Transcription du comité 1991-août-29 | Assemblée législative de l'Ontario

Sandy Hill Community Health Centre; Cumberland Township Community Resource Centre / Centre des ressources communautaires, canton de Cumberland; Coalition of Community Service Centres of Ottawa-Carleton / Coalition des centres de services

Public Service Alliance of Canada

Family and Children's Services of the County of Lanark and the Town of Smiths Falls

Almonte Community Development Corp

Ottawa-Carleton Food Coalition Project and Emergency Service Providers

Ontario Public Service Employees Union

National Union of Provincial Government Employees

Social Services Committee for the regional municipality of Ottawa-Carleton

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

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)

Substitutions:

Conway, Sean G. (Renfrew North L) for Mrs Sullivan

Morin, Gilles E. (Carleton East L) for Mr Phillips

Villeneuve, Noble (S-D-G & East Grenville PC) for Mr Stockwell

Wilson, Gary (Kingston and The Islands NDP) for Mr Wiseman

Clerk: Decker, Todd

Staff: Anderson, Anne, Research Officer, Legislative Research Service

The committee met at 0901 in the Delta Hotel, Ottawa.

1991-92 BUDGET

Resuming consideration of the 1991-92 provincial budget.

The Chair: Good morning. We will resume our hearings on the budget review for the standing committee on finance and economic affairs. I would like to welcome you here this morning, our last day in Ottawa and our last day on the tour.

AUTOMOTIVE INDUSTRIES ASSOCIATION OF CANADA

The Chair: I would like to welcome the Automotive Industries Association of Canada, Mr Dean Wilson. You will have one half-hour for your presentation, and in that half-hour, at the end, perhaps you could leave some time for questions and answers for the three parties. You may proceed.

Mr Wilson: We appreciate the opportunity to appear before your group and give our views. I do not think I am going to take a half-hour for the presentation, but perhaps my presentation may take 10 or 15 minutes and then we could proceed to the questions.

The Chair: Not at the end of the half-hour, but within that half-hour.

Mr Wilson: Within that half-hour, sure. I think we can cover all the ground we want to cover.

First of all, I will give you a brief description of who we represent. The Automotive Industries Association of Canada is a national trade association and we represent suppliers, distributors, wholesalers and retailers of automotive parts, accessories, tools and service equipment. We have roughly 1,100 members across Canada, and I would say that probably 40% to 45% of those members come from Ontario.

To give you an idea of the sorts of companies we represent at the supplier level, the manufacturers could be companies like Champion Spark Plug or Moog or Munro shocks, that sort of company. At the distribution level, we are talking about companies like UAP, Acklands, McKerlie-Millen, and at the retail end, Canadian Tire is our biggest member. We also represent Goodyear, Midas, Speedy and so forth.

That is who we are. We represent four levels in the aftermarket side of the business. Maybe I should point out that there are two obvious sides to the industry. One is the original equipment side, which is the assembly of vehicles and the production of parts that go into those vehicles. That is not us. There are some other associations that represent that group. We are the aftermarket side of it, which is repair and service and distribution of parts to service vehicles on the road.

Where do we stand? The first issue I would like to talk about is deficits generally. The accumulated federal deficit has reached $400 billion now. It takes roughly 30% of government revenues to pay interest on this accumulated debt. Our concern now with the Ontario government is that it would appear you are going to get yourself into the same jackpot as the federal government, with a planned deficit of $9.7 billion this year. It seems to us far too much. I am not sure what your accumulated debt is in Ontario, but I suspect it is in the range of somewhere between $40 and $50 billion.

What we do not agree with is the direction in which you are headed, to increase debt. We have too much debt at the federal level, and now if the provinces start getting up to the same magnitude of debt proportionately, it is really going to make it tough. There is a connection here between debt and competitiveness in industry, because to finance the debt you have to have higher taxation. If you have higher taxation, businesses are less competitive. That is the crux of the problem, so we urge you to try to balance your budget and not incur deficits. That is really the major concern in terms of the deficit.

Turning to interest rates, they have come down probably 4% to 5% over the past year, which is in one sense good, and I believe the prime rate now is 9.75%, certainly better than it was a little while ago, but part of the problem is that the rate of interest in Canada is 2.9% higher than it is in the United States. Any time a company in the industry is thinking in terms of investment, either establishment of a new company or expansion of an existing facility, it is looking at the rates of interest, and if our rates of interest are 2.9% higher than in the United States, this is going to have an impact on the decision-making of those companies. Unfortunately it is not working in our favour now, and it makes it very difficult to convince companies to remain in Ontario and to invest in Ontario.

Obviously there is a connection between interest rates and deficits, federal deficits and provincial deficits. The reason the interest rates are higher, in my opinion, is that they need to be higher to attract the short-term investment to finance our payment of interest.

The other connection is that the high interest rates are keeping the dollar too high. Most economists seem to think the Canadian dollar is overinflated. Whether it is or is not, all I can tell you is this: At over 87 cents, our members find it very difficult to export to the US. We came out in favour of the free trade agreement four or five years ago when we were involved in the committees that were making the recommendations. However, at that time the Canadian dollar was 72 cents.

There was not a consensus in our industry, by any means, about whether we were for or against free trade. We did come out in favour, but we had some riders on it. We said that if the dollar got to the 80-cent level -- at least that is what our members told us -- we would be in trouble. It got to 80 cents and we were in trouble. At 87.5 cents, we are almost blown out of the water. The dollar is too high, and I am sure I am not the first person to tell you that. If you are going to try to make Ontario more competitive in the business community, we need to get the currency rate down to 80 cents or less.

Another issue I would like to touch on is cross-border shopping. As I mentioned, we represent the retail sector of the industry as well and it has been particularly hard hit in Ontario by cross-border shopping, partly, I guess, because of the proximity of a large percentage of the population to the US border. But there are a couple of suggestions I have for you to consider which might help alleviate the problem.

I believe there was a consultant who did a study a few months ago in Sault Ste Marie which showed that the number one reason people went to shop across the border was the price of gasoline. If the price of gasoline in Ontario was reasonably close to prices in the United States, it would remove a large incentive for people to go across the border. There is a fair amount of saving on a tank of gasoline to justify your reason for going across the border.

The Ontario government taxation on gasoline, I understand, is in the range of 20% to 25% of the total cost of the gasoline, be it 13 or 14 cents a litre, so it is substantial. We submitted some briefs to three of your government departments about the cross-border shopping issue and we suggested you might want to consider reducing the tax on a ratio basis as you get closer to the border, which might alleviate some of the incentive for people to drive across the border and shop. As it rests now, gasoline is a major reason why people go across the border.

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Another factor is the tire tax. You charge a $5 tax on tires in the province and when you add the 8% provincial sales tax it is $5.40 per tire. Our members tell us that a consumer can save $200 on a set of four tires by buying them in the United States. That is a pretty substantial saving. So we urge you to get rid of the tire tax, the $5.40. In any event, that $5.40 was intended to go into a kitty to do investigation on disposal of scrap tires. The province has done some research work, I guess. It may have spent some of those moneys, but certainly not even the majority of the money has been spent on what it was originally intended for, so we believe you should scrap the tire tax.

In any event, if you need money to do the research, I suggest another avenue because you are getting leakage now. There are so many people going across the border to buy tires and you are not collecting the tax on those lost sales anyway, so why do you not put it on the registration of the vehicle licences, either on the person's driver's licence or registration of the vehicle once a year when you get your licence plates? Then you will not have any leakage and it could be spread over a broader base.

The whole point is that when you put it on a tire, what you are doing is encouraging people to go shop in the United States, and it just does not make sense. We could argue all day about whether you should have had a tax on tires in the first place; I mean the intent of it. I do not agree with the concept of having a tire tax, period, but if you really need that revenue to do research on the disposal of scrap tires, for God's sake, put it on the registration of the vehicle or registration of the driver's licence.

That would be a far better way. You would not get so much slippage, and then you would spread the base evenly and then you would collect it. The way it is now, you have no way of knowing if you are going to collect it because every time somebody buys tires in the United States, it is lost tax.

The other thing is that we urge you to allow the fuel derivative use of the disposal of scrap tires. Some of the other provinces are now allowing it. I realize you are looking at some projects about using scrap tires for the paving of roads, but I do not think it is economically justified. You can get rid of the tires that way, but I think it would cost you money to do it, whereas I think research has shown that if you use scrap tires in kilns, for example cement plants, it is less of a polluter than, for example, coal.

I cannot understand why Ontario would not allow the use of scrap tires as a fuel derivative, as long as you monitor the use of it and make sure it is used properly and the emissions are at least within the range of other types of fuels. That is another suggestion of what you could do, certainly on a temporary basis until better means of disposal of scrap tires are found.

Another thing we feel very strongly about is the combination of provincial sales tax with the goods and services tax. We were neither for nor against the GST; however, we did work very hard with our members across the country putting on seminars to explain to them how it worked. We produced a handbook on the goods and services tax and we worked very closely with the departments of Finance and National Revenue trying to eliminate some of the more difficult areas in the administration and collection of the tax.

I think we were fairly successful. Our members have said it has gone reasonably smoothly in the industry. As I say, we were neither for nor against, but I guess the whole point here is that there is a 7% GST and there is an 8% Ontario tax and it is double administration. It is ludicrous.

I cannot understand why the provincial governments will not be more co-operative with the federal government on some issues. I realize there is a difference of political view on some of these things, but it comes to a point where the damned country is in trouble. Let's face it: We have a competitiveness problem in this country. We have to eliminate some of the waste and complexities that governments are creating for industries and businesses, and the GST is one of them.

Whether you disagree with the concept of the GST is one thing, but it is in place, it is there, so why do you not combine it with your Ontario tax? Then you would have a lot more teeth to try to stop cross-border shopping because then you can collect the GST and the provincial sales tax on sales coming back across the border for those people who are not entitled to exemptions, and then you collect more tax. You have less leakage. You also have less cross-border shopping. You also have less administration by companies in the industry. That is another suggestion. We feel very strongly that you should have a really hard look at combining the provincial sales tax with the goods and services tax.

I realize this is perhaps not that directly related to your issue of the day, but I would like to talk about some proposed amendments to the Labour Relations Act. I got a letter from Premier Rae yesterday and he explained to me some of the things that are happening, but I think there is perhaps a little void in communication. He is pretty vague on exactly what is going to be proposed. I gather it is back with Mr Mackenzie, the Minister of Labour, to try to develop guidelines or proposals on how the amendments might proceed.

Some of the stuff we are hearing is very alarming to our members. I get a lot of calls from our members. I have talked to a lot of our members about some of the proposed amendments and I can tell you that they are terrified. I do not know that they are proposed amendments. I guess they are just on the drawing board at this stage.

You had a labour group that came forward with some proposals and you had some business people who came forward with some other proposals. They could not agree, but now if you lean too far towards all the labour proposals, you are going to scare the hell out of business and it is not going to invest in Ontario.

That, to me, is going to be self-defeating. The whole purpose of the Labour Relations Act is to protect jobs and to protect the way they are treated and so forth, but if there are no businesses around to employ them, then people are not going to have jobs.

I guess we cannot really get into details about it, but I just caution you about the changes to the Labour Relations Act, because I am hearing a lot of resistance from our members about your deficit in your budget. Bill 70 was kind of scary at first, although you have backed off, I guess, or made some changes which are a little more palatable, but this Labour Relations Act, I can tell you, is the one that is really scary.

All this adds up to competitiveness in our industry and competitiveness in other industries. If Canada and Ontario cannot become more competitive, we are going to continue to lose manufacturing jobs especially. The service industry, obviously, is going to have to exist in one way or another, although that is questionable near the border the way things are going right now.

We need continuing dialogue. I notice that in Mr Rae's letter to me he talks about great hardship for people and families across Ontario. I find it strange that he did not mention business in that sentence. He talked about people and families, but he did not mention business.

The business community is part of your constituency and I think you need to listen very carefully to what organizations like ours are saying. Our association would be very pleased to continue to work with all Ontario government departments wherever applicable. We have done it in the past. We do it all the time on a regular basis with the federal government. We urge you to consult with our association on the issues that affect us.

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Mr Morin: I have a quick question. I know Mr Kwinter wants to ask one too. We have often heard the Premier mention that he wants to establish a really good rapport with businesses. Obviously this letter does not seem to give you any hope. What would you suggest to Mr Rae that should be done to bring labour and businesses together?

Mr Wilson: I commend you for the fact you have held these hearings. I do not think it was your intent to hold them originally, but I think the fact that you have held them is good. We were invited here to give our views and we appreciate that opportunity. On the business of the Labour Relations Act, which I guess is specifically the one of most concern now, I think you are going to have to achieve a consensus on what you propose. If you present a proposal that is strictly a labour-oriented amendment to the Labour Relations Act, it is not going to work. You are going to chase business away. But surely you can get the two sides back together to hash out something they could both live with. It is too one-sided now.

You got two minority reports, I guess, that basically came out. You had a business report and you had a labour report, so you have to get those people -- what is happening on strikes right now? They do not agree. They have to get back to the table until they agree. You have to do the same thing on this Labour Relations Act. You have to get business and labour back to the table to come up with proposals that are finally going to be acceptable for both sides; otherwise, it is not going to work.

Mr Kwinter: Mr Wilson, I thought your presentation was evenhanded and quite moderate. You seem to be quite concerned about the deficit. We hear more and more presenters talking about the deficit, saying it is not the problem because the government chose to fight the recession rather than fight the deficit. Their projections show that for the next four years, they are going to continue with deficits of about the same magnitude. The lowest it gets to is $7.8 billion in 1994-95. That in effect is going to double the debt. Notwithstanding that the Treasurer, in an article today, said that the proportion of the dollar used to service that debt is still going to remain at about 12 cents on every dollar, it is in fact going to double, and if it is 12 cents now, in real terms it is going to double the carrying of that. How do you think that is going to impact on your industry and industries like yours?

Mr Wilson: Oh, it is going to have a tremendous negative impact because we are overtaxed now. If your deficit doubles over the next three or four years, the money has to come from somewhere to pay the interest on the debt. Where is it going to come from? It is going to come from personal income tax, sales tax or corporate tax. Taxation is going to go up for companies, and we are going to be less competitive than we were before and we are going to continue to see loss of jobs to the United States. I do not agree with the philosophy. What the $9.7-billion budget is, you are trying to throw money at problems. That does not solve anything. Handouts to people are not going to solve problems. You have to get industry more competitive so they create more jobs. That is to the benefit of the people of Ontario.

Mr Villeneuve: The deficit is of great concern, and that is really why we wanted to see at least a message come through. Interestingly enough, a lot of the people who made presentations to this committee were saying, "Bravo, you're doing a hell of a job. Double the debt, and you'll never get into the same problem as the federal government," and yet, at the same time, they severely chastise the federal government for trying to curb some of the excess spending.

In Ontario -- it has not been mentioned -- the federal debt has to be carried by Ontario residents, as it will be carried by everyone. The doubling of the provincial debt must be carried by Ontarians. There are the $30 billion plus of Ontario Hydro debt -- we will have a 40% increase in Ontario Hydro costs here in Ontario -- and the $10-billion unfunded liability of the Workers' Compensation Board are things that have never been mentioned, and yet we have many groups, particularly labour groups, that come in and say, "Keep her going. Just get us more into debt," and at the same time, in the same sentence, chastise the federal government.

It is a very interesting scenario, particularly here in eastern Ontario. We have the province of Quebec. A short six years ago we had a 10% tax advantage. Now we are at a deficit disadvantage with Quebec and, of course, New York state. In the area where I come from, which is just north of Cornwall, we have Akwesasne sitting there with no tax on gasoline. So we have a double whammy in this area. You have mentioned the tire tax. Your industry probably effectively employs most of the people who have sat in the same chair you sit in here and said, "Now this government is looking after people." But people are employed by people you represent. There seems to be a great vacuum there.

My question to you is, when we incorporate the federal debt, the doubling of the provincial debt, the Hydro debt and the worker's compensation unfunded liability, can we continue taxing just to maintain that -- I am not talking about reducing it -- and have you people stay competitive?

Mr Wilson: The answer, of course, is no. We are not competitive now, and we will become less competitive as debt, both provincial and federal, continues to increase. I think there is a reckoning coming down the road. It would be nice to have all these social programs and fancy things for the people, but we cannot afford it. I realize, though, that it is a problem in that Canadians have a perception that the country owes them these things. I do not know. You have to change the philosophy of the people and make them understand somehow that we cannot afford all the services we are providing in this country; otherwise, we are going to go bankrupt. That is basically what it amounts to.

I realize you are getting pressure put on you by the feds. They are cutting back on some of the funding for social programs. They have to try to get their deficit under control. I think part of the reason your deficit is going to be so high is because you are trying to pick up the slack of the money that they are not giving you now. I think you should take the other approach, "We're going to have to cut back, and everybody's going to have to pay the price and suffer a little bit in order to make ourselves more competitive." Why do governments get elected? They get elected to lead, not to govern by opinion polls.

Mr B. Ward: I would like to thank you for your presentation and some of the suggestions, which perhaps we could look at and explore in greater detail. An example you suggested was the removal of that tire tax introduced by the Liberal government previous to us and perhaps to take a look at increasing the charge for licence fees to compensate for the lost revenue. I would like to point out some things. First of all, we have heard some requests for a balanced budget by presenters. However, I think we are clearly on the record that all three parties are stating that for this year anyway there would be a deficit of some type. What level it is still would remain to be determined as the other parties have not clearly stated what it would be.

I am glad to see you clarified the last part of your presentation concerning the Labour Relations Act in that it is not proposed legislation; it is simply reports from a subcommittee formed by the Ministry of Labour to examine the Ontario Labour Relations Act. I get upset at times because we have heard that time and time again, a misconception. I do not know who is spreading that misconception, but there seems to be a misconception in the business community that it is proposed legislation when in fact it is not. I am glad to see you have clarified that. I hope that when the members contact you with their concerns, you can express that to them, that it is simply reports from subcommittees and will be consulted and examined from both the business and labour side. I agree they should be working together to try to come to some compromise.

Looking to the future, I disagree with your feeling that there are some things we should not have as a country. I really believe we should maintain our medicare system as much as possible. That is one avenue we should continue to look at, to maintain access to a decent health care system.

Mr B. Ward: Looking to the future, to build co-operation and trust between labour, business and government, an example would be sectoral skills training agreements. Do you think that is the proper way to go?

Mr Wilson: I think training is a key here, sure.

Mr B. Ward: To begin to build that trust.

Mr Wilson: You have to build the trust, sure. If some companies go down and some industries go down to a certain extent and people get laid off, you cannot keep paying them out of the government till. You have to retrain them and try to get them into another industry, another job or something, because otherwise they are going to be a burden or an anchor on the economy.

I would mention to you, though, on the labour amendments that I wrote to the Minister of Labour over a month ago asking him for clarification on what direction he was going in, and I still have not got an answer back.

Mr B. Ward: I will make sure you do.

Mr Wilson: I would appreciate the response and an opportunity to be involved in that.

I would like quickly to mention something about the medical benefits. I am on the automotive select panel. That is the Canada-US group that was formed to try to make the free trade agreement work better. We are doing a major competitiveness study now. It is interesting that if you go to some of the states like Tennessee and Kentucky especially, they are being very aggressive about wooing business down there. They even take out advertisements in papers, magazines and so forth. The state of Illinois has been doing the same thing. They are very aggressive about attracting business to those parts of the country.

I can tell you that with health care costs in some of those states where there is non-unionized labour, they are far more competitive than us in that area. On the other hand, Canada is more competitive than the Big Three in the United States, but that is because they are unionized. So there is a bit of a double standard there in the US. Some of those states are very competitive, especially in health care costs. I think the province needs to be more aggressive in getting out there and wooing business to invest in Ontario.

The Chair: I have to cut you off at this time. Maybe you could put some of these points you bring up in a brief that you could send to this committee, since we do not have enough time and our half-hour has run out. Thank you for appearing.

Mr Wilson: It has been a pleasure.

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GARTH TURNER

The Chair: The next presenter is Mr Garth Turner, MP. You have up to one half-hour for your presentation.

Mr Turner: I would like to thank the committee for the opportunity of being here to make a contribution on this important topic. I would like at the outset to praise the committee for the work it is doing. I think it is extremely important to have this kind of in-depth look at an economic document such as a budget. I also applaud this government's decision to hold hearings. I think that was a progressive move and you are to be congratulated for it.

My personal experience with committee work at the federal level certainly emphasizes my belief and conviction that this committee can do a lot of good work. I am not here today to chastise or to preach, but to try to share some experience I have had at the federal level and also some of the knowledge I bring from some of the feelings of taxpayers in the province.

Let me very briefly go through the first part of my brief, which I call "Deficit Financing: The Federal Experience."

It is useful for those framing the Ontario budget to look long and hard at Ottawa's experience with deficit financing. Of course, that is the practice of deferring taxes through deficits in order to increase spending without increasing taxes. In broad terms, during the 1970s and 1980s Ottawa took the political decision to keep taxes low and to concentrate on deficit financing. In the five-year period prior to 1984, 17% year-over-year spending increases were the norm.

Ottawa, as we all know around this table, did not have taxation policies that kept up with spending policies. That culminated in the 1981-82 recession, where we had by the end of that, and going into 1984, almost a $40-billion annual shortfall and the accumulated deficit, that is, the national debt, had risen to more than $200 billion by 1984. The composition of that particular deficit is the most worrisome here, because of $38 billion a year, $16 billion was being borrowed to finance spending on programs and only $12 billion to pay the interest on the debt.

The legacy of accumulated deficits is a debt, and as we all know, through the magic of compound interest, debts have a way of increasing on their own. That is in fact what the federal experience has been since 1984, because that $200-billion debt has now mushroomed to almost $400 billion. That is not because the government overspent but because of the interest on the debt that was there in the first place.

It has been a cancerous experience. In order for the government to get out of that box, it has taken cuts in transfer payments to the provinces, cuts to Via Rail, cuts to the CBC, and the GST and some 30 other tax increases.

We know what the political cost has been. We see in a new Gallup poll today that the federal Tories are at 12% in the polls. A lot of that has to do with these efforts that were made necessary by the debt that was there and has just exploded because of the magic of compound interest. That has been the federal experience.

I am not here to tell you how to run the province, but I am here to say, look at the experience of another level of government which has gone through a similar political decision-making process to what the government of Ontario appears to be doing now. This is what I hope the Ontario government will consider as it embarks on the same course as the federal government took about a decade ago.

Let's not forget that deficits are deferred taxation. This is the most important point. While the province of Ontario defers $9.7 billion this year, it will have to be taxed at some point in the future. Because of compound interest and accumulated debt, it will have to be taxed to cover a higher amount in the future.

I run through some of the statistics on the budget under study. I will not bore you with them here, because you are experts on it. You know all about the government, its impact, its fiscal projections, the projected accumulated deficit accumulation over the next four years, and the fact that you will accumulate more debt in 48 months than in the previous 125 years.

I do not want to fall into hyperbole, but I will say that I think there are some macroeconomic consequences of some of the political decisions the government has taken.

For example, I believe this particular budget will impact on inflation rates and interest rates. In fact, as you know, being experts in the field, the two are very much interlinked, interdependent. Interest rates are likely to come under greater upward pressure as Ontario, being the biggest and most important economy in the country, increases spending and increases its deficits and accumulated debt. As we all know, the laws of supply and demand apply to money as well. Money is a commodity. When money is in demand, the price goes up. Ontario borrowing excessive amounts of money compared to past history puts more demand on the supply of money. Therefore, the price of money goes up, and the price of money is interest.

Also, Ontario has granted wage increases to civil servants and increased its spending by about 13.4% in a single year. That has to be inflationary. I am sure the Bank of Canada is somewhat concerned about the impact of Ontario's budgetary policies on its own targets for fiscal and monetary policy. I know it is concerned about that. This amount of extra spending by Ontario can knock the Bank of Canada off its course. If that happens, then we are going to get higher interest rates.

The net result is declining competitiveness and that is what perhaps is of most concern to the federal government, if I can speak for some of my colleagues, because the debt in Ontario is seemingly to be institutionalized. It is going to guarantee the need for future higher taxes. It is going to make it less competitive to set up shop in Ontario, and I think if we lose potential investment in Ontario, we are losing potential jobs. I just do not see how that benefits my province.

Finally I think this particular budget, ironically, may be laying the seeds of the next recession. I say that because if we scare off some potential investment from the province, potential jobs, if we knock inflation and interest rates off their course, then the rather fragile recovery we are seeing now could remain fragile and perhaps be jeopardized in the future.

Finally, I mention the social policy of deficits. I know the government in Ontario now is very concerned about social policy. As we all know, deficits are financed through government borrowing. Governments borrow essentially from those who have capital to lend, be it in the form of bonds or Treasury bills, whatever. Normally, individuals who have capital to lend to governments tend to be those who are either corporations or well-off individuals. When the interest is paid to those people who are bondholders of the province, that money comes from tax revenues collected from all the citizens of Ontario, whether they are single mothers or bank presidents. In other words, when you run deficits, you actually are encouraging the rich to get richer by nature of where the interest flows. I am not exactly sure that is the philosophical bent of this government and I am not sure how you can actually support that.

In part 2 of my brief I touch on the national implications of the Ontario budget. Speaking as a federal politician, I must say that I do see far-reaching consequences beyond the borders of the province in this budget because of the importance of the Ontario economy. Again, I go through some of the macroeconomic points I made a moment ago, inflation targets, interest rate targets and so on, because higher inflation through Ontario spending brings higher interest rates and we get lower competitiveness in the Ontario economy. That affects all of Canada because of the importance of the Ontario economy.

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I also make the point that it would appear that the Ontario government is out of step right now with most of the other governments in Canada, other provincial governments and the federal government, because while the Ontario government has chosen to adopt a recovery through spending approach, basically all the other governments in Canada have adopted a recovery through restraint approach. I think it is incumbent upon the committee to revisit that fact and to perhaps ask itself whether the government of Ontario alone is the sole repository of economic wisdom in this particular approach. I am not saying it is or it is not, but being so out of step with all the other governments in Canada I think is a point you must address.

Finally in my brief I touch on the impact of the Ontario budget on individuals, because as I say, macroeconomics is one thing, but the Ontario budget will do more than that and more than worry the economists and the business leaders; it will have a direct impact on the men and women who are taxpayers in the province. The most obvious impact, of course, as is always the case, is direct taxation. I note that the budget increases by about $1 billion the tax load in this year on Ontario taxpayers. In addition, it defers almost $10 billion in what will essentially be direct taxation in the future.

I quote a friend from the Canadian Federation of Independent Business as saying that it categorizes this budget as being a tax time bomb. This brings me to the most salient point, probably, in this brief. If you remember nothing else of my brief appearance here before you, I hope you remember this.

Taxpayers at all levels are feeling very much under the gun. I am not saying any one particular level of government is to blame for that. I think all of us, as politicians and elected officials, share a responsibility in that. But there are four or five sets of government and one set of taxpayers. They are feeling most pressured right now.

As we look at deferred taxation, as we add another $30 billion or $35 billion in debt or potential future taxes in Ontario, we have to look at the consequences. In my brief I mention two of the most obvious.

One is cross-border shopping. I think this particular budget will have an exacerbating effect on cross-border shopping. I accept blame that the federal government is involved in some of the reasons this is happening as well, but any additional impetus that we give to people to cross the border to shop hurts all of us and hurts our province.

Second, there is a tax revolt movement gaining speed rather rapidly in Ontario under the umbrella of a group called the Taxpayers Coalition Ontario. They have several tens of thousands of members now and are continuing to organize. I know many of the people who are involved in this. I have not been discouraging them in their activities, because I think that all politicians at all levels need to have the hounds of hell breathing down our necks, and if that is a tax protest, that is fine. Anyway, it exists. I can see the contents of this particular budget giving great cheer to those people as they are out there organizing and exhorting others to become mad as hell at politicians at all levels.

I also feel that as this budget puts pressure on inflation and interest rates, we are going to end up with higher mortgage rates and personal loan rates. We do not need that right now in this fragile economic recovery. We need consumer confidence; we do not need consumer doubt and obstacles. Reduced economic activity can also be an expected result of this budget, because as I say, the recovery is fragile and the anticipation of higher taxes and higher interest rates is not welcome. Finally loss of investment capital concerns me a great deal, because we need all the investment we can get in this great province. We need investment so we can have jobs, and all of us have a stake in that.

I will conclude my remarks there to allow members some time for questioning. Thank you once again for this opportunity. I hope I can add in a very small way to the deliberations on this. Again, my congratulations to the committee and the government for agreeing to these hearings.

Mr Sterling: Mr Turner, your reputation is known among federal politicians as well as provincial politicians in terms of these kinds of issues. The favoured tactic of the government party has been to blame all the problems on the federal government. Also their straw men in these hearings, the unions which have appeared in front of the committee, have gone up and down the sides of the government talking about the reduction of federal transfers, the monetary policies of the Bank of Canada and the free trade agreement, "Those are all problems for the recession and we are not to blame for any of this." Would you care to comment on any of those particular issues?

Mr Turner: Certainly. I am well aware of the critics of the federal government and their arguments in an economic sense. I think we can address them one by one, but more important, I would point out that some of us tend to forget that there are business cycles and that after seven or eight years of strong economic growth, it becomes human nature to expect that there will be no correction. However, as you know, 18 months or so ago, at the end of the business cycle, we were seeing the natural economic results. That was upward pressure on inflation. Therefore the Bank of Canada adopted a high interest rate policy to try and dampen those pressures.

The money supply was increasing rather rapidly 18 months ago, and that was of great concern to the Minister of Finance. The intent was to try and cool out the economic cycle without depressing it unduly. History will tell whether this was a major or minor recession, but in terms of some of the issues you talk about, free trade and so on, I think there is some evidence to say that the recession might well have been deeper with more severe job loss had we not had some of the safeguards that are in the free trade agreement. But again, I think we are looking at this from far too myopic a position and it is going to take some period of time over history to know, looking back on the free trade agreement as a 10-year-long diminution of tariffs, whether this was a factor or not. But I tend to think not, at this point.

