have said, "Look, here are important, needed changes," and it should have prepared to make them. I did not see that at all. That was just a scattergun approach to social programming. A budget is an opportunity to look at the plans and the major priorities of the government. I just do not see anything like that in this budget whatever. I see no evidence of any strategic economic planning. This government had a golden chance to start to make some needed structural changes, and it seems to me that you have instead milled around for the past year like panic-stricken sheep.


What of the end of the recession? Does this government have plans for reducing the deficit when better times return? I do not apologize. I am a Keynesian, but I support the other side of the Keynesian equation. If good times come back, I want to see a healthy surplus, I do not want to run a deficit for ever. Certainly previous Tory and Grit governments in both Ottawa and Toronto have utterly failed to reduce deficits, and I do not have any faith in that. I certainly hope that this government does a little better.

Because the latest budget is primarily a subsidy of Ontario business people. I propose that when the recession ends, the taxes on us business people be increased, and I think 20% would be fair, to help reduce the deficit. I do not think that this measure would hurt in a very healthy economy. Certainly if the need for social assistance was to drop and a couple of hundred thousand additional paycheques start to move around and a couple of hundred thousand people start to pay some reasonable taxes again, then everybody will be much better off.

I will sum up my main points. The poor people in Ontario are much worse off than you folks seem to think. The budget deficit is primarily a subsidy. The lack of priorities in strategic economic planning has meant that most of the borrowed revenue will simply be wasted. When good times return, the deficit must be removed, and because business people are the real beneficiaries of the budget, they should bear the brunt of repayment. Thank you very much.

Mr Phillips: I appreciate a balanced presentation. We have had the extremes come to us and I think this is a balanced presentation.

My question is really in terms of dealing with the deficit and the debt when we come out of this. You suggest a 20% increase in corporate taxes. How much would that raise, do you think, and what sort of a dint do you think that would make in the projected $10-billion deficits in the future?

Mr Mewhort: I am not sure at all. I would rather clarify that. When you say corporate taxes, I am looking at my clients, and a lot of my clients are starting businesses in the present recession and gambling everything they have, their house and dog and everything else. Certainly it would not hurt if they start to make a lot of money to pay taxes and help the economy. They could certainly afford to pay that extra.

Mr Phillips: Can I just make the observation that corporate taxes raised about $3 billion in Ontario, that is, less than 10% of revenue. That is the challenge, a 20% increase on that, so just a bit of a dent.

Mr Stockwell: And 20% would be $600 million, so it would be absolute peanuts.

A quick question, if I could: You say the budget deficit is primarily a subsidy of Ontario business people. Your assumption is that because they are increasing social services and the payments go to social service recipients, who then go out and buy Ontario goods, in effect, by the government giving the money to the social service recipients, they have indirectly subsidized Ontario business?

Mr Mewhort: Yes, that is my point. My clients survive on money changing hands and they immediately spend that money on other businesses and it goes round and round.

Mr Stockwell: I would be willing to bet you as much money as you have that Ontario business would be prepared to forgo that heavy subsidy you are offering them.

Mr Mewhort: Certainly none of my clients are willing to forgo that.

Mr Stockwell: They are not?

Mr Mewhort: No.

Mr Stockwell: I think business in general would. Quite frankly, I think it is a convoluted approach, to be honest.

Ms M. Ward: Thank you for your presentation. I do not have time to ask you much. First of all, I would like to say I certainly agree with you that there are a lot of poor people in Ontario who are in a very bad position. I see them in my own riding.

Regarding your example about the woman, the single parent whose total income was $4,000, you do say that was 1990, and maybe she was only on social assistance part of the year or something, but I think there is a higher level of support than that available, unless you are in an area where the municipality is doing its share. The same thing with child care. We do not know where this person is. Is it the case that there is not any child care available there? I know there is a waiting list for subsidies in a lot of places, but in some places there are not even the facilities, which is a great concern of ours.

I agree with you also about reducing the deficit when better times return, we all agree with that, but the comment I would like to make there is that it is not expected that we are going to have any miraculous recovery in the economy. We are not going to be into boom times next year. That is something that maybe is not realized.

The Chair: I am sorry, Ms Ward, time has run out and your preamble was a little bit too long for an answer.

Mr Mewhort: Thank you very much.

The Chair: Okay, thank you for attending.


The Chair: We will call on Professor Michalos. I would like to welcome you to the standing committee on finance and economic affairs. You also have 15 minutes for your presentation, and at the end try to leave enough time for maybe one question from each one of the parties. You may begin.

Mr Michalos: I did give the clerk 25 copies, so you should all have copies.

I timed it. I will just read it, that is the fastest thing, and it will not take more than six or seven minutes to read.

The main point of my submission is this: I think the 1991-92 Ontario budget was reasonable, modest, and in the best interests of developing a high quality of life for Ontarians.

Others have recited and will recite the numerical details of this budget. Rather than repeat that exercise, I would simply remind you of the statement of July 29, 1991, of the 59 Canadian economists who strongly endorsed this budget.

I mentioned the July 29 statement to an economist friend at the University of Guelph one day, and remarked that I wondered when we would have a list of economists from the other side. He said he doubted there would be such a list, because the Keynesian idea of increasing government economic activity during economic hard times is a sound idea. That, of course, is what John Kenneth Galbraith wrote in his Toronto Star article following the budget.

In another Toronto Star article of May 4, 1991, by Thomas Walkom, it was pointed out: "This year, interest on Ontario's total accumulated debt will account for about 12 cents of every tax dollar. In 1982, at the beginning of the last big recession, interest charges accounted for 11 cents of each Ontario tax dollar.... By comparison, Ottawa has to pay 34 cents of every tax dollar to service its debt. In 1984, when the Mulroney Conservatives took power, that figure was 32 cents.... In 1982, under Davis, Ontario's total debt was equal to 17 per cent of everything the province produced. This year, that proportion is estimated to be 18 per cent." I assume he has got his numbers right.

These considerations indicate that the Ontario budget is in some ways similar to that of the Conservative government of Bill Davis, and much more responsible -- more cautious -- than that of the Mulroney Conservatives.

One can always quibble about the precise sizes of annual deficits and continuous debts. It seems to me that members of the Ontario Liberal and Progressive Conservative caucuses insisted upon these hearings to do just that: quibble and hopefully score points on the New Democrat government.

If, on the other hand, they are really suggesting significant structural adjustment programs, like those brought in by the Mulroney government, I would raise the following question: Since Mulroney-style structural adjustment is destroying our country, much as such policies are destroying many Third World countries, in what ways would Ontario Liberals and Conservatives depart from the Mulroney strategy?

This is not the place to describe and attack Mulroney-style deficit-fighting structural adjustment. However, it should be emphasized that the Mulroney policies are clearly having the effect of dividing Canadians into rich and poor by compressing the middle classes. If the Ontario government followed the lead of the federal Tories, an already bad situation would be made worse. Thus, the proposed budget of Floyd Laughren offers some appropriate resistance to the wrong-headed and destructive policies of the federal government.

More generally, since the federal government insists on initiating policies that allow our country and its natural resources to be sold to the highest bidder, it is important for provincial governments generally, and for the Ontario New Democrat government in particular, to initiate policies that allow us to have greater control of our own house.


Accordingly, looking further down the road, I hope the New Democrat government will make good on its promise to legislate fair taxes. Excellent studies by David Wolfe for the Macdonald commission and by David Cameron for the Brookings Institution documented the fact that around the world, right-wing and centre-right-wing governments typically create enormous deficits and public debts in precisely the way the Mulroney government and its Liberal predecessor created them. Instead of taxing their relatively wealthy supporters they borrow from them through private financial institutions. In Canada, as a Statistics Canada report showed earlier this year, as elsewhere, huge government deficits and debts are not the result of excessive spending, but of regressive taxation mixed with excessive borrowing from the private sector. The clear result of such fiscal strategy is bound to be an increase in the gap between rich and poor, as the social safety net is shredded in order to pay off the national debt.

The record of social democratic governments around the world -- this is according to Cameron and Wolfe again -- and of the former New Democrat governments in British Columbia, Manitoba and Saskatchewan is also clear. Such governments tend to levy relatively heavier taxes in order to fund first-class social programs in health, education, training and social security. Assuming more taxes are in store for us, it is vitally important that they be fair. On this score, I think the government's appointment of the Fair Tax Commission is an excellent idea.

National surveys by Statistics Canada in 1970, 1977 and 1984 showed that the wealthiest 10% of Canadians own just over half the private wealth of the country, and the wealthiest 20% own just under 70% of it. Recently, Statistics Canada reported that since 1984 the share of the national income going to the rich increased at the expense of the middle class. That will certainly be matched by an increased wealth gap in the 1991 survey.

In light of these facts, I would urge the tax commission and the government to seriously consider some forms of annual net wealth taxation, or if not that, at least a reintroduction of some forms of succession and/or inheritance taxes. The last thing we need is an additional sales tax like the GST or flat taxes of any kind on consumption and income.

Steps should also be taken to introduce something like Quebec's spectacularly successful Caisse de dépôt et placement in order to put public sector pension funds to work developing Ontario industry. As Peter Campbell indicated in the Toronto Star of July 14, these funds represent about $55 billion and have annual cash flows of between $7 and $10 billion. Besides funding indigenous development, an Ontario caisse could be used to cover deficits without borrowing.

In the provincial convention of the NDP a few months ago, Premier Bob Rae said that he had "no particular affection for any particular institutional arrangements" and that "what we are committed to is to Canada itself." What must be remembered is that it is precisely institutions that give visible and substantial form to social and political visions. The reason so many of us are horrified by the Mulroney government's wholesale destruction of such institutions as the CBC, medicare and so on is that an essential part of the substance of the Canadian egalitarian vision is embodied in those institutions. If all the institutions are erased, there will be no more of Canada than there is of Camelot.

Floyd Laughren's 1991-92 budget keeps hope and the dream of an egalitarian Canada alive, and I for one welcome it.

Mr Stockwell: Most business people I know wholeheartedly disagree with your approach. Clearly, I can understand why. Many of them would like to be in your position of ensuring themselves a paycheque every couple of weeks and not having to meet payroll and not having to deal with the economy, such as yourself. They do not have that option.

Mr Michalos: What part of my approach are you talking about?

Mr Stockwell: Within your job situation. Their job situation is very different. If you did in fact study Mr Keynes, you would have read -- and you choose to adopt some of his ideas, but not all of his ideas. If you truly supported --

Mr Michalos: What are you talking about now, specifically?

Mr Stockwell: I am just asking the question. If you truly supported this type of economic philosophy, you would be opposed to this budget. He suggested yes, there are times when you do need to put money into the economy as a government. He also suggested that if you have two years of influx of capital, you must have three years of reduction. This government has committed itself to five years of deficit financing. I could ask you 50 questions in here, but that one jumps out at me. If you are truly a believer in Keynes's economics, why, then, do you support this budget? It is contrary to his approach.

Mr Michalos: It is not contrary to his approach. His approach is that when you are in recessionary times the government has to do more, and that is what it is doing.

Mr Stockwell: You did not finish reading his thesis.

Mr Michalos: I finished reading it. You do not know what is going to happen five years down the road.

Mr Stockwell: No, but I do know what this government has suggested in its plan for the budget. Their plan -- and it is right there, you can read it -- says four to five years of deficit financing. He specifically said, if you are going to influx capital for two years, you have to retire debt for three. How can you support something that is so contrary --

Mr Michalos: And your alternative is what?

Mr Stockwell: I am asking you. You are the one who is suggesting to me it is a good budget. Your defence of that is Keynesian economics.

Mr Michalos: That is right.

Mr Stockwell: He does not agree with this budget, so how can you say it is a good budget?

Mr Michalos: He seems to agree with it. He agreed with it when John Kenneth Galbraith said it. He agreed with it when the 59 economists said it.

Mr Stockwell: Then, tell me where I am wrong. Have I misread his theories? Have I misread his --

Mr Michalos: Yes. Obviously you have.

Mr Stockwell: He did not say that we must retire debt?

Mr Michalos: Give me your alternative. We are in a recession, people are starving, there are 125 people in the food banks of Toronto --

Mr Stockwell: The question is, did he not say you must retire debt for three years after incurring it for two? That is the question. I would like to hear an answer.

Mr Michalos: Maybe he did. So what?

Mr Stockwell: So how can you support this budget if it is contrary to what Keynes suggested?

Mr Michalos: Because I am supporting other things he said, obviously.

Mr Stockwell: Thank you very much.

The Chair: Twenty seconds, Mr Carr.

Mr Carr: All of a sudden you are going very quickly. The problem we have with what is happening at the federal level -- and as you know, Jeffrey Simpson laid it out -- is the fact that we ran up the deficit in the early 1980s. The fact is, now there have to be cuts to a lot of programs because we cannot afford to pay it.

The Chair: I am sorry, I have to cut you off. We are out of time.

Mr Carr: See you after for coffee.

Mr Sutherland: I do not think any of us can say for sure whether Mr Keynes would support this budget or not, since he has been dead for many years, but I am sure he would be supportive of the approach in general with his philosophy that in the bad times you stimulate the economy.

Mr Michalos, thank you for coming and making your presentation. You talked about two issues I would like to get your comment on. One is the issue of tax reform; the other one is the question of pensions and developing something similar to Quebec and the Caisse de dépôt. My understanding of the Caisse de dépôt is that some of that has been used in risk ventures, and people who have put money into the pension plans have been willing to take some of that risk. What do you think the effectiveness of that approach would be without too much risk to future returns on those pensions?

Mr Michalos: I think there are risks, and I think it has to be done delicately and cautiously. It has been spectacularly successful in Quebec. I think it is a risk well worth taking. We have to get command of our own house. There is a bundle of money there, and we have to be willing to risk some of it in order to get command of our own house.

The Chair: You have got 30 seconds. Have you got a quick question?

Mr Sutherland: Go ahead, Mr Jamison.

Mr Jamison: I would just like to say that we appreciate your response and coming here today and appreciate your point of view. I think it does reflect sympathy with what is happening to people in this province during a recession that is deeper than the one many of us can remember. We believe that we are on the right course, and I am pleased to see you reflected that in your report.

The Chair: Mr Jamison, we have to cut you off. We go to Mr Phillips.

Mr Phillips: Your position does not surprise me. It is pretty predictable. Just a couple of comments. How much time do we have, by the way?

The Chair: Two minutes.

Mr Phillips: The reason that the federal government has not responded is it is broke, bankrupt. They have no money. It is as simple as that. I guess we all have to eventually wake up to that one.

The gang of 58 actually criticized the budget. You may not have heard it, but they said it was their belief that the budget should be balanced within four years. As you know, the budget never gets within $8 billion or $9 billion of being balanced. So I think you may have some concerns with the long-term implications of the budget. My concern is that we need to balance things. We need to have some economic activity.

