1991-92 BUDGET














Tuesday 30 July 1991

1991-92 budget

Phyllis Griffiths Neighbourhood Centre

Gary A. Porter

Fair Share for Peel Task Force

Alliance for Employment Equity

Ontario Federation of Agriculture

Fair Rental Policy Organization of Ontario

Income Maintenance for the Handicapped Co-ordinating Group

Association of Day Care Operators of Ontario

Hamilton and District Apartment Association

Beverly Campbell

Barry W. Henaut



Chair: Wiseman, Jim (Durham West NDP)

Vice-Chair: Sutherland, Kimble (Oxford NDP)

Christopherson, David (Hamilton Centre NDP)

Hansen, Ron (Lincoln 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 (Carleton Centre L)

Ward, Brad (Brantford NDP)

Ward, Margery (Don Mills NDP)

Substitution: Jackson, Cameron (Burlington South PC) for Mr Stockwell

Also taking part: Villeneuve, Noble (S-D-G & East Grenville PC)

Clerk: Decker, Todd

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

The committee met at 1010 in room 230.

1991-92 BUDGET

Resuming consideration of the 1991-92 provincial budget.

The Chair: I see a quorum, so I would like to begin so that we are not too far behind by the end of the day.


The Chair: I would like to welcome Reet Mae from the Phyllis Griffiths Neighbourhood Centre. The procedure here is that you have half an hour. You can do your presentation, however long that takes, and then the committee has time divided equally among the three parties to ask questions in order. At the end of the time, we have to move on. That is the procedure. If you could begin, we will have half an hour from now.

Ms Mae: My name is Reet Mae and I am the executive director of the Phyllis Griffiths Neighbourhood Centre, which gives a considerable number of people difficulty over its name and its pronunciation. I get called Phyllis quite an awful lot.

This is a multiservice community-based agency that receives a portion of its operating costs from the Ministry of Community and Social Services. Because I am speaking on behalf of our chairperson to a certain extent and also on behalf of issues that are relevant to other similar agencies, I will be speaking from a prepared text for the most part.

I appreciate the opportunity to speak today to the standing committee on finance and economics in the matter of the current budget for the province of Ontario. I am not here as an economic expert, nor will I address any global issues relating to the budget. I am here to ask for your support of front-line community-based programs and services in a number of areas. Such community-based programming forms a minute proportion of the provincial budget expenditures yet provides a critical link to the rest of the social service sector for community members. By making a substantial financial commitment to community-based, community-run programs and services, we save dollars in later social service costs and reduce the burden of suffering of the vulnerable and isolated in our communities.

In the speech from the throne, I was pleased to hear that there is a commitment on the part of this government to "listen to the people" and to "work towards our communities becoming supportive environments where all people, including those who are vulnerable, can meet their full potential, participate in community life and make their contribution to society."

I am reassured that this government is "committed to both employment equity and pay equity...particularly in areas such as child care" and that this commitment extends to the "range of public services to families." I am counting on this government taking practical steps to fulfil its stated declaration that public policies and programs must reflect the realities of family life, the growing participation of women in the workforce, the balancing of work and family life, and the changing role of the extended family in caring for children.

As a taxpayer, I also appreciate the commitment to the most effective use of public funds, and I wish to bring to your attention a number of existing social services which provide a most efficient and effective way of addressing many of the issues and concerns cited above and outlined in the speech from the throne, as well as in the budget speech.

With your permission, I will briefly outline some of the relevant background and history of community-based support services and then present three specific issues in community-based programs for which I am seeking your support. Community-based programs and services are very precarious under the current budget allocations yet provide vitally needed services to large segments of our communities in an accessible, effective and cost-efficient manner.

In 1979, the Social Planning Council of Metropolitan Toronto outlined a number of issues making social service planning and provision difficult, particularly in large urban areas, in a report entitled Metro's Suburbs in Transition. Outlined in part 1 of this report were a number of factors contributing to changing needs in large urban areas. Metro's suburbs at that time were experiencing increased immigrant populations, the isolation of the elderly and of those caring for young children, increasing unemployment among young people and changing age structures in suburban areas. Many of these changes are continuing and greatly affect the accessibility to social services and community programs of community members. The importance of local, community-based resources that could respond to local needs in an immediate, accessible fashion was stressed in the report.

Following this, the report Neighbourhoods Under Stress was produced in 1983 by the joint task force on neighbourhood support services. The Neighbourhoods Under Stress report contended that neighbourhood support programs could be considered essential services in much the same way as roads, police, schools and public health were. Such neighbourhood support services provide the essential work to enhance the quality of life for individuals and to make communities healthy and support living environments, particularly for the elderly, the isolated and the vulnerable. The report further argued that no other essential services use public dollars as efficiently as neighbourhood support programs do.

The community and neighbourhood support services program was a funding program that was a creative response to the issues outlined in both of these reports. This province-wide funding program is shared jointly among the province, which provides 50%, the local municipality and the United Way locally, which both provide 25% of the core funding allocations. The funding program is intended to provide core funding to local neighbourhood-based agencies which are representative of and responsive to their communities and which have no other stable source of funding. The funding program began as a pilot project in 1985 and was made a permanent part of the provincial social service structure after the completion of the three-year pilot phase.

Agencies funded under this program are run by volunteer boards of directors, use many community volunteer hours and are able to provide flexible supports and services to members of local communities, providing a wide range of services, including employment counselling, family support, community integration for new immigrants, seniors support services or programming for new parents. The success of the program is due to the dedication of the large number of community volunteers who donate their time and talents, as well as the dedication of the staff employed in these agencies.

The funding of the community and neighbourhood support services program, however, is inadequate and has been inadequate from its inception. Initially, the maximum dollars available for core expenses were $30,000. Out of this limited allocation, boards of directors were expected to pay the salaries of their executive director, office support staff, office rental costs and administrative costs. Even at the time, this was clearly inadequate. In a 1988 salary survey of CNSSP agencies, the average salary for the senior staff person was found to be $22,000. This is the chief executive officer of these agencies. This was equivalent to the starting salary of a clerk at Metro and there was no access to benefits for any employees. While these figures have improved to some degree in the intervening years, I remain concerned and I wish to share this concern with you.

Most CNSSP agencies are primarily staffed by women, who are continuing to bear the burden in a very direct fashion for the provision of social services to our communities. This, I believe, is a disgrace, particularly when we are surrounded by commitment to pay equity. It does reflect the prior provincial lack of financial commitment to adequately fund the community and neighbourhood support services program.

Without adequate funding, the burden of providing support and service to communities remains directly on the workers, particularly in smaller social service agencies, as well as on the community, which must generate additional funds for the agencies to remain viable. These community-based services have become a valuable part of our social service system in Ontario, yet the CNSSP program has not shown the growth that could be expected. This, I believe, has been due to the lack of funding commitment on the part of the province, which is the major funder. There are no equivalent means for cost-effectively providing support and services to our citizens before costly interventions are required, and I believe the community and neighbourhood support services program deserves our fullest support.

I believe, as this government has outlined, that the future wellbeing of Ontario depends in large measure on how we care for our children today. Former support systems such as extended families no longer exist for many of today's families. As a province, we must address the changing needs of families and provide services that support the child. At the moment, in the greater Metropolitan Toronto area there are over 100 family resource centres providing a wide range of prevention-oriented services for families and children. Some of these are funded through the provincial government through the child care unit. Others are funded through local municipalities, and still others through private means or their own fund-raising. Many of these family resource centres operate as part of broader community-based agencies.

Family resource centres are a vital part of our services to children. As the majority of children in care are not in licensed day care settings, resources need to be made available to care givers of young children that ensure adequate standards of care for all of Ontario's children. A family or preschool resource centre can provide such support services for all community care givers and thereby enrich the lives of children in care as well as reduce the risk of child abuse and neglect. Such services fulfil the same role for parents, grandparents, aunts and uncles who are staying home to provide care for young children. Support services may include dropin programs, toy libraries, informal day care registries, child enrichment programs, parent training and informal counselling.

At the moment there is no stable funding source within the province of Ontario for such services. Agencies funded through the child care unit have in the past been informed that providing support to parents is not within the mandate of the child care unit. Unfortunately, at the moment, inclusive family support services do not appear to be within anyone's mandate.


This is another sector in which the majority of employees are female. Once again, the already heavy burden of providing for the social service needs of this province is resting on the female workers in the sector. Even within agencies funded by the provincial government, wage inequities are immense and the majority of agencies remain dramatically underfunded and rely primarily on women to make up the funding deficits. Such agencies, while employing early childhood education graduates, as in licensed day care agencies, are not eligible for direct operating grants or any other form of pay equity adjustments at the moment.

These women also are child care workers and they fulfil a very important role in ensuring safe, high-quality child care made available for all children in the province, both from parents and informal day care providers, and their salaries are falling far behind those with equal responsibilities and equal qualifications providing child care in licensed agencies at the moment.

Finally, I would like to remind you that a large part of the social service provision in this province is still being done by women. Because the services outlined above are predominantly provided by women, until new legislation becomes effective we are not even eligible to be considered under employment equity. Many women who work to provide much-needed programs and services to the citizens of Ontario are themselves sole support parents, immigrants, and vulnerable individuals because of their life circumstances. Many of these programs and services are provincially underfunded. If pay equity legislation were to set guidelines for equitable salaries in small, community-based services, the local volunteers and board members, many of whom again are women, would become responsible for raising unrealistic amounts of additional dollars for salary adjustments. Unless the province itself is committed to pay equity for all agencies under its various funding programs, pay equity cannot become a reality in the province of Ontario.

To this end, I believe, as this government does, that it is possible for us to live together to build a society in Ontario that provides a decent quality of life for all of us. To this end, I am asking for the support of this government in the three areas that I have outlined above by, first, providing stable and realistic funding to the community and neighbourhood support services program, phased in over a three- to five-year period; second, making both a financial and a philosophical commitment to the lives of children in this province by recognizing the importance of those caring for children, especially in the early preschool years, and by providing the necessary financial, economic and social resources to support both parents and care givers in this important role, particularly in recognizing the important role of family or preschool resource centres and ensuring that adequate funding is made available for such services; and finally, making a financial commitment to pay equity for women that will include an evaluation of the province's role in contributing to inequity through underfunding of many smaller social service agencies and by developing a strategy to provide supplementary funding to such agencies when the appropriate legislation is passed.

I thank you for the opportunity to present these concerns. I know that you share these concerns with us and look forward to seeing some practical answers to these concerns, both in the current budget and over the long term.

The Chair: We have 15 minutes left, five minutes per party, beginning with the Progressive Conservative Party.

Mr Jackson: Reet, thank you for your presentation. One gets a sense from it that we have heard these concerns before. However, trying to pull that into the budget, where you see the budget having addressed that or whether the budget has not, I certainly have a clear view of that, and I wanted to get a sense from you where you see the deficiencies in the current budget. I do not want to prejudge the committee or this government, but it is highly unlikely that a whole series of promises in the last budget are going to be dropped in order to shift them to others. I do not want to prejudge that, but by the same token, I am a realist. But I want to ask you very simply --

Ms Mae: The commitment to pay equity, for instance, does not apply to the workers who are working for me providing child care support services. There is no additional funding for them.