Mr Sterling: As a federal politician, you would have much more exposure to what is happening in other provinces. Your colleagues from other provinces would be talking, no doubt, about the recession. In your estimation -- I do not know if you have any feeling for it at this time -- how are we doing in Ontario compared to other provinces with regard to this recession? Are we recovering as fast? Are we feeling it as deeply as the other provinces?

Mr Turner: In speaking with my colleagues in the House and also in my travels, I must say that Ontario is suffering, to my knowledge, the greatest penalty of this recession. Certainly it has been hit for a number of reasons. Our manufacturing base is significant and therefore a recession is going to impact us quite severely and quickly, but I must say it would appear that some investment decisions have been made in a negative sense towards Ontario; that is, some companies have decided to defer their investment in this province. I think there was a survey that came out yesterday showing that 37% of potential investors had decided not to invest in Ontario. That may be due to a number of factors, but I think this budget is certainly a part of that, where the anticipation of higher costs in the future and significantly higher taxation in the future is causing people to think twice about investing in Ontario. That will only prolong this recession here.

Mr Sterling: In 1984 the Conservatives came to power with $200 billion of deficit which was a legacy of the Liberal government at that time. In 1995 or 1996 -- I do not know when the next provincial election will come -- there is going to be a legacy, it appears, of about $80 billion there, if we are to believe what happens. What would you do at that stage of the game if you were coming into power? I think there is quite a parallel, and you play on the parallel with regard to the experience. What choices is the next government going to have?

Mr Turner: I think the choices the next government will have are the same despicable choices the federal government has had over the last few years; that is, if there is to be a restoration to fiscal health, then cuts have to be made. I guess the irony is that after years of running deficits in order to support social spending, then the government that inherits it no longer has a choice. There has to be restraint brought in in order to rescue a sinking ship, and that puts those very social programs at risk.

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We need only look at the federal experience of cutting Via Rail, the CBC, transfer payments and special interest group funding that in a political sense nobody wanted to do. In an economic sense there was no choice, because we were forced; our backs are to the wall. Staring $400 billion in debt in the face, the federal government has no choice, and I submit that by the time of the next Ontario election the ratio of deficit to gross domestic product in Ontario will be twice as bad as at the federal level.

Mr Sutherland: I guess as a provincial politician what concerns me the most in terms of your presentation -- you have talked about it and certainly understand the federal deficit problem -- is the fact that many of the measures taken by the federal government that have had a tremendous impact on this province and on other provinces have been done in what I would consider to be a somewhat arbitrary measure, in terms of rewriting the fabric of this country and what it is that has brought us together, the common values for the country. In a sense, if the federal government had negotiated with the previous government and said, "We're both in a bind here. We've got to find a way of capping transfer payments, in a negotiated sense," and then this government had gone out and put on a larger deficit, then I think there would be some valid criticism.

But you take a combination of the free trade agreement and many of these federal factors. I do not think they can be ignored. You take an overly tight monetary policy. We have even had the Royal Bank in here saying the policy has been that the dollar should be around 81 cents or 82 cents to allow our industries to compete. You take the changes to federal UIC. We have a $1.4-billion increase in social assistance payments. They are going through the roof because changes were made to the UIC without what I consider to be a negotiating process with the provinces as to how they were supposed to pick up the additional cost. There are also cutbacks in the transfer payments. I guess my concern is that it is one thing to say, "The Ontario government shouldn't be doing this," but it is another thing when the federal government is rewriting the economic relationship and I think in some ways rewriting the whole relationship between the federal and provincial governments in an arbitrary manner.

Mr Turner: I am not going to argue with you. I happen to agree with a number of the points you are making, particularly in terms of the need for more intergovernmental co-operation. Yes, I do agree with you in that I think part of the malaise of the whole Canadian nation is a bunch of governments fighting each other. I think that is really regrettable. I do not want to lay blame on one side or the other. I am just saying it is a common observation. I would agree with you and I think there should be more negotiation and co-operation. We probably have too many levels of government anyway, to start with.

Having said that some of the cuts have been made in an arbitrary fashion and that it hurts the fabric and common values of our country -- I do not argue with that either I think there is a price to nationhood and we are paying the price right now. In fact, we are paying for a lot of decisions that were made in the past for crass political reasons that today are hurting our country. If we cannot afford our social programs, if we remove from ourselves the ability to make decisions in terms of our spending, then we only hurt our country, so I am not going to argue with you on those points. I do not blame specific federal government policies, but I do think, yes, we need to talk more, negotiate more and co-operate more.

Ms M. Ward: I would suggest that it is not the person whose unemployment insurance has run out and is now going to be on welfare who should be paying that price for the government disagreements.

You were speaking earlier about the free trade agreement and inflation and the deficit. I do not have time to ask all the things I would like to ask. One thing, about inflation: One of the biggest inflationary factors this year was the GST, which I think most people agree has added about 2%. Do you think that was the right time for this to come into effect? That is keeping our interest rates high and the interest rates are one of the biggest factors in the recession, I believe. What are your comments on the GST coming into effect at this time?

Mr Turner: My first comment is it has nothing to do with the Ontario budget and you are nicely throwing the ball from your court to mine.

Ms M. Ward: No, it has to do with it. Because of the recession, we have to keep the support in place for people.

Mr Turner: I will gladly toss the ball back, though.

I happen to be chairman of one of the House of Commons committees that conducted hearings into the effect of the GST on consumer prices. We concluded that likely the GST would have a one-time price impact of between 1.5% and 2%. In effect, the GST consumer agency I think reported that the effect was around 1.35%, as its final impact. It was not unexpected and the inflationary impact was about where the Minister of Finance thought it would arrive.

Was it a good time to bring it in? There are two schools of thought on that. One is that if you raise any prices during a recession, you are further deepening the recession. The other school of thought is that if you are depending upon the open and free market and competition in order to minimize the impact of the tax on inflation, that is a good time to bring it in, when people are scrambling to maintain market share.

I do not pretend to know which of those is absolutely correct and I do not think anyone will for a period of time, but I certainly saw a lot of people advertising -- Canadian Tire, Sears and others -- saying, "We will pay the GST," during the first few months of this year.

Mr Kwinter: I have to admit I have read your articles over the years and have not agreed with all of them, but I think you have made some good points. I think the number one point you have made, and contrary to what you say about if nothing else is remembered about your presentation, is that deficits are deferred taxes. There is a feeling certainly from the comments I have heard from the government side that deficits are a bookkeeping entry, that they do not realize that somewhere down the line someone has to pay for that. When you have a debt that is going to double in four years and all the payments that are being made are just being made to carry the debt and not to reduce that debt, you have a problem.

I was interested in your comment that from a debt-to-GDP ratio, ours is going to be double that of the federal government. How is that going to impact, in your opinion, let's say at the end of that four-year period? Where are we going to be?

Mr Turner: I mentioned in my brief that the government of Ontario is quite out of step with the other governments in Canada. I think by 1994-95, that will become even more acutely evident to a lot of people. I can certainly see that while the federal government is getting its deficit under control, and hopefully to zero by 1995, the bond rating services are going to look at Ontario as being quite out of step with other governments that took measures to restrain spending in the early 1990s. So by the mid-1990s, I would say, this province is going to have to raise a lot of money to service its debt and it could be very expensive money because of bond rating service downgrades.

Mr Kwinter: Could you also give me an idea of how outside investors look at that? What is your feeling about that?

Mr Turner: I think the survey I alluded to yesterday, which shows that already investment decisions are being taken negatively towards Ontario, will only accelerate. As Ontario slides further into a structural institutionalized debt, the kind that Ottawa has suffered, then I think we are going to see a loss of potential investment. No one can measure it, because it is potential. It is not there to be realized. But I think the signal being sent out to investors is a highly negative one, that the cost of doing business in Ontario can only increase. When Ontario is competing with Ohio, Michigan, New York and Pennsylvania for investment dollars, we have to be competitive. Part of that is a tax structure that is as low as possible.

Mr Kwinter: Several of the presenters have stated that in their opinion the corporations are not paying enough tax, that they are not paying their fair share of tax. What is your response to that?

Mr Turner: It may be true in terms of being compared with personal income, but having said that, I hark back to my statement a moment ago that this province is in direct and constant competition with northern American states and the Sunbelt as well. In order for us to attract more manufacturing, more industry, more service industries to Ontario, we have to have a competitive tax base. So I think it is quite facile for people to believe that all we need to do is crank up the corporate tax rate by five points and we can pay all our bills. We may pay the bills, but it is a very temporary way to do it.

The Chair: Thank you for your presentation.

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ONTARIO ENGLISH CATHOLIC TEACHERS' ASSOCIATION

The Chair: The next group is the Ontario English Catholic Teachers' Association, Mr Mike Coté, president. You have one half-hour for your presentation.

Mr Coté: I would like to introduce my colleagues. Helen Biales is the first vice-president of the Ontario English Catholic Teachers' Association. Jim Carey is the general secretary and Terry Mangan is the deputy general secretary of our organization.

I would like to begin by thanking you for the opportunity to make this presentation and also for allowing us to come to Ottawa. I think the original plans would have had us presenting in Toronto, but because of meetings several of us had to be at during that time, we were unable to be present with you in Toronto.

The Ontario English Catholic Teachers' Association represents over 34,000 women and men who have chosen teaching careers in the separate schools in Ontario. This is the first time the Ontario English Catholic Teachers' Association has made a presentation concerning a provincial budget. We have requested an opportunity to speak before this committee not because we believe we have a better understanding of finance, nor whether spending one's way out of a recession is superior to squeezing the life out of inflation, but because our members see the human effects of cutbacks, inflation and recession.

Societal conditions, and fluctuations of such, are nowhere better gauged than in the classrooms of the province. The successes and failures of the economy are reflected in our student populations and their families.

In our view, the bottom line of recession goes far beyond the corporate balance sheet. It is reflected in the despair of widespread job losses and displacement of families and individuals, in the stress of marriage breakdowns and increasing domestic violence, in the frustration and helplessness of those dispossessed through no fault of their own. Sadly economic realities and their social consequences are also reflected in the children in our schools.

In the budget papers, the Treasurer indicates that the hardship suffered by many of our citizens during the recession is understood at government levels. You can read for yourself the quote there which I am sure you are familiar with.

The Ontario English Catholic Teachers' Association is particularly pleased with the program to establish an employee wage protection program. It is ironic that even in this day the value of time and effort invested in a business or enterprise by an employee is not deemed to be at least the equivalent of a dollar investment.

Programs designed to place women and children first are immensely important in a time when societal and domestic violence appears on the upswing. The Ontario English Catholic Teachers' Association believes it is incumbent upon society to reach out to individuals and families, assisting them to obtain the tools to become full participants in our province.

Considerable acrimony has been heaped upon the province's proposed budget by both business and our federal representatives. The greatest fluctuation in provincial income has occurred in three main areas: Income from federal payments has been reduced from 15.4% to 12.4%; income from corporation tax has been reduced from 11.1% to 7.4%, while income from personal income tax has risen from 30.4% to 37.1%.

Some of the business community most opposed to the proposed budget are the ones most likely to gain from the deficit. Certain members of the financial community will be able to extract a fee for placing the Ontario government's debt instruments with investors. Perhaps in a gesture of good citizenship, the fee will be waived so that the deficit can be lessened for all Ontarians.

It is important that business co-operate with government. The wealth needed to operate the business machine must be coupled with the government's need to deal with social justice issues in order that both may achieve their goals.

In the Premier's Council report, 1990, we are informed that US firms invest twice as much on formal training per worker and that German firms spend up to four times as much as do Canadian firms. Perhaps expenditure by Canadian firms in worker training at this time would be of more assistance to our Ontario society than some of the senseless rhetoric to which we are being exposed.

New job creation is of paramount importance in this province. In the 1982 recession, about 24% of layoffs were permanent. In the 1990 recession, approximately 65% of layoffs were caused by permanent plant closures. Blaming such closures on a high Canadian dollar, free trade, GST or high interest rates can be more self-serving than productive.

The government has proposed that there be no major cutbacks in social service areas as has occurred in other Canadian jurisdictions. Cutbacks would have hurt the marginalized, the newly employed, the entrepreneurs as well as other business ventures, yet we must be cognizant of the problems inherent in a deficit. In preparing this paper the association reviewed a number of structures which might help determine how high is too high, or failing that, how low is reasonable for this recessionary deficit.

There is a chart that appears on the top of page 6. Those numbers, expressed as a percentage of total expenditure, are found on page 72 of the budget. The education numbers indicate that the provincial allocation to education, while decreasing over the last number of years, is being maintained during 1991-1992.

With regard to the public debt interest, even with a relatively large deficit, interest payments are projected as being comparable to those paid in previous years. Any decrease in expected revenue from federal sources must be made up by Ontario taxpayers. While we would prefer that debt servicing costs be eliminated, it must be noted that debt servicing costs on Canada's deficit are projected to be 21.7 cents per dollar higher than that projected for Ontario.

According to the Toronto Star, April 30, 1991, we find that this deficit is expected to be about 2.4% higher than that encountered some 9 or 10 years ago. We are unable to make a definitive statement on the need or the size of a deficit budget, though in the April issue of the Toronto Stock Exchange Review, Peter Traynor writes, "This implies that Mr Laughren's method may be right in spite of its seeming madness." In his Financial Post column, Inside the Markets, Patrick Bloomfield states: "This column has no quarrel with the additional $3 billion or so that Laughren is putting towards social relief, health costs and education. Any community's most important asset is its families. Invest in them and you invest in the future."

In a May 31, 1991, article to the Globe and Mail, John Kenneth Galbraith, in extolling the importance of removing government from the deflationary track, states in part:

"Why not revive the economy with greater public investment? It is in this regard that the Ontario government is leading the way. It has decided to cut taxes for people with low incomes, to provide more money for social assistance, affordable housing and capital projects."

There are quotes on page 9 from Hansard, June 27, in which Mr Whitestone indicates that the $700 million is particularly useful for the economy at this time and that a deficit in the order of $4.5 billion would not be out of line. Although speaking against the many, J. G. Frank of the Conference Board of Canada seems to present a commonsense point of view when he states, "Although a tighter fiscal plan would have kept the deficit constant, it would have had a major adverse effect not only on Ontario but on Canada."

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Consideration must be given to the basic alternatives available to Ontario's Treasurer at budget time during a recession. The Treasurer may raise taxes, cut expenditures or provide a deficit budget.

In a presentation to the standing committee on financial and economic affairs on Thursday, June 20, the Treasurer explained the effect of not increasing transfer payments. When queried as to what might be done should Ontario have extra revenue during the next four years, in a column in the Financial Post, May 15, the Treasurer is quoted as saying, "As a Treasurer...I'd be looking to get those" -- deficit -- "numbers down faster."

Clearly, the experts agree that a deficit budget of some magnitude is inevitable. This debate then is solely over deficit size.

The Ontario English Catholic Teachers' Association had hoped that additional funding might be available for the building of more schools so that fewer of our children would be required to spend their days in portable classrooms. We had hoped this budget would see a move towards 60% government funding of education, a move which would alleviate some of the financial burden currently shouldered by the local ratepayers. Neither has come about with this budget, but then neither has this budget thrown parents out of work, and by increasing funds to the needy, we can only hope that all students receive the care and nurturing they deserve.

As a significant deficit appears inevitable, we commend the government for its commitment to the people of Ontario. The citizens of this province must be shown care and expressed consideration during this period of real recessionary hardship. On behalf of the children of all our schools, we thank the government for maintaining for our students the same level of service as in the past.

The Ontario English Catholic Teachers' Association asks this committee to recommend (1) that the budget be implemented as quickly as reasonable; (2) the deficit in year one be kept as low as possible, with projected deficits into the second, third and fourth years being minimized; (3) government, business and industry co-operate in order that the economy of this province be competitive and vibrant in the world marketplace; and (4) the wellbeing of the citizens of this province remain the number one priority of Ontario legislators.

Mr Christopherson: Thank you very much for your presentation, an excellent description of the circumstances as you see them regarding the budget. I would just like to hear in your own words -- I have asked other groups this; I am doing it as much to get it on the record as for our edification, and I offer that up front -- had we flat-lined, and you make some reference to it, this year and indicated that during the term of this government increases to our transfer partners would not have kept pace with inflation for the next three or four years in addition to just this year, what would have been the impact both on the school system you are part of and also the children and the communities that would have to pick up the slack? Just from where you sit, in your words, what would that mean to those important entities in our communities?

Mr Coté: I have seen statistics that indicate that if the government were to have flat-lined the transfer of payments to boards of education, the result would have been closure of approximately 6,000 classrooms. I do not know if those figures are accurate, but if they are anywhere close to that number of classrooms, then that would have had a disastrous effect on our school system at a very critical time.

Right now, as you are probably aware, we are involved with the Ministry of Education in a massive restructuring of education undertaking that involves consultation and efforts by practising teachers as well as the people in the ministry. Such an effort, to be successful, depends a lot on trust and goodwill and faith that people who are in positions of authority mean what they say and are able to deliver when they talk about improvements in education.

To close 6,000 classrooms around this province would just have devastating effects on the goodwill that I think is there right now as we proceed through this restructuring of education. I think the restructuring project is going to keep our province at the very forefront of education in the world. I think we have the best education system in the world. I think we can maintain that and keep up with evolving developments, but if we were to flat-line the transfer payments, it would be a major backward step.

Mr Christopherson: Further then, I am going to put a situation to you and ask you to comment to it. Some groups have come forward and said that we hear from a lot of self-interest groups who have a vested interest in seeing us continue flowing cash to the traditional people and groups and organizations that receive it, that really, to put this province on a stronger financial footing, what we need is anywhere from a 10% to 20% cut in everything, and that if everybody would bite the bullet then we would become stronger and would be in a better position to resume funding to the groups and targets we would like to.

To take it a step further, I would like to ask what would happen -- I have asked you to answer if it was flat-lined -- if there were an actual cut of 10% to 20% in the funding you receive? What kind of situation are we then looking at?

Mr Coté: I think that in that situation school boards would be very hard pressed, especially in this year of municipal elections, to go to the ratepayers and try to make up the shortfall they would not be receiving from the provincial government. I think the enormity of the classroom closures would be much greater, and the effect of that on the quality of education our children would receive would manifest itself years later in a poorer product being developed, if you want to talk in crass business terms. I think you have to be willing to spend some money on our most important resource, our children, if you want to maintain and improve upon our level of competitiveness in the world economy.

A little analogy that just came to mind -- I do not know if it is exactly appropriate, but I will try it out on you -- is that if a farmer was told, "Sorry, we can't afford the amount of seed you normally would put in the ground to produce your crop; we have to cut that in half or we have to reduce it by whatever percentage," of course the end harvest is going to be much smaller, much less significant and in the long run, by not paying for the seed in the first place, the farmer is going to have a much lower income in the end because the product will not be there.

Mr Kwinter: Mr Coté, as an educator, if you had a classroom of 15 students and one of your students stood last and got 55% on his examination, would you choose him to be your valedictorian?

Mr Coté: That is a very interesting hypothetical question. First of all, I have never had a class of 15. I would welcome that opportunity. The choice of valedictorian is one that I traditionally have left up to the students.

Mr Kwinter: The point I am trying to make is that you referred to James Frank as being your sort of model of economic accuracy. In a study that was done by the Financial Times of the 15 top economists in Canada, he was ranked 15 out of 15, and his accuracy rate on his predictions was 55%. In fact, he had a 67.3% error rating. The point I am making is that he is the one guy everybody quotes. There are 50 economists, 50 people who are saying that this budget is a very bad document; nobody quotes them at all. All they do is come in and quote Frank.

I want to get to another question. I would like to get your observation. On page 3 of your presentation, you say that the reason the budget is in trouble is that the transfer payments from the federal government were reduced from 15.4% to 12.4%. You are saying that income from corporation tax has been reduced from 11.1% to 7.4% and personal income tax has risen from 30.4% to 37.1%. The implication is, "Look at how high personal income tax has risen and look at how low these other taxes are," as if something is wrong. The federal we cannot talk about. We have no control over that. The federal government made that decision, so I cannot discuss that, but when it comes to the corporation tax, I would suggest to you that the reason the tax is reduced is because their profitability has been reduced. They are not making any money. The bankruptcies of companies -- all you have to do is read about it -- are the highest in our history. So what you have are a lot of companies not making money, and as a result they are not paying taxes.

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On the other hand, the government has gone to great pains to state that it has not increased any personal income taxes, so it cannot be that personal income taxes are going up because the government has raised taxes. Personal income taxes must be going up because people are making more money. How do you respond to that? I am just throwing that out as a supposition. I would like to hear your comments.

Mr Coté: The point we were trying to make, Mr Kwinter, with that particular paragraph was that there seems to us, by this statistical evidence that we relate, to be a shift to the individual in the responsibility for paying for services. That was the point we were trying to make.

Mr Villeneuve: Just to follow up, you would agree that your assumption is not quite correct. The statistical data would indicate that personal income tax has gone up, but effectively personal income has gone up and therefore income tax. Would that be right?

Mr Coté: No, I do not think we could draw that conclusion necessarily. I note that today's paper states that the number of unemployed has decreased by 1%, but the payout has gone up by about 33%. One reason is that obviously those who are on unemployment benefits are receiving greater benefits. I think a like conclusion can be drawn here, that higher taxes are being paid by individuals who are perhaps paying higher taxes because they are making more, yes, but also perhaps paying more because the rate has increased.

Mr Villeneuve: I gather your organization of Catholic teachers is agreeable that we increase and effectively double the provincial debt in the next four years. You have put a cautionary document there. You are aware that Ontario Hydro has $30 billion of deficit and you are aware that the Workers' Compensation Board has a $10-billion unfunded liability. That all has to be carried by Ontarians, and if we have a slight shortfall in the gross income at the provincial level, our total debt will have more than doubled in four years.

Could you comment on that in light of the fact that all Ontarians must carry the federal debt as residents of Canada. We have to carry the provincial debt as residents of the province. We have to carry the Ontario Hydro debt with a 40% increase on the doorstep. There is workers' compensation and all the rest of it. Do you feel this sends out a right signal to business people to invest or to set up shop here in Ontario?

Mr Coté: I think the message that is being sent out, Mr Villeneuve, is that as much as possible this government is going to try to put the interests of people first. None of us like having a mortgage. Your question really boils down, I think, to how high is too high a debt. We say at the outset we are not financial experts. We do not know. We have read what some of the experts are saying. We are just thankful at this time that the government has chosen, from the three alternatives that we see the Treasurer had -- to increase taxes, to make massive cuts or to have a deficit -- the latter alternative, because that is the least painful to the people, in our opinion. We hope we will be able to weather this recession and then in better times pay down our debt.

Mr Villeneuve: As you are aware, the public service in Ontario got a 6.8% increase across the board. I was a member of the select committee on education of several years ago and we all have to be aware that the cost of education is 80%-plus in salaries. It is very difficult to cut in that area because you have a very good union, and I commend you for that. But the 6.8% increase for all civil servants in Ontario? I represent many farmers who have taken a 25% cut. I represent many business people who are hanging on by their fingernails and may not continue to hang on. Are you supportive of the 6.8% across-the-board increase that provincial civil servants got?

Mr Coté: I definitely would not take any exception with a negotiated agreement that any union has made. I think that is their business and I think the process of collective negotiating is a very viable, fair way of settling what individuals should be paid.

There are two points I would make more as a personal thought on this than as an association position. In my own personal opinion, the more people we can get to work, the better off we are. I referred earlier to those unemployment figures that are out today. It seems to me to be a negative way of handling things if we have to pay people who are not working, if it is possible to create jobs for those people to get them working, off the welfare and unemployment rolls, and contributing to society by paying their taxes on the amount of money they earn. That is one thing.

The other thing I would like to leave as a personal suggestion to the committee is to recommend anything you could that would create more research and development and stimulate that end of universities and business, the research and development end of our economy, which I think needs a real shot in the arm. People I have talked to indicate that those kinds of transfers have been flat-lined and have been cut, in some cases. I think that is being very shortsighted, because if we are going to have a future in the world competitive economy and so on, the global economy, then we have to put more into research and development. Anything that could increase that and produce more jobs in our society I think would be of benefit.

Mr Villeneuve: And we need employers.

Mr Coté: We need employers, yes.

The Chair: Thank you, Mr Coté and your colleagues, for your presentation.

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CANADIAN TOBACCO MANUFACTURERS' COUNCIL

The Chair: The next presenter is from the Canadian Tobacco Manufacturers' Council, Mr Mark Resnick, and you have a colleague with you. Welcome to the committee.

Mr Villeneuve: It is a no-smoking committee.

The Chair: I would love if we had a cigarette out. Maybe I will have to talk to him later out in the hallway. I am sorry; I will get back on track here. You have one half-hour for your presentation.

Mr Resnick: My name is Mark Resnick. I manage government relations for CTMC. My colleague is Mr Jacques LaRivière, who is the vice-president of public affairs. I would like to begin by thanking you, first of all, and the members of your committee for the opportunity to appear today to comment on the budget. As suggested, I propose to begin with a summary of our views concerning the budget and then naturally we would be prepared to answer any questions you might have.

You will not be surprised to learn that we vigorously oppose the increase of more than $3 a carton in Ontario tobacco tax. Taken together with an even larger increase in federal taxes on tobacco announced earlier this spring, Ontario tobacco consumers have been hit with a tax increase of $10 a carton in 1991 alone. Indeed, since April 1, 1988, Ontario taxes have increased on cigarettes by a whopping 127% compared with an increase of approximately 18% in the Ontario CPI during the same period.

The increases have obliterated Ontario's long-standing status as one of the nation's most stable tax jurisdictions, notwithstanding the fact that the province has been the principal economic beneficiary of the Canadian tobacco industry. Over the course of the past decade, the average retail price of 25 cigarettes in Ontario has risen from approximately $1.25 to $6.25, fuelled in large measure by federal and provincial tax hikes. The consequences of these increases in terms of the direct economic impact on the industry and the provincial economy have been entirely negative. Jobs have been lost, manufacturing plants and farms have been shut down, and the illicit trade in tobacco products has emerged as a serious criminal byproduct.

Five years ago there were three manufacturing plants in this province; today there is only one. A decade ago the manufacturing sector in Ontario employed 2,665 persons; today it is down to approximately 1,500. Ten years ago there were 2,500 tobacco growers generating one of the province's largest farm cash crops; today there are barely 1,200. I note that a couple of you represent tobacco farm constituencies in Ontario, and you would be as aware of those figures as we are.

Between 1981 and the beginning of this year, shipments of our members' manufactured cigarettes to Ontario wholesalers declined by over 21%. Sales of fine-cut tobacco -- tobacco for roll-your-own cigarettes -- during the same period declined by nearly 19%. As a consequence, employment in the growing, processing and manufacturing sectors has declined by more than 50% of what it was at the beginning of the last decade. A study prepared by Peat Marwick, Stevenson and Kellog estimates that approximately 2,000 person-years of employment in the growing, processing, manufacturing and supplier sectors have been lost in Ontario alone during the last 10 years.

Since the beginning of this year, and taking into account the combined federal and Ontario tax increases announced this spring, domestic shipments to Canadian wholesalers have declined by approximately 11.5%. As a result, it is entirely predictable that there will be further job losses and income declines -- the very kinds of impacts which the government said its budget was dedicated to ameliorating.

Notwithstanding declines in consumption and employment, the tobacco industry continues to make a substantial contribution to the Ontario economy.

In 1990, total Ontario consumer spending on tobacco products was approximately $3.2 billion. Approximately one third of that amount, $1.1 billion, accrued directly to the Treasury in Ontario. The $3.2 billion in expenditures on tobacco products also generated approximately 18,800 person-years of direct employment in the province. While we recognize the downward trend in consumption of tobacco products is at least partially attributable to lifestyle changes and legislative measures at the federal, provincial and municipal levels, we are also convinced that radically higher tax rates are a principal factor in the softening of the Ontario tobacco market.

The Canadian tobacco industry does not dispute the notion that its products should be taxed at a fair and proportionate rate. As good corporate citizens, we recognize that expenditure controls and revenue growth are essential elements in reducing the fiscal pressure which has been building on the Ontario government for some time. Having said that, however, consumers in Ontario are paying out roughly 75 cents of tax for every tobacco dollar they spend in the province. We submit that this is grossly unfair, not to mention inherently regressive.

Given the disproportionately high tax component on a package of cigarettes in Ontario, it is not surprising that in recent years there has been a quantum leap in the illicit trade of tobacco products. The scope of this activity is well documented in another Peat Marwick report which suggests that organized smuggling -- not counting the more amateurish operations that are sprouting up at an increasing rate and not counting cross-border shopping by individuals -- now amounts to some $500 million a year with a resulting tax loss to federal and provincial governments of up to $370 million a year. It is worth noting that this study was carried out prior to this year's budget increases, which will no doubt lead to an increase in this illegal activity.

When Ontario consumers can enter the nearest US border state and buy cigarettes with all US taxes paid and even Canadian duty paid, at barely half the price of tax-paid, Canadian-manufactured product, it is little wonder that cross-border shopping has proliferated dramatically. Only this week, Statistics Canada reports that same-day visits by Canadian citizens to the US increased in June of this year by 17.5% while overnight trips increased by 27.1% when compared to June 1990. It has been reported that the Ontario Ministry of Industry, Trade and Technology has estimated a loss of retail sales in Ontario in 1991 of $2.2 billion. There is no doubt that tobacco products constitute a substantial portion of retail sales leakage to the United States.

During the last two years, CTMC member companies have co-operated with federal and Ontario governments by instituting, at their own cost, elaborate and expensive product marking programs which are designed to frustrate the illicit tobacco trade. It is our sincere hope that this, combined with intensified enforcement procedures in both jurisdictions, will contribute to a marked reduction of black market activity. But marking programs are akin to treating the symptom rather than the disease. The essential problem is excessively high tax rates which invite this sort of activity. Smuggling of tobacco takes place, and will continue to be a problem, as long as large profits are available to unscrupulous individuals who sell cigarettes on which no tax has been paid at prices well below the legitimate, tax-paid, retail price. In so far as the tobacco industry is concerned, there is no doubt that smuggling of tobacco is a tax-driven problem.