The president of the University of Western Ontario was before us yesterday. Lo and behold, the US spend far more in subsidies per student at universities than Ontario does. The bad US do that. He was saying there needs to be a major influx of funds into the universities. I think the only way that can happen is with strong economic activity. If you are here a year from now, are you satisfied that within this budget there is enough to stimulate the sort of economic activity that I think you and I would agree has to take place to sustain and to enhance our quality of life?


Mr Michalos: Enough? I do not know. I think it was modest. The additional "enough" they put in was something like $1.5 billion. As I say, that was modest. Most of the people I talk to think it was modest. I do not know how much good it will do in a year. I would have to look at it then, but I certainly would have taken the step. Maybe personally I would have gone further, but I do not know. I am not in their seats, so I do not know what I would have done.

Let me just make one comment on the federal government being broke. They are broke because successive governments have practically destroyed their own tax base. If you look at the Brookings studies and you look at the regression equations, the mathematics is perfectly clear. The reduction of the tax base is about five or six times more important than the spending in terms of the deficits that are created.

The Chair: Okay, I would like to thank you for your imput into this committee and your presentation. Thank you.

Mr Michalos: You are welcome.

Mr Phillips: See you next year.


The Chair: The next group is the Onward Willow Centre. Would they come forward please? Okay, I would like to welcome you here to the standing committee on finance and economics and the budget review. I understand the clerk has a copy and when we get back to Queen's Park each member of the committee will get a copy of your brief. We do not have the accommodation here for copying them all as it is right now, so each member will get a copy on the road next week. In your presentation you have one half-hour and if you can leave some time at the end to have a question-and-answer period, most of the opposition, third party and government would like to ask questions on your particular brief for possibly more clarification. You may begin your presentation.

Mr Zuber: Thank you. Good afternoon, gentlemen, women. My name is Gary Zuber. I am the chairperson of the Onward Willow safety committee and a sitting member of the Onward Willow committee itself.

Ms Margetson: I am Chris Margetson, a community development worker at the Onward Willow Centre.

Mr Vanderwoerd: My name is Jim Vanderwoerd and I am a researcher with the Onward Willow Centre and the Better Beginnings, Better Futures project in Guelph.

Mr Zuber: As I was saying, good afternoon, and thank you for allowing me to speak at your little convocation here. It is a privilege to be allowed to express my personal views on matters surrounding the proposed NDP budget, and what effect it will have on my life and those around me.

Let me first give you a brief history of my background and how I wound up in the situation I now face. I began working in 1960 full-time, trying my best to make a living for myself. I laboured at many jobs that, when I look back in retrospect, I would not work at again, but when you are young and dumb, thinking is a process that does not often enter into a lot of decision-making. I met a young girl in 1963 and in 1965 we were married and we started to raise the family we both agreed we wanted to have. We had three children and in the fall of 1974 my middle son, Jeffrey, was diagnosed as having aplastic-anaemia. This disease is almost always fatal and in our case it was. At the age of five my son died, leaving my wife and me totally devastated. I had lost my job. I had lost my car, my house, my money, my credit rating, and most important of all, I had lost my son. But I still did not want to accept bankruptcy.

I started another job and tried to put my life back together. I made payments on the bills I had accumulated and times were very tough for us. Still I had not taken any money out of the so-called system. Gradually the tension and stress began to affect my health and I contracted psoriasis which, in turn, led to psoriatic rheumatoidal arthritis which I have had for some time now. As this disease progresses the chance that I will work again becomes less and less of a possiblity. Nevertheless, in the fall of 1987 I went back to school at the tender age of 43 to see if I could get a diploma that would allow me to re-enter the mainstream and become a productive member of society once more. Through the grace of Voc Rehab and all the help and support from them, plus an awful pile of hard work, I graduated in September 1990. I had successfully completed 35 various courses and received corresponding credits. Unfortunately, my disease had progressed to the point that I was under heavy medication, preventing me from actually going out and seeking employment. Moving my wirists and hands had become a real difficulty, which it still is. Now, having bored most of you to death, you are probably saying, "My, that is too bad, but what has this got to do with the new proposed NDP budget?" Well, I am going to tell you. The money that was used to put me through my reschooling came from the very source that is now being pushed to be cut. What would I have done had this money not been there? Where would I have turned?

Let's take a look at the worst-case scenario, and in fact one that I am going to be facing very, very shortly. Since I am unable to work, since I am finished with Voc Rehab, I am going to be forced back on to the welfare roster, a system that is in the biggest mess it has ever been in. Survival in this system, as it now stands, is nearly impossible. Yet someone, in a moment of sheer lunacy, has proposed cutbacks. Wow, what a wonderful future to look forward to.

Who makes these decisions? Do the people who are stuck in this stinking hogwallow ever get asked for any input? No. Well, let me tell you, we are going to be heard. I see a great groundswell coming from the economically oppressed that will be heard far and wide. For those of us who are stuck in the welfare system through no fault of our own the future looks mighty bleak. What chance will there be for us to escape? None.

We are tired of being pushed around, ignored, and being told what is good for us. Sure, we have those in the welfare system who cheat and try to abuse it, but they are few and we have to live with them because we do not have the luxury of a cabinet shuffle or resignation to hide our dirty laundry. Everyone expects the present NDP government to make a silk purse out of a sow's ear, except they were given the entire pig. Sure we will be dealing with a deficit, inherited. Money must be put into the welfare system to try and revamp it. Money must be spent on educational and vocational training and retraining through college programs. How else can we get people back into the workforce? Or should we just keep them in the welfare system?

Also, if we do not see this proposed $215 million go into the welfare system, many of the now existing programs will be forced out of existence. Certainly without this $215 million the chance of anyone in the welfare system being able to get back to being a productive person will be almost nil. Moneys cannot be taken away from building more low-cost housing. I live in a rent-geared-to-income housing complex in Guelph. It is not a bad place to live, but there are still 800 on the waiting list in Guelph alone. How can we justify cutting back on any funding dealing with violence against women? One only need turn on the TV any day and there is increased evidence of this horrible crime. In and around the area I live many of the residents are single, female and parents, and I see living proof every week of this most brutal of crimes. And I mean every week.

Also of monumental proportion is the maintenance and management of our health care system. Whatever it takes to maintain it must be done. We cannot compromise on this. Too many of us, myself included, depend heavily on this system, perhaps the best one in the world. There are many other issues that I would like to bring forth, but as time is at a premium, I cannot. At a time when we must be trying to stimulate our great province, we cannot have our hands tied because we are going to be working with a large deficit. At least the money that the government of Ontario is planning on spending offers a glimmer of hope for many of us who, without it, would be afforded little or no chance.

So, I plead with those who are in opposition to this budget, take off the blinders and help to make it work instead of criticizing it to death. Maybe, just maybe, with some co-operation we can get this province off its backside and start it on the long, slow road to recovery. I, for one, feel strongly this can happen. It must happen. We cannot allow ourselves the luxury of believing that everything will heal itself. It takes money, initiative and the promise of a better future, all of which the NDP budget offers, especially to me. Sure it is going to cost us more money; sure we will have a deficit. However, I shudder when I think of the alternatives. It scares me. It really scares me.

Let me conclude by thanking you for taking the time to listen to me. I realize I may not be as articulate as most and I do not understand all the intricacies of a complicated matter such as this budget fully, but I do know in my heart what it means for myself and my family. Thank you again.

Mr Sutherland: Mr Zuber, you just said that you may not be as articulate as other people, but I think that is one of the most articulate presentations we have had. You have told your story. It is a great pleasure to see you here today. I did not know that you were going to be here. I think you have not told the whole story. Some of the support you have received through the years has, I think, resulted in a success story, and that is through your oldest son, whom I happen to know from university, and the fact that he has now successfully been able to get through university, is out being self-supporting, is married and is raising a family.

I think that example clearly shows that when you put support to people, and when you provide this necessary support through the tough times, there is a great deal of hope there for people. It is not that people do not want to get off the social assistance -- they certainly do -- but many people need to be maintained and I think what your story reflects -- and what I know about Kelly who is certainly an incredibly hard-working and bright person -- is that with support we can make steps in breaking cycles of poverty.

Mr Zuber: Exactly. By the way, how are you?

Mr Sutherland: Not bad. I would just like to know a little more about specifically what the Onward Willow Centre does as a whole. I am wondering if we can just get a little more background information about that.

Ms Margetson: You may hear that as Jim and I do our portions of the presentation.

The Chair: Oh, excuse me, I thought the presentation was finished.


Mr Zuber: We have a three-parter.

The Chair: Okay, I am sorry. Let's finish our presentation there then. You have used a little over a minute; about a minute or two minutes left. Would you continue on? I am sorry I interrupted there. I thought the presentation was finished.

Mr Vanderwoerd: I would also like to thank you for the opportunity to speak to you about the NDP budget. The criticism and attacks on the government's budget have made me angry enough to want to say my piece in favour of the budget. In my opinion this is one of the few government budgets which is designed with the needs of the majority of citizens who have relatively less power and which does not cater exclusively to the interests of the powerful.

I personally am tired of budgets which justify spending cuts for programs and services with deficit rhetoric. The deficit has been the excuse for endless cuts to essential services and programs which support and enhance the lives of those who need them most. What especially irks me is that the people who enthusiastically support reducing spending on programs for people are the same ones who clamour for corporate tax breaks.

I believe government has a responsibility to those of us who are less powerful. I believe government has an obligation to ensure justice and fairness. Government must be a leader in providing the supports and resources necessary for all citizens regardless of gender, race, income, marital status or anything else, to live a life of dignity, free from stigma, poverty, discrimination and oppression.

The present government's 1991 budget has clearly placed its priority on people, especially those who have less power. I am completely in favour of this budget and find the rhetoric and criticism against it to be shallow, selfish and motivated by thinly disguised self-interest.

In the past year, I have been involved as a student and a researcher with a neighbourhood project in one of Guelph's poorer communities and have come to know many of the residents who have been involved in this project. Through my relationships with these people I have come to see how important this budget is to them and how important the programs funded by this budget are. I would like to share with you some of the stories of these people as a way of illustrating the importance of a budget which places emphasis on supporting people who do not have the power or the money to influence policy makers but who are deeply grateful for being remembered.

Charlie is a 42-year-old father of three. Four years ago he developed back problems which forced him to quit his heavy-labour job. After nearly a year on a waiting list, he was able to return to school for retraining with the help of the vocational rehabilitation program offered by the Ministry of Community and Social Services. He enrolled in the local community college and began a two-year course in social services. However, things began to fall apart at home with Charlie being away all day at school and spending long hours in the evenings studying. The task of caring for the three children without her husband's support and guidance was too much for Charlie's physically challenged wife. Charlie was forced to withdraw from the program so he could spend more time with his wife and children and re-establish stability in their home.

Charlie is ready to begin classes again this fall because his oldest child will be in school and government-subsidized day care spaces have come open for his other children, which will significantly reduce the stress on his wife. At the same time, his wife is learning skills which will assist her in overcoming her challenges and increase her self-esteem through programs offered by agencies funded by the government. Charlie and his family do not have access to the policymakers and they can only add their voice to thousands of others like them who would all express overwhelming support and gratitude for this budget which has remembered them even during a recessionary economic period.

At the age of 37, Alice found the stress of coping with an assaultive husband too much and finally mustered the courage to leave. For several months she and her two children stayed at the local government-funded women's shelter and, with the help of the staff, began to make plans to rebuild her life. However, the accompanying pain, guilt and stress were overwhelming for Alice, and she spent the next year and a half in a therapy program offered by a government-funded agency.

During this time she was unable, both emotionally and financially, to care for her children. An arrangement was made with family and children's services to care for her children in foster care temporarily until Alice was ready to resume caring for them. Alice enrolled in community college and two years later proudly graduated with a diploma as an early childhood educator. During this time, she was able to care for her children and survive through family benefits allowance. As well, she found affordable housing with the Wellington Housing Authority, funded through the Ministry of Housing. Alice is now living independently, supporting herself and her children. She recently celebrated her first anniversary at her new job by buying a car and taking her family on a week-long holiday, the first holiday her family had ever been on.

Alice was able to reconstruct her life after the breakup of her marriage to an assaultive husband only through the many different programs and services funded by this government. This budget has maintained these programs and services as a top priority, and thus will support others like Alice towards healing and independence in similar stressful situations.

Finally, Dianne is a working mother of two young children. With the support of government-subsidized day care, Dianne has been able to support her family with her job as a supervisor of kitchen staff at a hospital cafeteria. However, troubles started when her youngest child developed kidney problems. Dianne had to take time off to accompany her daughter back and forth to the Hospital for Sick Children in Toronto. Her daughter required expensive treatment and equipment in order to remain at home. This was all covered through the Ministry of Health, including special programs to cover her transportation expenses and a home care nurse to check up on her daughter once a day.

Dianne is now back at her job, with the added perk that her wages have been increased as a result of recent pay equity legislation supported and continued by this budget. In addition, Dianne's taxes will decrease as a result of this budget, because she is a lower-income earner with dependent children. All of this means that Dianne can continue to support both her children and herself despite the added medical burdens and her temporary interruption at work. Through programs like these, Dianne and her family are able to maintain their independence and dignity, even in the face of a medical crisis.

None of these three people will likely have a direct voice in government policy. In fact, the majority of people do not wield the power or wealth to influence government policy. Too often, the results are policies which benefit the powerful, with the rest of us paying the bills.

This budget places people with needs as a top priority. Government must take responsibility for those whose needs are greatest, particularly because there is no one else to advocate for them. I completely support the government of Ontario's 1991 budget, and applaud its compassion in putting people first. The temptation and pressure to respond to the cries of the powerful is strong. I applaud this government's resistance to well-financed and slick pressure tactics, instead preserving and enhancing programs and services which are essential to building and maintaining quality of life for all.

Ms Margetson: I have listened to and read avidly all of the criticism and negative commentaries on our provincial government's recent budget, and have also listened closely to and read many explanations and supportive articles. It is interesting and difficult for me to comprehend how so many intelligent and well-educated people can disagree so vehemently, and see the facts and figures from such different points of view. Philosophical and ideologic differences abound.

I wish to speak to you today, from a much more practical and simplistic point of view, in support of this budget.

Social services, health care, child welfare, housing, violence against women and fair taxation must all be priorities in a fair and equitable society. Ontario is a wealthy province. I see signs of this daily: expensive new cars; personalized plates; our beautiful and regularly filled-to-capacity SkyDome; thousands of kids wearing $100 shoes, playing hockey or piano and attending expensive schools and camps; corporate executives wearing $1,000 suits, filling up the rooms in our expensive hotels. These are just a few of the things I notice. Many Ontarians are living the good life.


However, my own life as a single mother and my daily work as a community development worker at the Onward Willow Centre, which is a primary prevention centre in a high-risk neighbourhood in Guelph, very clearly point out the wide discrepancy between the haves and the have-nots in our province. Daily I run across many situations that are unfair, inequitable and downright unacceptable.