Mr Jackson: Okay. I am familiar with a couple of documents that address the preventive aspect of children's mental health and children's support services and not the proactive funding in that area -- that is your second bullet point on your synopsis page. Is there a concern about not having clearly defined dollars in the budget for that area as well?

Ms Mae: I guess the concern is more a lack of commitment to the entire concept of providing support services to families. I believe that anyone who looks after young children is entitled to the maximum amount of support that we can provide. Those agencies that are funded through the child care unit have in the past been told variously that if they allow parents to come to such programs they are not within the mandate of the child care unit. The funding has not been cut because of that, but it has always kind of been the line that has been held over everyone's heads.

I honestly believe that by providing support services to children in the community, whether they are cared for by their parents or someone who is paid for it, we will ensure a better society for us all, and that it is very effective and cost-efficient to do this on a local community level.

Mr Jackson: I could not agree with you more, but I am trying to get a clearer sense of why the budget and/or policy direction does not address that issue. We see elements of it; we see it in interval houses. There is a growing recognition of the need for not just child care workers but persons with psychometric skills so that they can do work with the children in that setting, in that environment. Although it is a family in dysfunction, it is a separate family with the mother and the child or children. Are you suggesting, therefore, that there is not this acceptance of community-based programming that works with families in that --

Ms Mae: I do not believe there is a commitment anywhere to this on a broad-based level. I believe there is a commitment that started from a concern over children in the informal child care system, which still remains the majority of children being cared for, but I do not believe that anyone has really examined a sort of philosophical overview of what we provide for all of Ontario's children. Because my staff, for instance, who are providing services in a family resource centre, are not eligible for any type of salary supplements, their salaries are falling far behind those of people in child care. I paid my co-ordinator for all these services $25,000 last year, which I do believe is a disgrace.

Mr Jackson: A final question, then, on the issue of the pay equity. I am surprised to hear that the government's position is that you are outside of the extended circle. I understand that we are broadening the circle for pay equity, but I know cases such as the YMCA network where they have been told that they fall within the legislation but outside of the line in terms of funding support or subsidy. You seem to be falling outside of both lines: whether pay equity affects you and whether or not you would be eligible to present yourself to the government for a subsidy.

Ms Mae: Unless this government makes a commitment to include us all, I am concerned that we may fall outside of it. We will not know until the final straw comes. The problem is, you see, that our agencies are already tremendously underfunded. So if you give $2,000 more and there only is half of the operating cost it really cannot supplement salaries until the core funding is adequate.

Mr Sutherland: I am glad to see that the member for Burlington South recognizes the difficult task the government had in terms of the demand for services and not being able to meet all those demands. There is still much more that has to be done, obviously, and we see that from your presentation.

As you are a neighbourhood centre, I would suspect that you can probably put a little more perspective on the impact of this recession. We hear that the recession is over, statistically the recession is over, but what is the reality of the situation? What are you seeing in the centre on a daily basis? How has it grown? Who is being affected and impacted the most?


Ms Mae: Statistically it may be over but it certainly has not changed in terms of the communities. I think this is true for agencies across Metropolitan Toronto: that there has been over the past year an increasing number of people who have been homeless. We have had families come to us, for instance, who have had young children and no access to food. We have had one of the members of Parliament call us to ask for emergency transportation to provide access to a disabled woman who had just returned from the hospital and could not get to a food bank, there being nothing to make that transportation possible for her to access those services.

We find that families are experiencing severe difficulties and that the need for peer support and also trained support for parents who are dealing with things such as unemployment or underemployment is becoming increasingly important, particularly in the issue of mediation in attempting to reduce the possibility of the risk for family violence as well as child abuse.

Those are all things that have been increasing. The demand for services at the community level has been increasing considerably over the past year, and we do not expect it to abate to any degree.

Mr Sutherland: Are the people you are seeing the traditional people who have always been struggling in the system to get above the poverty line? Are you seeing new people, different types of people that you have never seen?

Ms Mae: Our community is very interesting because it is a community that has some very wealthy people living in it and also has a large number of co-operatives and some subsidized seniors' buildings. So we have literally the entire spectrum as well as some basement flats and little tenementy kinds of buildings over storefronts and things like that.

We find that this has affected almost everyone in our community. As you probably know, in Scarborough the whole issue of basement apartments is a big issue, and certainly within our community people who before would have had no difficulty in maintaining their own homes with their own resources are not able to do so any more. In our community, as well, there is a large proportion of elderly women living on their own and really struggling to maintain their own homes, particularly women over 70, which is a very vulnerable population.

Mr B. Ward: Part of the benefits of the budget as far as the people of Ontario are concerned was our maintenance of social programs during these extremely tough economic times. As well, and you touched on it, we did have a commitment towards pay equity, although in your opinion it perhaps is not moving along as far and as fast as it should.

Because of this commitment to maintaining social programs during tough times and moving towards pay equity, we have been criticized as a government by some groups and individuals. That criticism is centred on: we should be cutting programs to keep the deficit down, we should be cutting programs that benefit the people of Ontario, and we should not be moving towards pay equity because that will make us uncompetitive as a province compared to other jurisdictions. I was just wondering, what are your feelings on those two issues and how would you answer that criticism, if you disagree with it or if you agree with it?

Ms Mae: I have to say that personally I am very impressed by the commitment to both social programming and pay equity for the people of this province, and I understand the delicate juggling and balancing act that goes into the process. I am by no means criticizing the current budget, and I do not --

Mr B. Ward: I am not saying you. I am saying that there are some groups and organizations that were criticizing us because we maintained social programs and because we are moving towards pay equity.

Ms Mae: I understand that, and I guess I am just saying that I do not believe I am speaking from that group's perspective, that I am truly speaking from the perception of the people in the community whom we hear constantly.

Mr B. Ward: Yes, and recognizing that you are trying to do the best you can in your job, do you think that we are moving in the right direction during these tough economic times?

Ms Mae: I personally do.

Mr Kwinter: Thank you very much for your presentation. I could not help feeling when I listened to it that it was a pre-budget presentation as opposed to a post-budget presentation. It is the sort of presentation we heard pre-budget, when people came to express their concerns, express their needs.

I would really like to get your feeling. You have indicated some of it. The government has indicated that it chose, rather than fight the deficit, to fight the recession. How has that impacted on your organization? In other words, are you any better off as a result of this budget than you were before the budget?

Ms Mae: We are better off by probably about 1% in terms of our funding to the family resource centre programs.

Other than that, we are in roughly the same state as we were prior to this budget. I agree with you. To some extent, this is a pre-budget, but it is also pre- the next budget and the next budget and the next budget as well. For that, I appreciate the opportunity to be here.

I really believe that the pay equity issue is something that has to be seriously considered by the provincial government, particularly as it applies even to one specific sector, such as people working with child care, because I have those people working for me, and they are not affected under this budget, as are people working in other agencies and organizations.

Mr Kwinter: Given the fact that in one area you have about a 1% increase and in other areas you have none, how do you propose to deal with your problems between now and the next budget?

Ms Mae: I am not saying that we got 1%. We got 1% above what we would have expected, so that we got 5% plus 1%, for instance, from the child care unit. This is not to say there has been no increase at all. We will carry on in much the same fashion that we have in the past, by doing our own fund-raising, by relying on people in the community to support the services we provide, because they also acknowledge the need for them.

Mr Kwinter: Are you having any problem recruiting people as a result of, say, the lack of effective pay equity and/or employment equity?

Ms Mae: The family resource centre program that we have is three years old now, going into its fourth year. In the first 18 months of the program, in two staff positions, I went through eight staff members. This is not a very efficient way to run an organization. Since that, things have become better, to a certain extent.

The thing that keeps all these agencies going -- and this is throughout the province -- is the commitment of the people to their communities. Particularly in family resource centres, there are many, many women who are single parents, who are on various types of government assistance, who really need and believe in the need to support one another. Because of that, they are prepared to make this type of commitment, as are the staff members. I just believe it is an unfair burden to place on the workers in these areas.

The Chair: Thank you for your presentation.

Mr Sutherland: Just before we go on to the next presentation, Mr Chair, I believe we had a document tabled with the committee yesterday. If that document has been tabled, will all the members of the committee be getting a copy of it very shortly?

The Chair: I understand that is the case. I thought everybody got one yesterday. I did not know that everybody did not get one.



The Chair: Our next presentation is Mr Gary Porter, partner, Porter Hetu. The rules are that you make your presentation. Whatever time is left from the approximately 20 minutes available for individuals is equally divided among the three parties to ask questions at the end. Thank you for coming, and you may begin.

Mr Porter: First of all, thank you very much for the opportunity to speak this morning. On behalf of myself and my partners in Ontario and across Canada, let me say that we appreciate this opportunity.

Just a little bit about us. There are over 4,000 accounting firms in Canada. Ours operates from St John's, Newfoundland, to Vancouver, and is currently rated by a publication that does an annual survey called the Bottom Line as the 23rd largest.

Our practice is based on small- and medium-sized businesses. It is especially from the vantage point of our experience gained while serving these clients that I am speaking here today.

Our clients are not abstract or faceless business entities. They are real human beings with mortgages, aging parents, kids in school. Most of them are close to their employees, know the employees' families and feel a strong sense of responsibility towards their obligations as employers.

We have watched as high interest rates, a resulting highly valued Canadian dollar and then a deep recession have battered these businesses, their owners, the employees and their families. We work with these people face to face in their stores and machine shops and in our offices. We are unable to see them as statistics, and for that reason we support the decision of the government of Ontario to battle the recession. It is our view that the heavy economic engines in Ontario cannot be allowed to run down unattended or to fall further into a state of disrepair.

As a national firm, we are mindful of the fact that Ontario accounts for over 40% of Canada's output. It is here that the recession has been most harsh, with more factories closed, more bankruptcies, more jobs lost and larger output decline than any other region of Canada. It is right and proper that the government of Ontario attempt to soften the blows, shorten the length of the recession and lay the groundwork for the recovery.

It is clear that this budget was not the time to cut back expenditures on social welfare, health or education. To do so would create additional unemployment, and the displaced workers would have little hope of finding new jobs.

James G. Frank, vice-president and chief economist for the Conference Board of Canada said it this way: "Although a tighter fiscal plan would have kept the deficit constant, it would have had a major adverse effect not only on Ontario but also on Canada. It would have led to a significant delay in the recovery and contributed further to increases in unemployment, bankruptcies and lost output."

We note with approval that the budget did not waste money on the creation of meaningless jobs and make-work projects. We agree with the policy of maintaining and increasing basic capital expenditures to maintain and improve the infrastructure in Ontario. These sensible investments account for almost 45% of the deficit.

It is our view that the way to make Ontario competitive in the global marketplace, and especially in a North American free trade area, is to increase productivity. This does not mean speed up, which only results in burnout and increased injuries in the workplace. The road forward is through greatly enhanced worker retraining and relocation programs, and a much increased development of technologically advanced production of goods and services.