In a survey conducted by Canadian Facts for CTMC during the week of June 24 of this year, 44% of Canadians indicated that they wanted tobacco taxes rolled back. The survey also revealed that 27% of Canadians feel that tobacco taxes should remain at current levels, and only 22% support further increases.

We have noted that the Liberal and Conservative caucuses in the Legislature have called on the government to rescind the tobacco tax increases announced by the government in its April budget. CTMC obviously supports that view and calls on the government to act accordingly.

That is the end of our formal presentation and we would be happy to answer any questions you may have.

Mr Kwinter: Mr Resnick, we had an earlier presentation by the tobacco growers and I voiced some of the concerns I had, and I sympathize with your problem. I sympathize with an industry that on the one hand, is considered legal and employs people and contributes to the economy; on the other hand, we have a government -- I am not talking about this government specifically, all governments -- in Ontario that extracts over $1 billion a year in taxes and feels that is fine. As I said, it leaves you sort of twisting in the wind. Either outlaw the product, or, if you legalize it, let you operate like a business and make a fair return on your investment.

I am really interested in hearing from you about the present state of illicit cigarettes. Have you ever been able to figure out where these cigarettes come from? I am talking about Canadian cigarettes that are brought back into Ontario from outside jurisdictions. How does that work? Why can that not be controlled?

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Mr Resnick: You are right. A substantial portion of the smuggled product is Canadian-manufactured, destined in some cases for export markets and in some cases for ship chandlers and the like. Depending on which markets the product is destined for, there are different means for bringing it back.

It is no secret that near Cornwall and Kingston, in that area of the province, there are Indian reservations that straddle the border. Under the Indian Act natives are able to purchase tobacco tax free. They do so in large quantities, and somehow or other it ends up coming back into the illicit market on this side of the border. There are elaborate retail networks, non-legitimate networks, that are set up to distribute and sell the product.

Products that our member companies manufacture that are destined for the legitimate export and duty-free markets are now marked. We voluntarily undertook to mark that product specifically as being designated not for sale in Canada in the hope that law enforcement officials in Ontario and Canada would be able to identify the product and apprehend the perpetrators of the illegal act.

There have been, it appears, more prosecutions recently but the volume of trade has increased to the extent that it is virtually impossible for law enforcement officials to totally control it. The stuff is coming across in boats at night. It is coming across border points where it appears as if the customs officials who are manning those border points are intimidated. There are jurisdictional problems between customs and excise on the one hand, who have control of the border points, and the RCMP, who have control of the points between the border points. They are undermanned. They simply do not have the human resources for surveillance of all that territory. So the stuff leaks in in very large quantities.

Mr Kwinter: What is your estimate? In your brief you say the Peat Marwick study was before this latest tax increase. What is your estimate of what it is now?

Mr Resnick: I could not even begin to estimate it.

Mr LaRivière: It was estimated at 10 million cartons.

Mr Kwinter: You would assume it is considerably higher now, though. The higher the tax, the more incentive there is to bring in more of it.

Mr Resnick: Sure, absolutely. The discount is obviously greater when you add $10 a carton in tax component. That increases the incentive exponentially to sell the product at a reduced rate. People are not shy at all about purchasing it. We participated in an omnibus survey that the Angus Reid organization carried out a couple of months ago and the results on this issue were quite interesting. There is no question that people put the finger on tax differentials as the reason for the purchase of illicit product and they are not shy about doing it, and they acknowledge that they are not shy about doing it.

Mr Morin: I have a question on statistics. You mentioned that there is some smuggling being done and a black market, I would call it I guess, from the Indian reserve. Let's take Akwesasne for instance. The population is about 9,000. I used to be a smoker. The average smoker would smoke a pack of cigarettes a day. Not everyone in Akwesasne smokes. Would you have any figures, any statistics on the number of cartons of cigarettes that you sell in Akwesasne on a monthly basis?

Mr Villeneuve: It is a 25 pack per day, per person.

Mr B. Ward: Is that what it is?

Mr Resnick: There is a quota system in place, set up by the Ministry of Revenue in Ontario, that permits 10 packages per week per person on the reserve, and I am assuming the quota is filled every week.

Mr Morin: Okay. If you know for a fact that there is smuggling, a black market, could not the tobacco companies reduce it and say, "Okay, we'll give you less cigarettes"? Do you know what I am saying?

Mr Resnick: Under the law, our member companies are not in a position to refuse to sell to people who have the right to purchase.

Mr Morin: In other words, what you are saying is each company, then, would have the right to sell 10 cartons a week --

Mr Resnick: To registered wholesalers.

Mr Morin: -- to each individual. If you have 10 tobacco companies, it means 100 packs a week.

You said 44% of Canadians were not in favour of the tobacco tax and want to reduce that.

Mr Resnick: To roll it back.

Mr Morin: What is the percentage of Canadians who smoke?

Mr Resnick: Approximately 31% or 32% of the adult population.

Mr Villeneuve: Representing a riding that is very close to Akwesasne and surrounds the city of Cornwall, the high tax federally and provincially has effectively turned quite a few of my constituents into criminals. There have been vehicles and boats impounded by the RCMP, and I personally believe there is a lot of gouging at both levels of government, particularly when you compare the $1.1 billion of provincial revenue to exactly 50% which goes to support agriculture in total, including civil service salaries. It does not quite make sense, and we are going through some times where agriculture is in very dire straits.

I believe two years ago the Provincial Auditor saw about $100 million of counterfeit or leakage of potential government income. You now consider that to be $370 million a year based on last year's stats at the provincial and federal level.

Mr Resnick: Yes.

Mr Villeneuve: I would say you are quite conservative in your estimate.

Mr Resnick: As I say, that estimate was made prior to this year's budget season and federal and provincial increases. I also think that notwithstanding the expertise of the forensic unit at Peat Marwick, it is pretty difficult to estimate, with any greater degree of precision than they have already applied, what the number would be. But that is a pretty big number in and of itself.

Mr Villeneuve: I find it strange that this government uses the word "profit" as a kind of a dirty word, and yet this is one of the best milk cows it has. If they saw certain industries making this sort of return and continued taxing -- it makes me wonder. The biggest catalyst bringing cross-border shoppers is fuel; that is number one; number two is cigarettes; number three is alcohol. There is no doubt about it when there is a tax-free state situated between the US and Canada, as we have in Akwesasne and a number of other areas; it compounds the problem in this area. At this stage of the game, I think you either declare tobacco illegal or at least make it affordable. Could you comment on that?

Mr Resnick: Well, so long as it is legal --

Mr Villeneuve: It is not affordable.

Mr Resnick: I do not think frankly that in 1991 governments can even begin to contemplate the consequences, either economically or socially, of declaring tobacco an illegal product. Then obviously I agree with you. The tax increases, somebody has to put a brake on them. With respect, it is not just the government of Ontario or the federal government that has been increasing taxes on our products.

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Mr Villeneuve: I realize that.

Mr Resnick: The fact of the matter is that governments led by one of the three major political parties in various jurisdictions in this country have been doing the same thing for a number of years. It is not just a recent phenomenon and it is not just exclusive to Ontario.

Mr Villeneuve: Finally, I believe you have a questionnaire or a lobby-type pamphlet or return in all packs of cigarettes, asking users to submit their concerns as to the very high cost of the product. How has that helped you, or how have your customers reacted to that? I realize one of my former colleagues, Mr Gillies, now works for the industry and he has turned into a smoker.

Mr Resnick: I do not know if he turned into a smoker as a consequence. He does not work for the industry, by the way. He works for an organization that represents consumers. Jacques, maybe you can comment on the tax campaign.

Mr LaRivière: As you know, the protest form was included in the slide portion or the interior portion of a pack of 25. A number of them were imprinted as part of the regular production run back in May. They then made their way to wholesale and then retail. The quick answer to your question is that at last report -- that was the latter part of July -- the federal Prime Minister's office had counted 3.4 million of these forms.

Mr Villeneuve: So there are some unhappy users of tobacco products out there.

Mr LaRivière: It would appear.

Mr Frankford: On page 3, you say, "We recognize that the downward trend in consumption of tobacco products is at least partially attributable to lifestyle changes and legislative measures." Would you not agree that it is more than that, that it is a public policy and a public health approach to raise prices and to discourage smoking?

Mr Resnick: I think it is quite clear and governments, in many instances, have been explicit about it. Government in various jurisdictions have indicated that their tax policies and smoking in the workplace legislation and so on are designed as a public health policy. Our contention is that the tax policy is an inappropriate means of dealing with what is referred to as a health issue.

One of the principal reasons for that is that by using consumption taxes, what you are doing in effect is penalizing people who are on fixed incomes, who are poor, who are unemployed, who can least afford to pay for the product, the right to enjoy something that they enjoy doing and have the right to do legally in this country.

Mr Frankford: But it is a discretionary product, is it not?

Mr Resnick: Of course it is.

Mr Frankford: I really do not understand your difficulty with a public health approach through taxation.

Mr Resnick: I just explained it.

Ms M. Ward: I would like to ask you to give me some more information about the structure of your industry. Last week, we heard from the growers when we were in Brantford, but my knowledge of it is that there is a gap between the consumer and the growers. You speak of 18,800 person-years of employment last year, but are there other businesses in between the large tobacco companies and the growers? Perhaps you could just give me briefly the structure of the industry in terms of the types of employment and businesses involved.

Mr LaRivière: I think perhaps the best way is to describe the chain.

Ms M. Ward: That is precisely what I mean.

Mr LaRivière: Let's work back from the consumer through the retail.

Ms M. Ward: The retailer: I understand all that part, having been involved in that.

Mr LaRivière: Wholesale?

Ms M. Ward: You could touch on it briefly.

Mr LaRivière: Let's work it the other way then. Let's start with the raw material, the grower. It goes from there to the processing plants to the manufacturing plants where the product is manufactured and sold to wholesalers.

Ms M. Ward: Could I ask you about the processing plants? Are those owned by the major companies or are those independent businesses or does it vary?

Mr LaRivière: Virtually all of them are owned by the manufacturing companies.

Ms M. Ward: So we do not have a large number of small businesses in between the grower --

Mr LaRivière: No.

Ms M. Ward: That was what I wanted to get an understanding of.

Mr LaRivière: Then from manufacturing to wholesaling.

Mr B. Ward: I want to focus on the taxation. The Conservative Party in Ottawa in the last budget implemented a whopping $7 a carton, 70% of the overall tax increase when you look at Ontario. You said $10 a carton and they implemented a $7-a-carton increase. Looking back in the past, in Ontario, when was the last time the taxes on cigarettes were not increased?

Mr Resnick: Actually, I will just consult on this but there was only a 5% increase, if memory serves me correctly.

Mr Villeneuve: Frank Miller's budget.

Mr B. Ward: Was it?

Mr Resnick: No.

Mr Villeneuve: Was there another one --

Mr Resnick: Not increased?

Mr B. Ward: Yes, not increased. Can you recall?

Mr LaRivière: There was a string of about four years, 1982 through 1986, where it was either at inflation, at the level of CPI, or less.

Mr Resnick: In 1989, there was a 5% increase, which was equal to the CPI.

Mr B. Ward: The taxes have always been increased, though, every budget.

Mr Resnick: Part of the problem is that if there is a federal increase, Ontario automatically gets a bump because of PST. That is included in our calculation.

Mr B. Ward: So taxes on cigarettes have always been increased?

Mr Resnick: In one way or another, over the course of the last 10 years, the curve has been going like this.

Mr LaRivière: My comment would be that at the beginning of the 1980s, it was closer to the level of inflation.

Mr B. Ward: Provincially from 1985 to 1990, because you mentioned it has increased 127%?

Mr LaRivière: That is from 1988 to 1991.

Mr Resnick: As I recall, in 1989, there was no increase in provincial tobacco taxes in Ontario.

Mr B. Ward: But from 1988 to 1991 -- we, the provincial government, raised it a penny a cigarette.

Mr Villeneuve: That does not sound like much, but it is 25 cents a package.

Mr B. Ward: That is what we raised it.

Mr LaRivière: No, it was 1.67 cents or 37 cents a package.

Mr B. Ward: If they did not raise it in 1989, where did all the other taxes come from?

Mr Resnick: There is federal excise tax, federal excise duty. There was the manufacturers' sales tax and now there is the GST. All that goes into the tax component.

The Chair: I am sorry, but time has run out. I would like to thank you for your presentation before this committee.

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SOCIAL PLANNING COUNCIL OF OTTAWA-CARLETON

The Chair: The next group is the Social Planning Council of Ottawa-Carleton. You have one half-hour for your presentation.

Ms Nelson: I am Margaret Nelson, president of the Social Planning Council of Ottawa-Carleton. James Zamprelli is executive director of the social planning council. Scott Evans is one of our social policy consultants at the social planning council.

Thank you for this opportunity. Because of the role the social planning council plays in monitoring social and economic conditions and advocating for the disadvantaged in Ottawa-Carleton, it is important that we should be here today to respond to the 1991 Ontario budget.

I will give you a little background on the social planning council, or the SPC as we call it. It was founded in 1928. It is a private non-profit organization governed by a board of directors who are nominated and elected by the membership. The membership presently includes 246 individuals who qualify through their active participation in the work of the council in its forums, task forces and committees, plus representatives of staff, volunteers and clients of 109 private non-profit social service agencies within the regional municipality of Ottawa-Carleton.

We have a full-time staff of 22 and an annual budget of $1.1 million. Our primary funding sources are the United Way of Ottawa-Carleton and the regional municipality of Ottawa-Carleton, with some additional funding from private foundations and from the province of Ontario for specific activities and projects.

The roles played by the social planning council include promoting co-ordination in the development of social services, conducting research regarding social and economic needs in social services, informing its membership and the public at large of issues affecting social and economic wellbeing, and advocating for improvements in the quality of social services and for public policy which contribute to the quality of life in our communities.

The council advises the United Way of Ottawa-Carleton, the regional municipality of Ottawa-Carleton, other municipalities and the province of Ontario on the allocation of resources to social services in this region.

With its long tradition of monitoring social and economic conditions and advocating for the disadvantaged, the social planning council has historically supported stimulative economic policies in times of economic hardship. At this time we applaud the Ontario government for its courage in bringing in a budget which focuses on stimulating a recovery from the recession, rather than following the lead of the federal government and other provincial governments, which have concentrated on reducing the deficit, apparently without regard to the hardship this has caused to our most vulnerable citizens.

This is a very difficult time for Ontario, which has been hardest hit of all the Canadian provinces in this recession. In the year prior to the budget, employment declined by approximately 250,000 jobs, while bankruptcies were up 73%. These statistics translate into economic hardship and distress for alarming numbers of Ontario citizens.

Social assistance costs have increased by 40%, and this at a time when transfer payments from the federal government to this province have been reduced by $1.6 billion. The government's options were few. In our opinion, cutting back on social services at a time of increased need would have meant abrogating responsibility for those citizens most seriously hit by the recession. This option would have been unacceptable. Increasing taxes to low- and middle-income Canadians would have been unfair and would have compounded the effect of the recession. We believe that a budget designed to support positive economic change while ensuring that the costs of adjustment are fairly shared was the right choice.

In general, we are encouraged by those measures in the budget which promise to bring some direct relief to the citizens of Ottawa-Carleton who have been hardest hit by the recession, while at the same time reducing the burden on the municipal government and stimulating local business through increased housing construction, increased capital spending on public facilities and greater spending power placed in the hands of our low-income citizens.

In responding to the budget, however, our main emphasis is on the extent to which it will alleviate the problems of the poor and the marginalized for whom we advocate and with whom our member agencies work on a daily basis. From this point of view, we have both praise and criticism for certain aspects of the 1991 budget. Now I will ask Scott Evans to continue to give more details on our response to specific aspects of the budget.

Mr Evans: The Ontario government has opted for a moderate course by introducing a mildly stimulative budget. While refusing to cut programs, there has not been a significant expansion of services in general, although some individual programs have been enriched. This means that in the short term the province must incur a deficit because of the current recession and the impact of federal government cuts in shared-cost programs, such as the Canada assistance plan and the established programs financing.

Moreover, the impact of a more restrictive unemployment insurance system, coupled with double-digit unemployment, has meant that Ontario's social assistance costs, already inflated due to the recession, have increased even more. One resident in ten in Ontario is now dependent on social assistance, a ratio mirrored in the Ottawa-Carleton region. While acknowledging that governments can streamline their activities and get more value for their investments, the council maintains that transferring the cost of a recession and intergovernmental bickering on to the backs of those most dependent on our social and health programs is fundamentally unacceptable and immoral.

Canada, and Ontario in particular, is in the process of retooling and restructuring its economy. With the economic perspective increasingly global in focus, this demands new investment in our labour force, technology, basic infrastructure and approach to work. Those who argue for massive expenditure reductions have faith in the magical ability of markets to rectify imbalances. The council does not share this faith and supports the government's pragmatic efforts to develop the province's human resources.

The $4.3-billion investment to revitalize public infrastructure and create employment is viewed as an appropriate policy that avoids generating further recessionary activity by supporting productive and necessary economic activities. Moreover, increased financing for social and non-profit housing, hardly profligate in nature, will create jobs and provide lower-income individuals and families with much-needed accommodation.

The creation of the Ontario Training and Adjustment Board is a critical first step of a needed strategy to address the dislocation caused by economic restructuring. The council lauds the $32.5-million labour adjustment initiative. The proposed employee wage protection program will minimize the personal cost to displaced workers in our changing economic climate. We urge the government to enact this legislation expeditiously. The employees of the insolvent Taggart group of companies, located in Perth, face loss of wages and severance pay. Had it existed, the employee wage protection program would have provided some protection for the unemployed Taggart workers.

It is premature to comment on the $700-million anti-recession program because the nature of the capital works is as yet unspecified. The government cannot expect a successful restructuring of the economy without careful consideration of the impact of particular projects on economic competitiveness. The targeting of the ministries of Colleges and Universities, Natural Resources and Transportation suggest some consideration of the long-term economic impact. However, specific reference to increased highway construction and the $7 million to augment the capacity of youth employment counselling centres does not provide sufficient evidence of how these programs will have a direct, positive effect on the restructuring of the economy.

One of the more encouraging signs in the current budget is the commitment to incorporate business and labour in government restructuring strategies, and to promote collaboration between business and labour. The fragmented and adversarial nature of Canadian business and labour, compared to our European counterparts, makes this task extremely difficult. Both the importance and difficulty of this task is underscored in research by individuals such as Bill Coleman at McMaster University. His work on the interest group structure of the business and manufacturing community and construction indicates that co-ordination and unity in industrial or sectoral strategies requires important changes in the way in which business represents itself. We support the government in its efforts to develop forums and councils capable of unifying business and labour around sectoral strategies.

The government has tried to increase the incomes of disadvantaged groups through increased funding for pay equity programs. It has also committed funds for development of new employment equity legislation in consultation with the interested groups. We look forward to participating in that consultative process and urge the government to move forward quickly.

Pay equity and employment equity programs generally affect public sector workers to a far greater extent than private sector employees. For this reason, we are concerned about the extent to which pay equity and employment equity legislation will benefit workers in the private sector. This is especially the case for women who are concentrated in smaller enterprises, which are often exempted from pay and employment equity legislation.

In its election platform the NDP promised to increase the minimum wage to at least 50% of the average industrial wage -- about $7.20 an hour in 1990 dollars. Since taking office in September 1990, the NDP government has increased the minimum wage from $5 an hour to $5.40 an hour. Recently it announced that on November 1, 1991 the minimum wage will rise to $6 an hour. While the increase is welcomed, it still falls significantly short of the NDP's stated goal.

To understand the effect of the minimum wage increases, let me give you one example. One person working a 40-hour week would have to earn $6.58 an hour to reach the 1990 poverty line. If the 1991 poverty line is estimated based on a very conservative 5% increase, the hourly wage necessary to meet the poverty line is $6.91.

We can perhaps talk about this in more detail, but let it be said that raising the minimum wage is not necessarily going to have negative ramifications on business, despite business rhetoric. If one looks at the multiplier effect of any kind of income supplement that is directed to the lowest income strata of the economy, you have almost a 100% multiplier effect. In other words, these individuals are not going to invest in bonds and treasury bills or savings, they are going to have to spend their income directly on consumer goods. So this gets rapidly translated into the economy.

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Mr Zamprelli: I am going to continue to walk through some other elements of our presentation which address some major initiatives that were contained in the budget, like social assistance reform, or at least the indications in the budget regarding the government's commitment to proceed vigorously with social assistance reform.

The commitment of $215 million to social assistance reforms demonstrates a willingness, albeit not as vigorous as anticipated, to pursue the actions outlined in Back on Track, which was the recent report of the Advisory Group on New Social Assistance Legislation. This commitment of $215 million is only half of the estimated $450 million the reform package would require, which was put forward in the Back on Track report.

We appreciate that the swelling welfare rolls resulting from the recession and such things as amendments to federal unemployment insurance legislation have placed enormous financial pressure on provincial and municipal governments. We may add as well that the recent Supreme Court decision is not going to help that situation. This has threatened more rapid implementation of welfare reforms. However, we submit it would be a grave error for the government to retreat in any way from its previously stated commitment to implementing fundamental social assistance reforms as outlined in the landmark 1988 report, Transitions.

Reform will require significant investments in people, as is the general philosophy of this government. However, we feel there is no alternative and this budget certainly reflects an investment in people. We are already spending millions on a welfare system that is hopelessly flawed. This is ably documented in the Back on Track report. We need nothing less than comprehensive new legislation that reflects a sense of compassion and a belief in the ability of recipients to integrate into mainstream society, both socially and economically.

In the short term, we expect the government to begin implementing the remaining actions identified in Back on Track. In addition, increases to welfare rates must be forthcoming. While improvements have been made over the past few years, most recipients are still unfortunately living below the poverty line. Furthermore, after its consultative process, the government must act quickly to restructure provincial-municipal financial arrangements in an equitable manner, especially -- and this is crucial -- those affecting social assistance.

Municipalities cannot afford to wait for more studies. Action is necessary and required immediately. Social assistance case loads continue to rise, with the resulting dramatic impact on municipal budgets and the delivery of services. We have included in the presentation a graph that shows the increase in social assistance case loads in our region between June 1990 and July 1991, which is rather dramatic.

New social assistance legislation which includes an operative definition of "adequacy" --

The Chair: Could I just interrupt you for a minute? On that particular graph you have there, do you have a presentation written up? Okay. It would be a lot easier for the members to follow on the graph you are referring to.

Mr Zamprelli: I am sorry. I thought we had distributed that. The graph is on page 6. This is data we have recently been given by the regional municipality of Ottawa-Carleton. We are seeing, in terms of thousands of case loads, an increase in that period, which is approximately a 12-month period, from approximately 16,000 to an estimated 24,000 cases, an over 40% increase. The point is that there is a shared responsibility, municipal and provincial, for support to the social assistance system, but what we are saying, as has been said in Back on Track, is that the issue of cost-sharing and respective responsibilities needs serious re-evaluation.

New social assistance legislation which includes an operative definition of "adequacy" must be introduced in 1992 if the momentum for change is to be kept alive. We also urge the government to continue its discussions with the federal and provincial governments around a national children's benefit that would take children, who comprise a whopping 42% of Ontario's welfare beneficiaries, off social assistance and put them on a program of support that is less demeaning and derogatory, as unfortunately, social assistance seems to be associated with that. It is simply unacceptable that so many parents must attempt to raise their children under conditions associated with the welfare system.

We have a few additional comments and qualifications on fair taxation moving forward towards a fairer taxation system and on the issue of child care and programs, policies and resources to create an adequate child care system, which we see as integral to socioeconomic policy and programming.

The government's budget address made reference to the Fair Tax Commission, which was set up to conduct a complete review of the tax system in Ontario, noting that directions were given to speed up the consultations on a minimum corporate tax and a land speculation tax. We concur that there is some urgency to bring in taxation reforms in these two areas, but we would like to add another item to the fast-track list. We believe the working poor in Ontario, and throughout Canada for that matter, bear an excessive taxation burden. Although the budget did introduce a $50 million tax cut to decrease the number of low-income workers on the tax rolls, there are still in our opinion too many poor or working poor people who must pay provincial income taxes. We believe the Fair Tax Commission must make taxation relief for low-income residents a definite priority.

In terms of child care, child care was not highlighted as much as we would have expected or would have wanted to see in the budget, despite the fact that there is an unquestioned need for an expansion of child care spaces in general, and specifically subsidized spaces. Since the budget came down last April, there actually has been an increased allotment of spaces, including subsidized spaces, within our region. There has also been a commitment to including child care space in the new schools that are built in Ontario. These initiatives are encouraging, but the demand for licensed quality child care is far greater than the supply. Child care must be viewed as a critical component of child development and labour market strategies, not merely as an isolated social service issue. Quality child care can be an integral factor in the development of healthy children capable of achieving their individual potential. This has been confirmed in government studies such as Factors Related to Quality in Child Care and Better Beginnings, Better Futures.

In conclusion, we would like to reiterate that on the whole the Social Planning Council of Ottawa-Carleton supports the course set by this government. Unlike the naysayers, we do not conclude that the budget is irresponsible or misguided. On the contrary, we maintain that to do anything less than what was promised in the budget or in terms of the directions in that budget would be irresponsible and economically disastrous for the province. We exhort the government to fulfil its past promises to enact substantive social and economic reform.

We also have, in closing, an additional recommendation. In the future we feel it would be far more fruitful and productive to hold public hearings on the provincial budget prior to rather than following the tabling of the document.

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The Chair: Thank you for your presentation. I would just like to make one comment. We have the three subcommittee members. "In the future we feel it would be far more fruitful and productive to hold public hearings on the provincial budget prior to rather than following." We did hold four weeks of pre-budget consultation in Toronto and we were willing to travel in the province to hear groups on the pre-budget consultation. It is not that we have not done it in years past also. I just want to clarify that so we do not have each one of the members here say, "That is incorrect." We did hold the hearings in Toronto and it was four weeks or so.

Mr Zamprelli: Okay.

Mr Sterling: The practice of holding hearings regarding the provincial budget prior to it was actually introduced by the former Liberal government and has been going on for a period of years. Unfortunately it does not get back to Ottawa often. That is probably why you did not hear about it.

I am interested in the social planning council. When you come forward with a statement like this, how do you gain approval of the council before you bring it to the committee?

Ms Nelson: We do not have a specific process for going to all our membership to ask whether they approve of our statements. They are based on our policies, which have been long-standing ones of speaking out for the disadvantaged.

Mr Sterling: So this does not necessarily reflect the actual membership, then.

Ms Nelson: When you talk about clients, board members of community agencies and staff of community agencies, I think we can count on them to be supportive of what we are saying, yes.

Mr Sterling: Okay. The other part we have heard time and time again, and we heard again from you, was the problem with federal cutbacks in terms of the funding they have given for social programs. As you know, the federal government is operating at a deficit as well. We had a federal member of Parliament, Garth Turner, a Conservative, come in and talk about the options the federal government has. Their options have been limited now because their deficit has grown to such a state that about a third of the revenue they get in the federal coffers is going to service the debt.

When groups like yours complain about the drop in support, are you suggesting that the federal government either have a larger deficit or increase taxes? I do not think you can come in and say, "They should transfer more money to the province." What should they do?

Mr Evans: First of all, I think this opens up a whole can of worms. I may ask you, where is the Nielsen report, where have all the efforts by the federal government to cut costs and to focus its activities on reducing the deficit been, then? The deficit has not been reduced significantly. I do not think we are arguing necessarily that taxes have to be increased, although there are times when taxes do have to be increased. I think the Conservatives have already agreed to that with their GST. We are not here to discuss the federal government.

I think one thing which has to be stated right here is that it is the obligation of the Ontario government, given the size of Ontario as a province and given its impact in provincial affairs throughout the country, to lead the other provinces in renegotiating fiscal relationships with the federal government. The federal government also has to rethink its priorities with respect to social programs. There have been a number of instances in the last eight years where they have had to backtrack on trying to roll back deindexation clawbacks and they have had to roll back occasionally with respect to seniors.

These things have to be put on the table and discussed. The Ontario government has to be one of the leaders in making sure that this is on the table and that things are refinanced or discussed as to how they are going to be financed. We have to discuss what our priorities are. If you look at the Nielsen report and the kinds of problems there are in government, there is recognition that things have to be restructured, no doubt about it. But that does not mean the provinces should roll over and play dead on this issue of federal financing and shared-cost programs. They have to come forward and renegotiate their position.

The recent Canada Assistance Plan ruling of the Supreme Court means that this is really a political decision, that this has to be dealt with by the politicians. It cannot be dealt with by the courts; it cannot be dealt with by the bureaucrats. It is the obligation of the Ontario government to say what its priorities are and to put a foot forward and lead the other provinces in renegotiating the fiscal relationships and shared-cost programs between the provinces and the federal government.

The Chair: There is one thing I would like to say. For one day it appeared in every daily in all of Ontario, so it did not matter whether you lived in the north or in Ottawa or Cornwall; everyone had the opportunity to put in an application on the pre-budget consultation. That is just a clarification. There was notification throughout the province.

Mr Christopherson: I spent a number of years on the board of the Social Planning and Research Council of Hamilton and District, so I have enormous respect and enthusiasm for the work you do. Thank you for your contribution to our community and society, because I think you play a significant role, as do all the social planning and research councils.

What I would like to ask you is a question I have asked a number of groups that have come in. Some business groups in particular -- there have been some individuals, but basically business groups -- have come in and said that the problem with this government is that we did not have the political will to do what was necessary to put the province on a strong economic footing. When asked what they mean by that and how they would achieve it, some have suggested that there has to be a relatively arbitrary cut of between 10% and 20% of all expenditures. They have said it is necessary to bite the bullet to give us the kind of economic strength we need. Their argument is that we will then recover, and when we are in a stronger economic position then we can go on to pay for the things that are the goals of this government, and of past governments to some degree.

I would like to ask you what you think would happen if there were that kind of cut on people, the people in your communities, the communities themselves in terms of organizations and those things that make the spirit and soul of a community and then the economy itself. What kind of impact would you think that would have on the economy overall?