Some examples are inadequate and unaffordable housing; hungry and hurting children; overburdened and poverty-stricken parents who are unable to meet the very basic physical, educational and psychological needs of their families; a single mom whose son is stricken with leukaemia and who cannot afford child care, transportation or long-distance phone calls to facilitate spending time at her son's hospital bed in Toronto. This mom is also functionally illiterate and must deal with all that entails.

Another single mom with three kids, two of whom are handicapped, must walk screaming through her neighbourhood -- and this just happened last week -- "Please help me!" She was screaming in order to call attention to her plight. All three of these kids have been sexually assaulted and the mom has been a victim of wife assault. There is seldom food in their fridge.

A creative, talented artist with two kids who has given many hours of volunteer time to our project and her own neighbourhood is so stressed out from poverty, school and surviving that she calls our local counselling centre. After spending several days crying and trying to find food, support and whatever else she needs, she is told there is a three-month waiting list for non-paying clients. She needs help today.

These situations I raise today are not exceptions; they are the rule for hundreds of thousands of Ontarians, many of whom are children. How can we rationalize or justify the continuation of this lifestyle for so many of our future leaders? Last Christmas, statistics informed me that 320,000 of our children were living in poverty in Ontario. This was no surprise to me. I am confronted daily by the effects of abject poverty: the fear, pain, hunger and humiliation.

I believe that just maintaining this status quo is unacceptable in Ontario, yet our provincial government would have had to run a deficit with this budget just to do that. As a result of the non-caring corporate agenda of our federal government, they find themselves in an unenviable and impossible situation. Bill C-69 is a good example of that agenda. It will lead to a child in a province with a less prosperous or caring government receiving less adequate medical, educational and social service support than one in Ontario living under our present government.

Twelve years ago, pregnant, fearful and alone, I began to parent my four-year-old daughter after my marriage broke down. I found myself without employment, living in one room, afraid and lonely. With the help of many government agencies -- for example, housing, welfare, family benefits, day care, OSAP, counselling, Big Brothers, Big Sisters -- I began the long and tortuous climb to recovery. It has never been easy. My kids and I have all suffered pain, degradation, hunger and abuse, both in and outside the social service system. At times I wanted to give up, but one day at a time, we moved along and we survived. I now know that the sky is the limit. I will never forget, though, how it feels to be in this untenable situation. It is a large part of who I am today. I still feel it in my bones.

If the opponents of this budget and our own federal government have their way, if services are cut, another woman in my situation would not have access to all the services and assistance that have helped pave the way to my autonomy and independence. Cutbacks in funding these programs will directly affect our most vulnerable citizens. Ontarians desperately need each and every dollar allocated in this budget.

Some grass-roots groups such as environmental, antipoverty and housing activists are pressing our government to do more, spend more, move more quickly. Although I can see their points and I wish the reality were different, I can see clearly how difficult it has been for the government, given the inherited deficit, Bill C-69 and the corporate lobby groups, to move forward at this time of recession with a budget which supports employment and economic growth. I support their first effort, a step in the right direction towards fairness and equality for all Ontarians. I applaud Bob Rae, Floyd Laughren and their government for their gutsy action and ask them to implement this budget and to continue to take steps towards a fair and equitable Ontario where all men, women and children will live with equal opportunity for health care, education, housing and an opportunity to move forward into the 1990s as equal partners in Ontario. This budget is the first ray of hope that Ontario will reduce economic disparities and make sure that the costs of economic growth and adjustment are borne in a fair and equitable manner by us all.

Mr Phillips: A very poignant presentation. The three examples you used -- Charlie, Alice and Dianne, my recollection -- as you described them, were all things that took place with programs by the previous government; nothing to do with this budget, because this budget did not come in until April 1. I just point that out because as you outlined the various services they required, I think they were mainly things that occurred, as I say, under the previous government, if I am not mistaken.

My question to the group is the one I have been asking elsewhere; that is, in order to build on these services, we do need to have a strong economy in the province. That was one thing that allowed the Liberal government, the previous government, to initiate many of the programs you talked about. We saw that economic activity going on.

Does your group have any concerns at all -- I know you are kind of unequivocal on the budget -- about whether this budget will develop the necessary economic activity so that the people you serve will actually be able to have the services and the jobs they would like?

Mr Zuber: I really have not given that much thought. I am going to be quite blunt and tell you that the only reason I am speaking here today is because of what this budget means to me personally. I fear for my family's future; I fear for my own future. If the economy goes down the dumper, which it is halfway down already, that is too bad, but my main concern is to keep my family fed and to keep my head above water. If the budget gets cut any more than it is, there is no way out for me, and that is what really scares me. Whether or not this budget will stimulate any growth, I really do not know, and quite frankly, I do not care. I just want to feed my family for the next four or five years, and this budget at least offers me that opportunity. Maybe, with the grace of God and some government program, I can get back in and start earning a living for myself again, instead of becoming what is so commonly called a leech of society on the welfare system.

Mr Carr: One of the things that has been proposed to find some money for some of the programs you talked about -- because obviously you have said it is not enough. I was just looking through the Agenda for People, where it said it would eliminate poverty. We are coming up on 11 months and it seems like we are no better off now than we were 11 months ago with the new socialist government.

One of the areas where money can be found in this day and age of increasing demands on money is through the civil service. As you know, they have recession-proof jobs. Right now, we have management groups within the civil service that are getting double-digit increases of 11%, while we have stories like this. We could put $1 billion into more programs like this if in fact we gave them just 2%, and if we froze them, we could probably do even more. Are you in favour of doing that, to ask the civil servants of this province to give up some of their increases to help people like yourself? Would you agree with that?

Ms Margetson: No, I would not. I think people who are working full-time and working hard -- and the majority of those people are working in Toronto, the most expensive city in Canada -- I do not think that is going to accomplish a whole heck of a lot.

Mr Carr: So they are not included in the ones you mentioned a couple of times, the rich and powerful. As you know, most of those people are making close to $100,000, and they are getting 11% increases.

Ms Margetson: I would suggest you are wrong when you say most civil servants --

Mr Carr: Just look at the paper, the jobs you are going through. We are talking about a substantial amount of money. We are not talking about people making $35,000. We are talking about people making from $60,000 up to double digits who are getting 11% increases. You seem to be saying that is okay. Is that how I read it?

Ms Margetson: I do not know enough about the civil service wage structure to really form an opinion on that, but I would say that average working people should not be asked to take a wage cut or a wage freeze, especially those people who are living in Toronto. If they are making $100,000 or $200,000 or $300,000, then maybe we have to look at that, but I am not sure I am the right person to ask that question. That is not my area of expertise.

The Chair: The time has run out. I would like to thank you for your presentation here.



The Chair: The next group is the Wellington Ad Hoc Committee Against Bill C-69.

Would you come forward, please.

I would like to welcome you to the standing committee on finance and economics on the budget review. You will have one half hour for your presentation, and near the end, leave some time within that half hour for questions and answers of the three parties.

Mr Bidgood: My name is Bruce Bidgood and I am the chairperson of the Wellington Ad Hoc Committee Against Bill C-69.

Ms Brownell: My name is Barbara Brownell. I am the executive director of the North Wellington advisory group and a member of the committee against Bill C-69.

Mr Bidgood: I am sure the question might reasonably be asked why this committee, the Bill C-69 committee, a group which is devoted to co-ordinating an opposition campaign against a piece of federal legislation, is appearing before this provincial standing committee today. It may be more timely for me to answer the question with clear statements regarding why we are not here.

First, we do not appear before this standing committee with any illusions that we are fiscal or economic experts, providing directions on how much and where the provincial government should direct its revenues. We leave this to the economists.

Second, we are not here to propose models for the complex of issues which is the relationship between the federal and provincial governments. We do not have any special clairvoyance in this area, and we leave this to the constitutionalists.

The Wellington Ad Hoc Committee Against Bill C-69 is appearing before the standing committee today to formally voice our opposition to the federal government's practice of unilaterally withdrawing its fiscal support of key human service programs within Ontario, a gradual erosion of the precise programs, both the Canada assistance plan and the established programs financing, which make up the very fabric of our Canadian social heritage. This practice, as we are sure the members of the standing committee will agree, has far-reaching implications for the current 1991 Ontario budget and for the provincial budgets for many years to come.

I am sure, given the events of the last couple of weeks, that most of the members of the standing committee are aware of this particular piece of legislation, Bill C-69, formally known as the Government Expenditures Restraint Act. It was part of Michael Wilson's 1990 federal budget, the first budget, from what I have been able to understand, that was drafted completely behind closed doors.

The bill, first of all, proposes to freeze federal funding for established programs financing, and this is a major source of funding for post-secondary education and medicare. Prior to 1977, two senior levels of government shared the cost of these programs on a 50-50 basis. Under the EPF, there was a gradual erosion of federal cash payments for these programs in favour of tax points transferred to the provinces. If that were not enough, in 1986, the federal government put further limits on the EPF so that -- and Bill C-69 in and of itself proposes to freeze all payments to this program from 1990 to 1992, and when you think about it, it represents a severe cutback in funding given the rise in both the costs for post-secondary education and medicare anticipated for the same period of time.

The net result of these federal initiatives has been the steady erosion of federal contributions for these essential programs, with the net result being that the amount of federal cash dollars for post-secondary education and medicare will be reduced to zero by the year 2004. Knowledgeable informants have expressed deep concern regarding this particular course of action. They say that it will limit the federal government's ability to enforce national health standards. If you do not pay the piper, you do not call the tune. Also, there has been extreme concern expressed by representatives of the college and university communities, as we could expect, who feel that the legislation will make post-secondary education completely out of the reach of low-income and middle-income Canadians.

Beyond that, Bill C-69 proposed to put a cap on federal spending for the Canada assistance plan in Ontario, British Columbia and Alberta, the three "rich provinces," provinces where almost 50% of Canada's poor live. The CAP is our country's primary program to fight poverty, and it stood for a quarter of a century as an important cornerstone of our Canadian social heritage. The spirit of CAP holds that every Canadian has a right to assistance as a last resort to prevent destitution, and in 1988 to 1989, over 2.3 million people, 40% of them children, benefited from this program. Under CAP, the senior levels of government share 50-50 the cost of the welfare services and social service programs. Bill C-69 proposed to put a 5% ceiling on federal increases to the provinces for CAP. Given that CAP funding, on average, has increased 11.5% per year, this represents a substantial reduction in federal dollars. Estimates -- I believe by the former Ontario Treasurer -- suggested that Bill C-69 will cut approximately $440 million from the Ontario welfare and social service programs between 1990 and 1992.

The disposition of Bill C-69: There has been a continuous campaign of resistance against this particular piece of legislation since it was first passed by the House of Commons on June 12. The province of British Columbia took the federal government to court, stating that they had a legitimate expectation that the federal government would not unilaterally change the conditions of the CAP program, and indeed did win, and this ruling was upheld by the federal Justice minister.

The federal government continued, though, to push it through the Senate, and we know Michael Wilson's 1991 budget, even before the legality of the document had been established, extended the terms of Bill C-69 for a three-year duration. August 22, which was last Thursday, saw the Supreme Court rule in favour of the federal government, stating that they have the right to cut back transfer payments to the province.

Our group got together because of concerns expressed to us by welfare clients and human service providers within Wellington country. To date, it consists of over 20 organizations which are listed in the back of the document which I have handed out to you. Why have they gotten together? Essentially, the people within our community felt strongly enough that they wanted a co-ordinated campaign to let their opposition be known.

To date, the ad hoc committee has pursued a number of different activities to try to let our opposition to Bill C-69 be known to the federal government. Most specifically, there has been a public education campaign through the local print media. We have met with local MPs, urging them to put this issue on the agenda of the provincial government and to advocate strongly against Bill C-69. We met local MPs, including the Minister of Health and Welfare and the Minister of Science and Technology. We have had a sponsored press conference with a formal statement by the Ontario government on where they stand on this particular legislation. We have done outreach to general welfare clients, and we have also made submissions to the Spicer Commission and the select committee on Ontario in Confederation.

There is inherently a dilemma in Bill C-69 and what it represents for the provincial government and for this committee. Our advocacy effort around this particular legislation has made our members keenly aware of a no-win scenario facing the provincial government in drafting the 1991 budget. During our meetings with the members of federal caucus -- as I said, the Minister of Health and Welfare and the Minister of Science and Technology -- it was clearly stated that the federal government believed that the provinces were in a more favourable economic position to absorb the increasing costs of EPF and CAP programs. I quote: "Every province of Canada is in significantly better financial shape than the government of Canada, and we believe that the provinces must begin to live up to their own responsibilities. It is up to the provincial government to decide on its priorities, including whether it chooses to delay welfare reform. Ontario is better placed than the federal government to pay for any increases beyond 5%." That is Bill Winegard, January 9, 1991.

The dilemma then arises that when the provincial government increased its budget to absorb the shortfall incurred by the withdrawal of federal moneys, it was widely criticized as being fiscally irresponsible. Little or no attention was being paid to the role of the federal government in creating a substantially larger provincial deficit. To make matters worse, the Prime Minister went on to publicly criticize the government of Ontario for its financial policies, while four months earlier, members of the caucus were suggesting and yes, indeed, actually encouraging Ontario to increase its spending on social programs. The federal government cannot advocate greater provincial spending on social programs while criticizing them at the the same time for running a deficit. There is something fundamentally hypocritical in this.

In addition, the original provisions of Bill C-69 stipulated that the limits on transfer of payments would be for a two-year period only. During our meetings with local MPs, we were given the impression that Bill C-69 was a necessary but temporary evil. "The CAP ceiling is not a permanent structural change. It is a temporary but necessary expenditure restraint measure for a two-year period." Again, the federal government demonstrated an interesting reversal in its thinking when, in the 1991 federal budget, the provisions of Bill C-69 were extended for three more years.

The government of Ontario does not draft its economic policies and budgets in a vacuum. It is our committee's belief there has been little public attention paid to the fact that the province has been put in a catch-22 position with respect to funding their social programs. There is increasing demand all over the place due to the recession. There is steady withdrawal of federal support, and everybody is criticizing increased spending.


Our members are, in no way, proponents of large governmental deficits. We would like to encourage fiscal responsibility at each and every level of government. To date, the theme that we used as the vanguard for our committee has been that we do not want to see the federal budget bounce on the backs of those who can least afford it. The sick, those reliant on the health care system, students, those reliant on post-secondary education and families living in poverty, those who benefit from the Canada assistance plan. The federal government would appear to have no ears. Our opposition cries and those of hundreds of different groups across the country have essentially gone unanswered.