If workers in Canada earn $15 per hour and workers in Mexico are paid only $3 per hour, it is possible to maintain our standard of living by producing five times as much output per hour or per wage dollar as is done in Mexico. Only a strong, consistent commitment to high technology investment and worker training, supported by public policy, can attain this objective. A clear economic strategy is required and a partnership which includes both public and private sectors is indispensable.

The budget papers make clear that the government of Ontario is headed in precisely these directions. Part of the increased productivity which we require will be a critical and thorough examination of the value for money we are obtaining in the massive public expenditure areas such as health, education and welfare. We are pleased that the government of Ontario has already undertaken to increase the efficiency of the health service by reducing expenditure growth while sustaining the quality of service.

We want to point out that it is a daunting task. Anyone can cut costs by cutting service. Such actions do not increase productivity or efficiency; they merely reduce our standard of living. Long-run gains in efficiency require cutting costs while maintaining the essential quality of the services provided.

We are pleased to see that the government is committed to maintain reasonable limits on the carrying cost of the provincial debt. Our own view is that the provincial economy will recover somewhat more quickly and reach somewhat higher levels than is predicted in the budget. If we are correct, we recommend reducing provincial deficits more quickly.

In our view, there are three areas where the government may find its current direction is at odds with its longer-run objectives. We do not believe that the clawback of the small business deduction within the narrow range of profits ranging between $200,000 to $500,000 is prudent. Small businesses are well known to create a high proportion of new jobs. However, jobs are created by reinvesting after-tax profits in the business. Smaller businesses have persistent difficulties finding outside sources of funds. Thus, retained profits are an especially important source of their growth. If a small business earns a $200,000 profit on which approximately $50,000 is paid in tax, and each of only two partners is paid dividends of $50,000, only $50,000 remains. However, to create a new job requires $60,000 to $75,000 to pay for space, equipment, hiring, training and new salaries or wages.

We believe that the clawback only serves to reduce job-creating capacity, alienate small business and is unlikely to generate a substantial increase in tax revenue. If the clawback is used at all, a threshold of $750,000 and a full payback by $1,000,000 is suggested. We believe that a minimum corporation tax will increase tax complexity unnecessarily. Better directed tax incentives or removal of incentives is preferable. This policy would simplify taxation of corporations while increasing tax revenue.

Finally, we recommend that the Treasurer proceed cautiously on a land speculation tax. A tax, for example, that does not exclude principal business corporations would be a strong disincentive for these companies to develop property in Ontario. There are many good and valid reasons why a land developer may sell a property before completing development. Inability to obtain approvals for intended use or cash flow requirements flowing from recession or high interest rates are examples. Other businesses will also be negatively affected.

These points are made in the context, let it be clear, that we support the basic policy directions and stated economic objectives of the government. We are pleased as business people, as professional accountants, and as citizens and as human beings that the government has opted for a course of action to reduce suffering in Ontario, speed the recovery and move towards restructuring our economy to flourish in a changing global environment. We support sustainable growth as an objective.

Mr Christopherson: Mr Porter, I want to thank you very much for your excellent, articulate presentation. It is important for all of us, and for those Ontarians who are paying attention and will read the Hansard from these discussions, to appreciate that there are objective business opinions that concur with the direction that we have taken. The opposition has been trying to portray the budget as wild-eyed socialists having gone crazy with the purse. The reality, as we see it, is something completely different. I am confident that by the end of these provincial hearings on the budget there will at least be a balanced opinion out there that would suggest that there are a goodly number of objective professionals, as well as ordinary citizens, who recognize that what the government did was a prudent course of action, that indeed it is a good budget for bad times.

I note that you talk about your clients not being abstract or faceless business entities and that they are everyday people who are very close to their businesses.

I would like to focus my question on a statement you made in the middle of the second page of your presentation where you state, "It is right and proper that the government of Ontario attempt to soften the blows, shorten the length of the recession and prepare for the recovery." I would like to ask you what you think would be the plight of Ontario with regard to that statement had we not gone in the direction we did, but rather had gone the way that the federal government has, which would be to chop services, hold the line and make that budgetary concern, that deficit constraint, the priority and ignore all these other things? What do you think, from your perspective, would have been the result in Ontario for the people who you work for and represent?

Mr Porter: Let me start this way. I think a lot of the smaller and middle-sized businesses that we represent were very much affected because they provide services to working people. Some of them provide services to other businesses, but many of them provide services directly to employees. It seems to me that following a course of action of maintaining even the deficit of approximately $3 billion would have contributed quite dramatically to increasing unemployment. It was that, probably above all, and the psychology that creates, the kind of conservatism that people have where they will not spend because they are not sure they are going to have a job tomorrow, that has really affected markets for smaller businesses. While on the one hand you are preserving jobs, on the other hand you are helping to create an atmosphere in which people were more confident that this thing was going to find a bottom, that things were going to turn around, and just created an economic climate where you could actually find customers. So from a small business point of view I think that is probably the most significant psychological impact. I do not think there is very much in the budget that goes directly towards giving things to people. It is maintaining existing programs, it is building capital expenditures and that sort of thing. At the day-to-day level of smaller business that is the single biggest impact. Ordinary people began to believe it was not a bottomless spiral and they could look to a possibility of coming out of the recession.


Mr Jamison: I have just one fairly quick question. You stated in your submission that there is a view "that the heavy economic engines in Ontario cannot be allowed to run down unattended or fall further into a state of disrepair." As you may know, we have invested in the future by investing in the infrastructure of the province. You go on to say, "It is right and proper that the government of Ontario attempt to soften the blows, shorten the length of the recession and prepare for the recovery." If we had not done what we have done in the budget, do you feel the recession would be a longer, deeper recession?

Mr Porter: We now know that all the statistics seem to be pointing to the fact that the recovery began in the second quarter, although at the same time there is a very strong body of opinion that says it is beginning rather weakly and inconsistently. I said our firm is quite optimistic and we believe that a lot of recessions end that way. All the statistics do not turn suddenly at once.

Again, the single biggest thing was a clear signal from a very large province, a very important province, that it was not going to go along with simply fighting deficits, that it was going to actually put a block under this recession as much as it could and to turn and signal to people that somebody was going to play Tom Henke, if you want, and be the stopper. I think that was the single biggest message from the point of view of fighting the recession.

The future, in terms of working with the private sector to develop high-tech, high-value-added jobs -- I think that is the terminology used in the budget, and which I agree with -- is the real way to have a sustainable long-run recovery and to really turn the problems in Ontario manufacturing around. I think the indications of that are in the budget.

Mr Kwinter: I would just like to make a comment before my colleague speaks. I have never heard such garbage in all my life.

Mr Porter: Thank you.

Mr Kwinter: You said yourself there were signs of the recovery in the second quarter. The budget did not come out until the end of the second quarter. There has been very little money spent on anything to date. There have been projections of what they are going to spend. To say that the best signal that ever went out is that someone is going to take control -- if you read anything about the budget, it was just the opposite. People were saying the greatest concern was about the deficit. Whether they understood it or not makes no difference. I am talking about the general public. The reason we are having these hearings is because of the general feeling against the budget, and to suggest that the greatest thing that happened in this budget was that it gave a sense of confidence to people, that Tom Henke was in there as a stopper, is absurd. It is absolutely absurd to listen to this. I cannot believe it. Carry on

Mr Porter: Is that a question?

Mr Kwinter: I said I just wanted to comment before my colleague asked a question.

The Chair: Normally he is not quite so lucid in his opinions.

Mr Phillips: I tend to agree with my colleague. You are in a different world than I am in terms of the business community. I will ask a question, though, on another comment you made, that you see the economy recovering a lot better than the budget figures. I would be interested in your estimates, because obviously you know the budget really well. What are your estimates for the recovery and, therefore, if those numbers you predict are right, what kind of surpluses should the government be running as it moves into that?

Mr Porter: I really have not worked out what I think the future budget should look like. We would look at the economy on a quarterly basis in our own firm, and the last look we had was just last month. People are talking now about 2.6% and 3% kinds of growth. We really felt the growth would be more in the neighbourhood of 4% in 1992. We do not believe the inflation targets the Bank of Canada has set will be reached, at least we hope they are not, because if they are, we believe it will be a fairly brutal experience on the economy. This is a national organization. We have not worked through for Ontario what we think that will mean in terms of increased tax expenditures and that sort of thing and exactly how the deficit should decline and so on.

Mr Phillips: I find that curious because in your document you say: "Our own view is that the provincial economy will recover somewhat more quickly and reach somewhat higher levels than is predicted in the budget papers. If we are correct, we recommend reducing provincial deficits more quickly."

Mr Porter: That is all we are recommending. We are not giving exact numbers.

Mr Phillips: I assume you have looked at this. You have obviously projected out, I gather, what is going to happen to the provincial economy. What would you therefore be suggesting to the government in deficits?

Mr Porter: As I said, we have not worked through it from the point of view of what we think the impact would be on tax revenues on the one side or the expenditures and program spending on the other side, so I am not in a position to tell you what I think the deficits should be.

Mr Phillips: What are you predicting for economic growth, then?

Mr Porter: As I said, I think in 1992 we can look at a 4% --

Mr Phillips: Real growth?

Mr Porter: Yes.

Mr Phillips: And if that were the case, what kind of deficit do you think the government should be running?

Mr Porter: I have tried to answer this question twice already.

Mr Phillips: I am relying on your credibility in this thing in that you have obviously studied the budget, and I assumed you had looked ahead at what your firm believes economic growth will be and what the deficits will be. One of our concerns is that, for ever, for the next 10 years, with economic growth at 4%, we are still looking at deficits of $7 billion, $8 billion a year. I had thought your firm had done some analysis and said it was predicting a certain growth and therefore deficits should be lower.

Mr Porter: We do think they should be lower. Because we think the economy will grow a little faster than the budget working papers predict, we believe it will be possible to reduce the deficits. On the other hand we also talk in this same presentation, and our view is, that the government should develop with the private sector a number of programs in terms of helping to develop productivity, high-value-added jobs, research and development and so on. Really, it is part of the capital fund for increasing expenditures on that side.

Mr Phillips: By the way, is your firm in agreement with the way they are planning to account for the capital fund?

Mr Porter: We think it is a good idea to separate operating and capital funds.

Mr Phillips: But do you agree with the way they are going to account for it?

Mr Porter: I cannot answer the question because I am not sure. I have not looked into the details of how it is planned to be accounted for.

Mr Phillips: It is quite important. As somebody who has studied the budget, I think they plan, as I think you know, to show virtually no cost to the capital for the next four years. I would be interested in the accounting community's view on that because most of your private sector clients wanted to show some appreciation. I think it is hocus-pocus finance but I assume your firm studied the budget. I would like your view on that.

Mr Porter: No cost account? What do you mean, they are not showing depreciation? What is it there?

The Chair: Time is up.

Mr Phillips: Maybe you could give us your view on that in writing. I have asked a few others, if you would not mind.