Mr Evans: That is a good question. I do not want to get into economic debates about what kinds of spinoffs there are with different kinds of policy actions, but I do want to speak more directly about the kind of people we represent, the kinds of agencies and the people they deal with on a regular basis. If you had 20% rollbacks, and I want to give you some examples, in some of the areas of this city, in the downtown area not far from where we are located right now, just a little bit farther towards the market, the child poverty rate in those areas runs at between 30% and 40%. Many of those children's parents, be they single parents or two-parent families, rely on social assistance. They rely on all the social and health support systems the government provides. When you roll back 20%, you are rolling back on those individuals.

The reason I focus on children is because children represent, in part, our future. How we deal with our children today, the kinds of opportunities we give them, the kinds of development they are accorded, will affect us 15 or 20 years down the road. A 20% rollback is like a business refusing to invest in its future, holding back investment in rebuilding its infrastructure and in research and development. That is the kind of thing you have to look at. One of the statistics that was cited, which is from Back on Track, is that 42% of beneficiaries on social assistance are children.

The Chair: I am going to have to cut you off there and go on to Mr Kwinter.

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Mr Kwinter: Mr Evans, I really enjoyed your presentation. I notice running throughout it you were very positive about the budget, but you expressed some concern that notwithstanding that times are tough, there was not enough money spent and you had hoped there would be more money forthcoming, and sooner. Is that a fair description of your position?

Mr Evans: I guess I better respond. It is directed at me. Yes, with one qualification. It is not simply a matter of throwing out money; it is how the money is allocated. The social planning council has historically been in favour of stimulative macroeconomic policy and we view these particular macropolicy techniques as a way of stimulating the economy. The alternative is a more monetarist form of policy, and we have some wonderful examples in Chile, in the United States and in Great Britain or the United Kingdom where these policies have not been terribly successful. We do not see any alternatives to this particular kind of stimulative policy on the horizon. If you have other alternatives, then I think we would perhaps be willing to listen.

Mr Kwinter: This year the expenditures increased by 13.4%. Next year the Treasurer -- these are his figures not mine -- is predicting that expenditures will increase by 6%, which is the rate of inflation. In 1993-1994, they will increase by another 6%, which is the rate of inflation. In 1994-1995, they will increase by another 6%, which is the rate of inflation. I want to get to 1994-1995, which is at the end of that period. At that point, the total expenditures will be $64.8 billion, which is the 6% cumulative increase over this year as opposed to the 13.4%.

Mr Evans: Not taking inflation into account?

Mr Kwinter: That is right.

Mr Evans: Then you have inflated figures. Take inflation into account, please.

Mr Kwinter: No. What I am saying is that this $64.8 billion does not take into account --

Mr Evans: Right, multiply it by the inflation rate.

Mr Kwinter: So when you put inflation into it, there is actually less money and the debt will --

Mr Evans: Are you sure there is less money?

Mr Kwinter: Well, $64.8 billion five years from now has to be worth less than it is now because of inflation. They are not saying it is $64.8 billion plus inflation. They are saying $64.8 billion as a global, finite figure.

Mr Evans: Give me the figures, the increase in terms of real dollars, and then we can talk.

Mr Kwinter: I am telling you. This year the total expenditures were $52.777 billion. Next year they are going to be $56 billion.

Mr Evans: Unfortunately, I do not have a calculator in my head.

Mr Kwinter: I have worked it out, believe me. Next year it is going to be $56 billion.

Mr Evans: In real dollars?

Mr Kwinter: In real dollars. The following year, it is going to be $60.3 billion in real dollars. In 1994-1995, it is going to be $64.8 billion in real dollars. What I am saying is that they have gone up 6% each year, but that is really the rate of inflation, so they have not gone up at all. In 1992 dollars, it is constant.

Mr Evans: Okay.

Mr Kwinter: The debt will have doubled. This year in the budget, of that $52 billion, $5 billion or $4.995 billion is used to service the debt. By the year 1994-1995, that will be close to $9 billion.

Mr Evans: I just want to sort of --

Mr Kwinter: The point I want to make --

The Chair: Mr Kwinter, let him give one short answer.

Mr Villeneuve: The question has not been asked.

Mr Kwinter: The point I am making is this. When you look at those figures, when you consider you have to pay the debt, the increase is only at the rate of inflation. There will actually be less money to spend in 1994-95 than there is this year, and this year you are complaining that there is not enough. How are you going to deal with that?

Mr Evans: But the argument you are giving is based on how you understand the budget. I would refer you to Harold Chorney at Concordia University who provides a very interesting analysis of the way in which the deficit is structured, certainly at the federal level. I would imagine, just based on extrapolating from his analysis of the federal deficit, that you would have a similar kind of deficit.

Those of you who deal with the finance department can tell me how the debt is actually structured. There are various ways in which debt and deficits can be measured on paper. The important thing is how this is having a turnaround effect on your ability to carry on with your expenditure activities. I do not know for sure. I am not terribly convinced however -- this is based once again on Harold Chorney's analysis of the federal deficit -- that your concerns with the deficit are what they should be.

Mr Kwinter: These are the Treasurer's figures, not mine.

The Chair: Mr Kwinter, I am sorry. We have run out of time.

Mr Evans: Harold Chorney provides a very good alternative analysis of those kinds of figures. Maybe you should look at him and address your question to Harold Chorney.

The Chair: I am sorry I have to cut you off. There is another group coming on and we are short of time. Thank you for your presentation. The parties here were be very enthusiastic about asking questions.

ONTARIO TEACHERS' FEDERATION

The Chair: The next group is the Ontario Teachers' Federation. You will have one half-hour for your presentation.

Mr Poste: I am Ron Poste, president of the Ontario Teachers' Federation. With me this morning I have Margaret Wilson, the secretary-treasurer of our organization, and Ruth Baumann, one of our staff assistants.

The OTF is pleased to appear before the standing committee on finance and economic affairs to offer its comments on the 1991 budget. We represent Ontario's 126,000 teachers who work in the publicly funded elementary and secondary schools. We are the statutory organization encompassing all five of Ontario's teacher affiliates. The Ontario English Catholic Teachers' Association you heard from earlier this morning is one of our affiliated groups.

We represent Ontario's citizens from approximately age four through to adulthood, as adults can go into continuing education classes, and obviously we have a very keen interest in the economic and social wellbeing of the citizens of this province.

I know you are getting to the end of three weeks of hearings on the budget and you have heard all kinds of people referring to the pros and the cons. It certainly is a controversial one. In spite of Mr Kwinter's comments about James Frank and where he ranked, I would have to argue that maybe that class is more than 15 students. It probably has thousands in it, and if you are in the top 15 in a class of 1,000, you might very well be the valedictorian.

Commenting on him -- the comments are in the middle of the page -- we were most interested in his point that because of Ontario's structure, the recession we have faced might have been longer had the government not taken the moves it has taken in this budget.

We are speaking for the children of our province, people who probably have not appeared before you themselves. I have a very difficult letter on my desk. I tried to answer it yesterday and I am still struggling for answers. The concern for Ontario's children goes beyond the teacher organizations. This particular letter comes from the president of the Peterborough Association for the Rights of Young Children. She bases her letter on the premise that we do not seem to value our young children in Canada and in Ontario. She cites the reluctant and perhaps inadequate funding techniques of the federal, provincial and municipal governments as they relate to that. If you have any easy answers to that kind of a premise letter, I would be most interested in your sharing them with me. I still do not have an acceptable answer as a member of the profession.

We recognize the problems of the government and the budgetary deficit, and it seems to us there are three alternatives. The first is that programs can be cut, and we have listened this morning to much of the debate involving program cuts.

Economic resources are stretched in times such as we have now, and in the schools, we see first the impact of this on the children of this province. Demands are increasing and these organizations were already pressed to the limit in providing service that, as a society, we have undertaken to provide. I would note that all three parties, in their turn in government, have indicated that it is important to provide assistance to families in need and ensure a consistently high quality of health care for all. The federal government has demonstrated, as you know, that it is prepared to renege on established programs and is offloading costs on to the provinces.

I participated last June in a conference with American and Canadian teachers. We focused for half that time on the universal health care program that is available in Canada. I need to tell you that it was a topic of very envious discussion coming from our American colleagues, not looking at it from the point of view of what it meant to them as individuals, but taking a look at what it meant to the children in the schools south of the border, where the families could not afford private coverage for health care that we in Ontario take for granted. That conference indicated the devastating impact that has been wreaked on America's children. Hopefully, that will not happen here in Canada.

We believe that a strong educational system is essential for Ontario's long-term economic health, for this is the system that does the training and retraining in times of high unemployment and in times of rapid job changes, things that we have right now.

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We have appended to our submission an article by Dr David Livingstone of the Ontario Institute for Studies in Education. He brings forward points I did not hear as I listened to other presenters this morning. I am not going to read them to you, but I would ask, if you are scanning while I am talking, that you might want to look at the last paragraph on page 2.

We acknowledge that expenditures in health, education and social services are important and major expenses of this government. Health care workers, teachers, school board support staff and social service employees all take a fair bit of that money. The point I would raise, in addition to the comments that were made this morning at the questioning about what would happen if we were to chop it by 20%, would be that it certainly would have a major effect on the employees within our system in particular. We would probably be looking at several thousands of people looking for other employment. I could not help but think as I sat at the back this morning that this might be like turning the fox loose in the chicken coop, because if those people who are out there seeking employment do get jobs, it is going to be at the expense of someone else. Is that really the right way for this government to be going?

Cuts in transfer payments to school boards and municipalities, I guess, is the federal technique moved to the provincial level. We see that as putting the municipalities on the spot, where they either have to raise taxes or go after the property tax. We believe this would continue to open up the gap between the rich and the poor in this province.

In spite of all attempts to maintain an educational system that is neutral to all citizens in Ontario, we know from the research that this is not happening. Our educational system, as hard as we have worked on it in the past, does tend to favour certain groups in our society.

If that is not a viable alternative for cuts, then we have to look at raising taxes. The Ontario Teachers' Federation believes that is very unattractive at a time when the economy is as fragile as it is right now. We are aware that programs and services cost money and that revenues must be found somewhere. We support the intended work of the Fair Tax Commission in its efforts to study and reform our current taxation policy. We believe the public is willing to pay for a quality education system if it has reassurance that the spending is prudent and the tax increases are justifiable. It is said any fool can tell you what is wrong with something. It takes a challenge to develop a workable alternative.

Few of the critics of the Ontario budget that I have read have suggested where savings should or could be achieved. They tend to make very general statements about restraint in public spending.

The third alternative then is to increase the deficit. We use the analogy that we have in our private lives: When times are tough, we trim discretionary spending. We consider what is essential and we are prepared to borrow. We think this applies equally well to the government. Using government moneys to stimulate the economy through increased employment, assistance to business and industry and the maintenance and improvement of infrastructure is not spendthrift behaviour if it is accompanied by a realistic plan to pay down the deficit in the future. This government, we believe, has started off on that route by requiring school boards and municipalities to provide matching funds in order to access the provincial anti-recession capital improvement funds. We believe this helps ensure that projects are both necessary and appropriate.

Our major pitch this morning is going to be for sound fiscal management. I would like to emphasize at the outset our desire to participate as a profession in this objective. We believe the provincial budget is a planning process. Effective processes for spending review require much more time, depth and detail than the preparation of a budget allows. We believe this is especially true in an area like education, where many of the decisions with financial implications are vested to local school boards. The province provides the money; the boards of trustees determine where that money is spent.

The Ontario Teachers' Federation believes that a thorough review of educational spending and of the financing of education is necessary. Again and again, we have indicated to this government and to previous governments our interest in participating in such a process. We believe that the provincial government, school boards, teachers, administrators and community representatives could undertake a responsible and complete examination of where Ontario's education dollars are going and why. We note that the government and the Ontario Medical Association have undertaken to work together in reviewing the health care system and its costs. We believe a similar process could be used in other areas of government spending over the next few years.

In summary, I once again would like to refer to David Livingstone's article, where he indicates: "The logical, democratic conclusion in a condition of underemployment would be to reform the economy in order to apply underutilized educational qualifications, rather than wasting them and restricting the development of further educational potential. Canadians, from the economic council to most classroom teachers and trade unionists, seem so bedazzled by the notion of `market forces' that we are reluctant even to think about alternative economic forms which are less obsequiously tied to the pursuit of profits and less indifferent to the wastage of human potential."

Ontarians who are unhappy with the budget would be wise to look around the country and see the effects in other provinces of the tough approach to the recession. There is no evidence that the cut public spending strategy improves the economic climate. We acknowledge that Ontario has been harder hit than other provinces. This budget attempts to provide some protection for the most vulnerable. The choices facing the government in preparing the budget are not attractive or easy. Sound financial planning takes into account obligations, needs and resources and looks at the long term as well as the short. No one likes a mortgage, but most of us have them. We urge the committee to do two things: (1) to support the budget, and (2) to undertake a series of program and financial reviews so that the paydown of the mortgage will be systematically addressed. The Ontario Teachers' Federation, the representatives of the 126,000 teachers in this province, is anxious to participate in such reviews.

The Chair: I would like to thank you for your presentation. What we have is four minutes for each of the parties, so in your preamble to your question, make sure your presenters have a chance to give an answer.

Mr Sutherland: Your presentation was very thoughtful. I appreciate the emphasis you put on issues of planning and debt reduction, which certainly are important issues. You talked about review of finances overall. I was just wondering what your view is in terms of local school boards, public school boards and separate school boards, co-operating or working together. What is your sense from your membership as to how that is occurring in terms of a voluntary effort. Certainly the minister has quite clearly indicated -- and I think rightfully so -- that the government has no intention of forcing amalgamation because that would certainly be seen to be undermining the constitutional right to a separate school system. But I am wondering if you can let us know your sense of what type of co-operative efforts are going to reduce costs.

Mr Poste: I will start and then I will turn it over. Everyone is aware that the level of co-operation around the province varies from boards that are working in harmony to boards that are at war with each other, requiring intervention of outsiders to try and get it done. Perhaps for specifics I could defer to Margaret Wilson.

Mrs Wilson: The federation encourages co-operation between school boards. There are very definitely areas in which they could share resources. Some boards are already sharing resources, consultants for instance, in terms of educational services.

One large area for co-operation that we believe could save a great deal of money is in school busing. But I would hate to focus on the co-operation of school boards as the sole issue. We are quite serious when we say that there needs to be an intensive examination of how the education dollar is being spent in total. I think right now our knowledge of how it is being spent is insufficient. I would be nervous of identifying any particular issue that might generate substantial savings.

Mr B. Ward: Throughout these hearings, we have had a lot of rhetoric on both sides about, on the one side, you should be cutting everything, and on the other side, spend more. From the aspect of education expenditure, I think that is one area we should be concentrating on, because the key to future prosperity is having an educated workforce, having the skills that are necessary to be able to meet the challenges of the 1990s. I agree that times change and we should be reviewing on a constant basis to ensure that the programs we are implementing are effective to meet the needs of the future, not the past. What is your feeling on how we can make decisions that will be effective, recognizing we should be having a fundamental review?

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The Chair: I am sorry but I have got to cut you off there.

Mr Kwinter: As a former teacher, a former educator and someone whose wife is still a teacher, I have a great deal of sympathy and support for teaching and for education. I agree that our most treasured resource is our young people and the people who teach them, so I am totally supportive of providing all the funds necessary to make sure that we have a well-trained, educated population. I enjoyed your reference to the very last paragraph of the last page, when you said: "Sound financial planning takes into account obligations, needs and resources and looks at the long term, as well as the short. No one likes a mortgage, but most of us have them." I agree. But tell me what your reaction would be to having a mortgage that costs you more money every year, but, instead of the principal going down, it goes up. So every year your principal increases, you owe more money on your mortgage than you owed last year and it costs you more to service it. How would you feel as a mortgage holder in that kind of situation?

Mr Poste: You asked me a personal question and I will respond personally, not very comfortably. I believe the problem the current government is facing is not totally of that current government's making. As I said at the back, and you probably will not like this and I say it a bit with tongue in cheek, I found it amazing how a party that was in government and is now in opposition can all of a sudden find stones on the floor of the greenhouse so it can throw them. Certainly, if one can believe the article in today's Globe and Mail about the deficit and the amount that is directly related to increased government spending, which is purported to be $3 billion -- I think I heard comments this morning that tended to support that and the source of the rest of it -- then certainly the problem is there but I do not think it is fair to lay all of the cause for it on the current government. That is why I said we believe there needs to be a systematic approach to paying down the mortgage and we are prepared to participate as educators in our part of that.

Mr Kwinter: Are you aware that last year, in the operating budget, there was a surplus of $192 million? Were you aware that for the first time in, I think, 30 or 40 years, $500 million was paid on the principal, which is not something that anyone is even considering. All they are talking about is increasing debt with no principal payments at all. But last year $500 million was paid on principal and there was a $192-million surplus in the operating budget. The total budget of $3.2 billion was in capital and that was a decision the government took. The government took the decision to spend that money. So in talking about stones on the floor of the greenhouse, I think you should take a look at what actually happened.

The point I am making is that I have no problem with a deficit when times are tough. But where the Keynesian economy falls apart is there is no provision and no structure for that to be reduced when times are good. All you have to do is take a look at its projections, because it went to the trouble of showing you what the projections are going to be for the next four years. They are going to have to say to school boards and social welfare agencies: "Look, times are good. We can't give you any money. You'll have to wait until times are tough, because there isn't any money now." They do not have enough money to pay down any debt, but there is no source for that additional income.

Mr Poste: I guess we say we recognize that; hence our desire to participate in a review of the costs of education.

Mr Sterling: You represent 126,000 teachers. Can you tell me what the average salary of a teacher is?

Mr Poste: It is $43,000 or $44,000.

Mr Sterling: So according to what I have read, we are about $14,000 above what it is in the United States. Is that correct?

Mr Poste: I do not know.

Mrs Wilson: Yes, that would be correct if you take the US average, but that would not be correct if you are looking at the northern belt of states. You have to include the Sunbelt to get that differential.

Mr Sterling: We are competing in a world economy now. You have heard a lot of people talk about productivity. I know from experience in my community that many young people want to become teachers, I think partially because of the financial remuneration and partially because of other, more laudable goals. But everybody looks at compensation as well. In fact, I believe that only 5% of the young people who apply to become teachers get into the teaching colleges, maybe 10%, I am not sure, but it is very low anyway. Do you think that because of the relatively high wages we should be getting a better system than anybody else? How do we explain things like the fact that the United States has a higher standard of living than we do?

Essentially, the education system is supposed to prepare our people to provide the economy and that is the argument, that the investment and the education system is going to provide us with the best educated individuals. Yet when we look at the results it seems that people who are spending less on education are getting more return. The standard of living has to be, in my view, the ultimate test in terms of how well you are achieving your goal. Are we overpaying our educators in relation to the world market?

Ms Baumann: We certainly do not think so.

Mr Sterling: I did not expect you to say you would agree with that.

Ms Baumann: I would take serious issue with your statement that the US standard of living in general is higher than the Canadian standard of living. I am not sure that is a supportable statement.

Mr Sterling: It is.

Ms Baumann: Certainly, in terms of what we know is going on in school achievement, in terms of, while their participation in post-secondary is higher than ours, that is a long-standing factor. The cost of post-secondary education has become astronomical in the United States. It is much less affordable than it is here and I guess I would say, as somebody who immigrated here from there a long time ago and who goes back on a regular basis to see family and friends, I am firmly convinced that our standard of living in terms of things like our health care system and our social welfare programs and so on has provided us with a great deal more security than our neighbours south of the border have.

Mr Sterling: You may be convinced of that. But the other point is that I know the OTF has taken a stance, or I believe the OTF was one of the groups against cross-border shopping. Was it the OTF?

Mr Poste: Yes.

Mr Sterling: Two days ago we were in Cornwall and the business improvement area of Cornwall hired a consultant to do a survey, to find out what was being brought across the border, who was bringing it across the border, etc. Teachers were number one in cross-border shopping. You are public servants and you are paid with taxpayers' dollars. Do you think that is a responsible thing for your teachers to be doing?

Mr Poste: My answer is a simple no. It is not a responsible thing. We have communicated the beliefs of our provincial organization to our members. I guess it is like anything else. Whether they choose to comply or ignore is an individual decision. It would be interesting to check at another time when teachers are not all on holidays whether your statistics were still there, but I still come back to my initial point. It is not supported nor endorsed by the provincial teachers' organization and I believe it is very shortsighted on behalf of the people who are doing it.

Mr B. Ward: On a point of order, Mr Chairman: I think that is a deplorable statement by the representative of the business improvement area of Cornwall.

Mr Villeneuve: It's in Hansard.

Mr B. Ward: It was a verbal statement. We did not receive the report that he was referring to.

The Chair: I would like to thank you for your presentation before this committee. This committee is recessed until 1 o'clock.

The committee recessed at 1201

AFTERNOON SITTING

The committee resumed at 1310.

The Chair: We will resume our hearings on the budget review of the standing committee on finance and economic affairs in the beautiful city of Ottawa. The first presenter to come forward is the Sandy Hill Community Health Centre. We are going to change the schedule a little bit here. We are going to have three groups. The Cumberland Township Community Resource Centre will come on next and then the Coalition of Community Service Centres of Ottawa-Carleton. After each one has made its presentation, I hope one representative from each group will be at the table to answer questions from the committee.

If you do not mind starting, you have up to one hour for your total presentation and we will have the question-and-answer period after the three groups. Maybe the members here should get their pens and take some notes, since we are listening to three groups right in a row without asking questions until the very end. Would the Sandy Hill Community Health Centre representatives please identify yourselves and your positions for the purposes of Hansard. You may begin.

Ms Muckle: Thank you very much for having us here this afternoon. I am Wendy Muckle from the Sandy Hill Community Health Centre. I am the medical co-ordinator there. I would just like to introduce my colleagues Linda Gunning, a member of our board of directors, Irene Norman, a long-time member of our board of directors, and Georgia MacNeil, who is one of our community committee members.

The Sandy Hill health centre provides a wide range of health and social services to the residents of St George's ward here in Ottawa. The health centre was started more than 15 years ago by a dynamic group of community residents and continues to be owned and operated by the community through an elected board of community directors. The centre is organized into five program components, which include social services, health services, seniors programs, addictions assessment and referral services and a community outreach and development team.

The centre provides a wide variety of programs and services which includes things like family medical care; one-on-one and group counselling; addiction assessment and referral; advocacy on behalf of clients in the community; seniors' health and activity programs; support and services to frail, isolated and at-risk seniors in the community; support and service to new immigrants and refugees; self-helf and support groups; health education and health promotion programs; and housing assistance. Beyond the provision of programs, we actively organize and support community involvement in issues like the upcoming municipal elections, responding to new legislation like the long-term care reform or changes to human service programs that affect our community.

As a health centre, we actively encourage people to participate in determining the future for themselves and for their community. In the past five years the centre has experienced tremendous growth and the addition of much-needed programs and services for our clients, accompanied by an exponential growth in the numbers and in the complexity of problems which are experienced by clients.

Based as we are in the community, we experience at first hand the results of recession and cutbacks in social assistance programs. We do not need to read the papers to be told there is rising unemployment and rising welfare rates and that social assistance programs no longer provide an adequate income. At our centre those statistics are people without decent housing, in many cases in fact without any housing. There are hungry children who are not learning anything at school. They are watching the cycle of poverty repeat itself from one generation to the next.

We see not only the struggle to survive but the costs in terms of human productivity and contribution to this society. For example, every program within our centre is struggling to respond to the mental health crisis which is being experienced within our community. This is not simply mental illness due to disease. It is mental illness which has been created and perpetuated by the recession, unemployment, poverty and a lack of decent housing and a safe physical environment.

We see the cost in human terms, in rising family violence, family breakdowns and an epidemic of addictions. As a centre, we see the 1991 provincial budget as a necessity, a recognition of what is really happening and a sincere commitment to investing in the people of this province.

I will now turn our presentation over to Linda Gunning.

Mrs Gunning: My name is Linda Gunning and I am a volunteer member of the board of directors of the Sandy Hill health centre as well as chairperson of the health services committee and the social services committee. In my day-to-day work, I am director of St Joseph's Women's Centre, which is a centre for homeless women, a day program. Most of our clients are psychiatrically disabled, and usually -- or at least for many of our clients -- that is only one of the problems they struggle with. Some of them also have to struggle with serious health issues as well as addiction problems.

Needless to say, about five years ago, when the numbers started to increase and I realized how complex were the problems of the clients who were coming into our centre, I started looking to the community to see what kind of resources I could bring in to stop some of the falling between the cracks that many of our clients were experiencing. It was then that I really learned about Sandy Hill health centre. It was in conjunction with them that the idea of health for the homeless came into being.

This is a project that is a combined effort between Sandy Hill and regional public health. It provides us with a nurse who comes in for half a day once a week, which has been an incredible help to the women, not only in direct health service and in linking them with the health centre, because this nurse does also work at the health centre, but also educationally. These nurses come in and bring in health material that they discuss with our clients in the afternoons they come.

We also got mobile outreach from the Royal Ottawa Health Care Group, and this provides us with a psychiatric nurse who now comes in as well as linking our clients up with other services at the health centre like counselling, addiction assessment, workshops on parenting, practical things like this that can really help our clients cope and manage through the day. That is all we really hope for -- just one day at a time.

I also hope that in return I have been able to give to the health centre some of my skills, some of my experience, some of my day-to-day contact with the problems our clients face, problems primarily due to poor health physically and mentally, to poverty, to housing issues. It seems everything out there that is maybe not working very well is affecting our clients to the greatest degree.

Also, as a manager working in an agency providing social services, I have worked closely with both provincial and regional government and I have felt at first hand the negative effects of Canada assistance plan cuts and provincial cutbacks. But I also know from past experience that when the community knows what the reasons are for tax increases and knows the community workers have been involved in the decision-making process, people are not opposed to reasonable tax increases. This is an experience we had with regional government just in the past year and it is a process that we are modifying and making better, hopefully, with each budget year.

Those of us involved with regional social services know this kind of process works, and the additional benefits of meaningful dialogue and understanding are well worth the effort to put such a consultative process in place.

What I do feel is personally objectionable is holding the public to ransom by blanket threats of tax increases -- either/or situations. I consider myself an intelligent citizen in the community, and if I know what is happening, I am ready to respond. I certainly think most of my peers, my colleagues, are willing to do the same thing.

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I also come here as a middle-class working wife, mother of two of my own children and one stepdaughter, all in university right now, hopefully not for ever, not to mention our dog, cats and the house, better described as the mortgage. So I certainly know what is involved in just keeping things together, the day-to-day struggle of the average person. At the same time, I always have to go back to the thought that how could I or any reasonable person jeopardize long-term progressive social justice and change that can make life better for my children's generation by saving a few well-spent dollars on taxes. No one is opposed to a good tax system that truly benefits all of the people.

Mrs Norman: My name is Irene Norman. I have lived in Sandy Hill for the past 20 years. As a long-time member of the board of the Sandy Hill Community Health Centre, I have a great deal of respect for the work that is being done there, as in all the centres with their professional services.

Since 1975, the service has grown from a small office with five employees to a centre with 71 employees consisting of doctors, nurses, social workers, secretaries, on and on. It has been my observation that the increase in size has gone along with increased concern for people and their problems. As a taxpayer, I am far more concerned about how the money is allocated than how much tax I have to pay. I believe I belong to a large number of citizens who are concerned to see huge corporations paying their fair share in Canada rather than moving their activities to Mexico, where they do not pay any taxes. In addition, they pay very much lower wages than in Canada.

However, as a peace activist I would certainly reduce the taxpayers' burden regarding armaments. The money saved in that field I would put into social services and affordable housing for the needy. We cannot have a healthy country while there is homelessness and hunger among us.

Ms MacNeil: Hi. I am Georgia MacNeil. I am a community committee member at the Sandy Hill Community Health Centre. In contemplating the problem you people have to deal with, I can say certainly nobody welcomes a budget deficit. As a taxpayer, I certainly find it frightening myself. However, as a community committee member at the health centre, I can see that the present economic crisis really is having disastrous effects on a growing number of individuals and groups. The dramatic increase in unemployment, the growth in the welfare rolls and a shocking number of children who are now living in poverty are just a few examples of the problems that we have to address.

Given the nature of this crisis, I certainly see that there is a necessity to incur a deficit at this time. I think the deficit is a really necessary investment and can certainly be repaid in the future. We also recognize that there are a lot of tradeoffs that have to be made when you are considering how to allocate the scarce resources we have. What we need is for the government to recognize the acute need for continued investment that is going to support social programs which help to enhance the social, economic and physical health of our individuals and communities.

We recommend that priorities be set to provide resources for the following areas:

1. We need continued social assistance reform, as outlined by the SARC document.

2. We need more affordable housing, more safe housing, and we also need more emergency shelters.

3. We need more job training programs that are specifically designed to recognize the special needs of the participants, such as transportation, child care and flexible hours.

4. We need increased mental health support services which run the gamut from crisis intervention to long-term counselling and intervention programs.

That is about all I have to say. I think that should summarize what we feel about it.

The Vice-Chair: Okay. Thank you very much for your presentation. We will now call upon Cumberland Township Community Resource Centre to come forward. If each of you would identify yourself for the purposes of Hansard.

Mrs Somers: I am Francie Somers, and I am a board member with the Cumberland Township Community Resource Centre, acting president. This is Thérèse Preston, our executive director at the centre. I want to thank you for inviting us here today to introduce our township and our community centre and to let you know a few of our needs in reflecting on the budget.

Cumberland township, geographically, is at the eastern border of the Ottawa-Carleton municipality. We are unique in that we have a large urban and a very large rural population that we serve, and for that reason a lot of their needs vary. Our township covers 315 square kilometres, so we have a very large area to service.

Over the last 10 years we have had very large growth, mostly in our urban areas, and with this have come increased social and economic problems that we have had to serve. Population projection for the year 2000, again, is going to take leaps and bounds, and they are looking at between 54,000 and 59,000. It is going to be like a mini-city within Ottawa. We are just having a very difficult time right now keeping up with the pace of the social programs that are needed and the economic programs that are needed.