What we are here today to do is to respectfully impart the same message to the standing committee and hopefully, indirectly, to the government. We do not believe that the provincial government should, at any point, attempt to cure its deficit by withdrawing funds from those programs which benefit the most vulnerable people in our society. While recognizing that there is negative public attention associated with increased spending on social programs, we are here to ask the government of Ontario to persist in its Agenda for People and to make a commitment to guarantee that our most vulnerable citizens will not be unjustly penalized by the dwindling support of their federal government.

This can only be done by ensuring that the adequate funding for EPF and CAP programs are maintained. We would also encourage the government of Ontario to advocate for reinstatement of the pre-1990 conditions of CAP and the extended programs financing, and towards this end we strongly applaud the Premier for his stand to make social assistance transfer payments an item on the agenda for the upcoming constitutional discussions with the federal government. Because that is exactly what it is, it is a constitutional issue.

We have heard frequently from the proponents of the federal government that the budget must be balanced to preserve a future for our children. Our question is: What about those kids today who are living in poverty? Who are experiencing family violence? Failure to address the needs of Ontario's most vulnerable citizens today, particularly during a time of recession, will only lead to a future generation of disfranchised and marginalized citizens who will be perpetually reliant upon government assistance.

We do not believe that the citizens of Ontario and Canada want to see any level of government balance its books by virtually taking away the food and shelter of those who are already living far below the poverty line. It is our conviction to this point, which makes a federal policy such as Bill C-69, extremely unconscionable even if the Supreme Court says it is legal.

Ms Brownell: I would like to draw your attention to some of the more practical issues around budgetary implications and recession in Bill C-69. Mr Bidgood and I are also on a committee of service providers in Wellington county. There are some 20 to 25 service providers represented on this committee and we attempt to do joint planning and co-ordinate our services as best we can. We attempt to be fiscally responsible in ensuring that we keep within our budgets while still providing services to the families and children in Wellington county.

However, the implications of Bill C-69, and certainly the recession, make it more and more difficult for these agencies to cope with long waiting lists. An example of that would be the mental health services. It is a very clear fact that in times of recession people are under more stress and therefore the essential services which we are attempting to provide need expansion.

One of our fears, at this particular point, is that because of the budgetary implications and the recession, there will be no expansions of services. I will use day care as an example. While the budget makes mention about prevention of violence against women, I think it is important that the support services that would go along with that philosophy, which I applaud, need to be in place and need to be expanded. Day care is an example of that. If we are to encourage people who are living below poverty to get out and find work or go back to school so they can improve their lifestyles and add some quality to their lives, then we have to provide day care. It is very practical.

In my own particular area, we have a community committee that wants to put in place a day care in the rural village of Arthur. We have the people, we have the children, we have a location, and we are told there is no money. So those children who currently could be accessing a controlled day care that we know is a safe environment and a productive environment for these children will have to go to in-home day care providers who cannot be supervised in the same way. People's choices in terms of care, people's choices in terms of accessing a variety of services is limited. Unless budgets are expanded in services, they will continue to be limited.

I would like to speak for a moment about the rural areas. It is easier to provide dollars and to provide services in urban areas. For the same number of dollars you can serve more people, and often the fiscal decision is to put the dollars into the large urban areas. In rural areas, services are very spread out. It is expensive to provide services. In north Wellington alone, we have 500 square miles and a population of 30,000 people. In order to serve those people, we must provide services in rural locations. We cannot have service providers being parachuted in from Guelph or from larger areas in the rural areas of the province.

Mr Bidgood and I would be happy to answer any questions and expand on some of the themes that we have discussed at this point.

Mr Phillips: Just a quick question: I am curious how people arrive here to present. Were you one of the groups that received a phone call from the Premier's office to appear?

Mr Bidgood: No, we did not receive a call from the Premier's office. Our invitation to come to this committee today was a direct consequence of our involvement with the local MPP on this particular issue.

Mr Phillips: The challenge, I guess, for the federal government, and I do not want to be an apologist for it, but I think it is broke -- bankrupt. Maybe there are ways to solve that, but they did not find them over the last few years. I am just trying to get from your presentation what your issue is. Is it that more money should be spent on these services, or is it that the money should be coming more from the federal government rather than the provincial government?

Mr Bidgood: We are not suggesting that there should be drastic increases in funding for any specific programs. However, we do believe that the principle of shared responsibility between federal and provincial governments is too important a quality to be compromised by saying, "I'm sorry, at this particular time we're having deficit difficulties." We would not expect the federal government to increase substantially or unrealistically its contribution for Ontario's social service programs. However, we had hoped that they would fulfil their obligations as specified in EPF and CAP prior to the changing of it with Bill C-69.

Mr Phillips: I am not advocating this in any way, but if you were a totally selfish Ontario taxpayer and you said, "Listen, I'm totally selfish," what is in the Ontario taxpayer's interest? As I say, there are a lot of national unity issues at stake here, but would it be best that all of this be transferred to the provinces and the provinces managed the welfare, the education area and the health area themselves?

Ms Brownell: I think one of the things we need to keep in mind is that we want some national standards for health, welfare and education. I do not think it is good enough for the federal government to dump the responsibility for the standards and for the services and programs on to the provinces. It is a little bit like a province expecting municipalities to determine the standard and level of services within their own municipalities. What happens then is you get a variety of standards. In Wellington county we get X standard; in Waterloo county we get X standard. I think that we should be very clear that as a country, Canada at one time made a commitment to its people and we created a social safety net, and now we see big holes in that safety net. I do not think we can allow the federal government just to back off and say, "Let the provinces get on with it."


Mr Phillips: Have you done the analysis, as I said, if you were looking at it purely selfishly, in terms of what would be in Ontario taxpayers' best interest?

Mr Bidgood: I do not know if you can look purely self-interested. However, from my perspective, I would even take a stronger stand in suggesting that I do not think that morally the federal government can back out of providing basic social service programs. I mean, that was part of the promise when this country came together, and since the period of approximately 1970 or so, we have seen a slow and gradual erosion of the federal contributions to a number of these programs. So if you were talking about the perspective of a purely selfish Ontario ratepayer, I would say that there is something more dear at stake here for the Ontario ratepayer, and that is the commitment from both levels of government to take care of you if you should fall upon hard times, and that would transcend for me any sort of self-interest you might have as a ratepayer. It is the cornerstone of our social policy, the cornerstone of our social heritage. It is what binds us together, and at this time it is coming very loose.

Mr Carr: Thank you very much for a fine presentation. As you know, what we are really talking about here is not the compassion of government, because, as you well know, the social programs do not depend on the compassion of government; they really depend on the ability to pay for these programs.

One of the things that has been suggested is that there was no money anywhere else to be cut. I will give you an example of where I see some money could have been. I do not know if you are aware of it, but in 1985, 80% of the rental units produced in this province were built by the private sector. As we sit here today, it is closer to 20%. The 80-20 has been flipped.

Interjection: Good word.

Mr Carr: "Good word" is right.

The amount of money that we are talking about is not millions of dollars. Over the course of this government, we are talking billions with a "b" that is going to be put into building rental houses because, as you know, people need them. The private sector will not do it; the people need housing; the government jumps in. That is one area where a lot of people have said that if we had not had Bill 4, the rent bill, and some of the other initiatives during the Liberals, the private sector money could have built those rental units.

Just so you know, the cost per unit when the government builds them is twice. The non-profit cost is $1,800, versus about $800 when the private sector does it. So that is an area where we are talking about billions of dollars -- with a "b" -- that could be used to help the folks behind you who want some more money. It could be used to pay down the deficit. It could be done in a variety of ways.

What is your feeling about something like that, of allowing the private sector to stay in the rental part of the economy so that we do not need to put public sector dollars that could and should be used for other things? What is your feeling about that? Maybe you could comment about the billions that would be saved in that area.

Mr Bidgood: Your basic premise began with a statement about looking beyond compassion from government. Is that correct?

Mr Carr: I said social programs do not depend on the compassion of government, they depend on money to pay for them.

Mr Bidgood: Actually, in some degree I agree with you, in some degree I do not. I think that to date the discussion has been almost completely on how do we pay for it and the question of compassion of government has essentially gone out the door. People have forgotten to ask questions about both federal and provincial governments' commitment to their peoples.

I would never presume to suggest what is the equitable relationship between private sector and public sector interests with regard to stimulating the economy or things of that nature. However, I think it is a very valid stance for us to sit back and reflect, as you had mentioned, about issues about compassion; to forget -- and I should not say this in front of a finance committee -- but to put finance aside or at least consider for a moment social cost and the very principles, the values at stake here, which I think are tantamount or equally as important as the fiscal considerations, and I think it has been completely obscured with this particular budget.

Mr Christopherson: I thank you both for the presentation. I have had a chance to meet and talk with you both before, of course, at public sessions in Guelph where we talked about this very issue, and I would like to again applaud your efforts in doing everything you can to heighten the awareness of this important issue.

Just before I ask a question of you, I think maybe it is important to put on the record that I find it curious that one of the previous members was asking a question about how you got on the speaker's list and where the invitation came from when we know full well that at least one of the groups we have met with, the chamber of commerce from one of the communities, had its invitation faxed from the Liberal Party headquarters. Nobody is making any bones about that; it is part of the process and that is the way it works. I find it curious that there is an attempt to try and suggest that there would be something wrong in anybody being encouraged to come forward and speak out.

If you recall when we spoke before, prior to the court case being made public on the cap on CAP, it was so low-profile. There were very few people who really were paying much attention to the issue of transfer payments between one level of government and another. My question to you is this: In light of the attention that it has got recently and the fact that the Premier of Ontario has said that this issue is so important to Ontarians that he now considers it to be on the constitutional talks agenda, do you think that we are succeeding in getting this issue on the agenda of the people of Ontario, or is it your opinion that over a short period of time it will fall away and again it will get lost in the dust of all the issues that come forward? I would just like your opinion on that, please.

Ms Brownell: I think it is a constitutional issue. I think people have a right to quality of life, and if the provinces who are being most seriously affected by the cap just lie down and play dead, then we are really in trouble. I think that this particular province has to keep up the song and dance. We have to keep up the publicity around some of the major issues regarding Bill C-69.

Mr Bidgood: Actually, I think that the entire issue regarding Bill C-69 has been one of the most interesting campaigns of selective inattention probably in history. There are a number of people who have alluded to why this may be so. I will not bother the committee with that here today. However, when the provincial government gets hit with a $400-million cutback, it receives fifth-page media attention. When one person representing, let's say, business interests or something of that nature wants to do some welfare-bashing, it gets a full page on the front page of one of the Toronto papers.

I do not understand why people have not been more concerned regarding this issue, because for me it is one that speaks to the very social fabric of our society. However, I can only hope that with the provincial government taking this as part of the agenda for constitutional talks, it will not become part of the back bench again and it will continue to be an issue that will burn in the minds of the citizens of Ontario for quite some time to come.

The Chair: I would like to thank you for appearing before this committee.



The Chair: The next group is the Brantford and District Labour Council, Mr Garry MacDonald, president. Would you come forward, please? I would like to welcome you here to the standing committee on finance and economic affairs and the budget review. You have 30 minutes for your presentation. In that period of 30 minutes, you can leave some time near the end of your presentation for question and answer from the three political parties of the government here. You may begin.

Mr MacDonald: My name is Garry MacDonald and I am here today representing the Brantford and District Labour Council. As president of the labour council I am very much aware of how provincial economic policy affects Brant county. In my brief before this committee today I am going to focus on the particular concerns of Brant county and our relationship to the provincial economy.

The Brantford economy is dependent on our manufacturing base. Here, 33% of the workforce is in manufacturing compared to the provincial average of 22%. The workforce here is also younger and less educated than the provincial average, which makes manufacturing employment essential to the local economy. As we know, in a recession, manufacturing is the first sector to suffer and the last to recover. Brantford's experience in the last recession of 1981-82 can be submitted as proof of this statement.

In fact many people believe, including myself, that Brantford still has not recovered from the 1981-82 recession. The closure of Massey Combines and White farm equipment was directly related to the previous recession. The economic downturn 10 years ago crippled agriculture in North America along with the federal Liberal government's high-interest-rate policies and the Conservatives who followed with the same policies. Farmers no longer had resources to purchase agricultural implements which had been Brantford's most famous and most profitable industry. Massey and White together employed 8,000 to 9,000 workers. These were high-wage jobs that supported the local economy.

Recent reports from Kitchener estimate that with the loss of 2,000 Uniroyal Goodrich jobs, 2,000 to 3,000 support jobs would be lost. Using the same formula, the closure of Massey and White affected from 15,000 to 20,000 families in Brant county, which is almost half of the entire population of the county. As the high-wage jobs Massey and White supplied left Brantford, the jobs that came in their place were fewer and lower paying. While most people speak of the 1980s as a period of unrestrained growth, that did not happen in Brantford.

Following close behind the closures of Massey and White was the present recession. In this recession the manufacturing sector was even harder hit -- the loss of 76,000 jobs in Ontario's manufacturing sector. This recession caused the loss of 102,000 jobs. In percentage terms, the loss is 9.9% of Ontario's manufacturing jobs this time as opposed to 7.2% last time. As 43% of all jobs lost in this recession were manufacturing jobs, I want to emphasize what this means to a community as dependent on manufacturing as Brantford.

In Brantford, this has meant the closure of Galtaco Redlaw, Fruehauf, Solaray, Chicago Rawhide, Sprout-Bauer and Penmans. This has resulted in an increase of people collecting unemployment insurance and families collecting welfare. UI recipients increased by 54% from June 1990 to June 1991. The economic devastation that has visited Brantford is better reflected in the welfare case load. With the uncaring and hard-hearted reduction in weeks for UI eligibility, Brant county social services' case loads have gone through the roof. From July 1990 to July 1991 the case load has increased 115%.

With no new large manufacturing plants moving into the area, the scenario over the past years for many Brant county workers has been the loss of their jobs, reduced weeks of UI, and after that runs out there are few options but to rely on the overburdened welfare system. Even as we see UI recipients decline by 503 from June to July, we see the welfare case loads increase. This indicates that many people are seeing their UI benefits run out and must seek social assistance before they find employment.

Some estimates indicate that 10% of the population of Brantford is collecting welfare. This does not include those people collecting UI or family benefits. At the Brantford food bank the total number of people using food bank services in the first seven months of this year is roughly the same number of people whom the food bank served in all of 1990.

I am pleased to see that the province has seen fit to fund the unemployment help centre so it can continue to house the Brantford food bank. The $75,000 the province has provided will also allow for the much-needed expansion of services to include training and retraining programs, but this does not address the fundamental needs of the Brantford economy.

If no new manufacturing jobs arrive in our community, a community which is already growing slower than the provincial average, what will become of Brantford? As Brantford has been so hard hit by this recession, the attitude of the federal government with respect to transfer payments has been deplorable.

The federal Tories cut $1.6 billion from federal transfers in health, education and social assistance. To cover these shortfalls in Brantford, health spending would have to be cut by $26 million. This would throw even more people out of work as those cuts would probably be made in nursing and support staff.