Mr Porter: I will look into it, sure.


The Chair: The next five minutes for the Progressive Conservative party.

Mr Sterling: I am totally amazed at your presentation today because I have always thought CGAs represented small business. I have not met one small businessman or woman in my constituency who has anecdotally said they could understand where the government was going on this budget. They are not only in disapproval but they are frightened by the fiscal policies of this government. I have been in politics for a long time and I have followed a number of issues which the CGAs have been involved in very much and I am very cynical about this presentation and its motivations. I do not want any other questions.

Mr Jackson: Just to build on that, can you name at least one of your Ontario-based small business clients who has told your firm they support this budget? Has a client called you up and said, "Look, we're just wild about this thing," or, "We think it is supportable, we think it is good for my business"?

Mr Porter: Yes, I could name clients because I have personally received phone calls from clients who support the budget. It is not my business to do so. Relations between clients and accountants are confidential in nature.

Mr Jackson: Do they know you are taking this position on behalf of the firm and referring now on record that you have received support from your clients for this budget?

Mr Porter: Any of them who have talked to me about the budget, which is a lot of them, know where I stand on the budget.

Mr Jackson: That is not what my question was. My question was, do they concur with your --

Mr Porter: We did not sent any announcement to --

Mr Jackson: The kind of firms I work with normally do that. Yours does not publish a letter of analysis? You are not that large a firm.

Mr Porter: We do. We send out an analysis of the budget.

Mr Jackson: Could you submit that to this committee so we could have a look at what your firm said as opposed to your personal views on this matter? Could you make that available to this committee?

Mr Porter: I can do that but I cannot do it today.

Mr Jackson: What was your firm's position? I understand your personal position in terms --

Mr Porter: When you receive it you will find that what we do at the time is simply send out a statement, basically, of fact. This is reasonably traditional among accounting firms. The commentary is almost kept to nil and you basically report what is in the budget and report what the basic statements of the Treasurer of the day are, whatever the political persuasion of the Treasurer. It is a fairly non-political statement.

Mr Jackson: And your senior partners would have met to discuss these matters. Are you one of those or is that --

Mr Porter: I am one of the founding partners. We have met to discuss it.

Mr Jackson: And that is the consensus of your partners?

Mr Porter: Yes, the consensus, that is true.

Mr Jackson: Okay. Are you aware of the government's need to raise $1 billion in revenue each month of this fiscal year?

Mr Porter: It would have to be somewhere near that just based on the deficit.

Mr Jackson: And are you aware that the current taxing mechanisms available to this government, with its present projections, would indicate that it will fall short?

Mr Porter: No.

Mr Jackson: If that were true, what in your view as an economist would be the options of the government faced with that reality?

Mr Porter: I am not an economist, I am an accountant, first of all.

Mr Jackson: Thank you for correcting me. You sound more like an economist than you do an accountant, but I apologize.

Mr Porter: I have not said "on the one hand" or "on the other hand" all morning.

Mr Jackson: That would make you sound like a politician.

Mr Christopherson: And then he would be like you.

Mr Porter: Can you just summarize this? You are stating the government is falling short by $1 billion a month.

Mr Jackson: I have been advised by certain persons who have analysed the budget that there is a shortfall in revenue projections, even with the $10-billion deficit and certain optimistic growth projections for revenue. As an accountant, when that situation occurs, what options are available to a government?

Mr Porter: The only options available if you still have a shortfall is you have to increase borrowing, increase taxes or cut expenditures. Those are the three options any government always has.

Mr Jackson: Which of those options do you think would be in Ontario's best interests if that were the case?

Mr B. Ward: Hypothetically speaking.

Mr Jackson: He has been answering hypothetically all morning.

Mr Porter: I wanted to start off by saying that this is hypothetical, because you are telling me this. It is obviously that kind of thing.

Mr Jackson: It has occurred in most of the last few years, incidentally, that we have had a shortfall. That is well known to you, I am sure.

Mr Porter: Obviously, some form of prudent mix is what you need. I do not think you do one or the other.

Mr Jackson: So you are referencing to the wealth tax or to this land speculation tax as a potential supportable document for you as an accountant, a supportable approach?

Mr Porter: I stated here what we thought of the land speculation tax. We thought that certainly principal businesses should be exempted, that is, people who really do develop land. Otherwise, it will cause a disinterest in developing property in Ontario.

Mr Jackson: What about the transfer of properties, like a nursing home or whatever, a day care centre, anything of that nature, private business that extends into the social sector?

Mr Porter: You ask me if there should be a tax on that kind of transfer?

Mr Jackson: That is what would be embraced by land spec tax or land transfer and land spec tax.

The Chair: Our time is up, so I must interject and thank you for your presentation.

Mr B. Ward: On a point of order, Mr Chairman: I am a little bit troubled by the comments, I think from Mr Kwinter, I realize in the heat of the moment. We have individuals we invited to come down to give presentations on their points of view of the budget, and I am going to have some difficulty in accepting what I hear at times from certain groups or organizations, but I really do not think we should use words like "garbage" or other words that I think are inappropriate for this committee. Sure, we can disagree and we can ask pointed questions, but that was a little bit extreme.

Mr Jackson: I would have used "irresponsible" myself.

Mr B. Ward: I am expressing my opinion. I do not think it is appropriate at this committee to use language like that when we invite people down here to express their opinions.

Mrs Sullivan: That is not a point of order.

The Chair: I do not think we should enter into a debate on this. I think we should maybe take that as a consideration, that we would like to have a nice atmosphere in here so that a good exchange of information can take place. Thank you again for coming and for your thoughts and opinions.

Mr Porter: Thank you very much.



The Chair: Our next presentation is from the Fair Share for Peel Task Force, Hal Brooks, chairman. We have allocated half an hour of time. The length of your presentation will be subtracted from the half-hour and whatever time is left over will be equally divided among the three parties for questions. Thank you for coming. We will just have a moment while the brief is handed out and then we can begin.

Mr Brooks: Mr Chairman, members of the legislative committee, good morning and thank you very much for the opportunity to meet with you. My name is Hal Brooks and I am currently the president of the board of directors of the United Way for Peel Region. This morning I am speaking to you on behalf of the Fair Share for Peel Task Force, a group of major child and family service agencies in our community. With me is Mr John Huether, who is the executive director of Peel Children's Aid Society and also a board member of the Peel United Way.

We are concerned about our community. The infrastructure required to meet child and family service demands in Peel is clearly inadequate. Furthermore, the gap between demonstrated needs and service capability is now widening. The implications of this gap are indeed serious and we believe they challenge the social stability within our region. Peel, like other outlying regions in the greater Toronto area, has experienced dramatic population growth. With that, rapid transformation from a rural to very much an urban profile has occurred over the last decades.

The Ministry of Community and Social Services not long ago released the Children First report. As you are well aware, this document makes an impassioned plea that the wellbeing of children and the protection of their entitlements must be society's highest priority. This is certainly consistent with a number of related initiatives, some even international in scope. I refer here of course to the United Nations Convention on the Rights of the Child.

The agencies that provide for children and families in Peel are frustrated, frustrated because the tremendous growth and need in the region have far outstripped the capacity to meet it, frustrated because the primary resource allocations from the province do not presently recognize this growth nor provide for it.

Nevertheless, we were heartened by the adoption in the Legislature in June of resolution 15:

"That, in the opinion of this House, recognizing that there currently exists a chronic underfunding of social services for children, youth and families in the region of Peel, which has caused a report to be prepared by the Fair Share for Peel Task Force consisting of volunteer presidents and senior staff from the Children's Aid Society for Peel Region and the United Way of Peel Region, which report has clearly shown the need for a consistent method for allocating provincial grants for social services, the Minister of Community and Social Services should take concrete steps to increase the service base to a satisfactory level over a five-year period and develop an equitable funding formula that recognizes population growth and social indicators."

We commend the Legislature for recognizing both the seriousness of the issues at hand and the need for decisive action on this front on behalf of not just the children and families of Peel, but of Ontario as well.

Regarding the report of the fair share task force, I would draw your attention initially to the page which lists organizations in Peel which have so far provided formal support for our initiative. These represent broad-based and grass-roots organizations in our community.

The main body of the report, and I believe everyone has a copy, chronicles the allocation of provincial funds to our community in various categories. In each case, typical service implications for Peel agencies are highlighted. For example, on page 7 you will notice towards the bottom that the Peel Children's Centre has wait lists of approximately 14 months. Even cases of extreme need will wait four or five months for service and there are presently no crisis intervention services available in Peel. In the child welfare category on page 11 is another example. If you go to the last line, you will notice that the per capita support for Peel is less than half of the provincial average. In fact, it is the second worst in Ontario, slightly ahead of York region, which is another GTA region, as you know. This places tremendous strain on children's aid society programs, and some of the implications are listed on pages 12 and 13 at the bottom. Similar findings are reported for categories of child care, developmentally challenged and family services.

Let me give you some very typical case studies provided by the Catholic Family Services of Peel-Dufferin.

Mrs A called the Catholic Family Services of Peel-Dufferin to get help for her two school-aged children, Sarah and Peter, who were having behaviour problems at school. They had seen a social worker at school who had assessed them and felt they needed longer-term counselling, which the school could not provide. The school social worker felt that the children were experiencing many problems because they had witnessed the murder of their father two years earlier. Six months after the original call, they are still waiting for service.

A second one: Mr B recently contacted the agency to get help for his son, who had been sexually abused by a relative. They had just completed a very agonizing trial which had resulted in a conviction of that relative. They had received great support during the trial from a court-ordered psychologist and others. Several months after the trial, however, Mr and Mrs B's marriage took a turn for the worse under the weight of the trial experience. Mr B called the agency for help but was placed on a waiting list. Four weeks later he called back to say his wife had forced him to leave the house, and they are still waiting for help from the agency.

Finally, Mrs C called the agency recently because her marriage was falling apart. She and her husband had tried to sort out their problems on their own without success. They called family services to get help to make their marriage work. They have two young children, Tim and Wayne, and would prefer that the family stay together. Six months after the original call, Mrs C called back to say the situation was getting much worse. Several people had suggested lawyers, but they did not wish to separate. They are unable to afford a private therapist. Separation will probably mean Mrs C will have to apply for family benefits.

We could go on and on. These are real-life situations that currently exist in the region of Peel.

What do we want from Ontario? Primarily and first of all we would like recognition that children and families are the greatest and most important resource we have in this province, and then funding priorities which reflect that commitment. Second, we would like recognition, as the resolution indicated, that areas with high population growth have not been well served by the current funding algorithms. Redress is required to provide some form of equity of service, and we look forward with considerable hope and anticipation to working with the government in addressing these issues in a very co-operative and collaborative fashion. Thank you very much.

Mrs Sullivan: I am very interested in your presentation. I think you make a compelling case. Coming from the neighbouring area of Halton, which has not experienced quite the same amount of growth that Peel has but certainly has had the same pressures on children and family services, I would like to ask some very specific questions.

First, have you completed in Peel an infrastructure review that includes both capital and operating needs for the long term and presented that to government? Has that exercise been gone through in Peel?