There are a number of concerns, as I have told you, in our community that we are trying to address, and with the recession being the way it is right now we have had quite an increase in some of our requirements for food programs and emergency housing.

Our community and our resource centre appreciate and are very encouraged by the 1991 budget. With these progressive social reforms and programs we feel that there is maybe a light at the end of the tunnel to help us with some of our community.

One of our biggest problems facing us right now is housing, affordable housing; it is non-existent in our community right now, in our township. Our planning department is in the process -- I believe it is the second proposal that they are putting into the province for this type of housing. There is a great need for it for our low-income families, our seniors, our displaced youth and our individuals with special needs.

Presently if someone is seeking affordable housing we are having to move them out of the community which they have lived in, often for a number of years, but because of financial changes or economic changes they have to leave their community now where all their resources are. where their family, church and every other kind of resource is, and have to go into Ottawa, further into Ottawa, to afford this type of housing. It is not ideal, but we are really looking forward now. With the increased funding in affordable housing we are hoping that over the next few years we will be able to benefit from this budget consideration.

Another area where we are lacking -- not just lacking, but it is non-existent for us also -- is for abused women. We at present have no social-service counselling available. There is only private counselling available for our community members, which is at, of course, a cost to the member. So a lot of our clients cannot afford this. There is also no shelter available. So an anglophone woman who is in distress and needing immediate housing would have to go all the way to Nepean, and I do not know if you appreciate that, but that is right across to the west end of town, completely away from her community, from her children, from her employment. It causes a great deal of problems with transportation for her employment.

Another area here, considering transportation at this time also, our rural women are very affected by the fact that there is no shelter and there is not easy, accessible transportation to get them to counselling or even to the Nepean centre or one in Vanier, which is in the middle of Ottawa.

So again, we are very hopeful, knowing that there is more funding being put into these areas, that we are eventually going to be able to benefit from this.

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We are very proud of the independent food program that we carry on at the centre, but over the last 12 months, we have had a 400% increase in demand and requests for emergency food. We can only handle so many. We do very well at what we do, but we are really looking forward to the benefits of the increased funds to the municipalities to help with welfare and social assistance, which might give us more opportunity to serve these people well in their food needs.

As I mentioned, transportation is a big problem. Public access is a big problem for us at the centre for our rural community, because it is non-existent right now. The urban sectors have it and we are still trying to negotiate. I think after discussing our three pertinent problems -- we know you cannot solve this problem for us, but we are trying to look for your support when dealing with other governments, municipal and regional, approaching them and saying that we really require this transit system. Maybe just having your support would be beneficial. That is one of the requests we are making today.

Basically, not to sound like we are pleading, the lack of funding is one of our big issues. We have been working underfunded since the onset and it has just become worse. So the demands are causing us to have a lack of human resources to facilitate our community and a lack of even physical space in looking after our community and our clients.

Basically, that is all I have to say for now, just to thank you again for allowing us to come and present. I am going to direct the next part of this to Thérèse Preston. We have a large francophone community in our area also, which I just happened to forget to mention, but it is a very important issue that we have to deal with and we have to have everything bilingual. So Thérèse will continue on with the francophone issues.

Mme Preston : J'aimerais prendre quelques minutes de votre temps pour vous parler de notre communauté francophone et de ses besoins.

Le canton de Cumberland est composé d'une proportion importante de francophones. En 1986, le recensement indiquait que pour 35.2 % de la population le français était la langue première. Tout comme la population anglophone, la communauté francophone est confrontée del'absence de logements subventionnés. Les logements subventionnés pourraient permettre également aux personnes à faible revenu de cette communauté d'avoir un logement à prix abordable tout en restant dans leur communauté, ce qui veut dire ne pas être exposé à l'isolement et aux difficultés de s'ajuster à une nouvelle communauté.

La communauté francophone, tout comme la communauté anglophone, vit également la problématique de la violence physique, psychologique et sexuelle, et particulièrement la violence faite aux femmes et aux enfants. Les femmes qui vivent cette réalité dans le canton de Cumberland n'ont pas accès à des services de conseil individuel ni à des foyers d'hébergement. Si elles ont besoin d'un lieu pour assurer leur sécurité physique, elles doivent aller à l'extérieur de leur territoire, lorsque les services sont disponibles.

En plus de la séparation qui est vécu au niveau de la cellule familiale, ces femmes vivent également la séparation de leur milieu, comme le font les membres de leur famille et les enfants, c'est-à-dire, un isolement ou une absence de l'école et la présence d'autres difficultés sociales reliées à cet isolement.

Pour les femmes vivant en milieu rural, cette difficulté s'accentue davantage à cause du manque de moyens de transport ou de services adéquats. Ceci contribue davantage à une difficulté d'accès à ces services.

Une majorité importante de francophones se retrouvant dans le milieu rural, notre problème de services adéquats de transport est davantage vécu par la population francophone. Le manque de moyens de transport affecte les jeunes qui ont besoin d'activités sociales ou récréatives et d'autres services, les personnes âgées, les femmes et les hommes qui sont parents avec enfants, les personnes handicapées et, également et davantage, les personnes, les femmes surtout, victimes de violence.

J'aimerais terminer en vous disant que, si nous avons un manque de ressources en général, tant pour la population anglophone que francophone, il se fait sentir davantage dans la population francophone parce que les services ne sont pas existants même à l'intérieur du territoire de la municipalité d'Ottawa-Carleton.

Notre communauté francophone du canton de Cumberland aimerait recevoir votre appui. Tout comme vous l'avez indiqué dans votre budget, nous avons déjà un fort encouragement au niveau du logement. Nous avons déjà un fort encouragement au niveau de la violence physique en ce qui concerne les foyers d'hébergement, tout comme les services pour les personnes victimes d'agression sexuelle chez les femmes et chez les enfants. Nous avons un grand encouragement -- votre appui -- dans les services en général pour les personnes vivant sur l'assistance sociale.

Nous avons également besoin de votre appui pour le développement des services en français, pour le développement des services sociaux en français.

Mrs Somers: Just one last note: We do have a written document here that just goes into a little more explanation and we would just like you to know that it is here for you.

The Chair: We will now call upon the next group for their presentation, the Coalition of Community Service Centres of Ottawa-Carleton. Once again, if each of you could identify yourselves for the purpose of Hansard, we would appreciate that. So if you would like to begin.

Ms Tolton: My name is Susan Tolton. I am the chair of the Coalition of Community Service Centres of Ottawa-Carleton and I will be giving you a brief introduction about the coalition, coming back with some recommendations as well at the end.

Ms Romaniec: My name is Wanda Romaniec and I am representing Carlington Community and Health Services. I will be presenting a little bit of information about the current situation in Ottawa-Carleton.

M. Monette : Je suis Richard Monette du Centre de ressources communautaires de la Basse-ville. Je veux vous entretenir un peu sur la situation des sans-abri, et plus particulièrement sur la situation du logement en général. À la fin, je vais revenir avec quelques recommandations aussi.

Ms Hunter: I am Chris Hunter representing Centretown Community Health Centre. I will be talking a bit about the budget and directly how it relates to our priorities, and some of the current situations that Richard and Wanda will talk about.

Ms Tolton: The Coalition of Community Service Centres of Ottawa-Carleton is a coalition of community health, resource and social service centres throughout the Ottawa-Carleton region. The coalition formed early last year to defend and advocate for necessary social programs in the face of federal government cuts to the Canada assistance plan. The main objectives of the coalition became: (1) that social issues become a priority at all levels of government, and (2) to encourage and support community participation in the political process.

The coalition believes that progressive social policy is a good investment and we support the right of all residents to adequate and affordable housing, an adequate standard of living and to live in a safe and healthy community.

Recently, the coalition facilitated consultations with over 40 groups across the region, trying to help citizens identify issues in light of the upcoming municipal elections, but during the course of these consultations many of the issues which were identified were directly linked to provincial social policies. Some of these included the need for more subsidized day care, the lack of affordable housing, a need for increased supports to employment and for adequate income levels.

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Ms Romaniec: Thinking about the provincial budget, the coalition recognizes the kinds of factors that were influencing that budget, primarily factors from the federal level of government. These factors include recent decisions around UIC -- eligibility, the amount people are eligible for, how long they are eligible for -- the backlog in processing refugee claimants, resulting in people who are willing to work and interested in working but legally cannot work, and as a result, turn to the social service system for support, as well as the recent limitation or the cut to the Canada assistance plan to limit the amount of transfer payments to the province.

All these conditions result perhaps in an increase in the demand on social services, as well as a need for the province to make up the difference, the shortfall, through the federal decisions.

We would like to concentrate on two areas, primarily food and housing. There are almost 14,000 households in Ottawa-Carleton spending more than half of their income on rent, some 2,250 living on the streets, and then many more living below the poverty line who are difficult to keep track of and to monitor.

All this has made food banks more than just an emergency service. The Shepherds of Good Hope here in Ottawa-Carleton have noted a 22.5% increase in the demand for their grocery program between 1988 and 1989. The five major food programs in Ottawa served 105,000 people in 1990. A July 1991 survey of grocery programs only -- this does not include the meal programs or the distribution of food vouchers -- revealed in just that one month a total of 18,275 people were served. Of these, 44% or a little over 8,000 were children. Richard would like to talk a little bit about housing now.

M. Monette : Comme je l'ai mentionné, je suis de la Basse-ville d'Ottawa. Dans la Basse-ville il y a plusieurs abris, c'est-à-dire des lieux où les personnes itinérantes peuvent passer une nuit.

Ce qui est frappant aujourd'hui c'est la température, entre autres. Traditionnellement ces abris-là sont à pleine capacité, surtout l'hiver. Quand il fait beau comme aujourd'hui, on ne s'attend pas à voir ces abris-là pleins. Mais le cas est le contraire : ils sont à pleine capacité presque tout l'été, alors on se demande ce qui va arriver cet hiver.

Il y a différentes raisons pour ça. Entre autres, il manque des services d'appui pour les gens handicapés au niveau mental ou physique. Il y a une insuffisance de logements pour les personnes qui sont toxicomanes, par exemple. Mais il y a aussi un grand besoin de logements abordables et adéquats pour les personnes célibataires. La municipalité régionale a une liste de plus de 1200 noms de personnes célibataires qui auraient besoin d'un logement subventionné, et cette liste-là augmente de 100 par mois.

D'autres statistiques, si vous voulez : la moyenne de nuits passées dans les abris est de 10.2 par individu par mois. Les bénéficiaires de prestations familiales sont ceux qui demeurent le plus longtemps dans ces abris. Aussi, les hommes âgés entre 50 et 60 ans sont ceux qui restent le plus longtemps, tandis que les moins de 20 ans et les plus de 60 ans demeurent le moins longtemps.

Quant à la situation du logement en général, au niveau de la municipalité régionale on estime que plus de 17 000 ménages éprouvent des difficultés financières reliées à la location d'un logement ; c'est-à-dire qu'ils vivent sous le seuil de la pauvreté tel que défini par Statistique Canada, mais aussi qu'ils doivent débourser plus de 30 % de leurs revenus pour se loger.

Au mois d'avril 1991, pour la ville d'Ottawa on estime le taux vacant des logements à 1.1 %, et la Société canadienne d'hypothèques et de logement déclare qu'un taux de 3 % est souhaitable. La région d'Ottawa n'a pas connu un taux de 3 % depuis 1980.

Enfin, qu'est-ce qu'on peut dire des milliers de personnes qui sont limitées par leurs revenus et qui doivent habiter un logement non conforme aux normes minimales d'habitation ? L'économie de notre province et le bien-être de notre société exigent que les ménages ontariens aient accès à un nombre suffisant de logements abordables et appropriés et convenant à leurs besoins variés.

Ms Tolton: I am going to speak just a little bit about our reaction to the budget. What we have tried to lay out for you here is the reality that the community resource centres and health centres face on a daily basis. This is really the human dimension of budget planning. This is also the reality that the province has to deal with.

Before we go any further, we want to share with you a short video clip from a meeting that took place last March. Members of the coalition, along with 100 community members from Ottawa-Carleton, most of whom are recipients of social assistance, travelled down to Toronto to give a response to the Back on Track report and have some input on that before the budget came around.

[Video presentation]

Ms Tolton: Actually, the final statement that came out of that meeting is attached to the back of the written submission, if you want to take a closer look at that. We will not be going into any more detail, but it is there for you to look at.

Ms Hunter: It is actually the separate blue sheet that we distributed.

Ms Tolton: The coalition sees the provincial budget as an effort to invest in the people, Ontario's most valuable resource. What we see in this budget is what the coalition has believed in for some time, that progressive programming is a good investment. We certainly do not like the idea of government deficits in depth, but as any business person knows, sometimes a debt is a necessary prerequisite to a long-term gain.

In particular, we were really glad to see that money was spent and put into social assistance reform, into increasing the amount of affordable housing, into increasing support for community health centres, into providing services regarding violence against women and sexual assault, and into increasing the minimum wage. The coalition is very, very encouraged by the direction of this budget and urges the government to keep up this commitment.

Ms Hunter: It is easy to say that we think that what you did is a good investment because it is what we wanted to see done, but we want to give you a bit of the reasoning behind that. We think it is a good investment for two major reasons.

One is an argument I think you have probably heard a number of times, that is, the pay-now-or-pay-later argument. We think that while Ontario may now have a financial deficit, Ontario already had a social deficit before that. We had children growing up in poverty. We also have adults living in poverty, but children, as we all know, are the future and if they grow up in poverty, they are going to be hungry. They are not going to learn as well. They are going to get sick more often and they are going to miss school. The chances are pretty good that they are going to drop out at a much higher rate than children who live in families that can afford food and can afford stable housing.

There are some very definite concrete costs when kids drop out of school. Richard Shillington tried to articulate those costs. He said that over 20 years, these kids dropping out of school are going to add $1.4 billion to UIC rolls. They are also going to cost Canada $9.9 billion in forgone taxes and reduce the national economic productivity by about $23 billion.

That is a lot of cost. It is not just the cost of paying for them to go to see doctors, paying for mental health problems and paying for problems in the criminal justice system. It is cost in what we lose in terms of what we are not contributing as well.

The other argument we would like to make is that investing in social policy is an opportunity as well to create assets; it is not just to avoid losses. First, a lot of social programs go to keep people functioning independently in a stable home environment. I am sure we have all moved before, and you know how hard it is to kind of keep on top of your work the week you are moving and to find the work you took home the night before, and it is in one of the boxes. Try to imagine doing anything productive if you are homeless and you are moving every night. Try to imagine how you prepare yourself for a job interview, how you manage to care about who you vote for in an election, how you manage to maintain any of your civic responsibilities. It is just not possible. Unless we can keep people housed, with an adequate income so they are not worried about food, then we are not going to be able to draw on those people to participate productively in paid employment or in any other way in our society.

Equally, it has been shown around the world that poverty and environmental degradation go hand in hand. Where you have poor people, the environment suffers. The environment is a resource that none of us believes that we can afford to lose or to use up. Dealing with poverty will help to respond to that.

In the past, economists had some stake in maintaining a level of poverty in society because poverty provided cheap labour. But our economy has changed, the nature of work has changed. We do not need cheap, unskilled labour; we need people who have initiative, who have creativity, who have skills to offer. That is what makes us competitive. That is what supports our economy. We will not get that from poverty. If we invest in preventing poverty, we will get it.

The one other point, I guess, is a fairly specific one, a fairly obvious one, that a lot of social programs do go to giving people those skills, getting them into the workforce for the first time or helping them get retraining so they can re-enter when their jobs have become obsolete or when they have been disabled and need to learn a new career. That is a very direct investment there. You spend, maybe, one, two or three years training someone and you get 20 or 30 years of a productive, taxpaying employee out of it.

Ms Tolton: I am just going to finish off with some recommendations for the committee. As a result of consultations with community members across the Ottawa-Carleton region, it would have been possible for us to provide a very long list and to have talked strictly about these recommendations. However, throughout these consultations there were a few points that became very high priorities for the community members.

M. Monette : La première recommandation est que le gouvernement continue à investir des ressources provinciales au niveau des politiques sociales.

Ms Tolton: Second, that the government immediately implement the remainder of the recommendations in Back on Track, expedite the legislative changes necessary for reform of social assistance and adopt the recommended market basket approach to determining welfare rates.

M. Monette : Troisièmement, que l'on augmente le financement destiné à des logements abordables.

Ms Tolton: Fourth, that the government continue to respond to the need for services aimed at preventing violence against women and sexual assault.

M. Monette : Cinquièmement, que l'on augmente les appuis en matière d'emploi dans les domaines suivants : le recyclage, les garderies abordables et aussi les augmentations des salaires minimums.

Ms Tolton: Finally, that there be a continued commitment to not pass costs on to the municipalities as the federal government did to the provinces.

Just before closing, we had just a few quick comments on the process of the budget hearings. The Coalition of Community Service Centres is a very strong advocate for public participation and community consultation, but we see this as a process which is much more useful before decisions are made. Finally, the purpose of the consultation should be to get public input and not create political backlash, as well, after decisions have been made.

Ms Hunter: Having sat here yesterday and watched another coalition that Centretown Community Health Centre is involved in at present, I would like to add that these groups, especially Centretown Coalition yesterday, have very limited resources to put time into this and they put a lot of effort in.

A young woman came out and I think showed quite a bit of personal courage talking to this group about her own situation in being on social assistance, and I was really disturbed that there were several people who talked through her presentation. It is not very easy being in her position, and I really feel that that was disrespectful of her contribution, especially given that you invited us.

The Chair: At the very beginning, I had talked to the three groups to make sure that they put their presentation across to the government, that we are here to listen to what the people of Ottawa are saying. I know there is not much time left, but do we have any questions? Mr Villeneuve.

Mr Villeneuve: Yes, just a couple. This is a very interesting pamphlet. I live very close to Ottawa, and some of the statistics are very alarming. Slightly more than half of all poor children live in two-parent families, 78% of all poor families with children have only one or two children, and 55% of the household maintainers under 25 years of age are poor. What is the date of these statistics?

Ms Hunter: Those statistics range in date from 1986 to 1989.

Mr Villeneuve: Those were very buoyant economic years. We are now in some of the leaner years, recession times. I would think that these statistics are now on the low side, so there is a mountain of a job to be done out there.

The Other Side of Fat City is not a misnomer at all with those statistics. I do not know, I am in a quandary. When statistics like this come out following good times, what are they going to look like in 1992? That is all I have to say.

Ms M. Ward: I could ask a number of questions and make a number of comments, but we do not have much time and my comment really was to the first group, the Sandy Hill Health Centre. I do not have a question. Really, I wanted to congratulate you, and the group presently at the table might want to comment on it too.

I had not heard before of a program such as your health for the homeless program. Perhaps there are other areas that have this. I have not heard of that being run in Toronto where I come from, and I just wanted to congratulate you for that.

I think that is a service which is of a great deal of importance, because probably one of the reasons people are homeless may have to do with health problems, what has driven them there in the first place, through job loss and so on. I do not know if someone on the panel at the present would like to comment or not. My purpose was to say congratulations on that and hope that you continue.

Mr Monette: As far as the Ottawa region goes, I think we must thank a lot of the religious groups that do this type of work. They get a per diem rate from the regional government for each person who stays overnight. They are doing a wonderful job, but social services are involved also, and we try to help these people along and refer them to employment programs, etc.

Ms M. Ward: I think one of the ladies from that group is coming up. It must be fairly difficult letting people know about the service, for one thing, is it not?

Ms Muckle: I am the chairperson currently of the health and the homeless committee here in Ottawa, and I would like to give credit, actually, to the city of Toronto. Street Health is a similar program in Toronto which has very different roots but does similar types of work to what health and the homeless does here in Ottawa.

I think probably one of the major differences between our two programs and between our two cities is that here in Ottawa we were able to put together a very, very interesting group of organizations and people who are all working together towards the same objectives.

Currently our committee consists not only of staff from Sandy Hill Health Centre but from other health centres across the city that deal with the homeless. We have the partners that we had originally, which include the public health department, regional social services and the Royal Ottawa hospital, but in fact many of the shelters currently here in Ottawa are extremely active on that committee.

As we go into the fall, we are tackling what we think are very exciting new programs to try to get a better handle on some of the diseases and things that are plaguing not only our homeless population but, in fact, are posing a threat to the health of the community at large.

Ms M. Ward: You do have a fixed base, also. You have a mobile unit and a fixed space where people are coming.

Ms Muckle: Yes. Perhaps I can describe to you a little bit about how the program works. From the health department and from Sandy Hill Community Health Centre, we were able to take the initiative to put together resources, so in fact we decided that we would be equal contributors in terms of human resources to the program. We all contribute an equal amount of nursing hours to actually go out and work in the shelters.

The work in the shelters is complemented back at our health centre, we being fairly close in location, but the nurses also assist clients in accessing services at local hospitals, at other types of health organizations, like Ste-Anne's clinic or the Elisabeth Bruyère family medical centre there. We do not provide exclusive care to the homeless, but we try to be a way of accessing different kinds of services.

At our centre in the past year we were very fortunate to receive funding to open a walk-in clinic. Our walk-in clinic operates the same hours as our regular clinic does, and it is available to people without an appointment. It is not exclusively a service for the homeless or for the psych-disabled or for street people and street youth. That is who it is funded for and that is how it is organized, but we welcome our middle class and upper middle class. We welcome any of our clients to use that service when they want to. We do not have a desire to discriminate.

They are able to receive urgent medical care at that time on their terms and it is our hope, and it has been our experience, that after they have come to our walk-in for a few times, they do hook up with the centre and they get involved with more and more of the services. In fact, we have had what we think are very gratifying success stories come out of this whole program.

The Chair: Ms Ward, I would like to give Mr Morin a few comments.

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M. Morin : Pour l'intérêt de ceux qui nous ont adressé la parole en français, j'aimerais vous rendre la pareille. Nous avons eu l'occasion depuis ces deux derniers jours de rencontrer au moins quatre ou cinq groupes semblables au vôtre, tous avec un message qui est très clair.

Dans les temps tels que le présent, il est excessivement important pour tout governement de se pencher sur un problème qui appartient à nous tous. Le problème maintenant est beaucoup plus aigu à cause de l'économie chambranlante. Nous passons dans une récession. Nous entendons des commentaires des gens qui disent, parce que l'économie est mauvaise, parce qu'on a créé un déficit, qu'il faudrait réduire les soins qu'on donne aux gens qui sont dans le besoin.

Laissez-moi vous assurer que je ne suis pas d'accord du tout avec cette philosophie. C'est une obligation morale pour tout homme politique de vous écouter et de vous aider. C'est une obligation qui doit être confrontée quotidiennement, et si on ne le fait pas on manque à notre travail.

Une des raisons pour lesquelles je me suis joint à la politique, c'était pour apporter de l'aide à résoudre un problème auquel on fait face tous les jours. Alors, votre message est clair. Sans parler au nom de mes collègues, je suis certain que nous avons tous les mêmes désirs. D'ailleurs, auparavant notre gouvernement a apporté le programme Transition, qui est en continuation aujourd'hui. C'est nous qui avons apporté des changements pour les personnes âgées aussi, un programme qui a été accepté par tout le monde ; nous avons été louangés à ce moment-là. Alors, soyez assurés que c'est notre responsabilité de vous aider et surtout de vous écouter.

The Chair: Thank you, Gilles. I have been talking to some of my other colleagues. As Chairman, I do not have too much to say at times other than keeping order at the meeting, but some of my other colleagues from all three parties are saying that sometimes when we travel around the province -- too bad we did not have longer to stay here in Ottawa so we could actually go out and see exactly what you are doing in the community.

I was watching the video for a very short period of time; I had other business to attend to. I think it relayed to this committee the work that you are doing here in Ottawa and I think you have to be congratulated on the work that you are doing here. I would like to thank you for your presentation before this committee. Thank you.

Ms M. Ward: If I might add, we agree with your recommendations. I speak for all our side, anyway.

PUBLIC SERVICE ALLIANCE OF CANADA

The Chair: The next group is the Public Service Alliance of Canada. Could they come forward, please? You have up to one half-hour for your presentation. I would like to welcome you here to the standing committee on finance and economic affairs on the budget review. For the purposes of Hansard, if you could identify yourself and your position. You may begin.

Mr Bean: Thank you very much, Mr Chairperson. I am Daryl Bean, the national president of the Public Service Alliance of Canada. With me is Steve Jelly, who is an executive assistant to the alliance executive committee.

First of all, I want to thank you very much for the opportunity to appear before you. I want to say that in our view, on April 19, 1991, the Treasurer of Ontario and Minister of Economics repudiated the right-wing economic agenda of the Mulroney government. In doing so, the government of Ontario has spurned the confrontational economics of the federal government, spurned the hysteria rampant in Ottawa and charted a new course out of the recession that is gripping Canada.

On behalf of the 170,000 members of the Public Service Alliance of Canada and particularly the 80,000 who work and reside in Ontario, I should like to publicly applaud the Ontario government for its fiscal integrity and fortitude in presenting an enlightened budget designed to help those hardest hit by the recession.

In less than a week, over 100,000 members of the Public Service Alliance of Canada will be in a legal strike position. The anticipated strike will be a direct consequence of the Mulroney budget of February 26, 1991. Those who criticize the Ontario budget for not following the federal lead and attacking the wages and job security of government workers should understand that ultimatums and confrontation will not spur economic recovery.

It is an undeniable reality that most strikes disrupt economic activity. I regret that the impending strike by PSAC members will undoubtedly hurt the Ontario economy. However, I personally believe that the short-term disruption of the economic activities and services to the Canadian public that will ensue during our strike pales in comparison to the long-term disruption that continues to occur as a result of the federal government's inept economic agenda.

Wage controls are but one manifestation of the federal government's inability to manage the economy. Other manifestations include high interest rates, the goods and services tax, free trade, and cutbacks in federal commitment to fund provincial social assistance, health care and post-secondary education, all of which, coupled with a tax system which is unfair, have conspired to generate the current recession and worsen its effect on working people.

In their respective 1991 budgets, the federal and Ontario governments had the option to either fight the recession or fight the deficit. On February 26, 1991, the federal government chose to fight its own deficit by imposing severe spending limits on government operations. As was noted by the Ontario Treasurer in his April 1991 budget, the federal government's budget posture reduced federal transfer payments to Ontario by $1.6 billion below previous commitments. Despite this shortfall, the Ontario government chose to fight the recession rather than its own deficit. In our opinion, the Treasurer made the right choice.

As is well known to all members of the committee, the current recession has devastated the Ontario economy. Employment has fallen by over 250,000, while unemployment has risen from 5% to the 9% range. As was inevitable, the recession has had a double impact on Ontario's fiscal position. Both impacts, declining revenues and increased expenditures, are negative. To wish these impacts away, as critics of the budget seem to imply, would be to force the victims of the recession to endure even more hardship than they already face.

By choosing to fight the recession rather than the deficit, the Ontario government made a conscious decision to cover its reduction in expenditures passed down to it by the federal government. Despite revenues that are expected to be some $435 million less than last year, the government faced the prospect of a 40% increase in social assistance costs to some $4.9 billion. While it is undoubtedly true that the Ontario government's projected $9.7-billion deficit is large by historical standards, it is not, in my view, overly excessive in the context of the current recession -- a recession, I would add, that was foisted upon the Ontario economy by the federal government.

Moreover, on a per capita basis, Ontario's projected deficit is low in comparison to many other provinces and the federal government. At what one would hope is the tail end of this recession, Ontario is projecting a deficit of $9.7 billion, which represents some 18.6% of its total spending and slightly less than $1,000 on a per capita basis. Following the last recession, both Alberta and Saskatchewan increased deficits to more than 30% of spending at a per capita cost of $1,713 in Alberta and $1,188 in Saskatchewan.

In reality, at the time the Ontario budget was introduced, there were and are today only two alternatives to the projected deficit. First, the government could have increased taxes at the personal and corporate level. Such an approach was rightly rejected because it would ultimately worsen and prolong the recession. It should be noted as well that the massive tax grab by the federal government in the aggressive goods and service tax has reduced the ability of all other levels of government to balance revenues and expenditures by way of tax increases.

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Having rejected tax increases as a means of reducing the projected deficit, the Ontario government was left with only one alternative, spending cuts, which is, I suggest, the real agenda for those who argue that the deficit should have been smaller. As the president of the Public Service Alliance of Canada, the largest union in the federal public service, I have experienced firsthand the enormous dislocation that results when governments try to contain the deficit by so-called spending restraint.

Since the Conservative government assumed power in 1984, the federal government has reduced its employment by fully 13,000 people. Today the federal public service is smaller than it was in 1973, despite the fact that Canada's population has increased by over 20%, despite the fact that the programs and the complexity of programs have increased in the federal public service.

As a direct consequence of spending cuts, service to the Canadian public has declined drastically, as has the morale of federal government workers. As a result of staff cutbacks, it now takes Health and Welfare Canada fully three months to respond to routine pension inquiries from senior citizens, while Employment and Immigration is doing well to process employment cheques -- I should say the unemployment cheques -- in nine weeks, for the unemployed.

The inability of society to provide in a timely way benefits that Canadians need and are entitled to can have tragic consequences. In the fall of 1990, PSAC initiated a commission on federal public service morale. Throughout the commission's public hearings, we were made aware that tensions between employees and clients in the direct day-to-day delivery of service have reached the point where verbal and, yes, unfortunately, even physical abuse of government workers is becoming increasingly common.

Over the past seven years, the federal government has gone to great lengths to cut its spending regardless of the economic and social consequences of its actions. My union has and will continue to oppose the arbitrary and in many cases draconian way in which spending has been reduced. Given this, it may surprise some members of your committee to learn that PSAC is not opposed -- I emphasize not opposed -- to looking at ways to make government operations more efficient.

In the federal sector we have, for example, called upon the government to initiate a full-scale parliamentary inquiry into the practice of contracting out. Since the current government assumed power in Ottawa in 1984, the federal contracting-out budget has swelled from $2.7 billion to over $5 billion annually. We have documented cases where the practice is less cost-efficient than the provision of service by government workers. Unfortunately, the expansion of contracting out continues despite the fact that it undoubtedly costs taxpayers more than if the service was performed in-house, because it allows the government to claim that it has reduced employment levels.