Education spending would have to be cut by $14 million, throwing numbers of teachers out of work. This would put an even greater burden on the welfare system as more capable, hardworking people would be on welfare just so the Tories could prove some political point.

Our estimates conclude that for social service spending alone, Brantford would have to come up with another $11 million. Where would our city find this money? In a city where close to 10% of the population collect general welfare assistance already, where nearly half the families in the county have been affected by a layoff of some type, would the federal government prefer that the residents of Brantford lose their homes as well? The property tax increases that would have to make up the shortfall in transfer payments would have to go through the roof to maintain a welfare case load that has gone up 115%.

Many Brant county residents would lose their homes, particularly seniors on fixed incomes or workers who have already been laid off and are waiting for this made-in-Canada recession to end.

The alternative to raising taxes is to allow people to go hungry, without shelter. Perhaps this is what the federal government had in mind when they cut the transfer payments. As 40% of people receiving social assistance are children, the only possible conclusion is that the federal Tories are in favour of child starvation --

Mr Stockwell: That's dumb, Mr Chairman. That is just the dumbest thing I've ever heard.

The Chair: It is a presentation --

Mr Stockwell: It is a presentation. I can question it, but I am going to speak out on this to go on the record --

The Chair: Yes, you have that right.

Mr Stockwell: That has got to be the dumbest thing I have ever heard anyone say.

The Chair: This is a witness before this committee.

Mr Stockwell: It may be a witness, but the statement is that the federal Tories are in favour of child starvation.

The Chair: You can make your statement after.

Mr MacDonald: Can I continue?

The Chair: Carry on, sir.

Mr MacDonald: Thank you.

Mr Christopherson: It is still a free province.


Mr Stockwell: That is what makes it free.

Mr Christopherson: Wait your turn.

The Chair: Carry on, sir.

Mr Stockwell: Sometimes you speak out when statements like that are made.

The Chair: Mr Stockwell, everybody has his opinion.

Mr MacDonald: Maybe he could come to the food bank in Brantford and see them.

Mr Stockwell: I have been to a food bank before --

The Chair: Mr Stockwell, let the gentleman finish his presentation. You may question him after.

Mr MacDonald: Okay, thank you. Provincial Conservative leader Mike Harris spoke only a few days ago about welfare recipients when he stated that he was not in favour of paying people to stay home and do nothing. Does Mr Harris suggest that the 40% of social assistance recipients who are children take to begging in the streets?

I can assure all members of this committee that the people of Brantford are hardworking people who would rather work than collect welfare. But without jobs, without a place to work, what other alternative is there? None of Mr Harris's wealthy friends have been kind enough to locate any of their plants here in recent years. What Brantford needs is industry, not political hot air.

I realize that the money for assistance must come from somewhere. However, working people currently have more of a tax burden than they can endure. I cannot speak in favour of tax increases. I also realize that the provincial tax revenue decreased this year over last year. As consumer spending decreased, revenue from provincial sales tax did as well. I also cannot speak in favour of government deficits that may end up being financed on the backs of working people. However, in fairness, the provincial government had some difficult decisions to make.


I am glad the province has recognized that in Brantford we cannot just give up and close the doors. We cannot allow children to go hungry. We cannot allow workers down on their luck to lose their homes. The provincial budget that has been criticized by every blue suit on Bay Street means that in Brantford children do not have to go hungry and workers do not have to lose their homes.

In this budget that has been so essential to the Brantford economy, just maintaining the spending levels affected by the Conservative cut in transfers pushes the deficit to $8.2 billion. However, this still does not address the primary problem affecting the Brantford economy, the lack of jobs. Our estimates indicate that the anti-recession projects included in this budget have created over 500 jobs for Brantford. Many of these projects, such as the relocation of the Brantford Public Library and the boiler conversion project at St Joseph's Hospital, may have had to wait years before the city had the funds to see them carried through. It is true that these projects are make-work projects, but at least they employ considerable numbers of workers who would otherwise be unemployed or on welfare. Over $5.15 million has been allocated to Brant county anti-recession projects. Without these funds and jobs they have created and maintained, the social safety net in our city would have an even greater burden. This city has fallen on tough times, but without this provincial assistance, times would have been even tougher.

I mentioned the Massey Combines Corp closure earlier in this brief and I want to speak of that closure again to indicate perhaps the most necessary feature of the provincial budget. The wage protection fund established in this budget is long overdue. Many former Massey workers have not received their severance pay from the closure of Massey Combines over three years ago. The hourly workers have been forced to settle for less than what they were legally entitled to receive under the Employment Standards Act. Varity Corp, the parent company of the former Massey Combines, has fought every dollar in compensation to these laid-off workers. Many reached the social assistance system earlier than they would have, had Varity Corp acted with the responsibility that an employer should.

As of March 11, 1991, in the region that includes Brantford, over $6.4 million in severance pay and over $3.6 million in termination pay did not get to the workers who were legally entitled to receive these funds. These totals are from only six months after the fund was announced. Workers should not have to suffer from the mismanagement of employers. Employers should not be able to hide behind the federal Bankruptcy Act to avoid their legal obligation to laid-off employees. I am glad a government finally recognizes that workers in a plant closure do not have the golden parachutes executives have. My only regret is that the wage protection fund comes too late to help those involved in the Massey closure.

I do not want to give the impression that Brantford and District Labour Council is 100% satisfied with the provincial budget. What this city needs is jobs, not handouts. Unfortunately, with the existing free trade agreement, industry is choosing to locate in the southern United States over Brantford. Soon, with the attitude of the federal Tories, industry will probably be choosing Mexico over Brantford. This city was once the third largest manufacturing centre in Canada; we are now in an emergency situation. We have been in this situation for some time and are tired of governments ignoring our local problems, but we are grateful that at least the provincial NDP has chosen to fight the recession and help Brantford get through these difficult times. No government is perfect and if not controlled this deficit could become unmanageable. But I understand that the per capita debt in Ontario is less than the per capita debt in Canada as a whole and less than many other provinces.

Many so-called economic experts are stating that the recovery is under way. I agree that without the initiative of the provincial government, this apparent recovery would not be taking place. However, for many of the reasons I have outlined in this brief, Brantford may not feel this recovery for some time. We will need help until we can get our people to work. Economic recovery here will not be complete until the high-wage jobs like those the farm implement industry supplied return to Brantford.

Considering the pressures the NDP government is under, I am satisfied that this budget is the best they could do. This is, after all, a government made up of working people who at least understand the pressures that working people are under. As for the critics of this budget, I think I have outlined the economic devastation they would have brought to this city if they had blindly followed Brian Mulroney's plan. I feel proud that Ontario has stood up to Mulroney and taken a different approach. Perhaps with a different government in Ottawa such extraordinary measures that the NDP has had to take would not have been necessary. Thank you.

The Chair: We have about four minutes for each one of the parties, starting off with the official opposition. Mr Stockwell, you --

Mr Stockwell: Official opposition?

The Chair: Third party, I should say. I just promoted you.

Mr Stockwell: No, no questions.

The Chair: Mr Carr.

Mr Carr: I have in front of me a poll that was commissioned and it talked about how in the 1991 budget the federal government introduced a new law to limit increases in government spending. "Do you strongly agree, somewhat agree, somewhat disagree or strongly disagree the Ontario government should pass a similar law?" It was interesting to note that 77% of the people who said they voted for the NDP supported that; for your record, 90% that were Conservative and 79% that were Liberal. Basically, the people of this province are saying there should be some controls on government spending and yet you come here and say there should not. Why the discrepancy among people who said they voted NDP, when 77% say we should have some type of controls?

Mr MacDonald: I am not saying there should not be some controls and I am not saying that we want a deficit that is going to become unmanageable or get out of hand. I think I mentioned that.

Mr Carr: Will become unmanageable?

Mr MacDonald: I said "could" become unmanageable.

Mr Carr: I think it will.

Mr MacDonald: I think you should maybe look at Brantford -- I do not know where that poll came from, if it was all over Ontario --

Mr Carr: It was Ontario.

Mr MacDonald: I think anybody who lives in Brantford and has seen the plant closures in this town and the loss of jobs since 1981 would say they have to do something. Something has to be done in Brantford. If that is what it takes to get the economy going, if that is what it takes to get our people back working, which is going to help reduce the deficit once they get working, I would agree in Brantford something has to be done. Brantford itself, I think, has been one of the hardest-hit communities, next to Kitchener which is going through some tough times right now. But if you go through the number of plant closures that we have had: big plants, not just little plants, 8,000 people; Fruehauf, a couple of years before they closed, had close to 600 people and I think when they closed they were down to 260 to 270 people; Solaray, places like that. It is a disaster.

Mr Stockwell: You spoke of Varity. Were you in favour of this government's position of holding the door open while they left the country?

Mr MacDonald: I do not think they held the door open. If that is your opinion, it surely is not mine. I think they did the best they could with the situation. It was getting to a point where the people had been sitting there for so long, something needed to be done. I do not think I would say they just let them walk out.

Mr Stockwell: You did not support their position previous to the election? Their policy previous to the election was quite different than what they in fact adopted after they were elected.

Mr MacDonald: I am not aware of what their actual policy was prior to the election, so I could not really comment on that.

Mr Stockwell: Obviously it did not matter. Thanks.

Mr MacDonald: Well, yes, it did.

Mr B. Ward: We would all like to thank you for taking the time to come out and present your views on behalf of the labour council. Some of the statements made in your brief perhaps upset some people on the committee, but here in Brantford we speak our mind and I do not think we should be ashamed of that or apologize for it. I think we are a tough community here of hard-working people and other people may not be used to that. Brantford has experienced tough times and I agree with you that those tough times have existed since the early 1980s.

Our government attempted to cushion the economic blow working people have faced not only in this community but throughout Ontario. I think it is no surprise that tough times are experienced in Windsor, experienced in the Niagara Peninsula, experienced in the east, experienced in the north. In fact, I do not think the north has ever had economic prosperity. What are your feelings on the direction our government is taking in Durham-Brantford? Should we have cut back and made things worse? Should we be continuing on the direction that we are heading?


Mr MacDonald: In my opinion, being close to Brantford and seeing the number of jobs that we have lost, if they would not have gone in the direction that they are going -- which I would commend them for doing; something had to be done to get a jump start out of this recession. I think they did that. I am not saying they went far enough, but I think under such difficult times they did an adequate job. Brantford, and I would like to state it again, is one of the communities that are really hard-pressed. I may use a few strong words but I do not regret them because we have many families that have lost their homes. I have people I know that used to have jobs. They are coming in to the food bank now, they are in such a bad situation. The number of lost jobs in Brantford has just been a disaster.

Mr B. Ward: I think for this province to continue to prosper and head towards recovery in the future, greater co-operation is needed among labour, business and government. I think an example of that occurring successfully is the Harding Carpet plant where there is give and take by all three groups -- private sector investment, government financial assistance and employee commitment -- to lead to success. Do you think that could be built on both locally and provincially if not nationally? Do you think that is something we can do?

Mr MacDonald: I think it needs to be done. I think it is something that should be done. Harding Carpets is a good example of it. This community needed that. If it had not happened, if all parties had not got together and worked at keeping that place there, you were talking about losing another 200 or 300-odd jobs. I think it was done in the best interests of everybody concerned.

Mr B. Ward: The one last question, and perhaps my colleagues may have one, is the relationship between the labour council and the chamber of commerce. Do you think the willingness to work together has been improving over the years, as well as with local government? I would like to think that Brantford is a first in many areas. Do you think that perhaps we could show the rest of the province how co-operation can benefit a community?

Mr MacDonald: Definitely. I think there is a great need for it. I think it was started a little bit prior to my time. There have been some ongoing things that were started a few years ago with the chamber. We do have some things that are ongoing with them. We involve them. We involved them last year, or I think it was the year before, when labour themselves approached them about being part of the United Way with us and stuff like that. You have to have some kind of working relationship so you can make your community grow and Brantford does need some growth, definitely.

Mr Kwinter: Mr MacDonald, I heard your comment about Brantford as if Brantford is something special. I should tell you that there are many communities in Ontario that are suffering as badly as, or worse than Brantford. I can tell you of places like Collingwood, Cornwall, Windsor, where they have far higher unemployment rates than they do in Brantford. I am not saying that to make you feel any better. What I am saying is that it is not a problem that is peculiar to Brantford, it is a problem that is peculiar to Canada, to Ontario and our manufacturing sector.

What you are saying is we need jobs. That is number one. Those jobs can only be created by people investing and deciding they are going to put some manufacturing capability into Brantford or any other community. How do you think an investor feels, whether he be -- a Canadian investor we will discount, because they are here -- but foreign investors, when they hear representations that have been made, particularly to this committee, by some labour councils who are condemning American investors, multinational companies who are coming in here, condemning business, condemning their attitude towards profits, so that on the one hand there is this anti-business feeling and on the other hand there is the feeling we need jobs? Who is going to create those jobs and how do you expect to entice them into a jurisdiction where the feeling is they are not terribly welcome other than, "We do need your jobs." There seems to be a kind of a conflict; you want the jobs but you do not want them. How do you deal with that?

Mr MacDonald: You said "other labour councils." I do not think in my brief here today I mentioned that "profits" was a dirty word or anything like that. I understand that to have a secure job you have to have profits. Companies invest to make money; "money" and "profits" are not dirty words, at least not in my line of thinking. The more profitable the company is, the more secure your job is going to be. As you said, you stated "other labour councils." I am not saying their views are wrong, but I am not sitting here today either saying that "profits" is a dirty word. I understand to create jobs, to create a base for jobs, you have to have companies willing to invest in your community. I understand that. I am not here today suggesting that "profits" is a dirty word. I work for an American company. It is totally owned by an American company. We have a good working relationship with that company and it is unionized; it is Rubber Inc and they are based out of Denver.

Mr Phillips: Thank you. I appreciate your presentation. I said to the other labour councils, "I never thought I would see the day when a labour council would come in and congratulate a budget that calls for unemployment this year of 10% and next year of 10% which, had that happened in any previous governments, a Conservative or Liberal government, I think you would be up and down the back of the government because those levels of unemployment are clearly unacceptable."

My question to the labour council really is -- I am not sure what your relationship is with the NDP; certainly many of the unions directly support the NDP; I am not sure the labour council does. I am just curious about how the labour council will resolve the possible conflict if in fact you are sitting here a year from now, or your successor is, and we are looking at what they call for, unemployment rates of 10%. Will you feel kind of at odds, because on one hand organized labour officially supports the NDP government financially and in other ways it is a government that has a responsibility for creating jobs. How will you and your labour council reconcile the challenges of that?