Mr Brooks: I could ask John on some of the specific questions, if you would not mind.

The Chair: You could perhaps introduce him.

Mr Brooks: John Huether, as I mentioned at the outset, is the executive director of Peel Children's Aid Society. He is also a board member of the United Way.

Mr Huether: In 1988 we conducted a needs study outlining some of the priorities within the region, which has been submitted to government. In terms of prioritizing capital expenditures, no, we have not done that.

Mrs Sullivan: Do you also have a joint committee -- this is just sort of information-gathering -- of people who are involved in the delivery of children's health and care services who work together to present priority lists to the ministry in terms of funding?

Mr Huether: We do have an interagency committee that is working on formalizing the kind of structure you are talking about. On an ad hoc basis, we have co-operatively worked with the local area office in prioritizing needs and use of the available dollars within the region. Our problem is, how do we stretch the dollars? There are only so many things you can do with the dollars and it is a Hobson's choice we are faced with.

Mrs Sullivan: Have you joined with other children's aid societies in the growth areas that are facing intense pressure on their budgets and that have been operating and are operating in a deficit position? Have you joined that particular group of children's aid societies?

Mr Huether: Our children's aid society and board are actively participating with the Ontario Association of Children's Aid Societies' board and funding committee to present the issues and to try to see that they are addressed in a systematic way. We are not making fast progress, but the association had a meeting with the minister in the spring. Another one is scheduled for the early part of September. She has assured us that she sees there are fundamental problems with the child welfare funding formula and is prepared to work with us to try to address that. At this point in time, there have been no additional dollars provided to address that and there are a number of societies in the GTA that are in very serious trouble.

Mrs Sullivan: Including our own.

Mr Brooks: Could I add to that an additional response? We recognize beyond the CAS, which is certainly a critical area of need, other agencies that are reflected in categories in this report. We have worked in some concert and collaboration with regions like York to make them aware of what we are doing. I understand they are in the process of releasing a report not unlike this one; their chronicles. We recognize that these are GTA issues and there has to be some response which is co-ordinated, but we are here today because we represent the particular issues within Peel region.

Mrs Sullivan: Certainly in the budget hearings, because in the budget you do not see these problems being addressed nor a beginning.

I want to ask a question about commercial child care. Do you see the recent changes in policy relating to the funding of pay equity programs for commercial child care as affecting the availability of child care in your area?

Mr Huether: Yes.


Mrs Sullivan: Would you like to comment further on that? How many of your young people are in commercial child care centres now?

Mr Huether: Our task force has not looked at that particular issue in specific terms so I cannot give you specific examples, but it is a reality in Peel that the commercial child care centres have made up a reasonably high proportion of the centres in that community, and there is no question that they are having considerable difficulty surviving.

Mrs Sullivan: In Halton, I think more than 70% of our children are in commercial child care centres and I wondered if the figures were comparable.

Mr Huether: I am sorry, I do not have the figures available to be able to talk to that other than to say that in general terms there is a decline in available child care spaces.

Mr Jackson: I would like to build on that question because I think one of the offensive priorities of the current socialist government is its interest in building child care spaces but not providing the subsidies or allowing the current system to expand naturally with some funding, but rather to shut down one sector. There is a delay in that. We understand where they are coming from, they support that, but there is a cost in the transition because you are putting money into building competing child care spaces at taxpayer expense when there is an incredible demand, particularly in Peel -- there is across Ontario, but it is particularly acute in the GTA because of growth -- for subsidized spaces or for increased subsidized space levels.

I think that really hits at the nub of an offensive priority where money may be going into capital but that money could be going into program. Is that the concern being expressed? It has nothing to do with the philosophical argument of for-profit or not-for-profit; it is just that for every dollar you are putting into bricks and mortar you cannot be helping a family who is on a waiting list.

Mr Huether: I think my perspective of the problem of available subsidy dollars for child care in Peel is that every single additional cent that might be available for social services or any soft services in the region is going into paying the 20% of the municipal share of welfare, and therefore the region, even with a significant tax increase, is not able to pick up the available spaces that can be made because it cannot afford to put an additional burden on the property tax base. That is an incredible dilemma that the regional government is facing and is something that I think is of much more concern in terms of its impact on the number of subsidized spaces available.

Mr Jackson: Let me move into that area then. One of the other offensive priorities of this socialist government which concerns me is that it has shelved the Provincial-Municipal Social Services Review Committee report, the Ron Book report, which I thought was a fairly good document in terms of bringing focus to the relationship between municipal funding levels and provincial responsibilities. Obviously that document made some recommendations -- we are pleased it went that far -- showing the changes in ratios.

My understanding, from discussions at the deputy ministerial level, is that this whole document is dead, that the years of progress we thought we were getting towards in terms of stabilizing not only the formulas about participation but also acceptance of growth factors which have become so acute in York and Peel -- and you are at the top of the list for how serious this problem is in this province.

Are you concerned about the fact that the government seems to be turning its back on these reforms but is rather infatuated with some other reforms that have little, if anything, to do with children's mental health services and social service delivery?

Mr Huether: Our task force has not specifically looked at the details of the PMSSR but there is no question that the governance issues, which is what you are talking about in terms of social services, need to be addressed. The Children First paper that Hal made reference to also raises that as a fundamental question that needs to be addressed.

Mr Jackson: My final question has to do with this whole issue of children's aid societies because, like Mrs Sullivan, coming from Halton, we are quite aware of the dire straits that children's services are in particularly in the GTA and in northern Ontario, which is also experiencing severe cases.

The budget document sets out the government's priorities. They cannot do all things for all people. The day before the budget they wrote off some $200 million owing with respect to the Dome. They made a major transfer, about a third of a billion dollars, to the teachers' pension plan. There were some very subtle priorities expressed by the socialists and yet we did not get confirmation that there is enough of a buffer in the Ministry of Community and Social Services to accommodate the adjustment in your growth factor.

I am not disputing that it took four or five months to get the minister's attention to a meeting. You got that. There is speculation in the paper that we are going to have a new minister so the whole thing is going to be set back another little while.

The fact is that there is no money in this budget to address your concern. That has been confirmed at the deputy ministerial level. How do you feel about the fact that we have seen no indication that the government is prepared to cut from other programs in order to honour its informal discussions with you to address a serious problem facing children? I know what it means in my region. The increased suicide rate among our youth is the most graphic demonstration of the cost of this offensive priority.

Mr Brooks: Just to respond, we recognize that the government faces some very tough decisions. We do not want to minimize those choices that you face at all. I guess our position and the reason we are here, as I mentioned at the conclusion of my comments, is to make an impassioned plea that children and families represent the very highest priority within this government and, second, that the whole allocation system be thoroughly reviewed because inherent in it right now are some really gross inequities.

It is fine within the GTA for communities like 50,000 and 100,000 people to spring up. Somebody looks after the roads and the sewers and perhaps, if we are lucky, the police force, but there are a lot of other soft services that have to be put in place and there has not been recognition of those growth factors in the past, and we are hurting.


Mr Christopherson: I think within the issues you raise you have probably dealt with, one way or another, half the issues that impact on this government. The last part of your comments about the infrastructure and the relationship with municipal governments and the needs there are ones that are very close to me, having spent five years in local government before I came here myself.

I was also interested in the concerns and references made both by questions and in your comments to PMSSR, the Hopcroft report, the whole issue of disentanglement. All of these are priorities for both levels of government and certainly all the services that are contained within the communities that are mentioned. Children and families, in terms of a priority, I would suggest to you are one of the driving reasons why you have a budget such as we have in front of us here in this province.

It was mentioned by previous members that certain things were not addressed and some things were omitted. I would like to make a statement and put a question to you that one of things we attempted to do was to follow a philosophy that said we cannot walk away from the people of Ontario during this major recession, the most important and deepest recession since the 1930s. We cannot walk away from those people and ignore them, and so we have done everything we can to maintain the kind of services, beef up the services where at all possible, and still try and remain as fiscally responsible as we can. Quite a balancing act.

I would like to ask you, first of all, if you believe that, in general, that thrust during a recession is the right sort of thing to do, and if it is -- and I am asking this hypothetically -- how would following the other approach, the Mulroney approach, have impacted on the agencies and the people you represent? If we had held the line and cut back on services and not recognized the need to at least maintain, how would that have impacted on the people and the agencies that you represent?

Mr Brooks: Perhaps we could both respond, and John could go first.

Mr Huether: One thing that needs to be recognized in the services we provide is that our volumes go up in the face of a recession. The number, for example, of credit counselling referrals that have been made to Family Services of Peel that it cannot respond to are approaching 300 and 400. So as the government responds in terms of making available the funding through GWA and FBA, it needs to recognize that there are a group of support services like Family Services of Peel for credit counselling. Our agency has faced an average of 100 additional families a month that we are having to serve. Our abuse statistics, in terms of allegations, have gone up significantly over the last eight months, and yet we have no additional capacity to respond to that. So that would be part of my answer.

The other reality, I have to say, is that in answer to your question about the federal government, it is very clear that this government is facing the negative impact of the limit on the Canada assistance plan, and that is affecting all of our ability to respond to the people because of that limit. So clearly that has had a negative impact on our ability to respond and your ability to support us.

Mr Brooks: In making reference to the cap on CAP, I would certainly agree that in economically troubled times a focus on people, people being the priorities, is important. In terms of the decisions you face, what gets the funding and what not, you face some very tough decisions, and I really cannot comment in terms of what goes and what stays, other than to say that we represent and feel passionately, at the grass-roots level, that the impact on children and families within our community because of the growth is bad enough. The recession, as John has just mentioned, through Family Services, Rapport Youth and Family Counselling, all these, adolescent services and so forth -- when families are under stress, they tend to fracture, and it is agencies such as ours that are expected to pick up and run with the ball, and we are hurting.

In terms of the juggle of priorities that it comes down to, I guess what we are asking for is that children and family services -- furthermore I would like to applaud you. The mere opportunity to come and talk about these things and for the government to open the doors to say, "Let's sit down around a table and deal with the issues in a very upfront fashion," the mere opportunity to dialogue is refreshing. I would encourage you to proceed in that direction.

Mr B. Ward: I represent the city of Brantford and I assure you that although we have not had the same growth as Peel from a population standpoint, we do share economic pressures and, as a result of the recession, the ever-present need for social services.

I asked this question of a previous participant. There are some groups and organizations in this province that are criticizing our government for taking the stand we did in this budget and ensuring that the effects of the recession from an economic standpoint, are lessened as much as possible on the grass-roots people, the working people in Ontario. We have been criticized for that, and these groups are saying we should be cutting those programs, we should be cutting out the social safety nets. What I am hearing from you in fact, because of the impact of the recession, is that there is an ever-present need for services that you provide. In fact, it is being underfunded to a degree, not only from the growth standpoint, but also because of the impact of recession.

Am I clear on that? I believe that was the gist of your presentation, that rather than cutting the programs of organizations that have been crying to us and criticizing us for not doing it, in fact more money should have been allocated, if possible.