While it is undoubtedly true that government expenditures can be made more efficient or reallocated to provide a greater public benefit, such assessment and reallocations should not be undertaken exclusively by the government.

Once again, the Ontario budget is clearly distinct, refreshingly distinct, from the practice of the Mulroney government in Ottawa. While the Mulroney government has arbitrarily cut spending, employment and service to Canadians, the Ontario budget states that the government is convinced the only way we will achieve effective fiscal management is through a comprehensive review and evaluation of existing programs, with the participation of the people who use services and the people who provide them.

When the federal Conservative government assumed office in 1984, it established, as a priority, reform of the income tax system. Like most Canadians, members of the Public Service Alliance of Canada welcomed this initiative, because it had become clear that the system had become unfair in a great many respects. A not-insignificant number of profitable corporations were paying no income tax and consumption taxes were penalizing lower income earners and were increasing. The share of revenue derived from personal income taxes and consumption taxes was also increasing.

Over the seven years the current federal government has held office, the tax system has become even less fair. As a result, the alliance welcomes the establishment of the Fair Tax Commission by the current Ontario government. The appointment of Susan Giampietri, an executive vice-president of the alliance, as a fair tax commissioner was particularly welcome.

Given the participatory structures that have been put in place by the Ontario government with regard to tax reform, I would expect future budgets from the Ontario government to accelerate the move towards greater tax fairness and equality.

In his April 1991 budget, the Ontario Treasurer made a conscious decision to fight the recession that has devastated the Ontario economy and imposed undue hardship on thousands of people. Rather than initiate significant tax increases that in all likelihood would worsen and prolong the recession, the government chose to allow the deficit to rise. The Public Service Alliance of Canada believes that the Ontario government made the right choice.

Unlike the Mulroney government in Ottawa, the Rae government has said to the victims of the recession that it is there to help. By maintaining the social safety net, despite critical underfunding from Ottawa, the Ontario government has set an example that should be followed by other governments. Similarly, by rejecting the wage-control and employment-cutback program of the federal Conservative government, Ontario has rejected the politics of confrontation in favour of negotiation. All Ontarians should be proud of their government.

Mr Villeneuve: Thank you very much, Mr Bean, and your association for having brought forth this document. I guess I will not ask you what political stripe you support. I think the last statement was fairly clear on that.

You suggest that the provincial government continue to, I guess, deficit finance. You are suggesting that is the only solution. Yet you chastise the federal government rather seriously for having done that. I know you will have a response that one government is oriented in one direction, in your opinion, and the other government is oriented in another direction.

However, we are all Ontarians and we have to support our share of the federal deficit. We have to support our share of doubling the provincial deficit in less than four years, or in four years. Ontario Hydro has a deficit of about $30 billion. WCB has an unfunded liability of some $10 billion. We as residents and taxpayers of this province are all responsible for that.

What do you think will happen, come next election time, and if indeed the socialist government is or is not re-elected, do you think that it can continue doubling the deficit, the total debt, every four years?

Mr Bean: Let me answer the question you did not ask in the first place. Sure, I make no apologies for the fact that I am a New Democrat. I would also point out to you that my union does not support a political party and I am here representing the union.

As far as the deficit goes, yes, everybody should be concerned about the deficit. But you cannot be concerned about the deficit in a time of high recession. Somebody must be helping those who need help and who are hit worse by the recession. I believe it is the right direction now. I am not suggesting, by any stretch of the imagination, that the Ontario government, no more than I would suggest that the Saskatchewan and Alberta governments, should continue to always run a high deficit.

Again, I suggest that they have done the right thing by instituting a study and working with the people who deliver the services as well as those who receive the services. That may well find some inefficiencies within the system. And I applaud that very much. I wish we could have this government in Ottawa undertake the same commitment. They go out and they have something which they call public service 2000. They talk to the managers. They do not talk to the people who deliver the service. They do not talk to the union which represents those workers, and that is not a way to address the situation.

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We have a government here in Ottawa which has increased the contracting-out budget from over $2 billion to over $3 billion. I could tell you where most of it came from. Most of it came from the cutback of 13,000 positions. Most of it came from the fact that the workers who are carrying out the work are having to train on a daily basis contract employees who come in, term employees who come in. Most of it came from the fact that the work that is being carried out by the contractors is done in an inefficient manner and at more cost, as well as having our own employees having to redo the work and correct the work.

So I am not suggesting by any stretch of the imagination that the Ontario government should continue with this high deficit. Naturally, as the economy improves, they should well start addressing the deficit also and bring down the deficit and eventually, whatever period of time that is, get a balanced budget.

Mr Villeneuve: Well, I am not sure I am unhappy with the reduction in the numbers of civil servants in light of what you have just said, and I realize that someone has to train people. I know Hansard cannot record this, but I will just mention it for Hansard purposes that you have on your lapel a pin that says, "On strike alert," and I suppose that is your right and your privilege. Many people in this country say, "You, as public civil servants maybe should not have that particular right." But in light of all this, I as a taxpayer see the contracting out as possibly a bit of a cushion against people such as PSAC who at present are on strike alert. Maybe you can comment on that.

Mr Bean: First of all, yes, we are on strike alert. We have tried to negotiate with this government since February. This government has taken a position which has simply said, "If you accept zero, a wage freeze, up to three, after you accept that we will talk to you about non-monetary and operational issues. After we get through with that we will talk to you about monetary issues, and should it cost any money -- of course, if we agree to anything it has to come off the 3%. We will not deal with job security. We will not deal with pay equity despite the fact that this union, in a joint effort between the government and this union, participated in the equal pay study. Despite the fact that this equal pay study required two thirds of the committee members to agree to a rating, this government has chosen not to pay equal pay for work of equal value."

They say we should not deal with it at the negotiating table; it should be dealt with through the Canadian Human Rights Commission. Well, we have been trying to deal with it since 1984 there -- for seven years. Rather ironically, the same day that this government is responding to the conciliation board reports which are favourable to the union, it is saying the government is in the court challenging the right of the Human Rights Commission to deal with pay equity. So they say, "You can't deal with it at the negotiating table, you should deal with it at the Human Rights Commission," but then goes to court to try and stop them. Somewhere, somebody has to deal with it. Again, it is the law of this country, and yet they have been found guilty by the Canadian Human Rights Commission of violating that law. The only thing the tribunal is doing now is trying to determine what amount of money.

As for the right to strike, first of all, I do not know where your polling has been or where you have taken your information from, but the majority of Canadians do support the right to strike. The majority of Canadians do.

The Chair: I am sorry, I have to cut you off and go over to Mr Sutherland.

Mr Sutherland: Thank you, Mr Bean, for your presentation and talking about the politics of confrontation versus the politics of negotiation and participation and empowerment in the decision-making process. I was wondering if you can maybe just comment a little more in terms of where staff morale is, and we have some time left; if you want to continue on in response to Mr Villeneuve's question, feel free to do so.

The Chair: No, I'm sorry.

Mr Sutherland: Oh, we will not be?

Mr Bean: No, I wouldn't do a thing like that. That would be against the rules. I always abide by the rules.

Mr Sutherland: Oh, sorry.

The Chair: Go ahead with your question.

Mr Sutherland: No, I am done with my question. It was just on morale.

Mr Bean: Staff morale has hit an all-time low in the federal public service. That is not me talking; that is the membership, the workers, studies that have been taken by management. You can ask anybody anywhere in the federal public service. The staff morale is at an all-time low.

Part of it is caused by the fact that they have accepted wage increases below the cost of living for the last seven years; below, by the way, what the private sector has been paying; below what the provincial and municipal governments have been paying across this country. They have seen the downsizing reach the stage where, as I mentioned, there are verbal assaults going on on a daily basis and there are actually physical assaults. Rather than trying to staff the offices so that they can deal with the unemployed people coming in, they build plexiglas with a little hole in it so that the unemployed people who are so frustrated and so angry cannot get in and wring somebody's neck. I suggest that is not the way that we will get out of a recession. That is not the way that we will have Canadian people with tolerance and understanding, which we certainly need at this stage.

I want to indicate to you that certainly, again, we are not anxious for a strike; our workers are not anxious for a strike. But when you are left no choice, when a government refuses to negotiate, when it dictates and says, "If you don't agree, we'll legislate you anyway," then you are not left with a whole lot of choice but to fight it, and the only way we can fight it is through a strike.

You can legislate away strikes -- there will be strikes. You can legislate collective agreements. What you cannot legislate is that workers will go back and do a good job. You cannot legislate that. They are only going to do that if they feel they are being treated fairly and their morale is high.

The Chair: Okay, I would like to thank you, Mr Bean, for your presentation before our committee on behalf of the Public Service Alliance of Canada.

FAMILY AND CHILDREN'S SERVICES OF THE COUNTY OF LANARK AND THE TOWN OF SMITHS FALLS

The Chair: The next group is the Family and Children's Services of the County of Lanark and the Town of Smiths Falls. Would you come forward, please? You will have up to half an hour for your presentation and in that period of time if you can leave some time at the end of your presentation for questions and answers by the three parties.

I would like to welcome you, and if you could identify yourself and your position for the purposes of Hansard, you may begin.

Mr Tyson: Thank you very much, Mr Chairman. My name is Chris Tyson and I am the treasurer of the Lanark county and the town of Smiths Falls family and children's services. On my left is our president, Larry Paul, and on my right is Suzanne Geoffrion, who is our executive director.

Mr Chairman, ladies and gentlemen, we are here to talk about what we believe to be a serious crisis in children's aid, not just in Lanark county but throughout Ontario. As treasurer of family and children's services, I have become familiar with, or in part familiar, and I will make no excuse for that, with the many complexities and challenges of the child welfare business. I say in part familiar because it is an extremely complex environment and the way it is funded makes it even more complex.

We live in an environment of increasing child population, of increasing family violence, of economic stress, and changes in family arrangements which are having a major impact on our organization. The 1990s, the last two years, have brought unprecedented growth in service volume. Service volume -- that is the number of children for whom the society has to investigate allegations of abuse or the number of children brought into care.

This trend is being experienced by the majority of child welfare agencies in eastern Ontario and across the rest of the province. There are a number of documents around about these issues, but suffice it to say that the partnership between traditional family, the community and government to meet the needs of the majority of children in Ontario is no longer adequate.

We are one of 54 agencies, and we are mandated under the law. We have no choice but to investigate children who are or may be at risk. The two volunteers at this table and our executive director, the whole of the board of directors and all our staff under the law have no choice but to carry out our mandate whether we have money to do it or not. These children who are at risk can be emotionally, physically or sexually abused. There can be parents who are having difficulty in controlling their children, women with unplanned pregnancies who are considering relinquishing their children for adoption, adolescent runaways, families needing assistance with special needs, adult adoptees seeking information about their birth families.

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On the chance that some of the members of your committee do not know how we are funded, 80% of our funds come from the province and the remaining 20% come from the municipalities. There are two municipalities in our case, the county and the separated town of Smiths Falls. We submit a plan every year to the Ministry of Community and Social Services, and our budget year is from January to December. Although this plan was initially intended to facilitate agency planning and development, in fact the service plan is our budget, which is adjusted annually by a predetermined amount. This year is was 6%.

It is interesting to note that we have just completed an exceptional circumstances review, which is a process which most agencies go through on an annual basis, and we have just requested for this year's 1991 funds another $800,000, which is between 40% and 50% of our original budget allocation. This is all to do with increases in service we are mandated to provide. The whole process that we go through in funding needs drastic overhaul. Anybody who ran a business as we have to run children's aid, from a financial standpoint, would be out of business. We will not know until next March what the allocation of any moneys which we are given under the exceptional circumstances review will be. Before then, we are mandated to provide the ministry and the municipalities which fund us with our budget. It does not take much to show that this system is out of whack. We have a severe process problem.

Not only that, but when we go to the municipalities, after we have been granted money under the exceptional circumstances review, we will go to them next February and say, "Oh, by the way, last year" -- and they have finished their budgets for last year and are now writing their budgets for 1992 -- "we want another so much money, so many thousands of dollars from you." So, we look as if we are totally out of control. That is not the case. The process is out of control, not the agency. As a municipal councillor myself, I feel that it really is time that the province got its funding process in order so that it fitted within the other funding processes of the other agencies which fund this type of activity.

I have already mentioned that we are growing very rapidly, and we recently had -- and I am going to divert from my script -- a planning session, trying to look forward five years into the future. It was quite clear that we only had available to us, we could only plan for, funds to do with protection, that which we are mandated to do. There is no way that we could sit down and plan for prevention, which is really what we ought to be doing. We should be trying to put ourselves out of business. Now, whether we ever will or not is a different matter, but we should be trying to put ourselves out of business, and every member of the staff of our organization and the volunteers would agree with that statement. We do not want children in care. We want to remove the reasons for it.

We have severe budget problems. As I said, we have just applied for, just asked for, with the assistance of the ministry staff, an $800,000 increase for 1991. With this sort of process, it is virtually impossible to plan effectively and monitor expenditures. I do ask this committee to do whatever it can to assist a process already under way, to speed a process already under way, to get the process of funding for family and children's aid changed.

I am a volunteer on this committee, and my belief is that the province is taking advantage of the volunteers by not providing them with a process and structure in which they can effectively do their job, which is to set policy and to provide local input into the process. We spend more time than enough trying to find out how we are going to afford to fulfil our mandated requirements when what we should be doing is trying to improve the quality of our services and to provide prevention programs.

In two cases, in Kawartha-Haliburton and in York, in one case the board threatened to resign and in the other case the board did resign. I must say that when I heard about what the ministry did to overcome the board that had resigned I thought all it was doing was skirting the problem. The problem is lack of funding and the process of funding. We have written to the minister and we have not received an acknowledgement. We wrote in March presenting our concerns when these two boards asked the ministry for help; otherwise, they threatened to resign. We did not threaten to resign as a board, but we seriously discussed it, because you are putting the volunteers -- you, the government and the ministry -- in an untenable position. You would not be in it, ladies and gentlemen.

We also keep in touch with our local MPP Leo Jordan and with the NDP committee in Lanark county and with the Liberal Party membership in Lanark county. We do not hesitate; we are a non-partisan organization, right, very deliberately, because we believe that everybody should be informed because there are kids -- and they are our kids, not your kids, if you see what I mean.

The Ontario Association of Children's Aid Societies has presented a document on the funding crisis, and it concludes the system is in crisis because of the funding structure on process. I have discussed that; inequitable and inadequate funding levels across the province, deficits and cash flow problems. Ladies and gentlemen, the one hope I could ask you to do is please speed the process. That would be all I can ask, I think.

We do have an excellent relationship with our local regional offices, and they do dig us out of the hole every time we go into deficit because they have this particular year or that particular year the money to do it with. Had they not been able to do that, this society would have been $400,000 in debt, and we have no means of supporting that level of debt. As it is, if we do not have cash flow, and we will not have cash flow at the end of the year because we will have used up all our allocation, we have to go into our own funds -- which have been collected over the years since we were effectively a local orphanage society, in 1922 I think -- which we would like to use to improve our programs outside the ministry's efforts, because the ministry will not even pay the interest on the loan for the money we have to borrow because we do not have enough from the ministry, and that is a farcical situation.

Last but not least, I would like to suggest to you that we would mention the current roadblocks in the provision of mandated services. I would absolutely support the first statement, inadequate salaries for child welfare professionals. The average salary in our society is about $36,000 a year. I, in the computer business as an intermediate programmer in government, get more than that, and ladies and gentlemen, there is no question about the relative responsibility these two people have. The child welfare professionals have to deal with much greater stress in everyday life and they have got to be extremely professional in their approach to make sure they help children and do not damage children.

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There are inadequate children's mental health services and anybody who has been listening to the review the radio has been doing on the Prescott case recently will know there was a long article on the radio yesterday about children's mental health service in the Kingston and, therefore, eastern Ontario area.

There is a funding issue over residential and custodial care versus in-home and community-based services. We in Lanark county are trying to find ways where we can assist setting up residential care services. I know it sounds as if I am contradicting the words in the presentation, but I am really not because we need group homes, locally, but more important, we need support systems to try to keep children in the home.

We have three problems: growth, which is outside our control, but we would like to prevent children coming into our care; the funding process, which is a bureaucratic problem; the dollars, which is your problem, and the impact the lack of dollars and the funding process has on both staff and volunteers.

Mr Villeneuve: I really appreciate your presentation and what you face up the valley is very similar to what we face in the area I cover, Stormont, Dundas and Glengarry. Maybe you could elaborate a little more, and there seems to be a problem in that the funding always arrives at the end of the year and you are working in a situation where you really do not know where your budget is, and yet governments are, for whatever their own reasons are, mandating some programs and some rules and regulations on you that are expensive and you have to abide by them. Yet the funding, in most cases, comes at the end of the year and it is not there in sufficient amounts.

I realize we are concerned here with the costs of government. However, I think we face a situation where children, I guess when they are 12 years of age or over, have a lot of autonomy and at times it makes life very difficult for the families who are attempting to look after them and for your people.

I have been involved in a number of cases where the OPP will not touch it. No one will touch it and I do not know where to turn to address the problem of a 15-year-old who is out of control. I am sure you have that very often. Maybe you can comment on that. I think there are problems in an urban area, but there certainly are problems in the rural areas that we sometimes do not bring to the fore.

Mr Tyson: Absolutely. We have discussed that problem. I am going to ask Suzanne to answer your question because she is the professional expert, I am not; I am the volunteer. But we have discussed the problem of what to do with a child at the age of 16. Here in Ottawa there was a very good radio article on a child who was literally in that situation with no one to help her, and what they did about it.

Ms Geoffrion: I think with the whole issue of how we serve older adolescents, or not so old when they are only 15, the solution is simply a change of legislation. The Child and Family Services Act really limits our powers and limits the powers of the police so we are in the position -- if you do not have the authority and the mandate through law and the child does not want to be helped, is not even capable of making the decision that he or she needs help, and you have parents who are sitting on the fence not sure what to do -- where you are right, you are leaving those kids nowhere.

I think what has happened is we went from a piece of legislation in the early 1980s that did not give youth a lot of rights and we have gone to the extreme of giving them too many rights. It is right to have rights but you do not have any responsibilities, and in essence I think now many youth have the right, all right, to destroy themselves. So, great, that is a wonderful right to have.

We can all feel good about that but we do not have any power to do anything about it. So we are frustrated as an agency. As you note, parents are extremely frustrated and they bear the consequences.

In terms of the funding process, we submit what we call the service plan in February. We usually get a response from the ministry by June. That is sort of okay. This is where we are at. This is what our organization is. This is what we need. Unfortunately, for the last 10 years, it does not matter what you need. It is 4.5% or 5%.

The only avenue we have is through this exceptional circumstance review, if you can prove that you have volume increase. It is helpful, but it does not address base budget problems.

Mr B. Ward: Thank you for giving your presentation and your views on the concerns that you have. One benefit of taking this committee out on the road show is an opportunity for groups such as yourself to come forth.

Just a question on your concerns and constraints that you have been under from a financial and funding standpoint. I know in Brantford, probably for the last three years anyway, there have been concerns about the level of funding. That is my home town, the city of Brantford. In fact, I was on the children's board for one year in my capacity as city councillor, so I can understand some of the hoops that have to be run through.

This is not unique to this year. How long have these concerns been going on?

Mr Tyson: I came on to the board as a county councillor. I am not on the county council. I am a township councillor now, but four years ago.

Ms Geoffrion: Our first deficit was in 1988.

Mr Tyson: Yes, 1988, so I have been around ever since there has been a deficit. In the first year, we started talking about the process of funding as well as the level of funding. I think we have to separate the two very carefully, because although one has an impact on the other, if we got the process right, we could all see -- politicians, volunteers and staff alike -- where all the money was going, at the right times.

Mr Conway: I have a question for Ms Geoffrion and it has to do not with anything in Lanark county but two cases that are not too far away, one of which has been referred to. I think in all the years I have been in public life, which is now 16, I do not think I have ever seen two or three cases that trouble me as much as the Alfred, Prescott and St George's case in Kingston, unbelievable commentaries on small-town, rural, small-city eastern Ontario.

I guess I would ask the question of Ms Geoffrion because the Globe and Mail, I think, did an interesting front-page piece on Prescott that caught my attention. I do not remember the article precisely, but it was a pretty shocking commentary about what seemed to have been systematic sexual abuse of scores of little children.

There were some interesting socioeconomic observations about how that might have happened, when it happened and where it happened. Not too many miles down the road, we have the Gallienne case at St George's in Kingston, which is in some ways even more stunning, and absolutely unbelievable.

My question, thinking of Alfred as well, is how does this happen, accepting all that you have said about the problems that we all know that you labour under? The St George's case and the Prescott case make me as a legislator, to say nothing of how I feel as a citizen, horrified and incredulous. How do those things happen to such a complete systemic extent in communities like Prescott and Kingston where you have simply got to believe that somebody knew?

Ms Geoffrion: I think we all have those feelings. I think they are horrendous cases. You have this frequency in eastern Ontario all of a sudden, but I think it is fair to say that this is not just happening in eastern Ontario; it is happening all over North America. I have certainly read studies that talk about it happening in Europe. I do not know. I have not done a thorough study, but I know that 10 years ago we barely knew the words "sexual abuse." I think these are practices that have gone on for centuries that we are just beginning to unravel. It is a real process of disclosure, which is slow. There is a strong process of denial. Even to this day, I know people in Kingston will say: "It is not true. It did not happen."

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Mr Conway: When I look at that Kingston case, and as I say the Kingston case really fascinates me because of St George's, if you know anything about St George's --

Ms Geoffrion: This is the choirmaster case.

Mr Conway: This is the Kingston élite. These are the sons of the professors, the newspaper publishers, the lawyers, and this was going on to quite an extent for quite a number of years. When you think back to some of the reports in the Whig-Standard -- and I am a bit prejudiced, because I have some friends who are involved in that -- I have to tell you there is a part of me, and it is not a very small part, that almost wants to say, "Before I give any more money to anybody, I want the most thorough and microscopic examination of what went wrong in Kingston, not before I commit any additional resources, quite frankly, but before I pay out any of the routine transfers." If I were one of those parents and if I were a taxpayer in Kingston, I would be just furious.

Ms Geoffrion: You realize that nobody ever disclosed. There was never any disclosure. The first incident came as the result of a suicide of a child who was well over 18 years of age.

Mr Conway: My question remains though, how did we not know?

Ms Geoffrion: People knew. I think Kingston and St George's, it is you and it is me. It has nothing to do with my position. It is us as a community. Agencies reflect communities, and I think if anything, it is just a sad statement of the whole issue of how we deal with sexuality. We are picking up the consequences of many years of problems and we are not done. I think the disclosures are emerging more and more.

Mr Paul: I am the president of the board of directors, but my position in Perth is a Presbyterian minister. I have been involved personally with situations of this kind. I have been a minister for some years and I know it shocked me too, that these things have only started coming to light. Of course I hear about the same things that you have mentioned. I do not know whether these things have always gone on. I presume they have, but we have not heard about them. This is putting, I would say, one of the extra loads on the staff of our agency, because once one of these is disclosed, or two or three, it is endless energy and court time that gets involved. It is sad. I do not like to see this kind of thing, but I think we have to work to help, to see what we can do. Maybe there should be some more investigation. I agree with you.

Ms Geoffrion: I think you have to realize when you are investigating these issues, you are dealing with criminal law. Let me tell you, the onus for evidence is extremely high. We have a lot of cases where we know it happened. We will stand up in court and swear it happened, and the police and the crown attorney look at us and say, "Sorry."

Mr Conway: Just a final observation: Prescott and Alfred I think I can understand. That does not excuse it in any way, but for a lot of the children involved, there were not people to advocate. But in St George's, boy, I will tell you --

Ms Geoffrion: The priorities were not clear in St George's.

Mr Conway: The stuff that has been printed in the Whig-Standard really makes me wonder how well our essentially white, middle-class social agencies can cope with some of these situations. As for the story at St George's, there is a great book there for somebody to write, and when it is written, I will tell you, I think there may be some --

Mr Tyson: I did use one word and that was "prevention." One of the things we have no funding to do is do what you want us to do, find out the causes of it before it starts.

Mr Conway: My distinct impression is that bells were rung and people with good hearing did not hear or could not understand what they were hearing.

ALMONTE COMMUNITY DEVELOPMENT CORP

The Chair: The next group to come before the committee is the Almonte Community Development Corp. I would like to welcome you. You have up to one half-hour for your presentation. At the end you can leave some time for questions and answers from the three parties. If you do not mind, please identify yourselves for the purposes of Hansard and your positions.

Ms Slater: I am here on behalf of the Almonte Community Development Corp and I am employed by them as their executive director. This is Nancy Fordyce, who is the residential director of our Mijiwam group home. Unfortunately, one of our board members was going to be with us but is on holidays and was not able to make quick changes in plans.

I have given you documentation that outlines the issues we wish to speak to. I will just read from this document as none of you have had time to peruse it anyway.

The corporation's mission statement is to strive to enable all members of the community to remain in and be a vital part of their community. The Almonte Community Development Corp will accomplish this by providing residential and other supports and services.

Our short name is ACDC, because Almonte Community Development Corp is sometimes a little long on the phone, so bear with me. We are very used to it now but I know it is not as common in other areas.

ACDC is a private, non-profit corporation. It is controlled by a board of 14 directors. The board is responsible for all activities of the corporation and has regular meetings once a month. All members of the board of directors as well as some 60 other members of the community who serve on committees are volunteers working without remuneration.

The following programs are sponsored by the corporation, and I think you will see we are a fairly broad-based corporation in the services we provide. We have a seniors' apartment building of 50 apartments, some of which are geared to income and some of which are market rentals. We have 26 geared-to-income housing units and two group homes for the developmentally handicapped, one of which is a special support home that Nancy directs and which also has a broadly used family relief program. We presently serve 25 children and adults within the community who reside at home and provide family relief to those 25 clients. It is worth while noting that when we opened we planned on about six. That is the kind of demand we have actually taken in the home. Last, but very important, we also sponsor a home-support program for seniors in the Almonte and Ramsay township communities.

We have about 25 full-time staff and about 10 to 15 part-time staff. We are probably the largest private employer in Almonte as well as the largest private taxpayer. We work closely with Almonte town council and Ramsay township council, each of which has a representative on the corporation's board of directors. At senior government levels, ACDC deals with the Ontario Ministry of Community and Social Services, the Ministry of Housing and the Canada Mortgage and Housing Corp.

In the past few years, the corporation has become increasingly concerned about the situation of the developmentally handicapped person living at home with aging parents or struggling alone in the community. The corporation has many applications from these residents of our community, all with many and varying degrees of needs. Some require minimal supports, some require enhanced supports and some 24-hour care.

Many of the applicants and their families apply to us expressing their frustration with a system that appears to favour the residents in the institution for funding. Parents feel they have fought and worked hard for years to keep their son and daughter at home, and they also feel they have saved the government thousands of dollars in that process. Now they truly and desperately require help, the system is failing them. Government publications like Challenges and Opportunities only serve to raise their hopes that there may be some viable and positive alternatives. However, these hopes are crushed when these other options are not available when they need them.

That is not to say we do not agree with the direction of Challenges and Opportunities, we certainly do, but there just is not the funding to implement it, and it raises the anticipation of these individuals. They do not understand why they seem to be penalized for not having placed their child in an institution at an early age. They see new group homes being built that are almost always filled with people coming out of the big institutions, Rideau regional and places like that, and they say: "Well, we've been waiting for 10 years. How come there is nothing for our child? We are 70 years old." We strongly support the right of these parents and their children for appropriate and affordable accommodation and services.

It has appeared to those of us in the community that it is only through time-consuming and concerted lobbying that money is eventually found to support the client in a group home, supported independent living program or other appropriate arrangement. Those parents or clients who are not fortunate enough to have or be strong advocates simply fall through the cracks. There are applicants on the corporation's list who have been seeking alternative accommodation for 10 years or more.

One remark that was made by a mother at a recent meeting with us was that everybody talks to her about normalization and how wonderful it is for her son, but she is in her 70s and she says, "How normal is it for you to have a 40-year-old son still living at home with you and there to be no other alternatives for them?"

They are worried about what will happen to their son or daughter as they become increasingly frail or pass away, and justifiably so. Instead of enjoying the golden years of their lives, they are still supporting both physically and financially their child. What often happens is that a crisis takes place and the first available option is accessed. This is not what they want. They want to be involved in planning and determining what is best for themselves. It is important that in any budget decisions, the need of these community clients is not overlooked but is considered equally with the needs of the lending institutions.

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To try to raise an awareness in the government about this heart-wrenching need, the corporation has already sent an extensive packet of information to the Minister of Community and Social Services requesting that funding be identified for those community clients needing supports and appropriate housing. Today is another opportunity for us to voice on their behalf the frustrations of our community clients.

The corporation recognizes, as we all do, that the government coffers are not bottomless pits. But there has to be a more equalized distribution. Therefore, we would like to suggest that when funding is earmarked for a person moving out of an institution, there should be equal dollars identified for a community person. Many times this money may even be enough to serve more than one community person, and in more than one way. In this way, parents would see that there may be some hope.

Also, there should be a way for long-term planning to be implemented for the developmentally handicapped person. At present, the planning does take place, but when the time comes to put the plan into place there just are not any options available to them.

Because we are involved in so many different areas, we have a number of concerns, so I hope you will bear with me. As noted previously, this corporation is also involved in providing a seniors' home support program. Its mandate is to strive to enable seniors to remain independent in their homes for as long as possible. This is a very satisfying and rewarding program to be offering, as we see the real and very positive effects of our programs on our clients. The corporation was very pleased to note the Minister of Community and Social Services' recent announcement that all home support programs would soon be fully funded, after United Way and municipality funding. On that basis, we do not get any municipality funding -- so hopefully it will be just after United Way funding.