Mr MacDonald: Addressing that question, I understand what you are saying. As a labour council president representing different unions and organizations that belong to the labour council, I understand their problem with the number of people laid off because this recession has been just as bad on some other communities as ours. But because of the recession and the number of jobs lost -- I am not saying that we would say 10% is acceptable. I do not think it is. I wish we could get it down more quickly.

You are talking about a government here that has just come in in very bad times. Just prior to that, taking Brantford as an example, I think we had over 10% even prior to that. As I have stated, our economy, in my opinion and some other people's opinion, has not really come back since 1981-82 when we had the big plant closures. Those places I mentioned have been steadily going down over the last few years. Our numbers here have stayed high since about 1981-82. I am hoping the NDP can turn it around and create more jobs.

The Chair: Thank you, sir, for your presentation.


The Chair: The next group is the Ontario Flue-Cured Tobacco Growers' Marketing Board, Mr Albert Bouw. Welcome to the standing committee on finance and economic affairs on the budget review. You will have one half-hour in your presentation and if you can save some time at the end of your presentation, the three parties would like to ask questions.

Mr Bouw: Thank you, Mr Chair. I probably will not take that much time and I will gladly answer some questions. I do not have a formal presentation. However, I do have five or six issues that I wish to bring forward to this sitting.

Being a tobacco farmer and representing the tobacco producers, we were obviously very disappointed in a budget -- the first budget by this government, by the way. It chose to take the easy target -- tobacco -- as an easy way to raise funds. We had hoped that this new government maybe would take a different view or different approach as to how it was going to deal with this particular issue. To this point, it has not chosen to do that.

I might add that this year when the federal government's budget came out, being much worse than the provincial one, we were in the midst of crop negotiations. We had to recess for 10 days for the domestic manufacturers to go back and re-evaluate their needs. We could not wait for a provincial budget to come out because we have to allot quota to our producers by a certain time because of cultural practices and farming procedures. Due to the federal budget we lost 23 million pounds in 10 days -- multiply that times $2.48 a pound and that is a lot of dollars. That is just in one fell swoop. Then, as I say, the provincial budget came after that. Probably what will happen and what normally happens, they make adjustments for that the following year.

Just to raise once again, and I am sure you have heard it many times before, what the value of taxation is as far as this province and this country, the numbers are pretty staggering. For the federal tax it is $2.31 for a package of cigarettes, which since 1986 has increased by 178%. The Ontario tax is $2.05 per pack of 25, which is up 144% since 1986. In that same time period consumer price indexing went up 21%. We have always said many, many times to former governments, and we say it to you now, that we can live with taxation as well as anybody else. We want to pay our fair share. We would probably even be willing to pay a little bit more than our fair share, but certainly we do not want to try to carry the whole country on our backs.

To give you another example, the total tax for a package of cigarettes in this province is $4.38. I can go to Detroit or go to Buffalo -- and a lot of people are doing it -- and buy those same cigarettes for 74 cents. So the difference is $3.64. We are talking only tax here, we are not talking about the product. The product is really insignificant in this little story.

I, as a grower, receive 11 cents a pack. Governments receive $4.38 for that same pack. The package itself costs as much as we, the growers, receive. That is fine, we can also live with that to a point.

The tobacco-producing area does not encompass that many ridings -- three mainly, and some surrounding ridings. I could relate to you that when governments started these taxation issues back in 1981-82, when they started with them in earnest, we were producing 215 million pounds of tobacco. Today we are producing 130 million. That is a loss per annum of $170 million to the growers -- $170 million per year taken out of our communities, out of our local economy. That is why so many of our local businesses have gone out of business today. That is why if you drive through Delhi, if you drive through the Tillsonburgs, the Simcoes and the Aylmers and some of the smaller places -- the Langtons and the Stratfordvilles and so on and so forth -- these businesses are not there any more because $170 million a year is directly taken out of the farmers' pockets.

The numbers are actually very scary. One tobacco farmer producing 100,000 pounds of tobacco, and that is about average today, contributes through that 100,000 pounds of tobacco that he grows each year, through taxes that governments collect, $4.9 million. That is what a little, 100-acre tobacco farm growing 100,000 pounds of tobacco generates every year: $4.9 million. A staggering number. What it has done -- it is no secret, we hear about it every day -- is encourage smuggling. We heard about Oka last year and there were a lot of things said about Oka. I dare suggest one of the underlying issues in Oka was a $500-million business in a little community like Oka where there were 76 outlets to buy cigarettes. That is what Oka was about, one of the underlying issues that never really came to the surface: smuggling.

What is happening in all our local little communities, the Delhis and so on, is happening all over the country. The Mac's milk stores and the Becker's are getting robbed left and centre every other day. People are afraid. They are not taking the money, they are taking cigarettes. I mean, the stuff is like gold. Why is it like gold? Because there is a $4.38 tax on it in the province of Ontario.

Smuggling costs us as growers. We grow tobacco in what we refer to as domestic export pounds. This year we are growing some six million pounds of that. That tobacco is for duty-free export stores, for ships, for airlines, and so on. I think we all know that a heck of a pile of those cigarettes -- and I do not think anybody knows the real number -- are being smoked in Ontario. We sell that tobacco at roughly $1.40 or $1.45 a pound. We receive $1 a pound more for our domestic tobacco. Of the six million pounds, let us assume that half of that is legitimate and not coming back in. There is $3 million that, because of smuggling, we as growers are directly losing.

Then there is the issue of the 6.4 million smokers. Where are their rights in this particular country? I think all of you should read the 100-and-some page judgement not too long ago by Judge Chabot, which I guess is now being appealed. He makes very critical comments about what governments are doing or trying to do with this industry. The federal government was told by its advisers and lawyers before Bill C-51 was ever put in place that it would not stand up under scrutiny. Social engineering, I believe is how Judge Chabot refers to it. I would not like to see that happen in the province of Ontario any further than it has.

Back to the point of the farmer: I am a farmer. There are about 1,200 of us and we have about 1,600 farms. In other words, some people have more than one, so they have what we call share-growers. So there are 1,600 units being produced. We employ about 20,000 seasonal people -- not a small amount. You add to that the distributors, the manufacturers, and in total the industry probably supplies some 60,000 jobs. I might add, if you do not know -- and I am sure you do know -- that in 1981-82 there were 2,600 of us. Now there are 1,200. As I said earlier, we have lost some 85 million pounds of production annually over those years and $170 million of direct revenue to farmers.

Nobody I am aware of has said that tobacco production is illegal in this country, or that tobacco smoking is illegal. Nobody has yet said that. And who are the smokers, really? I think we all know who they are. They are farmers like myself, people who work in factories, lower-income people for the most part -- that excludes MPs, of course -- and people who are on fixed incomes. Do you know there is only one group where there is an increase in consumption, and by whom or what sector?


Mr Kwinter: Young women.

Mr Bouw: No sir, senior citizens is the only sector of smokers where actually there is an increase in consumption. You have these old folks homes and all of a sudden they are going to that extreme. The other day I saw a person who had his leg cut off, he is 83 years old. He is sitting outside, for crying out loud, like a criminal. The man is 83 years old and you are going to say to him, "You can't smoke"? Ridiculous. I could go on about this subject for hours and hours because we have had to talk about it many times for quite a few years already.

One further thing: the budget itself. One of the comments in the budget which bothers us -- the same type of comment was left in the federal budget -- is that the provincial government is putting together what is called a tobacco control strategy. I have unsuccessfully made some inquiries about what this legislation may be. My simple question has been: can we have some input? Is there room for that? The first time I asked this question they said, "Well, it hasn't passed yet so you don't have to say anything yet." I said to the gentleman I was talking to, "Well, it's after the fact." We would like some prior input if there is going to be such a policy. Like I say, I have no idea what that is going to be.

For this industry to survive, we as an organization have had a conscious decision that we now have to seek more export markets, because the domestic market does keep continuing to decline. We have to compete more against the Brazils and the Zimbabwes. That is our competition. It is not the United States. So we have to compete against 60-cent-a-day labour. We pay $65 a day plus provide accommodations and housing and God knows what else. We feel we probably can do that in the long term. We are prepared to pick up that challenge, but we need some help. We need help because governments have not left us alone.

We put our five-year strategic plan together like we have done for the last eight years -- this year starting a new one. The governments come along and do this to us overnight and we have absolutely no control over that. They tax the hell out of a product that, as I said before, is legal and collects some $8 billion a year for this country. They owe our industry more than what it has received in return up to now.

We need support in finding new export markets. And yes, governments have been to a degree supportive of that in the past. We need more people in other countries. I am talking Asia specifically now, where the province should be putting people in place so they can deal with the Asian-type person. I do not mean that in a derogatory way at all. They do business in a different way and we feel in order to be successful in those countries you have to have people on site regularly.

For the longest time we produced to a ratio of 65-35 -- 65% of our crop was domestic and 35% was export. This particular organization, this board, has been in existence since 1957. Before that there was an association. So we have been around a while and have been exporting a long time. We do it to a lot of countries. We no longer can take the load alone. We need support through the transition, the transition of going from that 65-35 ratio to almost a 50-50 ratio this year. I expect next year, for the first time ever, a total switch to where our production will probably be more export than domestic.

As I said earlier, we need to compete against these African countries. We are prepared to meet that challenge. But we need some help in the interim. World prices on tobacco, believe it or not -- and there is a lot of pressure on world tobacco right now -- are going up because there is a shortage everywhere, except of course in Canada. For that transition period we need some support from government. When I am talking support of government, I am talking dollars. I am not talking in terms of an airplane ticket -- because we will take that too. I am talking in terms of hard dollars to meet the competition. Because things are changing there too. For example, in Zimbabwe their labour increased by 18%, which obviously we like to see, because maybe those fellows will be able to buy a TV set some day once they get hydro. Of course when people get accustomed to better things, they want more things. That is the way human nature works.

So we feel that the world price will continue to move, but in the interim, until we can become competitive with those people -- and I will give you a further example. We ship to the United Kingdom. Tobacco coming into the United Kingdom has 22% duty on it. Tobacco coming from Zimbabwe into the United Kingdom has zero duty. So even if our tobacco were exactly the same price, we have a 22% competitive disadvantage. Coming from Brazil it is 7%. Some of that is offset through transportation, because it is a longer way. We have asked the federal government in that particular case through the GATT to give us some support there, but we all know that is not over yet either.

Once again we will pick up the challenge. We have picked up the challenge. We will continue to lose producers, so the REDOX program -- and Mr Jamison full well knows what the REDOX program is all about although some of the other members may not. We need continuation of that particular program, which has been supported by both governments for the past five years, but more than that, we need government approval.

I believe at this point we have a nod from the federal government that it is prepared to move in this direction to help with our plight, because I think, I hope, that it recognizes the damage that it has done. We have asked for this program to be put in place until the year 2000, because that is when we are supposed to have a smoke-free society and if by the year 2000 we do have a smoke-free society and the 1,200 tobacco farmers in the communities of Delhi, Tillsonburg and Simcoe are gone, then we will be asking for full compensation for an industry that was eliminated by governments. I think I have rattled on long enough and I would answer some questions now.

Mr Jamison: It is nice to see you here. You are the second constituent from Norfolk we have heard from today.

I am very interested in your presentation and I have got two questions, so I will ask the first one and hopefully I will get the second one in. The first question is, when you are talking about support programs and help from government, when do you feel that should be in place to be most helpful to you?

Mr Bouw: When we put our crop agreements together this year through what we call a Tobacco Assistance Committee process with governments -- both governments are involved in that, by the way, as well as manufacturers, dealers and ourselves, and that is what we call the TAC -- part of the consideration at that time was that we receive support from governments on this export issue.

We will be opening our markets October 21. Last year, our growers received on average $1.98 for their tobacco. This year our contract is less than the previous year, because of this export issue. In order to communicate with our producers their support from the governments, we need -- and at the early point it does not have to be publicly -- by October, November, a positive signal from government that it is supportive of our request as to how it will treat this transition period as far as helping export markets.

That is imperative, that by October, November, whether it is direct communication to myself or to our board, at that particular time when our growers receive their final cheques, they can count on the support of the government. I might add, our market is completed in February. Realizing budget constraints and so on that governments are under, and probably the fiscal year is March-April, but we need the communication -- as I say, it does not have to be done openly, as long as it is communicated to us directly -- that we can have some confidence that when we are dealing with the following year, because we start those talks right before Christmas, that when we are forming these negotiations and putting in our pounds for export -- because export pounds are risky, there is no commitment from the exporter. We grow those at our own risk. The domestic stuff is guaranteed, but the export pounds, other than 40% of it, is at our own risk.

So before we start the talks for the following year, we have got to be able to communicate with our growers and say, "This is what the government is doing to support us with exports."

Mr Jamison: One point that I would like you to just verify is about land values. With the pressures that are on tobacco and tobacco farms and the growers -- of course growers have no pensions, they have invested everything in their farms. At one time when tobacco was good, certainly there were farms that sold for $1 million. Of course when times are not so good or the outlook is not as good in tobacco, and I am not saying that probably will not change, but what is the effect on the grower and especially the grower that bought in the 1970s, and so forth?


Mr Bouw: It is like any other industry. You are correct that maybe at one time they were a little bit overvalued. Certainly there were $1-million farms, but a lot of people bought $600,000 and $700,000 farms in the late 1970s because the industry was just rolling along like it always had. So farms that were purchased for $600,000, $700,000, all of a sudden were worth the value of a house. So a 100-acre tobacco farm at one point -- I could cite you more than one case where the farm was for sale and the person interested in buying it was not a farmer. He went to the bank and he said, "I'd like to buy this property," and gave them the details. He said the banker said: "No, it's got 100 acres of land with it. Get rid of the land and you can buy the house for that price." So it got to that degree.

Mr Kwinter: I really welcome the chance to talk to you, because the tobacco industry is one that has been a conundrum for me in all the years I have been in politics and I think it is for every politician. I just want to outline the situation that most politicians find themselves in.

You have an industry -- and it is in dispute, I know, by the industry -- but there is a report in the paper today that 35,000 people in Canada lost their lives as a result of tobacco. The figure that is used in Ontario is 10,000 people a year die as a direct result of smoking of tobacco. You have a situation where there is not a government that has got the guts to take a stand and finally say, "Look, we don't want this product grown," but if it does that, it gives up a lot of tax revenue, which is a problem.

So they sort of leave you hanging in the wind, really, because they will not put you out of your misery because they want the tax revenue. They have got this other problem at the other end where they have got these health costs and they have a product that you cannot advertise properly. You have got to put warnings on it that it is bad for your health. They do everything to put you out of business but keep you just going well enough so that you can continue to pay your taxes.

How do you deal with that as an industry? I mean, how do you come to terms with that?