Mr Brooks: I have two responses: First is, I think it is incumbent upon all of us to adopt a spirit of continuous improvement in the way in which service is delivered, so that we get the most efficient and effective delivery of service for the dollar investment. I mean, we have to do that and we have to be encouraged to do that; to sit down and work collaboratively so that there is an overlap in service and that the money is not going into bricks and mortar --

Mr B. Ward: Or more properly, duplication of service.

Mr Brooks: Duplication of service and those kinds of things, that is part of it, but fundamentally, within that process of dialogue and with the government, to recognize the inequities that exist in the allocation systems, and some of them are chronicled in the report, as I mentioned. For Peel to have doubled its population in a little over a decade, the funds to provide that infrastructure are not there, so that what we end up doing is Band-Aid stuff. It is like a balloon: You squeeze it here and it pops out over there.

The Chair: Time is up.

Mr B. Ward: Quickly, I did not see anything on day care, and there seemed to be a focal from our friends across. Which page was it?

Mr Brooks: There is a day care package on page 12.

Mr B. Ward: Did I miss it?

Mr Brooks: Yes. I highlighted a couple, pages 9 and 10. Page 9 is the statistics and 10 is the analysis.

The Chair: Time is up anyway, gentlemen. Thank you for coming and for your presentation.



The Chair: Our next presentation is the Alliance for Employment Equity, Handel Mlilo. Please introduce the person that you are with and begin your presentation.

Mr Mlilo: I am Handel Mlilo. I am co-ordinator for the Alliance for Employment Equity, and with me is Carol McGregor, co-ordinator for Disabled People for Employment Equity. Mr Chairman, we would like to thank you for the opportunity of speaking to you today about the first budget presented by the New Democratic Party.

The Alliance for Employment Equity is a coalition of 65 organizations representing women, visible minorities, persons with disabilities and aboriginal persons. We were formed in 1987 to lobby the government to introduce mandatory employment equity legislation in Ontario.

Disabled People for Employment Equity is a broad-based coalition of 33 disability organizations representing the thousands of people with disabilities in Ontario. DP has been in existence since 1985, following the release of the Abella report which identified persons with disabilities as being among the most disadvantaged group, economically and socially, in this country. The primary mandate of DP is to press for mandatory employment equity legislation both on the federal and provincial levels.

We are here today to express our concerns with the budget that was introduced on April 29, 1991. We are quite aware of the attempt by the opposition and business to attack this government for the current deficit. The fact remains that this government inherited a $3.5-billion deficit from the previous Liberal government. This came in spite of the assurances from the then Premier Peterson that the budget was balanced.

Attempts by critics of the NDP government to blame the deficit on overspending will not fool Ontarians who know that the primary responsibility for the recession in Canada must be laid squarely at the feet of the present Conservative government in Ottawa. Its fiscal policies of Reaganomics have resulted in 250,000 workers being laid off by the time the NDP budget was introduced in Ontario.

In order to deflect criticism of their own inept financial policies, the Tories chose to attack a government that was attempting, in our opinion, to deal with the recession in a responsible manner. The NDP chose to assist those most affected by the recession.

From the point of view of employment equity advocates, creating jobs or preventing loss of jobs must be seen as a priority issue. The people on whose behalf we advocate are usually the last ones hired and the first ones fired. While there have been some gains for women and racial minorities in the past few years, the recession has negated this today. Persons with disabilities and aboriginal peoples are still unemployed in large numbers.

It was estimated that disabled people had an unemployment rate of 80% prior to the recession, and we now know that these numbers have risen considerably during the recession. Reports from food banks indicate that disabled people are having to rely on this service just to exist from week to week. Approximately 35% of aboriginal peoples are employed for less than six months per year and aboriginal women earn approximately $5,000 annually. I would like Carol to continue from here.

Mrs McGregor: We understand the difficult position that the Treasurer was in in attempting to deal with the overwhelming problems facing this province, but we have some serious concerns about the budget that we would like to address at this time.

1. In the budget, $24 million was allotted to the public service for employment equity initiatives. Of these moneys, $11 million was committed by the previous Liberal government. The budget is strangely silent on funding for the new Employment Equity Commissioner. In fact, we know that the commissioner received only $1 million to carry out her mandate of developing legislation. This is to include the cost of consultation throughout the province. This makes one wonder about the true commitment of this government to employment equity.

2. The budget makes no mention of extending funding for accommodation for persons with disabilities in the public service. At a time when various ministries should be encouraging persons with disabilities to apply for positions, this omission could have serious repercussions. In fact, it is now taking up to one year to accommodate one employee who is disabled within the public service. This is totally unacceptable from our viewpoint. You will not be able to retain disabled people within any ministry if you are not able to accommodate them.

3. In its budget submission, the government recognizes the importance of education and training for jobs. In a previous submission that we made prior to the budget, we pointed out that students with disabilities at colleges or universities must have expanded funding to compensate them for their extra expenses incurred as a result of accommodating their disability while attending post-secondary education. There is nothing in this budget to address that problem.

4. If a person wishes to access programs on job training, he or she must have a job in the first place. For aboriginal persons and persons with disabilities, these opportunities have not existed previously. We are not able to access those programs and, again, there is nothing in this budget to address that. Where are the training initiatives that will enable these groups to enter the workforce?

5. In the budget there is a reference to equity for aboriginal peoples. There is a commitment for $48 million to assist aboriginal peoples in establishing self-government and land claims. However, there is nothing to assist the large numbers of aboriginal peoples who live in urban centres. Off-reserve people are not fully represented in this budget.

6. In the budget there is a strong commitment to pay equity by this government. The years of discrimination towards women have unfortunately made it necessary for the government to respond in this fashion. However, we would like to point out that if previous governments had introduced mandatory employment equity legislation, there would not be this necessity to correct past wrongs. Mandatory employment equity legislation would have achieved the same objective and would have assisted the other three designated groups simultaneously.

This budget attempts to respond to the ravages of a serious recession. If the opposition is indeed concerned about the deficit, then it should be working in partnership with the government to find solutions that will alleviate the pain caused by this recession. The charade of public hearings will do nothing to put food on the table for workers who have been laid off. It is not going to assist disabled people who have to continue to use food banks in large numbers. The charade will just increase this deficit. The voters of Ontario will not be misled.

We urge the government to stay with the values that got it into office in the first place. It is these values that won them the right to form the government. We urge them to ignore their detractors and carry out the promises that were made during the election. Mandatory employment equity is just one such promise.

The Chair: Thank you. We have five minutes for each of the parties, beginning with the New Democratic Party.

Ms M. Ward: I appreciate your advice, which you closed off with, telling us to stay on track. You emphasize the problems that the disabled face and I think that is a very good point to be emphasized. It is something that the public should realize could happen to any of us. We could at some point be disabled and be in that situation. Sometimes you have to appeal to people on their own self-interest.

What I would like to ask you is if you think we are heading in the right direction. I think I gather that from your presentation. You have some recommendations of things you think we should be moving a little faster on, the employment equity, but overall do you feel that the direction being taken is the correct one?

Mrs McGregor: We felt initially that the direction the government was taking was in the right direction. However, I must tell you that the disabled community in particular has serious reservations about the direction that your government is heading in.

We are not happy with long-term care, although I am going to let other people coming in this afternoon probably speak on that. Transportation remains an issue. As for employment equity, the recent speech by Juanita Westmoreland-Traoré gives cause to think that you are backing away from your previous commitment of Bill 172.

The disabled community is at a very militant stage. We have had promises from the NDP government. We worked very hard in consultation with your leader to develop Bill 172. This is a bill that he put his heart into. We put a lot of hours into trying to develop this legislation that would affect all the four groups and labour. This was not done just on a whim. To back away from this piece of legislation at this time would seriously damage your own reputation with our community.

We had been promised at a meeting in the fall with the Premier that we would have employment equity legislation by this spring. Obviously, we do not have it. We were told at a recent meeting earlier with the new commissioner that we would have legislation come September. We will not have that legislation by September.

We probably will not get this legislation introduced into the House until next spring, following yet another round of consultations. We have been consulted to death about employment equity, about the wrongs that have been done to us.


You cannot expect this community to stand back and support you while there are repeated attempts to stall. We are not getting people employed. Disabled people are not getting employed. I cannot emphasize it hardly enough. I have people out there who are in dire need. We are being hit very hard by this recession. We have people who are not getting attendant care until five o'clock in the afternoon. They are not getting breakfast until five o'clock in the afternoon. They cannot get out even to go and meet their own ministers because they cannot get transportation. We cannot even get people in the labour force; we cannot get them out of bed.

This group of people is being hit very, very hard by the cuts in services. I do not think this community will stand still without some strong legislation, strong measures coming from this government, and we see this government backing off on disability issues.

Ms M. Ward: There have been increases for the disabled transportation, and the --

Mrs McGregor: The services have been cut back on transportation. I do not know whether you are aware that the city told the disabled community that they must be content with less on Transhelp.

Ms M. Ward: From what I understand about the buses --

Mrs McGregor: We may get that. There is a --

Ms M. Ward: There is an effort to stall at the moment because of the municipalities. The province wants to put in more funding for it but the municipalities have a problem with the matching fund.

I probably had better finish off my questions. In the employment equity, there was $24 million allocated for initiatives in the public service, and the disabled, along with minorities and aboriginal peoples, are the target group of that. That is the public service.

Mrs McGregor: That is right.

Ms M. Ward: You need the legislation, I think, in order to get it to happen in the private --

Mrs McGregor: To the public.

Ms M. Ward: To the broader public, yes.

Mr Sutherland: I guess basically what you are telling us is that you feel this government has not done enough, quickly enough, on the issues of employment equity in terms of the legislative channel, but also on putting the money where our mouth is in terms of other programs within the public service and in those agencies that serve many of the constituents you represent. This seems to be a common theme that we are beginning to hear, despite the fact that we have a $9.7-billion deficit. The demands and the needs are still very great out there and they have become greater.

I guess the other thing you are saying is you are getting very frustrated, and as people who have been patient for a very long time it is easy to understand why you are getting frustrated.

Besides what you have got in your document here, is there any other specific advice you would like to give in the area of employment equity?

Mr Mlilo: Yes, I think so. What we are really urging you is to stick to those principles. One of them is lack of mandatory employment equity legislation. It is still as essential as it was before you got elected. It is even more so now because of the effects of a receding economy. The urge for me is, do not be distracted from those principles that got you here and let us get on with it.

Mrs McGregor: I would like to again emphasize the lack of accommodation in the public service. This has been coming to me more and more often. We have several people who have gone into the public service who have yet to be accommodated after eight months. This affects the job performance. It affects the way other employees view disabled people if you do not have the equipment to do your job.

I use a voice computer, for example. If I was to go into the public service, I would even tell you the process, because we are fighting with this government now to try to get one person accommodated. We have been trying now for eight months to get one person a voice computer and a scanner to do his job. Being blind, if you do not have this equipment -- I was offered a job with the government, and it was very nice, but I still could not do my job because you guys could not give me the equipment. It is tendered out and to me, this is a ridiculous way to do business with disabled people because you are going to have to develop a large store of specialized equipment that is there so that you are not going to have to wait for months.