This is a very welcome announcement, as our corporation is finding it increasingly difficult in a small town of only 4,100 people to fund-raise the moneys needed to run the program -- approximately $20,000 per year. The fund-raising requirements are starting to become a major part of the board's work. This is quite a change for the board, as it has been primarily concerned with providing the supports and services the community so desperately needs. Fund raising saps volunteer time and energy and detracts from the important work the corporation has been so successful at to date. You will therefore understand the pleasure with which we received the minister's news and we applaud you on that decision.

The corporation also applauds the government's initiative in the pursuit of its long-term-care reform. With our extensive involvement and experience with the senior population, we recognize how important it is to seniors to have their independence for as long as possible. We have seen elderly residents in our apartments who, as they become more frail, enter nursing homes simply because they or their families are afraid they may fall and hurt themselves at night and no one will find them for days. This problem could so easily be solved with a phone call to a home support program like ours. The program might have resolved their fear and problem by providing a daily telephone assurance check, or referral to a 24-hour medical alert service.

So many of these seniors and their families are still entering nursing homes on the recommendation of their doctors, without even meeting with the seniors' home support programs and other community services to see what alternatives may be available. These community-based programs are experienced at keeping people in their community and their very philosophy supports independent living for the aged. Hopefully, as the reform progresses, this will become one of the automatic steps in the process and more of our "sage age" clients -- this is a new name they have given to themselves in our area -- will be able to happily stay at home a lot longer.

One caution we want to make, because of our experience with the developmentally handicapped, is that those of us who have dealt with both the developmentally handicapped and the seniors' population are really increasingly nervous about there being sufficient supports and funding in the community to serve the increasing needs of our population. These community supports are essential and there has to be sufficient money identified to meet the growing demand. This is where the system now collapses for the developmentally handicapped person. The reforms proposed will not work if the funding for these basic community services, and their anticipated growth, is not available. Already, our home support program is experiencing a growing demand for its services.

We see more and more existing programs being cut back. For example, the local hospital now looks to our program to see if we can offer transportation for outings for its chronic-care clients. The integrated homemaker program has recently added the requirement that a senior must require personal care in order to get assistance, which they estimate will cut new referrals by 40%. That 40% now come to seniors' home support program to see if they can get homemaking services. We are fortunate that we offer that service. Other home supports do not. What will happen in those areas? In addition, our foot-care clinic was started because the public health unit stopped providing the service and there was no one to fill the void until home support stepped in.

All of these new requests coming to our program concern us. We wonder what other existing services will be cut back and what our program will have to pick up. At present we have our volunteer staff to continue to deal with the increased demands. But this will not always be possible without increased resources.

As numbers of seniors requiring service increase, there must either be funding to support the existing services or for those programs to which seniors turn to replace supports they used to obtain from another source. Therefore, with the increasing numbers of seniors requiring support services, and the direction the long-term initiative is taking, please ensure that the grass-roots supports in the communities are in place and that a plan is developed for funding these services as demand increases.

One of the very welcome changes to the long-term care initiative made by the NDP government was to identify the need for the link between seniors' housing and seniors' support services. Members of the Ontario Non-Profit Housing Association and others have for many years identified concerns about the lack of recognition that non-profit housing has as a vital link in the provision of services to the senior. For so many years non-profit housing has been referred to as simply bricks and mortar, but we at ACDA have proven that seniors' housing can be so much more than that. By providing the home support program to members of the community, including our senior residents, we have been able to enrich and enhance their lives. We have tenants in their 90s who have been able to stay in their apartments only because of our programs.

If the Ministry of Community and Social Services had not provided the funding for this program, we would never have had the staff time to provide these vital and necessary services. The corporation would be only a bricks-and-mortar agency and not a community development corporation which is increasingly able to look at the whole person and his or her needs.

It is very important, however, to ensure in the future that these ministries work more closely together -- in our case, the ministries of Housing, Community and Social Services, and Health. The money can be earmarked in a budget for use for joint projects by the ministries. But it will not work unless there are some clear guidelines about determining which projects will be funded. As has happened in the past, and almost to our cost, we almost lost a project because of that. How do you determine which projects should be funded? What if it is a housing project where there are 200 seniors in desperate need of housing but yet MCSS determines that these seniors do not have a high priority for social supports or vice versa? We have to recognize that wherever there are communities of seniors, there will eventually be a need for these supports, that is, if long-term care continues.

The corporation would therefore like to suggest that it be a requirement of all new seniors' housing that these future needs be considered, that a long-term plan be established with the support of the ministries of Community and Social Services, Housing, and Health, and that these long-term plans be considered as and when strategic planning and budget forecasts are prepared.

The last point of concern we would like to raise is the use of volunteers. In the past few years, there have been increasing and worrying signs that the government looks to the volunteer sector for service provision. While volunteers are, and should continue to be seen as, valuable and important enhancements to programs that exist or are developed, it is very dangerous to build programs around skeleton staff while counting on volunteer help. There are limited numbers of volunteers available and those who are available are often tapped to the limit. In Almonte, with only 4,100 people, I think we are very fortunate to have as many as we do.

How do you ensure a consistent service if it exists mainly through volunteer help? How do you discipline volunteers if they arrive late and a program has to wait? Where do you find them all? We are finding it increasingly difficult to obtain volunteers. Programs like the Imagine campaign from the Canadian Centre for Philanthropy are excellent, but people today have less and less time. In addition, the women-at-home group, historically a source of volunteer help, is dwindling as more and more women return to, or are in, the work force. Therefore, we wish to caution you on the development of new programs that are dependent, either wholly or partially, on volunteers to exist. Volunteers should be seen as enhancements to a program, or as committee and board members.

We would also like to make a couple of suggestions about possible ways to increase the supply of volunteers. One idea is that recipients of unemployment insurance or welfare who are willing and able, be allowed to volunteer one day a week to a non-profit group. Not only would this provide the non-profit with some valuable labour assistance, but many would gain useful work experience, as well as a sense of purpose and meaning. We have had people in both those categories who have applied to do volunteer work, who have been told that they are supposed to be at home waiting in case they get a call, and should not be out volunteering. So we have had expressions of interest in that area and they just have not been able to follow through because of the rules. This training would cost the government nothing, but would hopefully provide a valuable opportunity to someone who eventually hopes to re-enter the workforce both in terms of skill development and work expertise. This is an idea of mine, but whether it will ever work -- what about giving a person a charitable receipt for volunteer hours? I bet you would get an awful lot more people volunteering.

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In closing, I would just like to summarize the four points I am here today to speak to you about. First, when funding is earmarked for a developmentally handicapped person out of an institution, there should be equal dollars identified for a community person, and there should be a way for long-term planning to be implemented.

Second, with respect to long-term care reform, please ensure that grass-roots supports in the communities are in place and adequately funded and a plan is developed for funding these services as demand increases.

Third, it should be a requirement of all new seniors' housing that the future needs of its tenants be considered and a long-term plan established and that these long-term plans be considered as and when strategic planning and budget forecasts are prepared by the ministries.

Fourth and finally, a note to request that new programs are not dependent on volunteers for their existence, but that volunteers are seen as the very important enhancements to the program delivery or as committee and board members. In addition, we need to spend some time developing new ideas on ways and incentives to recruit new volunteers.

The board of directors and staff at the Almonte Community Development Corp believe that this corporation is a very unique and special entity. It is a group that will fight to meet the needs identified within its community, even those beyond the programs currently offered by the corporation, and which will continually strive to improve and expand upon these vital necessary services.

I think we are one of the few organizations that provides as many different services and in different areas as we do. As an aside, we were very fortunate this summer to get funding from the Ministry of Community and Social Services to hire some of our tenants' children -- the tenants receive welfare or the people themselves were on welfare -- and we ran a summer program for the children of the developments that was very, very successful. But it was that funding. It brought a lot of work experience to those children and really made a difference in their lives and also stopped a lot of problems within our project. So we are always looking at new avenues of ways to enhance people's lives in our units. Thank you for letting me speak today.

Mr Sutherland: First let me just extend my congratulations. For someone who does not have that much familiarity with eastern Ontario, I must say these two days of hearings have certainly been enlightening and very encouraging -- to see how many community-based organizations there are in eastern Ontario and the Ottawa area who are working to make their communities better and helping those people who are less advantaged or sometimes have difficulty helping themselves. I think it is a great credit to this part of the province that there are so many willing people, not only volunteers but dedicated staff people.

You mentioned developmentally handicapped and that you do some of the housing for them. What is the role of the Association for Community Living? In my riding the Association for Community Living basically tries to set them up in the different housing areas. Are you involved with that?

Ms Slater: We have an Association for Community Living in Lanark county. We have two other groups, ours being one of them, that also provide group homes for the developmentally handicapped. I think the idea was that there should be options available to the developmentally handicapped, as there should be to other people. With our organization, one of the very positive features of it is that we have seniors and families and developmentally handicapped, so it is sort of a very generic corporation. We are not just the developmentally handicapped.

We had one program, one of our group homes, that started about nine years ago, I believe. It was such a success that when we looked at this other group home, the ministry certainly supported us. We have an elderly gentleman in his 80s who is developmentally handicapped. The family chose to have him come to our community because of our seniors connection. We can provide services to that gentleman that we would not otherwise be able to provide.

Mr Conway: Should the Rideau Regional Centre be completely emptied?

Ms Slater: That is a political issue. I do not know if I want to get into.

Mr Conway: I respectfully suggest that that is a fundamental question of public policy.

Ms Slater: We have a number of individuals within our special support home who are severely physically and developmentally handicapped. Their lives have improved tremendously in the last two to three years since they moved. They were in Elmvale, which was another institution that closed. We had one of the young ladies pass away and the mother said those two years were the best two years of her life. We certainly as a corporation, I think, provide a quality program. We are always doing quality checks on our program. We link with many of the services in the community and our staff are extremely caring.

Mr Conway: I accept all of that and I know something of the very good work you do in north Lanark. My question remains -- you are very knowledgeable providers in this part of eastern Ontario: Should Rideau Regional Centre be completely emptied?

Ms Slater: I think if they can find alternative accommodation for those individuals that provides the services they require, then it is much better for them to be in a small home setting with those kinds of supports and caring staff than in a larger setting.

Mr Conway: To your assistant can I ask, is it your view that condition can be easily met?

Ms Fordyce: In the community?

Mr Conway: Your colleague indicated that if those kinds of community placements can be provided it could be and probably should be closed. Is it your view that it is reasonable to expect those kinds of specialized placements can and will be found in Lanark and Leeds and west Carleton?

Ms Fordyce: I would hope that is the move of the government and that people are going to receive top-notch care in the community better than can be provided in an institution.

Mr Morin: You raised one problem that you have in recruiting volunteers. I was involved in that very, very directly and I understand --

Ms Fordyce: I think you told me that one.

Mr Morin: I used to be minister responsible for senior citizens' affairs. I would suggest that you give a call to Mrs Mary Brown with seniors' issues. She will give you all the advice that you need to get volunteers. It is difficult to get them, but she will help you out -- a terrific person.

The second thing: I wish you success in trying to obtain volunteers with the people who are receiving either welfare or unemployment insurance. That is going to be tough. The idea is excellent, to keep them involved so they become informed of what goes on, because if you want to activate a person in finding a job, it is to keep them employed. I agree with you 100% with that, but I wish you success.

The Chair: I have to go on to Mr Sterling.

Ms Slater: Can I just speak one second to that?

The Chair: You are taking Mr Sterling's time away. Okay, he says it is okay.

Ms Slater: All I wanted to say was we wondered when we hired five students this summer who were all recipients of welfare, or their families were, and out of the five, four of them were wonderful employees and did a super job and one did not work out. You might be right on some occasions, but it is not always the case.

Mr Morin: It might be easier in a rural area.

Ms Slater: Maybe.

Mr Sterling: I would like to follow along with Mr Conway. I am very much concerned about Rideau Regional Centre in terms of the patients or residents who remain. They are severely handicapped and they have severe physical problems as well as other challenges. My concern is that in talking to the parents, they just do not think there is enough money in any government to do a proper job outside Rideau Regional Centre.

The second thing I think people from outside eastern Ontario should understand: Rideau Regional Centre, in my view, is a home for a lot of these people. It is not an institution to them. Their ability to survive in that community is much greater than their ability to survive in Almonte or Carleton Place or any other community because there are more safety nets within that institution. I think deinstitutionalization is a goal that we should try to achieve for everyone, but I do not think it is achievable for those at the low end of the scale --

Ms Slater: We have done it.

Mr Sterling: No, you have not. There are still 850 in Rideau Regional Centre.

Ms Slater: We have some very severely handicapped.

Mr Sterling: And every one of those you put out, to keep the example that you brought in, is going to keep three of those back in, because it is so costly to put the last 850 out into the community, when they have taken "the cream off the top." I think there were originally over 2,000 or 3,000 residents there and they have deinstitutionalized down to 850, but the remaining ones have got severe problems. I think the government, quite frankly, should not close Rideau Regional Centre at this time at least, unless something changes dramatically.

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The other thing that I am concerned about is there is no tracking of a person who leaves Rideau Regional Centre. The government washes its hands of a resident 30 days or 90 days, I am not certain, after they leave Rideau Regional Centre. There have been people who have dropped off the face of this earth who have been deinstitutionalized from Rideau Regional Centre. No one can locate where they are. They somehow got out into the community and got lost. My concern is, I know there are happy stories, as you have said, but are there other stories which are sad, where people have been allowed to go out into the community and just have not found the social net to protect them? That is my greatest concern.

The Chair: I would like to thank you, Mr Sterling. I remember that speech you had in the House not too long ago.

Mr Sterling: I thought it was good.

The Chair: Yes, I listened there. We were listening. I would like to thank you there for your presentation before this committee. See, you did not think anybody was listening, Norm.

OTTAWA-CARLETON FOOD COALITION PROJECT AND EMERGENCY SERVICE PROVIDERS

The Chair: The next group to come forward is the Food Coalition and Emergency Service Providers. I would like to welcome you. You have 15 minutes for your presentation and in that period, if you want, leave some time at the end for questions from the committee. Would you mind identifying yourselves for the purposes of Hansard and your position.

Mr Wallace: My name is Bruce Wallace and this is Robin Pow. We are both food coalition project workers for the food coalition project which was established using the food bank contingency fund of the Ministry of Community and Social Services; today we are also representing the emergency service providers which is a coalition group, as the name says, emergency service providers, people providing dropin services, food banks in the region. We are members on that committee representing them also.

Ms Pow: On my way over here, I picked up a bag of groceries from one of the food programs downtown, one of the local programs. What you see on the table is basically what a single person would get in a food package which would last until the end of the month. You can see there are a couple of cans of soup and some beans. The only thing that is missing from this package -- there are actually some eggs over here -- is a pound of hamburger and about one quarter of a pound of margarine.

From what Bruce and I have been seeing -- we have been doing a research project -- many people would come into the food bank, about the second or third week of the month, often paying high rents on general welfare assistance. They run out of money often due to the high rents; there is not a lot left over for food. This is what they get, usually, to last until the end of the month. A lot of the programs are flexible and they will allow people to come back more than one time during the month, but they ask people to try and last as long as they can on what you see before you.

I do not know how long you think this would last you; this is supposed to represent three meals a day. Usually, in talking to people, it will last for about three or four days. A lot of time and money goes into food distribution and we are concerned about the effort that is being put into that and not being channelled into giving money directly to people who need it. People have to drop this off for pickup. The food-bank truck comes to pick it up, it gets taken back to the food bank and gets sorted. There are volunteers there and paid staff. It goes back out to the food programs. There is an incredible amount of volunteers in the city who come out. They are in church basements every day sorting food and handing food out to people. There were over 18,000 people in the month of July who used the services of grocery programs. We just want to make people aware of what the situation is and what people are actually receiving.

Mr Wallace: We are here to try to relate to you how the provincial budget affects one segment of Ontario's population, the people who use food banks in the Ottawa-Carleton region. It is a diverse group of people. But last month we interviewed or talked to 131 users to try to get an idea of the different profiles of users. We also tried to find out not only who they are but what they would need from a provincial government.

We strongly support the general direction of the NDP's budget as a budget that would begin to help a significant population within Ontario. During the month of July, there were over 18,000 people who asked for and received groceries such as you are seeing here from the 28 emergency grocery programs in Ottawa-Carleton. That does not include all the people who go to soup kitchens, get meals from dropins, breakfast programs in schools and places giving out food vouchers. It is only the grocery hamper programs.

Out of these over 18,000 people, over 8,000 were children. Children make up 44% of the total people using food banks. Agencies which provide these services, as you might expect, have seen great increases since the recession has started and now a lot of them just do not know what to do. They are throwing up their hands. They cannot meet the demand. Quite a few churches are running out of food halfway through the month.

What I wanted to tell you now is what people told us last month when we talked to users of food banks. Most of the people who use them are receiving government benefits; over 80% actually are receiving benefits. Very few are what are considered the working poor. Almost one half of all the people using food programs are general welfare recipients. People receiving family benefits allowance make up a further one quarter of those seeking food. Over 80% of the people we interviewed are renting apartments or rooms from the private market and many were paying over 50% to 60% of their cheques on rent.

We were told by two thirds of the people we interviewed that they run out of food before the end of the month and half of these people ran out of food before the second week of the month. We also ask what would help a person to be able to buy food for themselves and almost 40% of them told us bigger cheques were needed usually to be able to afford the high rents and their bills. Another 20% said a job is what they needed and a job is what they wanted, yet they knew that their chances were pretty dismal during the recession. We had men in their 50s with little work experience or little education, recovering from work-related injuries asking us, "Who would hire an old man like me?" It is really hard to give an answer.

The reality is that of the people we interviewed, over half of them had not completed high school and about one quarter, exactly 23% of the people we talked to, told us they have used psychiatric services. A provincial budget based on a market approach would not be a budget which met the needs of these 18,000 people in the region using emergency food programs. In our survey, every one agreed that the food programs cannot be shut down. They told us they needed them and that without them, a lot of people would go hungry. Many of the people told us that crime would increase if there were shutdowns.

The food banks are not a suitable response to Ontario's poverty. They are only a Band-Aid approach to an economic problem. Closing the food banks will not help; it will only further hurt this population. What is needed is continued social welfare reform, more affordable housing and lower unemployment. We do not believe that the needs of this population can adequately be met by market-based policies. The population needs the NDP government's commitment to building more affordable housing.

As already said, 80% of the people needing food bank food are renting apartments or rooms in the private market. This population needs the provincial government to continue to implement social assistance reforms as outlined in Transitions and Back on Track. We are pleased with the initial steps that have been taken, but believe a greater commitment is required to bring about real change and positive results for those affected although the $250 million is encouraging, it still falls short of the $450 million promised to revamp and improve the system.

In closing, we would like to respond to a report issued earlier this week by the Fraser Institute which criticizes the NDP government's budget and it's food bank policies. This report recommended that the Ontario government, rather than trying to eliminate food banks, should encourage such private charity. The institute explains that food banks are not a problem but evidence of good citizenship. We strongly disagree. Food banks are not just a problem, they are a disgrace. There should not be acceptance of food banks but rather outrage that in this so-called fat city there are over 28 programs in the area made up of hundreds of volunteers handing out food to thousands of poor men, women and children.

Charity such as this on this large scale throughout the province is functioning to preserve the status quo, to maintain hunger in an affluent society, an affluent province. No institution other than government is able to ensure basic needs such as food, clothing and shelter.

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Mr Villeneuve: Regarding the food bank phenomenon. I was always surprised when we were going through the good economic times -- and you are probably aware of the planning and counselling -- about the other side of fat city, and you have referred to fat city. This, I believe, will be an ongoing phenomenon, particularly going through a recession or coming through a recession.

When we go back to the buoyant economic times of the late 1980s -- I live just outside of Ottawa, and Ottawa radio stations are heard there and Ottawa newspapers come to our door on a daily basis -- I was always wondering why in this city we had this type of phenomenon. I am starting to understand it a little bit, but could you expand a little more? Can we not get these people, particularly when times are good, to be self-sufficient at least? To be for ever and always asking for additional food and food banks, I understand it going through the recession, but I have great difficulty going through the period from 1986 to 1989 when times were supposedly good. We are going through the recession now, but quite obviously the fact that they are needed more and more indicates a malaise somewhere that we have not been able to put our finger on. How do we correct this?

Mr Wallace: As mentioned in the presentation, I think the easiest way to correct it is through what we see as the great social reforms like the Back on Track reforms. More affordable housing is probably the largest one, where as the money increases, if the rents increase, it is not going to end. Most of the people told us it is the rents which are really putting them behind, which they can never get ahead of.

On the hiring, most of the people whom we talked to would like a job. As I also said, it is really hard to sound encouraging that a lot of people would get jobs. As we said, 23% of the people told us they had used psychiatric services. Many people are older and they have had industrial injuries. They are not people whom many of the people in this room would pick out of a labour force as people they would want to hire, especially during the recession. There are just so many layoffs. I do not know that just closing the food banks or trying to see the solution as being a food solution is possible. It has to be a solution that is based on welfare reform, housing and more jobs.

Mr B. Ward: Thank you for your thoughts. I have read that article by the Fraser Institute as well. I could not believe the inferences it was making, and that the Fraser Institute would make such an irresponsible statement concerning food banks. Perhaps you could explain, from your point of view, why they would even suggest such a thing, if you can.

You are basically on the front lines working with the people of Ottawa who are severely disadvantaged because of the recession. We have attempted to maintain our social programs during these tough times, if not to improve them, and I have been criticized for that by some groups. What do you think it would be like here in Ottawa if we had not implemented what we did in the budget pertaining to social programs?

Ms Pow: We were pleased to see the reforms that were put into place and we think they are going to make a difference for people.

Mr B. Ward: If we had not done it, what would --

Ms Pow: If you had not done it, I think the situation would be even worse for people. There is no doubt about it.

Mr B. Ward: Why do you think the Fraser Institute would make such an irresponsible statement concerning food banks?

Mr Wallace: From what we read of the Fraser Institute, it thought that the food banks were a great example of citizenship in Canada, because of the charity of the churches and how the churches do in outreach. I cannot --

Mr B. Ward: And why do --

The Chair: Mr Ward, let him answer, because you have only got about 15 seconds left.

Mr B. Ward: Okay.

Mr Wallace: Anyone who thinks of the food banks as an example of really good citizenship in Canada has never been in a food bank, I do not think, and seen how degrading it is for the people who go through it to have to prove that they need the food. To prove that you are from that area to get this food, to go and stand in line for this amount of food and to take it home is very degrading. The citizenship is when Ontarians do not have to go and stand in a line and almost beg for their food from these agencies. There is no way that they investigated what a food bank really is, to call it good citizenship at all.

The Chair: I would like to thank you. We have run out of time.

ONTARIO PUBLIC SERVICE EMPLOYEES UNION

The Chair: The next group is the Ontario Public Service Employees Union. Good afternoon. I would like to welcome you. You have 15 minutes on your presentation before the committee. In that period of time, if you can leave some time at the end of your presentation within that 15 minutes so the members of the committee can ask questions on your brief. If you would not mind, for the purposes of Hansard, to identify yourself and your position, you may begin.

Mr Upshaw: Let me first of all say that I appreciate the opportunity of being here today. I want to introduce Beverly Dalys from our educational and research department of OPSEU, who will be sitting alongside me here and answering any technical questions that there may be. Let me also say that I understand the National Union of Provincial Government Employees, who are following us, have given part of their time to OPSEU for this presentation, so we actually have more than the 15 minutes allotted.

My name is Fred Upshaw and I am president -- I am sorry. Is this off my time or what?

Mr Sterling: What is happening here? I thought this committee determined what times people were given and there were no deals made out in the hall as to who was going to be heard and what the times were. Are these people all one group?

The Chair: Okay, Mr Sterling, let the clerk explain this. I am just going by the schedule, 3:45 to 4 o'clock. That is the scheduled time here.

Clerk of the Committee: My understanding is that OPSEU was offered an appointment yesterday and would have had a 30-minute appointment, but they were unable to make it yesterday. In coming today, the only appointment left was a 15-minute appointment, which they accepted, which is why they have 15 minutes on the agenda.

Mr Upshaw: If I may ask then, if one of the panel objects to OPSEU, which represents actually about 110,000 workers in Ontario, having the opportunity of sharing some of the time with our national union, which we are a component of, if I understand --

The Chair: You are talking the National Union of Provincial Government Employees?

Mr Upshaw: Yes, which we are a component of.

The Chair: So you are going to take 45 minutes and split it in half then?

Mr Upshaw: But my understanding is that a panel member objects. If that is the case, we will accept that, and we will try to give our presentation in 15 minutes to the employees of the Ontario provincial government.

Mr Sterling: I object.

Mr Upshaw: Obviously, you do.

Mr Sterling: I do not think you should be --

Mr Upshaw: Obviously, so I accept.

Mr Sterling: It is all one group, and you are all going to say the same thing anyway.

Mr Upshaw: I accept your objection, Mr Sterling.

Mr Sterling: It is a joke.

Mr Upshaw: We understand.

The Chair: Would you continue?

Mr Upshaw: I am pleased to address the committee on an issue that affects the lives of the 69,000 provincial government workers whom I represent and thousands more OPSEU members in colleges and agencies that depend on provincial funding. So we are talking of 110,000-plus members in Ontario, the largest in the country.

It is not often that the Ontario Public Service Employees Union finds itself in the position of agreeing with its major employer, but I will congratulate the government for bucking the national trend to bludgeon public sector workers.

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As far as budgets go, the latest fashion rage seems to be for government treasurers to wear oxfords that are two sizes too small and very tight. After Ontario's 1991 budget was delivered by Treasurer Laughren, the opposition and the media acted as if the new Treasurer had delivered a budget in oversized fluorescent sandals, loose, casual and entirely self-indulgent. In our opinion, Mr Laughren's budget would appropriately have been delivered in flippers. Although deceptively large, they fit tight and serve their purpose as a flotation device. In this case, the Ontario budget is keeping afloat the economy, not just of Ontario, but of Canada as well.

Critics have charged that the projected $9.7-billion deficit is higher than we have ever seen before. That may be true, but this budget is responding to other numbers we have never seen before: half a million unemployed; 83 full and partial plant closures in the past six months; 10,000 business and personal bankruptcies in Ontario in 1990; a 90% increase in welfare cases in Toronto. With one exception, the current government's response has not been a radical departure from the response of Treasurer Frank Miller to the recession of 1981-82, and that one was not as severe.

We in OPSEU recognize that there are other aspects of this budget that have not been seen before in this province. Federal transfers contribute less than 12% of provincial revenue. Federal cutbacks this year may cost Ontario over $1.6 billion. In 1982, the Conservative administration was looking at a decline in federal transfer to 15.8% from 17.3%. Today, it is only 12%.

In 1982, the Tory government spoke out against these harmful federal cutbacks, specifically cuts to established program financing. The cost to Ontario then was well under $500 million. Today, it is three times that amount, and today Ontario has to account for the ravaging effects of federal Bill C-69, which focuses Ontario to pick up the largest part of Ottawa's tab on social assistance. Bill C-69 has a very damaging action by the federal government. Ontario depends on transfer payments to maintain the social programs that are delivered by our members.

The Supreme Court decision of August 15, which upheld Bill C-69, has bolstered the principle of downloading responsibility to lower levels of government. Clearly, the NDP government does not abide by this principle. To its credit, the government has not downloaded the extra costs to the municipalities. If it had, the provincial deficit would have been lower, but I expect the opposition would still have been whining. If Ontario had passed the increasing cost of welfare on to the municipalities, they would have been forced to raise property taxes and hurt many of those who can least afford to pay. I submit that the government did the right thing in stopping the buck where it belongs.

Our overvalued dollar, high interest rates, the GST and the free trade agreement with the United States have combined to lay waste to Canada's economy, especially Ontario's. During the 1981-82 recession, Ontario's unemployment rate remained below the national average and there was less overall movement to Ontario, but today Ontario's unemployment rate continues to increase, even though the recession is supposed to be about over.

These pressures on the Ontario economy have provided this government with little choice but to increase spending. Maintaining current standards of health, education and social assistance added over $3 billion to the $3-billion deficit that this government inherited from the Liberals.

Then there are the extra costs of making pay equal. Will you chop the $125 million that this government is making available for pay equity adjustments to low-paid women in municipalities and day centres? I think this proves that the government understands that women should not bear the brunt of economic downturn.

This government may also understand that redistributing money to those who need it increases spending and boosts the economy. In a recession you cannot argue with that, and in the 1982 budget Frank Miller created temporary jobs like UIC top-up programs, but this new budget is responding to the needs of the province for lasting jobs and encouraging an effective mixed economy. Better roads and hospitals provide ongoing benefits to citizens and businesses in Ontario. The NDP government is taking no hostages, be they women, workers on UI, municipalities or public service workers.

The Conservative administration of 10 years ago chose to make public sector employees pay for the shape of the economy. The 1982 budget statement imposed wage controls, claiming that public sector workers have a considerable degree of job security. That was in spite of the increase in unclassified, casual staff and the tendency towards privatization that was happening then and continues to this day. We know that public sector job security is a myth. Mulroney is proving it at the federal level. Ward closures in provincial psychiatric hospitals and the restructuring of such areas as OHIP and the business practice division of the Ministry of Consumer and Commercial Relations are examples, while my own members are not -- and I emphasize "not" -- secure.

That said, it is a relief to see a government show economic leadership by continuing to respect our free collective bargaining relationship through hard times. Government workers are not the root cause of budget deficits. In fact, our share of the budget dollar has been steadily decreasing. To apply tough policies to fight the deficit during the worst economic downturn in 50 years would not only have been insensitive, it would have been unwise. Ontario's actions are necessary for the health of the national economy.

We at OPSEU are pleased that the basic difference between this budget and those of the past comes down to how the real problems of working people and disadvantaged people are treated. It is refreshing to see a government that does not treat pay equity, native issues and wage protection as luxuries. It is a real pleasure to see that this government recognizes the contribution that its employees make to the public. OPSEU members provide quality service to the people of Ontario. At times like these, when so many people must rely on assistance, our members make an outstanding contribution.

I thank you.

Mr Sterling: I understand the average increase for employees is around 7%?

Ms Dalys: It is 5.8%.