Mr Bouw: I was on an airplane the other day and reading in a magazine how a gentleman comes to his usual restaurant and sits down and says to the waiter, "I'll have the usual." The waiter says, "Sorry, sir, I'm new here, so I don't know what your usual is." "Well," he says, "I'll have soup, a salad and I'm going to have the pork chops today and I'll have coffee and dessert." "Excuse me, sir, the soup you're referring to, do you want base stock or do you want soup stock with just water?" He says, "I want the good stock." The waiter says, "Sir, that has got a lot of fat in it, it's not good for you." "Oh, okay. Well, forget the soup. I'll have the salad." "Well, sir," he says, "maybe you should think about that. That salad's been washed in water and it's washed all the nutrients out and, God, I don't know if it's really all that good for you." So he says, "Well, forget the salad." He goes on to the pork chops and so on, and I will not go through it all, but he got to the end and of course he had eaten nothing. There was a glass of water and, "Gee, sir, you know, there's chlorine in it," and it does this, and so on and so forth. So the guy gets up and says, "Well, I guess I'm not hungry today," and he leaves and the waiter follows him. "Sir?" "Yes?" He says, "It's not good that you don't eat. You should eat three times a day." By that, the gentleman grabs his head, starts screaming and runs out the door and a truck runs over him.

That is in a roundabout way coming around to your question, Mr Kwinter. How far do we take all these issues today, as people, never mind as governments? I heard what you said about the 35,000 deaths. I have yet to see any place where somebody can prove that to me and I am not going to get into that argument.

As a matter of fact, you talk about health costs. The government of the past did a study of its own which actually showed that the money taken from the tobacco industry by far exceeds the health costs, and that was in 1986. I suggest with my numbers, the tax-take has gone up 144% since then, so I imagine there are lots of dollars there.

I do not want to belabour that particular issue, because the problem -- and I agree with you in a sense, saying that governments like the tax dollars and, yes, there is a perceived health issue, and I dare say how far or how real that health issue is, some day, I would like to get the answer to.

Basically, all we have so far is comments by Dr So-and-so and another comment by Dr So-and-so. There is all kinds of documentation that can be provided on both sides. I do not know where that argument is going to end, but I agree with you 100%, it is a hell of a good way to raise money and so it is 90% dollars and 10% health. That is my opinion.

The Chair: I have to go on to the third party here. As you know, most of us here are divided on the issue of smoking.

Mr Bouw: It does not surprise me.

Mr Carr: Ron is not divided; he is an avid smoker and healthier every day.

The question I have and I think you are right, all of us coming from an urban riding, growing up, we are all coming to appreciate the problems that the agricultural community is facing. In fact, I think one of our members said it in the last week when we were together for a little bit. Of course he is a farmer and he said, "There is something wrong in this province when we get more per ton for garbage than we do for my crops." Unfortunately, in the greater Toronto area, he is not far off with that. We are paying more for garbage to be trucked away and dumped than we are for crops and so it is a sad situation.

But I was interested in a couple of things you touched on. In the Southeast Asia areas, Japan, where cigarette smoking is fairly heavy in terms of population, I was wondering -- you commented a little bit on the different tariffs and so on -- what the market is for something like that. Is it tariffs that are keeping out, transportation costs? This may be just a naïve question, but are there any potential markets in the Far East.

Mr Bouw: We do sell tobacco, by the way, to Hong Kong and to China. We have not for a long time to Japan. We sell tobacco to Taiwan. So we do have some markets there.

But the real problem, in my opinion, with those markets -- sure, the cost of transportation -- is the Americans do a better job of selling themselves in those countries. I am only familiar with tobacco. When I refer to having more onsite people -- the province of Ontario has good people there, I am not knocking them at all; Michael Loh who is in Japan, is an excellent person and there are other excellent people. There are just not enough of them. The Michael Lohs or the Tony Stamfords or whomever they happen to be who work for the province just cannot spread themselves that thin to really have a grasp of -- I mean, how many commodities or how many issues can you really deal with as one person, and do it well.

I think the province should have more onsite people not to deal specifically with tobacco. I am not suggesting that, but do not expect the people who are over there to deal with every issue or every commodity product that the province has to sell over there. They cannot do it, so we need more people like that onsite.

The Chair: I would like to thank you for your submission to the standing committee on finance and economics on the budget review.

Mr Bouw: Thank you very much for giving me the opportunity.

The Chair: Thank you for travelling a little bit farther.



The Chair: The next group is the Ontario Psychiatric Survivors' Alliance. Welcome to the standing committee on finance and economics on the budget review. You have one half-hour for your presentation. In that half-hour, you could possibly leave some time at the end of your presentation for questions and answers from the three parties here. If you would not mind identifying yourself for the purpose of Hansard, you may begin your presentation.

Mr Miller: I am James Miller and I am here today to speak on behalf of OPSA, the Ontario Psychiatric Survivors' Alliance, in favour of the provincial budget.

What is OPSA? The Ontario Psychiatric Survivors' Alliance is a self-help network for psychiatric survivors. OPSA has individual and group members all over Ontario.

What is a survivor? A survivor is anyone who has had or is having psychiatric treatment.

Why self-help? By sharing our experiences both in and out of the mental health system, we can learn that we are not alone and not to blame for what has happened to us. In learning new ways to look at ourselves, we can begin to take control of our lives. Through OPSA you can get together with people who talk with you rather than at you; people who can really listen; people who have been where you are and got through it and can help you get through it.

What can OPSA do for you?

Support: OPSA can help you start or join a group in your area, and we can show you how to get organized and look for funding. You can contact OPSA if you want to find out about peer support.

Self-respect: OPSA can help you feel better about yourself by providing opportunities to get involved, to make things happen and to help other survivors.

Advocacy: OPSA can help you find resources to deal with specific problems, as well as advocating for necessary changes in the mental health system.

Education: OPSA can let the public know that we are not bad, dangerous people. We can educate service providers and family members about what is important to us. OPSA members are available to do public speaking and media interviews and can show others how to do these things.

Alternatives: OPSA can help you create effective alternatives to current mental health services.

Communication: OPSA can help you find out how other survivors all over Ontario are dealing with personal and mental health issues. As an OPSA member, you will receive and can contribute to our newsletter.

Rights: OPSA can make sure your rights under the Ontario Mental Health Act and other laws are respected.

The funding that the government has given to us thus far has made a major difference in all psychiatric survivors' lives, because many jobs have come out of the funding for consumer-survivors. The funding has brought psychiatric survivors together to begin new lives for themselves by sending them to conferences, workshops, leadership training courses and providing consumer-survivor positions. Positions have become available with OPSA chapters across Ontario and consumer-run businesses, such as Quick-Bite Catering and Take-out downtown here in Brantford. For the first time in our lives, we feel our opinions really count regarding the many needed changes within the mental health system, and, boy, does this feel wonderful.

We believe and feel the need for continued funding is necessary to keep the psychiatric survivors' movement going. We still have a long way to go regarding the many changes that are necessary within the mental health system. By continuing your funding, we can assure you there will no longer be a need for psychiatric institutions.

We are having our annual conference in Toronto in September, called Rising Tide, and your financial assistance has made this possible for our members across Ontario to attend by providing funding. A lot of our members would not be attending because of financial reasons above and beyond their control. We will for ever be indebted for your generous assistance, so on behalf of OPSA, I take this opportunity to say thank you. Your government is putting control back where it belongs, which is with the psychiatric survivors. If you need further information, please feel free to contact me at 1-519-752-4120. If I am not there, please leave a message and I will return your call.

The Acting Chair (Mr Christopherson): Thank you very much for your presentation.

Mr Miller: These are my two colleagues for support.

Mr Johns: My name is Eric Johns and I am a psychiatric survivor.

Ms McLeod: I am Margaret McLeod and I am also a psychiatric survivor.

Mr Phillips: I really appreciate your being here today. One of the things that interests me is self-help groups, and I appreciate your advice to us. I am led to believe that one of the first self-help groups was Alcoholics Anonymous. It has been enormously successful, and many other self-help groups have formed, not directly as a result of that, but it is perhaps one of the most effective forms of dealing with issues.

I am intrigued by your organization. Maybe you could just give us a little more information about whether there are chapters across the province, how many there are, how the thing works, because I have a feeling that for governments of the future, regardless of political stripe, organizations like this may offer one of the keys to dealing with issues in a very cost-effective but efficient manner.

Mr Miller: There are several chapters located across Ontario. I do not know the exact numbers right now. Head office unfortunately did not give me that information, but right now there are several, from way up north to Windsor and that surrounding area. I am representing a southwestern region today when I speak, as well as the entire organization. Funding has come down at various levels of funding, and it has really and truly made a difference with all survivors, the fact that we are getting together, banding together, setting up self-help groups with local offices within our own cities and communities.

Mr Phillips: Where would there be an office right now that helps you? Is it here in Brantford, is it in London; where would it be?

Mr Miller: Right now I am in the middle of putting a proposal in for next week. Our proposal is basically done. All that has to be done is it has to be typed. I will be heading up our local office here in Brantford as the co-ordinator, so therefore it will come on to me as the responsibility to put this proposal in. We are hoping to be located in the downtown area for accessibility for all survivors to attend.

Mr Kwinter: Could you just clarify, is a survivor anyone who has been treated by a psychiatrist or is it a special kind of person who has been treated?

Mr Miller: Our definition is, and I will quote it again, a survivor is anyone who has had or is having psychiatric treatment. It could be ongoing or it could be a two- or three-time visit. So there are a lot of people included in that definition.

Mr Kwinter: I know lots of people who have had treatment because they have had a problem and they have been treated by a psychiatrist. Some of these people I know quite well. There has to be some raison d'être for your organization where they feel that as a result of that treatment they have to do something else, as opposed to someone who, once they have been treated -- I am just trying to satisfy myself as to exactly what it is that you do and what kind of people come to your organization.

Mr Miller: A lot of people, unfortunately, have had many bad experiences with the system. There have been many questions arise because of different diagnoses, etc. For me, as an example, I was misdiagnosed as a manic depressive disorder and it turned out to be sexual abuse. They were so far off the money it was incredible. For me, I am very left-wing, and I do not mind stating that, because as far as I am concerned, and this is my position, we should tear down the system and rebuild it. Too many people are falling through the cracks and they are not getting the help they need at this point in time. If we can come together to help them, why not?

Mr Kwinter: That answers in part what I was trying to find out. In other words, the people who are survivors would be people who identify among themselves that they have been through the system and they were not totally satisfied with what happened to them. I would assume if they were totally satisfied you would never hear from them because they had been cured or had the treatment that satisfied their needs and that would be the end of it.

Mr Miller: I do not believe that is true, due to the fact that we have people who are right-wing and very much in favour of the medical model and we have people who are middle-of-the-road and left-wing such as myself. So we have it represented way across the spectrum.


Mr Kwinter: I am not talking politics, I am talking about people who are treated.

Mr Miller: We do have people who have never had a bad experience come out and join us, and those are the people who are the right wing in our organization. They do believe there are changes. Even though they did not have a bad experience, they are also working towards changes with us.

Mr Stockwell: I am having a difficult time understanding whether you are a self-help group or an advocacy group. The advocacy portion, as you said, would be to tear down the existing structure and rebuild it.

Mr Miller: What I have outlined there, what OPSA can do for you, we do self-help as well as advocacy.

Mr Stockwell: Then you are not receiving funding for your self-help? Alcoholics Anonymous is another self-help group that does not receive -- maybe it does, but I do not think it receives government funding, does it?

Mr Phillips: No, it does not.

Mr Stockwell: So in essence, you are not receiving funding for your self-help work. That is just something you do.

Mr Miller: That is correct.

Mr Stockwell: Is the government funding then to fund your advocacy role?

Mr Miller: It is funding to help with all of those things that OPSA can do for you. By going out there and teaching per se, as myself, already a survivor, by going out there and sharing my knowledge with other survivors who are coming to us asking for help, that way in turn we are showing them how to do it and giving them alternatives to make proper choices instead of the constant medical model role.

Mr Stockwell: Would a policy of your group be to tear down the system?

Mr Miller: Not outright, no.

Mr Stockwell: That is your personal policy.

Mr Miller: That is my personal opinion.

Mr Stockwell: Do you find it difficult to receive government money from the very source that you are suggesting is operating less efficiently or improperly? There is a bit of a conflict there to me. If I were up against a project or a program opposing something, it would seem contradictory to me to take grants from them to fight with them. Do you find a bit of a conflict or contradiction there?

Mr Miller: No. As I said, I was speaking in favour.

Mr Johns: There are mental health issues in this world that we do not often recognize. For instance, I think we all have a moral imperative sort of thing, and that means working with other people who help you follow through on what you start. For my money, everything that is on the outside comes from the inside. That is a moral imperative, mental health issue for me. There are real people out there who have gone through political wranglings, I think is a good word to say, in their own lives, family politics, hospital politics, without the situation being made light of to the powers that be, or politicians, if you will. There are real mental health issues that reflect a social environment. Politics, in a sense, has its own share of in-fighting and back-biting and back-stabbing.

Mr Stockwell: It is marginal, though.

Mr Johns: Marginal. I do not speak from a lot of experience; I am not really that politically active.

Mr Stockwell: This is in fact how the group then came together.

Mr Johns: We were trying to seek alternative health practices that give us --

Mr Stockwell: More control.

Mr Johns: More control over our own lives.

Mr Stockwell: I see. That is a good explanation.

Mr B. Ward: I would like to thank you for coming forward and presenting your views. I think it is important that as many people as possible have the opportunity. Looking at Brantford, I think the local chapter is fairly new, is it not?

Mr Johns: It is fairly new. Just this summer we have come together.

Mr B. Ward: How many people would be participating?

Mr Johns: Right now, there are perhaps seven of us.

Mr Miller: That number has actually gone up over the summer. It is now nine actual registered members here in Brantford.

Mr B. Ward: That is just Brantford?

Mr Miller: Just Brantford alone. As Eric just said, we were formed back in July.

Mr B. Ward: I wish you good luck in the future.

Mr Johns: It is lots of luck we are going to need, too, because we are all trying to gain control over our own lives again. Hopefully there is life without psychiatry and without psychiatric medication. We like to think that we can live our lives responsible for our own actions instead of other people masking and taking care of us. God save us from people who have nothing better to do than help us against our own will.

Mr Stockwell: How much money do you get in grants?

Mr Miller: I do not have actual numbers before me, but our local chapter is putting a proposal in and it is for just a little over $189,000 at this point.

Mr Stockwell: Is this the one that has nine members?

Mr Miller: We will be accessing the entire community. The numbers are there to support these kinds of dollars, these kinds of figures, because we will be doing a major educational component of this program that is being sent in and that will be included in our proposal going in.

Mr Stockwell: Okay. But right now you have nine members and you are applying for $189,000 in funding.

Mr Miller: That is correct.

Mr Stockwell: You are hoping to get more members.

Mr Miller: We will be having more members in the near future but right now we are going to have to be doing major education. That is the key.

Mr Stockwell: Has the funding been approved?

Mr Miller: Not yet, because I am in the middle of submitting it next week.