You cannot ask people to go in there to do a job and not give them the tools to do that job. I am very competent in what I do, providing I have that equipment to do my job. The people you have hired in your various ministries are very competent, but if you do not give them the equipment to do their job, they are obviously not going to be very efficient in their own job. There has to be a better way of serving the accommodation needs of people within the public service.

Mr Phillips: Thank you for a very good presentation. It is just one year ago, almost today, that the election started, as you probably remember, and I think your community played a big role in the change of government. I always carry the Agenda for People around with me because it certainly was used very much in the campaign and, as I say, I think your community played a big role.

As your community would see priorities, what would be the number one in terms of the government's taking action to be of the most assistance?

Mrs McGregor: You are talking about the disabled community?

Mr Phillips: Yes.

Mrs McGregor: The disabled community right now is not happy with long-term care. We are not happy with deinstitutionalization. We are not happy with employment equity legislation and transportation. Those four are probably all sitting up there equally.

We thought we were going to get something out of long-term care, and it is a very poor piece that came out. We are not at all satisfied with that, and people who are stuck, who are in institutions, you just have to read the cases going on with Christopher Robin right now. Our concern with the children in institutions is very great, and we have to look out for those because they are very vulnerable.

Employment equity legislation: Obviously we have to get our people off welfare. We are attaching a great priority to this. I for one am not convinced that this is going to be the be-all and end-all. The constituency I represent probably does feel that by the time we get this legislation, we are going to automatically get jobs. I am afraid we are not going to get those jobs when we see what is happening after five years on the federal level. Even if we were to introduce this, the backlash even within the Ontario public service is still fairly sharp against disabled people coming in. I am a registered nurse and I still was not initially deemed qualified for a job by anyone, even though I had past work experience. We have a long way to go to accept people with disabilities.

I really could not put a priority on any one, but those four still remain top.

Mr Phillips: I think you say in your brief that a high priority is to create jobs, just jobs generically. As you can imagine, there is in this committee quite a difference of opinion about the impact the budget will have in terms of job creation in the province, and my own view is only time will tell. This is an interesting debate we are going to have here, but the proof will only be maybe in a year or two years from now when we see what impact the budget will have.

In terms of the groups and the people that you deal with, are you seeing any change now, in the last month or so, in employment opportunity? We hear the recession is ending. The budget is beginning to kick in now with its positive impact. Are you starting to see a pickup in the economy?

Mr Mlilo: When people say the economy is turning around, is coming up, the people I represent are probably the last ones to feel that. You know, last one hired, first one fired is not a position in which, right now, you start to feel any positive anything. We are starting from a disadvantage in the first place of discrimination in the workplace for the designated groups, and that disadvantage makes it worse in a recession. We applaud recession-fighting measures because they minimize to some extent the pain that the groups would suffer, which is even more in many ways.

But in terms of have I seen anything in the last month, are you asking me if I have seen anything in the last two or three years? There may have been positive things here and there for women in racial minorities, but we are just seeing a lot of designated group members who are just not accessing the workplace, because the workplace is still very discriminatory to them. There are dozens of examples out there of people who could come here and tell you that despite their qualifications, despite their efforts, the workplace is not very friendly sometimes.


Mr Phillips: You would say that the budget is recession-fighting. Is it? The concern some have is that it is fighting the symptoms of the recession, but perhaps rather than accelerating the end of the recession, it may prolong the recession. Does your group have a view on that?

Mr Mlilo: We have read also, as you have, the columnists who have said that perhaps this province took the right road in trying to deal with the economic problems that exist right now. I look at it from the point of view of somebody dealing with disadvantaged people. When somebody says to me, "We are trying one way or the other to minimize the effect of what is going on here" -- and that is a positive thing -- then I say: "Go on from there. Deal with these systemic problems that exist."

Mrs Sullivan: How do you see that having being done in this budget, the effect of the recession being minimized? From what I hear from you in fact, there has been none of that minimizing effect in your organization; you do not see that effect.

Mr Mlilo: No; I am saying any time you try to blunt the increase in unemployment, you indirectly help us, because we are the ones that get there first in the unemployment situation, because of the historic disadvantages. That is all I am saying. I am not saying that the claim that it is a recession-fighting budget is being seen, because I have not seen it. I am just saying that in any discussion where somebody is attempting to minimize unemployment rates going higher and minimize effects of economic recessions and so on, you have to look at it and say, people are doing something, at least in the immediate term, and hopefully stronger measures in the longer term.

Mr Sterling: I am interested in your views on the projected deficits by the Treasurer over the next three or four years. We hear a lot about the $9.7 billion, but we hear less about the deficit of about $8 billion for the next three years, when we are supposed to be out of the recession and in a positive time. Do you think that the government should be operating at a deficit during that period of time?

Mrs McGregor: I do not see any other way the government is going to operate except in a deficit. We have no problem with the deficit from our perspective. Disabled people never have any money to begin with. We are always living on a deficit. We would like to see the government continue on its course, I think from our perspective, if we had some decent legislation that would enable disabled people to have jobs.

You have to look at the cost of keeping a disabled person at home each year. You are paying people who are qualified, people who have got university degrees, college degrees, to sit at home and collect welfare up to $21,000 and $25,000 to $26,000 a year with support services. If that person were enabled to enter the job market, that would take that burden off it. The other taxpayers would not have to pay.

I do not know of any other society that is so willing to keep disabled people sitting at home collecting welfare as Canada is. We are the last industrialized country to bring disabled people into the workforce. We have such an aversion to having to look at someone who is disabled. I really think that if that legislation is in effect we will start to see a little bit of a shift. Employers will be forced to look to hiring disabled people. That is going to take some of the pressures off the taxpayers. They are going to see the value of having such legislation and perhaps see the value of introducing such positive legislation.

Mr Sterling: My concern is the ability of future governments to take care of special problems of many of the people you represent. My concern is that by continuing to load up the total debt, or the deficit, you make future governments less and less capable. They are less capable because they have fewer dollars to deal with those problems, to support people who are deinstitutionalized and to help people in the community who need extra help.

Mrs McGregor: We would agree with you on that but I think again we have to look at the fiscal policies that are coming out of Ottawa. The transfer payments obviously had a negative effect in how they are being introduced by our community. We are fighting the Tories very hard on this. We are not happy with the fiscal policies in Ottawa. When it trickles down from the feds to the provincial government to the municipal governments, municipal governments are the ones that have to turn around and say, "We cannot provide services."

I have got diabetics coming to me saying they have home care services cut off and no one to load up their insulin syringes -- people who are blind having to load up their own insulin syringes. I do not think you would be very happy if I, as a blind person, were to load a syringe and give it to you. Yet we are asking people in their homes not to have anyone come in and do this. So the municipalities are being forced because of lack of resources to do this. We are already being hit. I do not know how much worse off this community that I represent could be in the future than we are right now.

Mr Sterling: My concern when we hear representations, as we did yesterday afternoon from economists and people who have a worldly outlook on the whole matter, is the ability of future governments to take care of the people in the best possible way they can. I have to tell you that it appears that the provincial government has set a direction that was practised by past federal governments. It is going to be in a very, very difficult position to be able to deal with problems. That is my biggest concern. If we do not pay our way now, or if we do not pay our way next year or the year after, how on earth are we going to be able to take care of our people? I do not know the answer to that. I mean, you have to pay some time.

Mrs McGregor: I do not know the answer to that either, but I certainly know that in the last eight years disabled people in boom times were not being served by the present economic policies. We are not being served in the recessionary times either obviously. At some point in time we have to bite the bullet. Yes, we know -- everyone tells us to take in our belts, you know, tighten up a little thinner. You are asking people to live on less than $600 dollars a month in most cases. You are asking them to do without food, which is making their health worse. This is in boom times. This is prior to any recession. This is when Ontario was booming, we were asking people to live in poverty like this. In a recessionary time, you want a government to say, "We are going to cut you off even further"? I do not think anybody would expect services to be cut less than they are right now.

The Chair: Thank you for your presentation this morning. This committee will reconvene this afternoon at 1:30 with the Ontario Federation of Agriculture.

The committee recessed at 1209.


The committee resumed at 1338.

The Chair: I see a quorum. I would like to begin this afternoon's hearing so we can be on time. We are starting a little late, but that is not a problem.

The format for the hearings is that you will do your presentation, and whatever time is left over from the half-hour you have been allocated will be divided equally among the parties. The questioning will be done in order. Each party will take up its time for the questions. The questions will begin, after you have finished your presentation, by the Conservative Party this afternoon.


The Chair: Welcome to the post-budget hearings. This is the Ontario Federation of Agriculture; Roger George, president. If you would like to introduce your companions at the table, we can begin.

Mr George: My name is Roger George. I am the president of the OFA. On my right is Carl Sulliman, the chief executive officer of the OFA; on my left, Cecil Bradley, the manager of our research division; and in the back benches we have Laurel Campbell, our media communications officer.

We are indeed pleased to be here this afternoon to speak before this committee of the Legislature. As you know, the OFA has several meetings on an annual basis with senior cabinet ministers, and we did meet with Mr Laughren before his budget to give him our advice. We met again with Mr Rae and a number of cabinet ministers shortly before the budget, and we have obviously passed comment on the budget afterwards.

Today we are here to talk to you about some events that have happened since the budget and about some of the impact of the budget and some of the ongoing events that are happening in Ontario agriculture today. I think they are of significant economic importance to Ontario.

I would like to start off by telling the committee that the OFA is made up of 20,000 individual voluntary members. We have about a $3-million budget. Among our membership we also count some 29 commodity and allied organizations, and we are represented in 47 counties and regions right across Ontario.

For your information, farmers in Ontario farm or have control over 14 million acres of land. That is quite a chunk of real estate when you think about it, so some of the impact of that on rural communities and on the environment is very great indeed. I do not think anyone in this room should sell the farm community short when it comes to realizing the economic importance of this sector to the Ontario economy. So while we are here, of course, to talk about the implications of the 1991 budget, we are also here to tell you people of the importance of our industry and why we need government assistance in some sectors to maintain a strong and vibrant industry, not just for the farmers themselves, but for the Ontario consumer and for the wellbeing of the Ontario economy.

You have before you a brief I do not intend to go through it, just to hit the highlights on the first two or three pages.

As outlined at the bottom of page 1, we are, in OFA, concerned about the $9.7-billion deficit. It is large, and I guess we are concerned about the projections for ongoing deficits, having come through the last 10 or 15 years where we have seen the very same pattern start in Ottawa and continue to the point where we now have what is essentially an unmanageable federal deficit. We are concerned about the underlying trend to that with this budget.

Having said that, as I said, we believe that ours is one sector where money put in, money invested in agriculture by the province, does have that economic spinoff. Agriculture in my mind is of just as critical an importance as health and education to this province.