Mr Sterling: Do you think that --

Mr Villeneuve: It is 6.8%.

Mr Sterling: Well, whatever it is, there is not time to argue over that. Do you take that as a top priority, over a group like that which was just in front of our committee before, the food banks? Do you think that a government's priority should be in properly funding food banks or giving increases of 5.8% to the civil service? I understand some civil servants got over 10%.

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Mr Upshaw: Let me say first of all that we do not look for wage increases that are going to take away from food banks. We do not look for wage increases that are going to take away from those who are unemployed, from those who are on the welfare rolls. We ask only for a proper increase. However, thank God we have a government now that is willing to sit down and negotiate, and we in turn will negotiate with this government. If it means that our people, the professionals who deal with the underprivileged, have to toe the line in order to bring this deficit which this government did not create in line, then that is what we will do.

Mr B. Ward: Just quickly, we have heard from a number of groups which are requesting that a balanced budget be implemented this year, which I think is unrealistic. When asked where they would cut, one of the first things they say is to freeze the civil servants' wages. What do you say to those groups which are suggesting that?

Mr Upshaw: What I say is, if you cut the wages of the civil service -- in other words, we cut the wages of the ambulance workers -- is that going to make the service any better? If we cut the wages of the people who work in the psychiatric hospitals, is that going to make the service to those patients any better? If we cut the wages of the people who work in the community colleges, is that going to make their job any better? I suggest to you that it is not the civil service that has caused this deficit. All they are prepared to do is their professional job, and that is to serve the people of Ontario.

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

Mr Upshaw: Thank you very much.

NATIONAL UNION OF PROVINCIAL GOVERNMENT EMPLOYEES

The Chair: The next group is the National Union of Provincial Government Employees. I would like to welcome you. You will have one half-hour for your presentation, and in the period of one half-hour could you leave some time at the end for questions and answers by the three parties here on the committee. If you do not mind, before you get started identify yourselves and your position for the purposes of Hansard. You can start your presentation.

Mr Clancy: Thank you very much, Mr Chairman and members of the committee. My name is James Clancy. I am the president of the National Union of Provincial Government Employees. To my immediate right is NUPGE's economic staff member; he is an economist, Bob Dale. He works for the national union. To my left is Derek Fudge, who is the director of research for the National Union of Provincial Government Employees. We have distributed a presentation to the committee. I will not read it, but rather I will make some short remarks, probably some seven or 10 minutes in length.

I gather that the committee did not, and I had agreed --

The Chair: Oh, you agreed that --

Mr Clancy: Sure.

The Chair: Okay. I did not hear anything come forward, so that is why I did not want at that point --

Mr Clancy: So OPSEU did not get any --

The Chair: They can come back on, but there is only that period of time. That is it.

Mr B. Ward: How much time do they have?

The Chair: There is a total of half an hour.

Mr B. Ward: So 4 to 4:30?

The Chair: Yes, that is correct.

Mr B. Ward: Is that approximately enough?

The Chair: Maybe Mr Upshaw can come and sit up there and the questions can be --

Mr Clancy: Sure. Brother Upshaw, will you join us?

Mr Sterling: Mr Chairman, I have to tell you something here. I want to make this perfectly clear. The unions may run the NDP government of Ontario, but they do not run legislative committees.

The Chair: Mr Sterling, we are not going over the time period.

Mr Sterling: It does not matter. We were scheduled for a half-hour here this afternoon with the National Union of Provincial Government Employees and that is who I expect to hear and question during this period of time.

The Chair: What we did earlier in the day between 1 o'clock and 2 o'clock is that we took three community groups and grouped them into one hour because they wanted to group that time. They did not get any longer period of time; they still only had the one hour for their presentation.

Mr Sterling: It is not a question of who is here when they are here. It is a question of who is controlling the committee. It is not the witnesses who control the committee, or a group that has a special interest in presenting a case that controls the committee. It is this committee that controls what happens in this committee.

The Chair: As Chairman, I am listening to your direction.

Mr Sterling: I object strenuously to people making deals outside of this room without the committee's knowledge and coming in front of this committee and saying, "We'll split up the time this way," or whatever it is. That is not the way things are done. As I say, the unions may have control of your agenda, but they sure do not have control of this Legislative Assembly yet.

The Chair: Mr Sterling, all I was taking a look at here is, that period of time was not extended or anything else unless the subcommittee wants to give the Chairman any different direction. As it is, I just looked at the clock and saw that they are here till 4:30. We are listening to the people of Ontario. Is there any objection?

Mr Christopherson: We are on track right now. Everything is fine, as it should be. Mr Clancy is entitled to whomever he wants in his delegation, and I suggest we proceed.

Mr Clancy: I thought it was just a small administrative error on somebody's part. They were supposed to get our time and we were supposed -- we are not hung up on it. Brother Upshaw is a member of our board. He is our Ontario vice-president.

The Chair: Let's not waste any more time and let's get on with the brief.

Mr Clancy: Let me begin by saying there was a comment made about the unions running the NDP. Let me categorically state that we do not. They are quite capable of running the government and doing, in my estimation, a fine job of it. So I have no interest in running the government. If I wanted to run the government, I would run for government.

The Chair: I hope I was fair as a Chairman to say you had your 15 minutes, Mr Upshaw. Now you are sitting with the other group.

Mr Clancy: The National Union of Provincial Government Employees, Canada's second-largest labour union, wants to thank the members of the standing committee on finance and economic affairs for giving it this opportunity to appear before them.

The national union was founded in 1976. It now has 13 components across the country. We represent people employed in both the public and private sectors in many different types of occupations and jobs across the country. In total, we represent some 302,000 workers, 109,000 of whom are members of our four Ontario components: the Ontario Public Service Employees Union, OPSEU; the Ontario Liquor Board Employees Union, OLBEU; the Brewery, Malt and Soft Drink Workers, Local 304; and the Canadian Union of Brewery and General Workers, Local 325.

What I intend to do is provide you with an oral summary of our brief and perhaps there will be time for a few questions.

Let me start by talking about a theme dominating most provincial budgets and the federal budget this year, that of tough choices. This is the idea that governments faced with difficult economic circumstances have no choice, even in a time of recession and severe economic hardship, but to brutally clamp down on crucially needed public programs and services and on the wages and jobs of the public sector workers who provide them.

As you evaluate the Ontario budget and consider its merits and its shortfalls, the national union would like the members of the standing committee on finance and economic affairs to contrast Ontario's people-oriented approach with the tough-choice, cut-and-slash, expenditure-reduction philosophy that most other governments have implemented.

In our view, you should be considering two related questions. The first is whether governments implementing policies based on that philosophy really understand what their mandate is. We do not think they do. Indeed, the overriding policy focus of most Canadian governments over the past several years has been on controlling or reducing their annual deficits and their accumulated debt.

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More people-oriented objectives, such as creating jobs, reducing unemployment and providing assistance to those in need, have been pushed aside to please both corporate executives and analysts who manipulate financial ratios in bond-rating firms. As a result, most of our governments have been far too willing to accept shockingly high unemployment rates, rates which never seem to drop far enough even in times of economic growth, and record numbers of people living in poverty, dependent upon welfare and food banks.

As we show in our brief, as high as some of these rates seem to be through quoting official statistics, they are actually much higher when more realistic factors are taken into account. Consider the national unemployment rate which is now officially at 10.5%. That figure ignores over 800,000 other unemployed Canadians: for example, those who have stopped looking for work, feeling there is no work available for them, or those who only work part-time even though they really want full-time jobs, and workers in similar types of circumstances. If we add those individuals to the official statistics, we see that the true national unemployment rate is around 16%. In Ontario, the 10% official unemployment rate becomes a 15% true rate.

That is wrong. Should we not all be ashamed that a society as rich as ours would tolerate so high an unemployment rate? Why do we let our governments get away with the cut-and-slash, expenditure-reduction policies that have caused so many of these people to lose their jobs, and then to be thrown on the scrap heap and often ignored?

Governments should be there to make things better for people, to provide people with needed public programs and services and to help people when they are in need, not to pull out when people's needs are greatest. Ontario's government decided not to pull out when its citizens needed it. It acted in marked contrast to the federal government and most provincial governments across this country.

The second question we would like you to consider is whether actions consistent with the tough-choice, cut-and-slash, expenditure-reduction philosophy actually address the problems governments supposedly want to address. We think the expenditure-reduction philosophy actually runs diametrically against what is needed for economic growth and recovery to take place. What expenditure reduction does is cost people their jobs and reduce the public programs and services they rely on, like health care, education and social assistance, at a time when people are already hurting.

Expenditure reduction also means less help for workers laid off by industry shutting down because of the so-called free trade agreement and high interest rates. Expenditure reduction means fewer opportunities for our young people to get an education, for working families to find quality child care they can afford, and less affordable housing being built. Implementing expenditure-reduction initiatives in a time of recession is not only perverse; it is immoral.

The Ontario government should be praised for having the guts to confront head-on the heartless and uncaring economic policies implemented by the federal government in Ottawa, policies to which most other provincial governments have acquiesced, despite what they would like their respective electorates to believe.

Provincial governments across the country, those that allege they were constrained in responding to what the federal government has done to their provincial economies through its policies on interest rates, transfer payments, taxation, free trade, unemployment insurance and deregulation, did have other fair, more people-oriented choices. They could have made these other choices despite these and other federal government actions. Indeed, the so-called tough choices those other provinces decided to make had less to do with their own province's economic problems than with their own political philosophies or, more appropriately, with the federal cut-and-slash, expenditure-reduction philosophy they have so willingly embraced. Is it not time our federal government and most of our provincial governments started to focus on people and treat those people more fairly, like the Ontario government has done?

Earlier this year, our union and the Public Service Alliance of Canada held public hearings across the country to obtain the views of ordinary citizens about Canada's future. We wanted to find out how people were feeling about a broad range of issues. Many of the people we met talked about the effect of federal and provincial expenditure-reduction initiatives.

For example, in Regina we heard the following: "The human costs are all around us: Growing rates of poverty; legions of the homeless; hundreds of thousands relying on food banks; plant closures as manufacturers move south; chronically high rates of unemployment; more taxes for workers and less for corporations; and a decade of economic insecurity, which has led to a serious recession. After all this punishment from their own governments, it is little wonder that Canadians are in a foul mood about just everything these days."

A youth worker in Vancouver said this: "Canada is a tough place to be these days if you are young, poor, down and out." But it is not only the young who are worried; we heard the following from a community activist in Edmonton: "I think to be a Canadian is to be worried about having a job. I look around and I see signs of social crises everywhere: Poverty, homelessness, educational decline, and violence towards women, children and aboriginal people." What a way to define the term "Canadian."

Most discouraging, perhaps, was what we heard from an employment counsellor in Whitehorse who said she felt that the federal government was telling Canadians, "If you are not healthy or wealthy, then you do not have a right to quality of life in this country." This is where the federally inspired tough-choices, cut-and-slash, expenditure-reduction philosophy -- a philosophy adopted by all provinces save Ontario and Prince Edward Island -- has led us.

It positively astounds us that some people can support initiatives implemented in the name of that philosophy, and it astounds us that people can be so critical of initiatives directed at turning those things around for those who are the most needy in our communities.

The Ontario government has chosen not to follow the lead of its federal and provincial counterparts. In this time of need it has decided that people come first. The national union strongly supports this policy thrust. At the same time, however, we suspect and hope that the Ontario government has not gone as far as it would have otherwise wanted to. Indeed, much more money and even better public programs and services are needed to address the needs of Ontario's 530,000 officially unemployed, its one million dependent upon welfare, and its other needy citizens.

So we say to the Ontario government, do not be swayed from your policy course to try to placate the corporate community. Do not think you are going to make people like the editor of the Financial Post, who thinks welfare recipients are too well off, happy. You will not. What you need to do is to stay on track. Moreover, when the economy turns around, we think there are ways of raising the money you will need to address the problems you have not yet been able to address.

For example, our Manitoba component recently estimated that fairer corporate and personal taxes in that province would have raised close to $70 million this year in their particular budget. Our Newfoundland component questioned the need for $165 million in corporate subsidies while the government cut 2,600 public sector jobs and closed hospital beds.

Along similar lines, our Nova Scotia component estimated that if corporate taxes had increased by the same proportion as personal taxes over the last 10 years, the province would have had $74 million more in revenues this year. And our New Brunswick component has observed that fairer personal and corporate taxes would have raised close to $30 million in provincial revenues.

In other words, even in provinces having far smaller revenue bases than Ontario, there are ways in which relatively significant amounts of money could have been raised to meet provincial needs. The only thing necessary is the government having the will to confront its detractors head-on.

We believe Ontario has such a government. We believe that government is moving in the right direction, and we believe that after examining the evidence in detail this standing committee will have no choice but to agree with us.

Thank you very much for your time.

Mr Christopherson: Thank you, Mr Clancy, for your excellent presentation. I note you talk about the philosophy the Finance minister of Nova Scotia followed, and I think we saw an indication just a couple of days ago of how people in that province feel about that approach, and I will say no more about it.

I would like to ask you about the reference you make to Newfoundland where your report talks about the closing of hundreds of hospital beds, cutting school board and community college funding, teaching positions and social assistance payments. Could you give me just a little more detail in terms of what that has meant in those communities? Literally, have they closed hundreds of beds, and what happened to the school board and community college funding and the social assistance payments? What have those things done to the people in that province and to those communities?

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Mr Clancy: Let me ask my colleague Derek, who has the good fortune to have come from Newfoundland and had the good fortune to spend a week down there this summer, to comment and give us the latest.

Mr Fudge: It was really unfortunate and it was very sad to go back to my home province this summer and see what has been happening. To give you a most graphic example, I have friends who live in a town called Burgeo. They now have to go nearly 150 miles to get hospital care. There is no hospital. I have a niece who is a social worker under the Department of Social Services. She has a case load of 550 people and she cannot cope with her cases, the physical abuse against children. It has also created and added to the official unemployment rate in Newfoundland. It has added over 1% to that rate since the budget came down in April. So policies like that have very much hurt the ordinary people of Newfoundland.

The Vice-Chair: I would like to thank you very much for your presentation here today.

The committee recessed at 1622.

1631

SOCIAL SERVICES COMMITTEE, REGIONAL MUNICIPALITY OF OTTAWA-CARLETON

The Chair: The next presenter is Nancy Smith, the chair of the Social Services Committee for the regional municipality of Ottawa-Carleton. I would like to welcome you here to this committee. You have one half-hour for your presentation, and in that one half-hour, can you leave some time at the end of your presentation for questions and answers with the three parties here. You may begin.

Mrs Smith: I hope you appreciated our five-minute break and did not spend it being frustrated as I was, being stuck a little bit in the traffic on the way over from city hall.

I would like to set the stage for what I want to say to you first of all by saying that as chair of the Social Services Committee at Ottawa-Carleton, we were very pleased with the changes in the funding formula for social assistance. If I just give you the magnitude of the money involved, perhaps you will understand why I make that comment.

Around March or April, we had to go back to council for additional money. We had to go back to council for $500,000 because of case load growth and some changes in the social assistance system. Without the change in the formula for funding that was introduced with the budget, we would have been going back for $5 million to $10 million of local taxpayers' money. It certainly was said at council at the time, but I do not think it has been said often enough. As chair of that committee, I do not relish going back ever for extra money. We represent a very vulnerable population and we try to do the budget once and stick with it during the year. To go back for $5 million to $10 million mid-year, I am sure you can appreciate, would not be something I would look forward to.

However, what I really would like to say to you quite simply is that the social assistance system in this province is broken in a fundamental way. I think it is beyond money. I think it is beyond the understanding certainly of most elected representatives. I would like to convey to you the need to fix that system so that the taxpayers' money, yours and mine, will go to service and management of the system and not to confusion and red tape.

I would also like to convey to you a bit of the sense of siege that certainly we on the committee and council feel and I think many people working in the field do. It is always a bit of a challenge to speak to a committee at the end of the day, having been in that seat. I will do the best I can, but I thought before I numb you with some statistics, I might share with you a quote from a municipal councillor. It goes back a couple of years to the AMO annual general meeting. She since married and moved to British Columbia and lived happily ever after. What she said at that meeting was, "Never tie up with your tongue what you can't undo with your teeth." We were speaking of social services funding at the time, and I still think it is very appropriate.

Ottawa-Carleton is a prosperous community and I am sure that some of you have probably told us that a number of times. Certainly you have heard it told. Our case-load growth over the past four years has followed this pattern year to year: 6%, 6.6%, 26%, 46%. We have close to 50% more people on general welfare this year than we did last year. In actual figures, we have gone from 12,000 clients to 25,000 clients in four years in this community. Looking at it in terms of money, gross figures, we have gone from just under $100 million to nearly $250 million, or in our local costs, from 25% to 53%. That is an enormous amount of change in a very short period of time.

The final figure one might look at is the percentage of the population on assistance. As some of you may know, that is the basis for a change in cost-sharing. A few years ago, the municipalities always used to say to the province, "Four per cent is no good." No municipality ever gets over 4% unless it is absolutely dead and destitute and all industry has closed down. We were at 3% here, 3% of the population on assistance; 3%, 3.5%, 4.3% and we are projecting 6.2% of the population of Ottawa-Carleton on assistance by the end of this year. When you add in people on unemployment insurance and other benefit programs, you are probably looking at 60,000 people, 10% of the population of Ottawa-Carleton, on benefits of one kind or another.

Our committee sits every other Thursday. We hear from a lot of clients, a lot of constituents, a lot of advocates and we deal with a lot of problems that do not have any solution, too many sometimes.

We have a very limited amount of money in relation to what has to go on and it can be a very disheartening situation, and I know a number of you have been involved in that area. What I think is the most disheartening is not the clients, not the need, not our inability to respond, but the complexity of the social services system.

I always say to members of the committee: "Please don't be embarrassed to ask. Nobody understands the system, and it is not possible to keep it in your head." I will not test you because I do not know how many of you have been involved in social services in any detail, but I have been on the committee for 11 years. I sat for six years on the funding arrangements committee which started under Bill Davis -- that gives you some idea of going back a little distance in time -- and then on the Provincial-Municipal Social Services Review Committee.

I think the system defies understanding and I think that confusion is at the heart of a really fundamental problem of accountability. That is one of those words that make people's eyes kind of glaze over and they fade off into the distance and wait for it to be over.

It is what I call the "Who should we yell at?" principle. The social services system: I defy you to figure out who you should yell at to get something fixed. That is all it is about. Nobody can figure it out. We sit there at the social services committee every other week and people come. They do not yell at us, we are on pretty good terms with our constituents, but they are upset and we are upset because nobody can figure out who to yell at to get the damned thing to work. It is like a car with square wheels and the steering wheel in the back seat. It does not go anywhere when you push what you think is the right button.

I think that lies partly behind some of the welfare-bashing. I think elected people do not understand it and they therefore feel it is totally out of control. I think the community does not understand it and so they are totally ineffectual politically. I think our staff spends enormous time finagling and negotiating, and your staff does as well.

I think energy should go into the management and delivery of services, especially now when things are so tight. I think the system has to make enough sense so that people can basically keep it in their heads when they are thinking about it.

This brings me to the current disentanglement initiative of the current government, and I will be very blunt with you about it. I am extremely concerned about the delay I think that will cause in solutions to these fundamental problems that I have described. I do not think we fool anyone when we set up another task force, no matter how many ministers and mayors you may find to sit on it.

I particularly think we do not fool anyone when we pretend we have to solve all of the provincial-municipal problems before we can act on any of them, and especially on this one. I just wanted to take a couple of minutes to tell you where I think the solutions lie and how I think you can move on them now instead of waiting for another three-year task force.

I call it the "tying of the can to their tails" approach. I think elements of the solution are at hand and I have to say I think that disentanglement report -- and it is known around here as the Hopcroft-Ballinger report; I do not know how many have had a look at it -- is very superficial. I think it is a bait and switch, and I think it is an effort to hijack the attempts at solutions because the solutions currently on the table would see a continuing role for municipalities in social services. I think the report is a very thinly disguised attempt to hijack the work that has gone on to date.

I think all of you, whatever your party and whatever your particular concerns and interests, should look at it and say, "Is this aimed at fundamental reform or is it just an effort to say to the province, `Here, take social services, it's yours'?" I think you will find it is the latter.

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I think from a provincial point of view, what you are going to be faced with is a complete revolt on social services. We, being creatures of the province -- okay? -- are going to be a little ineffectual in how that is done because really when push comes to shove you can put us to the wall and take the money, but in the meantime let me explain to you some of the things that will happen. Certainly I will not be voting for them and a lot of the people I work with will not be either, but I can tell you it is going to start. It has started in day care now.

What will happen is that municipalities will start to dismantle the community-based services, the things that continue to be optional -- "discretionary" they call it under the act. Day care: We are the only municipality in Ontario to put new money in for day care this year, the only municipality. The spaces in Toronto were just catch-up spaces for the 100% spaces that they had to put forward in the last couple of years, and they blackmailed the province into picking them up this year.

Those community-based services are supposed to be the wave of the future and you have all said, from all three parties, "We want community-based services, community-based control." They are supposed to be the way that we make some headway, we make a little bit of a dent in the cycle of poverty, day care, employment support services, counselling, refuge for battered women. All these things are still discretionary, and if the costs continue to rise on the municipal taxes the way they have, many municipalities are just going to have to stop and there will be no cost-sharing on those services. Those services will simply stop existing.

Community resource centres in this community are at the leading edge of integrated health and community services. They are optional. We fund a whole lot of them. They are not even foreseen under the current legislation.

Having said that disentanglement is really pretty much of a sham, let me just suggest a couple of things I think you should be looking at or recommending that the government of the day have a look at. The Provincial-Municipal Social Services Review, which was delivered to the Liberal government last March or so, made some very simple proposals. We are not here to talk about that in any detail, but let me just give you very simply what it is about.

Basically you would have regions managing community-based social services -- and I have just named some of them -- and continuing to fund a modest share of those community-based services. It would put the income distribution program, social assistance and welfare cheques on to the income tax, managed and funded by the province. That is it; it is that simple.

It comes out with a minor temporary benefit to the municipalities financially. I think it also comes out with a system that can be managed. I think it provides real management authority to the regions, and I always say that right now we deal with the tyranny of the tiny toilets. The province counts toilets and we carry the liability for abuse in day care centres. We do not have licensing authority, but it is our problem legally if something terrible happens in one of our day care centres. That does not make any sense.

We manage a budget of $250 million to $300 million. We do not need a provincial inspector to count the toilets. I think we could all agree on that. We need proper delegation of management authority to the regional municipalities, and I think with that management authority comes the responsibility to sort out the local problems.

I think that municipal governments and particularly the regions have a unique and continuing role to play in community-based social services, but I think we all have to accept that local property-tax dollars should not be spent on income distribution, not on the welfare cheque. With the dollar figures and the increases that I have described to you, I hope you can understand the pressures that are moving us very quickly to solutions that I do not think any of us want to see.

Unless you, as provincial politicians, want to be faced with the situation where the municipalities simply say, "I'm sorry, it's yours. We're closing down, you pick it up," I think you have to recognize the need to make those fundamental changes.

To go back to the beginning, obviously we are pleased with the money that came through in the budget. I do not know what we would have done without it in this community. But social services reform in the last three or four years has come to mean nothing but money. We have to do some of that dull, boring, mundane management improvement and reform, or the system is not going to continue to support the weight of the demands on it and it certainly will not continue to justify the investments of money we are putting into it.

So I would ask you to rescue social services from disentanglement, or at least put it at the top of the list for that committee. They have to deal with it before they deal with everything else or you will have municipalities dealing with asphalt and human services will be yours, like it or not. I think that is a shame, because I think we have a system that has a lot to offer and personally I am committed to a local share in the funding. But you have to move some time soon. Somebody has to see the urgency in this, because it is two and three and four years past when it was already a crisis, certainly for us. With a 46% increase in welfare in this community, I think you can appreciate that we are one of the better-off communities in Ontario.

Mr Morin: Did I hear you well when you said -- and I am sure you did not say that -- that all the work that has been done in the past, Transitions, long-term care reform, was useless?

Mrs Smith: No, I certainly did not say that, Mr Morin. I said I think the disentanglement report is an attempt to put all of that, and in particular the PMSSR report, on the shelf for good. There are people involved in that who do not see municipalities as having a role in either funding or management of human services. That is what I am concerned about.

Mr Morin: So you are saying there was some good work done.

Mrs Smith: I think my committee did good work.

Mr Morin: Was there some good work done by the previous government? That is what I want to hear, because all we have heard today and yesterday was doom and gloom: that nobody else understood social welfare better than this present government. This really tickles me no end. Let's be fair; let's be honest.

I have not met one politician, whatever party he belongs to, who was not sincere and wanted to find a solution for the needy, for welfare cases, for the homeless, people without food. I have not met one, one single one. So have we wasted our time? That is what I would like to know from you.

Mrs Smith: Quite bluntly, the jury is still out. I started when Mr Davis was in power, carried on under the Peterson government and we are now into the Rae government and I am still waiting for the system to get fixed. I would like to think the work that was started under the Davis government and picked up in a different way by the Peterson government would result in a conclusion and I would like to think the work that all of the, as you say, sincere people involved have put into it would come to a positive conclusion. I think the problem is, management is boring; it is not politically sexy. You do not run around on the hustings and say, "Let's have management reform; what fun." It does not sell very well. But that is what we need, because all of that other stuff is going to be down the drain unless we get some of this other stuff fixed -- dull, boring and unsexy as it may be.

Mr Morin: You may be the saviour.

Mrs Smith: Just fix it. I do not require the need to carry the cross.

Mr Morin: Come and tell us how to do it, because I think all of us would be very happy to solve that problem.

Mrs Smith: I think the elements of it are in the PMSSR report, Mr Morin. I do not think that is the final solution, but there are some very simple and elegant ideas in there and I certainly hope the current government will, as I said, rescue those from disentanglement and try to make them work. We can run a tab on the bill between municipalities and province while that is done. That is fine. We can keep books on it. But it has got to be dealt with.

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Mr Sterling: Thank you very much for appearing in front of the committee. I appreciate gaining some knowledge and not hearing a litany of excuses as to why the economy is so bad. Your suggestion is that the disentanglement of social services -- in other words, the province taking over the whole function of providing social services -- would not be as efficient or done as well as if the community, the region, the municipalities kept a hand in it. Is that what you are saying?

Mrs Smith: I think there are areas where it is appropriate to have a local municipal role. If I can just make the distinction, there is no reason for somebody eligible for a welfare cheque to be treated differently here than in Peterborough, than in Toronto, except for maybe a cost component. There is involvement for local government in that; we have nothing to say about it. We cannot contribute anything much.

However, among community-based services, for example, in this area there is a need for francophone services. In other areas you may need a heavy multicultural component. Some places you may want to have your day care in centres and in other places out in individual homes. Those are the types of things I think can be better handled at the local level. There is need for flexibility. I think we get better services and more locally responsive services. It is tough for an area office of a ministry to provide that type of tailor-making to the local scene.

Mr Sterling: As for the control of the expenditures in terms of the province giving that money out, do you think a local component of the cost is necessary?

Mrs Smith: No, I do not think it is paying the share that makes you be careful of the money. The regions should have an amount each year that is allocated, almost a block funding, but block funding for social services, and the province should back off and leave the region alone to manage it. That way it is our problem if we mess it up and our taxpayers know that. They certainly can get to us very easily. So the provincial control would be in the total amount that is allocated to that region that year, but you would stop counting the toilets for us.

Mr Sterling: In your remarks regarding Back on Track, you say that it is simplistic and that it is --

Mrs Smith: No, I am sorry, there are so many reports out there. If I had had a wagon I would have brought them all. It is not Back on Track I am referring to; it is a report that was done by a past president of AMO with David Ballinger, Hopcroft-Ballinger. It was discussed at AMO this last -- disentanglement.

Mr Sterling: Okay, I did not catch that.

Mrs Smith: We have too many reports, I think.

Mr Sutherland: This is more of a quick comment than really a question: Both Mr Hopcroft and AMO seemed somewhat supportive that the Minister of Municipal Affairs was going to start the actual process of looking at disentanglement. I think everyone agrees it would be nice if we already had the solution there, but I do not think the work of Ballinger-Hopcroft or the social services review is going to be totally thrown out the window. I think the basis will come from that. But AMO did seem quite supportive of the process when the minister did announce it at the AMO conference.

Mrs Smith: I think AMO is making a big mistake and I think you are too if you bail out at this point. If you get into the disentanglement process for another three years you are going to be three years too late to fix things. I was not at AMO, I was at AFMO, at the francophone association, just prior to that, Mr Cooke said very clearly, and I was pleased to hear it, that the government had not committed itself to the content of that report but to look at the issue and that PMSSR in particular would be part of that review. I am saying to you, make social services first. I think you should look at the ideas in that report fast, because nobody is at the moment; it is on the shelf. I think you will find some things that could be acted on quite easily up front. Take children's aid at the provincial level right now. That would be a major improvement. Thank you.

Mr Sterling: When you were talking about the management, what were you including when you talked about reforming the management process?

Mrs Smith: Definition of management? Decision-making authority for quality and quantity of service in the context of variable resources and in accordance with the provincial Legislature and strategic directions. Quality, quantity, allocation of resources within an overall amount of money. It is much more decision-making authority than the legislation contemplates at the moment. Right now it is a complete hodge-podge. Okay?

Mr Sterling: Okay.

The Chair: Fine, I would like to thank you for your presentation before this committee.

Mrs Smith: Thank you, Mr Chairman. I appreciate your taking a short break to let me get here.

The Chair: Before we break here, I would like to thank the staff, Hansard, our research staff and our clerks. During the last three weeks out on the road they have been working very hard out of their suitcases, let's say. I appreciate our trip up here in Mr Morin's area and Mr Sterling's and Mr Villeneuve's. We appreciate this eastern tour and your hospitality here in the city of Ottawa. Too bad we could not stay a little bit longer.

Mr Villeneuve: You are welcome to.

Mr B. Ward: We might.

The Chair: Okay. I appreciate the participation from the citizens of the Ottawa area.

The committee adjourned at 1657.