Mr Stockwell: Thank you.

The Chair: I would like to thank you for coming before this committee.


The Chair: The next group to come forward is the Ontario Women's Action Coalition. I would like to welcome you here to the standing committee on finance and economic affairs on the budget review. You will have one half-hour for your presentation and perhaps you can leave some time at the end for a question and answer period. If you would not mind identifying yourself for the purposes of Hansard, and you may begin.

Ms Maher: Good afternoon. My name is Janet Maher, and with me is Miriam Edelson. We are from the Ontario Women's Action Coalition. That is a group relatively newly formed which co-ordinates the activity of equality-seeking groups here in Ontario, which includes women's centres, women's groups across the province and women's committees of other groups like unions and professional associations. It also includes a number of other provincial organizations that work on single or narrower issues like violence against women, health care, and so on.

What I would like to do is speak very briefly, because in fact we are more interested in responding to questions from the committee. I would like to begin by referring to the notes we have prepared for you and then Miriam will add a few comments at the end of my presentation.


Thank you for your invitation to appear before the standing committee on finance and economic affairs. What we have here and we want to refer to are some of the representations we made to the Treasurer of Ontario in February as he was doing his pre-budget consultations for this budget we are speaking of now.

At that time we raised four main issues with him, as follows:

First of all, the current spending priorities, which I think was the main issue we wanted to raise with him. Without dwelling on that issue, I think we pointed out that women recognize the constraints imposed by the recession. None the less, we urged the government to act immediately and resolutely on a few, what we thought were very critical, money issues, as follows: (1) raising social assistance rates over the next two years to the minimum guidelines of adequacy recommended by the Metropolitan Toronto Social Planning Council; (2) meeting, as a minimum, the NDP election promises on child care, housing and community support programs to eliminate violence against women; and (3) implementing public funding for the interim pay equity adjustments that had been spoken about to workers in the chronically exploited voluntary social service sector, with a planning mechanism for achieving and funding full pay equity in that sector by 1995, which we understand is the present mandate of the Pay Equity Act.

With regard to other areas of chronic underfunding -- post-secondary education, training and employment development, and health care -- we urged the Treasurer to formulate and implement a strategy for restoring 1980 levels of service, and funding to maintain them, by the year 2000. We think that was a fairly modest proposal and we would like to speak to you again about that.

Second, we asked him to think about planning for the future. Even last February we thought there were some signs already apparent to suggest that the current recession would not always be with us. We were already witnessing social and economic projections produced by the government of Ontario indicating that we would be facing significant labour shortages in as little as five years, notwithstanding the free trade agreement, notwithstanding all sorts of other federal and provincial actions. In that situation, we encouraged the minister and his staff to begin to take a long view in its program planning.

We think that, in particular, the government needs to ensure that measures are put in place now, even in the midst of the recession, to ensure that women do not continue to bear an undue burden in times of economic slump. We think there are a number of measures, not all of them costly in terms of government expenditure, like employment equity, progressive and flexible family leave policies, pay equity and child care, which are central to the equal participation of women in the labour force and, in a situation of scarce labour such as we may be looking at as soon as 1995, could be the competitive edge that Ontario can offer employers.

In our view, available funds should be allocated to be more women-friendly and sensitive to the broader equality objectives of the government. In particular, we emphasized the need for the government and its respective partners to ensure that the structure of transfer programs continues to advance equality objectives, as noted above. I think there are particular kinds of things. I understand the new government is also looking at implementing a wide range of training programs, but these programs we support need also to take into account, for instance, employment equity objectives that the government talks about in some of its other departments.

Third -- and I think this is the point that we probably agree primarily with the members of the government on -- accommodating regressive federal fiscal and social measures. The recent federal Bill C-21 amendments in unemployment insurance to reduce benefits and the benefit period for most categories of claimant will not only discriminate against the most vulnerable of our population, a lot of those being women; it will also add pressure to strained municipal and provincial social assistance rolls just as those municipalities and provincial entities are coming to grips with the worst casualties of the recession and accommodating the labour adjustments resulting from the implementation of the free trade agreement.

Similarly, the erosion of federal responsibility for transfers supporting health care, education and social services spending in the name of federal deficit reduction is small consolation to ordinary taxpayers or probably to provincial and municipal governments, which must deal more directly with the real needs for services. The ruling last week of the Supreme Court of Canada on the legality of federal Bill C-69 was particularly dismaying to us since it legitimates unilaterally the devolution of funding responsibility without any room for consultation or co-ordination to minimize the impacts of such devolution to the lower levels of government.

We think Ontario will need to make some serious decisions, not only in representing adequately the constitutional aspirations of its residents in Canada but also in coming up with short- and long-term revenue strategies to maintain the standards of health care, education, and social services Ontarians have come to expect and we think they should continue to have.

While we were dismayed that the government chose not to move significantly on any of its major tax reform proposals in the Agenda for People, we were encouraged by the Treasurer's appointment of a Fair Tax Commission. We think it is critical, particularly in the context of current constitutional discussions as well as a decade of successive and incremental funding freezes at the federal level, to review policies and strategies for revenue generation that will ensure equality for all Ontarians in the year 2000.

We think the proposed structure of representative working groups on the Fair Tax Commission on most of the major tax issues has the potential for public consensus-building and we think it will be essential that those avenues are used if we are to meet the challenges of the next decade and into the next century.

The final point we want to speak to today relates to consultation. I think we, like a number of other community groups and popular groups, were in agreement with the new government in its objectives to involve all sectors of the community fully in public consultation on the future of Ontario. At the same time we think it is quite important for the new government to develop and implement a strategy for the support of voluntary-sector advocacy.

We indicated to the Treasurer and we have also indicated to a number of members of the new government our willingness to consult on a a plan to make available resources for constituencies traditionally underrepresented in political life to facilitate the research and communication which would actually allow their participation in the democratic processes, for example, through funding for advocacy groups on the plan of the federal women's program, fairness in funding.

We take seriously the commitment of the government to consult broadly with all groups in Ontario. We thank you for hearing us today. I think we want particularly to encourage the committee, as it thinks about having public hearings at other times and places, how short notice and short preparation time have the effect of limiting most the participation in the democratic process of volunteer-driven organizations like our own.

Ms Edelson: I just want to speak briefly to two points we mention in our brief. The first is when we are talking about measures which would allow for greater participation of women in the labour force. We underline, I think, in our presentation that these are not necessarily high-cost measures. I am thinking of things like more flexibility from employers for family responsibilities, be it child care problems, where there is a child sick, or where we are talking about elder care, which more and more is a concern of people, certainly of our generation and probably most of you as well, in terms of the responsibilities we increasingly have with parents who become ill and so on.

It is our view that, certainly in the case of a recession, if those services are not available for women, more and more women are kept outside the workforce. That is not really to anybody's advantage in terms of trying to build an economy. None of these things have to be very costly, but I think the government can play a very strong role in terms of encouraging employers, for their own good, really, to provide these kind of flexibilities to the workforce.

A number of these things were discussed in some depth recently at a conference which I guess the women's --

Ms Maher: Work and family life.

Ms Edelson: The work and family life conference. Was it sharing the caring work and family responsibility --

Ms Maher: Yes.

Ms Edelson: -- which the women's directorate was involved in. So we would be quite interested in talking about some of those initiatives with you if you are interested.

The final point I wanted to stress as well is this issue of consultation. Certainly there are traditionally many groups in society who have not been involved in any kind of detailed consultation with government. In our own sector, dealing with women's issues, the advisory council dealing with women's issues is now beginning to conduct quite an extensive consultation, which we look forward to participating in. Part of the mandate they have been given is to really examine over the next five or six months whether or not there should be such a council existing at this time, a kind of buffer that has existed over the last several years between groups like our own and a whole number of women's groups and government itself.

I do not think we have a fixed and fast position on this. It is something that really has to be looked at. There is some question as to whether there should be a group like that doing research or whether it should be replaced with something that is quite explicitly an advocacy group for women that is doing more than simply buffering but really going out and arguing on behalf of women's groups, whether it is for funding or for legislation and social policy reform. But again, that is an issue that I wanted to underline and we would be happy to discuss with you.

Mr B. Ward: I would like to thank you for your presentation and coming to Brantford. We have had some presentations from business people that talk about competitiveness and the cost of doing business in Ontario. They almost always mention the cost of pay equity and employment equity as a concern to their operations. What answer would you have to business people or organizations when they discuss competitiveness and the fact that pay equity and employment equity may be adding an economic burden to their overall operation?


Ms Edelson: First of all, we should make a distinction. I do not think employment equity has to cost an employer any more money if you are going to bring in people of colour and aboriginal people and disabled. Certainly there are some costs related to making a workplace accessible to a person who is in a wheelchair or providing equipment that allows a blind or deaf person to do the same job you or I might do, but I do not think those are excessive costs when you look at the whole range of costs facing employers. I think we should make a distinction between that, which is an issue of basic fairness in our society, one of equity right across the board for people, regardless of whether they have different abilities than we might.

Pay equity is that this is an issue whose time has come. You have certainly seen all the reports in the Toronto Star that a zookeeper was making the same or actually making more than a person who is raising our children in a child care centre. I think our society has finally taken the position that the work that has been traditionally undervalued, typically done by women, has to be valued more. If Ontario is leading the way to some extent and saying to employers, "You've got to pay up; you've got to make sure these people have the same ability to pay for the gas for their car and the rent for their home as anybody else," then I think that is quite valid and Ontario should be proud that it is pushing that.

Most forward-thinking employers know that if you pay people a good wage, and in particular, if you pay traditionally undervalued employees a good wage, you are going to get a lot back. I think we have to look at it in terms of improving our competitive advantage.

Ms Maher: Particularly with regard to pay equity, I think our information is already beginning to come out that the women who are being benefited by pay equity are the same women who a year or two ago were going to be family benefits recipients or welfare recipients and so on and so forth. What we are doing is implementing a strategy which will, in the long term, do us a great deal of good because it will give these women a bit of self-esteem, as well as a bit of money that will assist them to raise their children and keep them off the welfare rolls.

Ms M. Ward: Your brief presents us with your recommendations to the Treasurer, basically, and some of the issues you are raising with him -- social assistance rates, and you are talking about housing and child care and pay equity, which you were just speaking of. I would like to ask you what your feeling is about the measures in the budget on some of these things, such as the social assistance, $215 million towards that, the allocations for the prevention of violence against women and the shelters and so on, and the housing, the 10,000 additional units there. What do you feel? Is this at least a start in the right direction? You might feel that it is not enough, but do you think it is a good start?

Ms Maher: I guess our position is that probably most women and most men in our society would rather have a job than have social assistance. I think, though, that we have come to the point in Ontario, and I hope in the rest of Canada, that where jobs are not available we are not consigning people to the junk heap. We think the social assistance measures that were announced by the minister, Ms Akande, on 1 May were important first steps. They go nowhere near reaching the kinds of recommendations we have made yet, but I think we have to kind of recognize that in this current situation it is not the worst thing in the world. As I say, I think that some of the other measures, like moving on pay equity and moving in the direction of severance and so on, provide other kinds of support. In the long term that will have been demonstrated to be the most important step that could have been made at this time.

Ms Edelson: Just briefly about the measures with respect to violence against women and children, certainly the initiatives that have been taken are important and they are important first steps. I think I have an answer in a similar vein. I was recently part of a conference on violence against women put on by the Canadian Auto Workers union. Anne Swarbrick, Minister without Portfolio responsible for women's issues, spoke there and received quite a warm reception, as you might expect. But specifically, we were pleased to see the money that is there now for shelters that was not there before, and for education and for materials and so on. I think that is quite exciting.

If we are looking at statistics that show that, there are not that many of us in the room, but probably as many as one of the women who are in this room will be or has been affected by violence in some fashion. It suggests the extent of this problem and that we are really just beginning to take it seriously and deal with it. I hope we will see some further measures and funding and that it is more important over the next couple of years.

Mr Phillips: I really do appreciate your being here today. Did you fly out from Toronto or are you from here?

Ms Edelson: We came on Highway 403, from Toronto.

Mr Phillips: Oh, good -- not that you are from Toronto, but it is a long distance.

Ms Maher: It had been our intention to have the member of our committee from Cambridge with us today, but she was not able to be.

Mr Phillips: I appreciate the advocacy work you are doing. As a Liberal, I know our government was moving on many of the issues, I thought, on pay equity and what not. The Agenda for People is a kind of blueprint I carry around because that was the basis on which the government got elected. I think some people are prepared to accept that the recession may have been even deeper than they thought when they issued this. They said, "Ontario is now in a recession."

My question to your organization is, what should be the timetable for them to implement the program they laid out for pay equity, which they said they would pass legislation on to cover all women for the child care, the social assistance rates, the co-op housing and the various programs they outlined in here?

Ms Edelson: I guess I am prepared to give them until the end of this mandate. I would prefer, and would have preferred, for it all to be in that first budget, but I have been around political life long enough to know that it does not work that way. Also, we are in the deepest recession and period of economic restructuring, with quite serious permanent job loss of our manufacturing sector, but I do not think we can expect all of it all at once. If it is two years from now and there has not been a hell of a lot of improvement, there is going to be a different point of view coming from organizations like ours.

Mr Phillips: The present Premier called our Premier a liar when he did not implement one of the probably 60 election promises, so we as Liberals are always just mildly sensitive in that area. I have never called the Premier a liar, but he called Mr Peterson a liar.

My other question relates to something you mentioned about whether advocacy groups should be part of government or independent of government. I did not quite understand that. I think you were alluding to something there. Maybe you can just elaborate a little on what you were driving at.

Ms Edelson: I was speaking about the advisory council on women's issues which now has a mandate to examine what its role has been historically and what it should be. The question comes up, is it appropriate now to have an organization like that which typically has done research -- that has been their main role, which is useful; it has a role -- or should it be replaced by the group that is quite clearly an advocacy group for women's issues and women's affairs? That would make one think about what the makeup of that group would be. Do you elect such a group from a constituency like ours, not just our organization but women who are active on these issues? Across the board, do you continue to have appointees, and what do you not want? I guess what we were very clear on is that you do not want a duplication of services. If you have an Ontario women's directorate that does good research, you have it already so why are we funding another organization? Maybe that other organization should play a different role. If you look at what some of the shortcomings are currently -- and I guess one of them would be the extent to which we are able to reach into the communities across Ontario, not just Toronto, and meet the needs of women who are at home, who have specific needs, women who are disabled, women who are part of aboriginal reserves or whatever -- are we really reaching those people? If not, then I think we have to look at how we go about doing that. If we are talking about democratizing structures, I would like to see us thinking about it in those terms and specifically with the notion of advocacy in mind. It is hard to be as specific as you would like me to be, perhaps, but they are really just starting their deliberations now.

The Chair: Thank you for coming before this committee with your presentation.

The committee adjourned at 1610.