On page 2, we do say we are not sure the provincial commitment is as strong as they would have us believe. The Premier has made statements, as has the Minister of Agriculture, about the commitment of the governing party to this industry. We do not see it in the budget. We have seen the agricultural share of the budget decline by another 0.1% in actual dollars. When we discount the property tax rebate, some $150 million which agriculture has never considered should be part of the agricultural budget anyway, our share of the provincial budget is in decline.

We did welcome the $50 million of interest rebate that was announced shortly before the budget. That was an important safety net for farmers who last year were trapped in spiralling interest costs. That is a short one-year agreement. We are still working with the Ministry of Agriculture toward a longer provincial credit policy for agriculture, because credit is a vital part of our industry. Farmers are large users of borrowed money.

In our mind, the government missed a golden opportunity in the April budget when it came to what we call the net income stabilization account. Here was a great opportunity for the province of Ontario to show its commitment for a relatively small amount of money, some $10 million or $12 million. The government could have committed to this NISA program, as it is called, which is one of the new federal-provincial safety nets. They could have committed themselves to the first year, and that would have triggered additional federal matching funds. That would have been of significant importance to cash crop farmers, who are having an extremely tough time surviving this year. I will talk a little more about that in a second.

On tobacco, in the OFA we are not so much worried about the product as the farmers who produce the product. In our mind, any attempt to tax farmers off the land, to tax people off the land, is just an abysmal way of going about things. We are very, very concerned with the tactics by both the federal and provincial governments in two consecutive budgets when they have raised tobacco taxes the way they have without offering any type of transition to those producers. We are dealing with people who for many generations have made their living on those family farms -- because that is what they are. The tobacco farms in Norfolk and Haldimand and Brant counties are family farms.

The taxation on gasoline and diesel fuel, while it does not directly affect farmers, does again alter the competitive position of industries like the food sector and makes us that much less competitive in Ontario. Indeed, it adds to cross-border shopping, which does directly affect farmers, particularly those in the dairy sector. In some parts of Ontario fully 25% of the dairy products coming into areas like Sault Ste Marie, as an example, are coming cross-border. That is causing some severe economic hardship on many farmers in the dairy sector.

We did welcome the attempt to put money into waste management, into municipalities. That is a very positive step and one which the OFA applauds and is in support of.

One example of fiscal policy which we felt is ill-timed and ill-conceived is the change in minimum wages. Agriculture relies to a great extent in some commodities on seasonal labour, and the minimum wage is going to have a tremendous, dramatic impact on many horticultural producers in particular. The effects of that are still to be felt. Once again, it strikes us as strange that in a time when on the one hand government talks competitiveness, on the other hand we are bringing in policies which reduce our competitiveness. I think one of the critical things we have to be looking at is to make sure that whatever fiscal policy we bring in, whatever new taxes we bring in, we do not add to that lack of competitiveness and start driving more and more small businesses, farmers included, out of business and driving businesses over the border.

I have spoken directly to some sectors that were discussed in the budget. I just want to take a couple of minutes to bring the committee an update on the state of the industry in Ontario today.

I cannot remember any summer where there has been so much strain, stress and uncertainty in the farm community and particularly the cash crop sector, the grains and oilseeds sector, where the cash flow has just not been there. We have been moving, as I said, into this new generation of safety nets where the farm community, along with the federal and provincial governments, has devised a pair of new safety nets called gross revenue insurance program and NISA which will be there for horticulture and for grains and oilseeds producers for 1992. But in our mind, the governments have abandoned the farmers in this critical transition as we move away from the old ad hoc program through to the new programs and there is just no cash flow. That is leading to many stories of farmers who are almost destitute. They are penniless. They have no cash flow as they await these government programs, from which money will not flow for many months and with some of them not for a year.

As an example, just last week I received a telephone call from a farmer in Huron county. The man farms 1,000 acres, grows 1,000 acres of grain, and he told me he had no money to buy groceries for his family this week. That struck me as being really tragic, really ironic, that he is a farmer growing 1,000 acres of grain, feeding countless hundreds of people, and he does not have enough money to put food on his own table.

That is part of the tragedy that is out there in the rural community. We are caught in this uncertainty with the trade talks. We are caught in international trade wars in some commodities and many farmers are questioning why they are doing what they are doing. Why after three or four generations should they continue to risk the equity that they built up in their operations? Why should they be encouraging their families to continue farming? What sort of inheritance are they leaving to their grandchildren?

This in my mind becomes a critical thing for the members of Parliament down here at the Legislature in Queen's Park to firmly get in their mind. Both urban and rural members have to come to grips once and for all with the fact that farmers cannot keep on doing this for ever and take all these beatings without some aid. Governments have to stand by agriculture in tough times. They have to; otherwise the farmers are just not going to be there when the good times finally roll around. At some point in time, this country, this province is going to lose its food security. We are going to be dependent on food coming in from south of the border or elsewhere. There is always going to be somewhere in the world where they can produce any goods, agricultural or otherwise, cheaper than we can do it here in Ontario.

If we are going to consistently let industries die because of some short-term economic policies, we are treading down a very dangerous and slippery slope. When the people of Ontario stop and think about it, all those millions of people who live in the cities, I do not think they want to see the family farm disappear in Ontario. I would put it to you that it is a real danger at this point in time. There is a real danger of that.


Politicians, if you want something to do in the summer holidays, get out there to rural Ontario. Those of you from urban ridings, get out into the countryside and team up with some people from county federations. They will take you around and you will see some of this hardship. Sure, there are bread lines and soup kitchens in Toronto, but we have equal hardship out there in rural Ontario, and it is high time the province of Ontario finally made some real commitments to rural development issues. I think for too long we in rural Ontario have sat in the shadows of the urban centre seeing billions and billions of dollars pumped into the Golden Horseshoe, all this money pumped into areas within 50 or 100 miles of the Canada-US border, and we have seen rural areas just left to make it on their own.

Well, we are not going to make it on our own unless we get some change in policy, unless we get some support from government to help us through these periods. Sure, farmers will get out there and we will do it. We will generate that economic activity when we can, but until things turn around a bit we cannot do that. Farmers are great spenders when they have money, and the money put into our industry is money well spent.

Sure, we are concerned about some aspects of the budget but we are also not interested in the least bit in discussing with our Minister of Agriculture and Food or any other member of the cabinet any talk about cutbacks in this industry. You should no more consider cutting back agricultural support than you would consider cutting back on education or on health.

Those are my opening remarks and I think we will be open for some questions.

Mr Villeneuve: Roger, thank you and your delegation from the Ontario Federation of Agriculture. I think you have painted the picture exactly the way it is, and it may be a little worse. We are actually getting prices for grain right now, not adjusted for anything, that are lower than they were 18 and 20 years ago. I do not know how many people are making their income at what it was 20 years ago, not adjusted for inflation or anything; those are in real dollars. Have you ever seen a situation where at this time of the year there is no market for barley, grain and soybeans?

Mr George: No, I cannot say that I have and I am not sure I want to see it again. I just returned from Manitoba. We were in Winnipeg for the Canadian Federation of Agriculture meeting last week. They have a wonderful crop out there and that same week the minister for the Canadian Wheat Board, Mr Mayer, announced the initial price of wheat in the west at $95 a tonne, and this is down from last year. It was $135 a tonne.

In Ontario the initial price is $75 a tonne. As Mr Villeneuve said, you have to go back 17 or 18 years to find those same prices, and you all know that $75 was worth a lot more 18 years ago. To give you an example, the expected net realized farm income from the whole of the Canadian grains and oilseeds is expected to be $250 million in 1991. Twenty years ago it was $3 billion. When people say Canada was the bread basket of the world, $3 billion is what our farmers were actually making in net profit growing grain that time ago; now we are down to $250 million -- one twelfth. That is some example of the state this industry is in, one twelfth of the income of many years ago. As Mr Villeneuve said, it is a tough situation, compounded by the international grain situation out there.

Mr Villeneuve: You have had an experience that you have just shared with us of someone who had no money to buy groceries. A rather ironic thing that occurs is that farmers are now attempting -- and I realize we have to save farm land, but right now there is no demand for what they are growing. It is a very negative signal that is coming out. Therefore in order just to exist, to keep the banker off their back, they may try to sell a small parcel of land. We have, I think, an example in Ottawa where the Ministry of Agriculture and Food is spending some $2 million-plus and saving 180 acres of agricultural land that is producing crops that no one wants. I would like your comments on the kind of situation when the Ministry of Agriculture and Food objects vehemently to someone trying to sever a lot just so that he can keep the banker off his back, keep his home and buy some groceries.

Mr George: For many farmers, the way they make the cash flow work is to get a severance or something once a year. I think the fundamental point in this is that if we had a healthy industry, farmers themselves would be the best defenders of farm land. We would be saying ourselves: "Hands off our farm land. Let's just save every acre we can."

It is very difficult for a farmer to make that case any more. The Ontario Federation of Agriculture, 10 or 15 years ago, was saying we were doing our best to try to stop the development around Toronto. We gave up on that a long time ago when farmers said, "There is nothing else we can do." The Premier himself I think acknowledged that at a convention in November, that it is no good trying to freeze land into agricultural production if there is not a crop that you can grow on it.

So the first thing you do is make our industry healthy and then we will protect every acre of farm land with our dying breath. Farmers will be the ones who will be defending it. We will not need a Ministry of Agriculture and Food to be defending it on our behalf.

Mr Villeneuve: As a final question, when farmers have money, what is the ripple effect throughout the economy? I think I have some sort of answer to that, but I would like it coming from you. When farmers have dollars to spend, what is the multiplier effect?

Mr George: We believe it is seven to one.

Mr Jamison: Thank you, Roger. We are pleased to have you here today, and the very interesting presentation. I do not think it really varies much from the presentation you gave to this committee earlier on, but certainly time has passed since then. I would like to thank you for your reference to the tobacco industry, that area which I represent. We share your view.

I would like to touch on something we all talk about and that is really about the family farm and how viable that family farm is, subject to the pressures that are there internationally with the problems with GATT and related federally and provincially. What will it take, in your mind? Obviously, from your presentation, we have done some things, and then you are saying very clearly that we have not done enough. What would it take, in your own mind, at this point in time to help the farm community and the family farm as far as farm-gate prices to the farmer are concerned? What is your opinion on that?

Mr George: To the extent that government can directly affect farm-gate prices there is probably little that can be done, other than the fact that some farmers have chosen to get into supply management systems where they have a degree of control over the prices and the profits they can make. Many of our commodities are priced outside the borders of Canada even and we have little or no control. So if you cannot do anything about the actual cash you receive for your product, then you have to get into looking at the cost of inputs. Governments very clearly can do things and they have attempted to do some things with interest rebates. Fuel becomes one issue. We mentioned the cost of fuel, and taxes.

One thing the government can do is to be very considerate of not only agriculture but all sectors when you bring in new legislation. I think of the environment. I am concerned that we are going to go hog-wild on environmental issues. Not that we do not need to be very concerned about the environment, but every time you bring in a new regulation, there becomes a cost of compliance and in some cases that cost of compliance may be more than the farmer can tolerate. So I think we have to be very careful about balancing those two things off between what is right environmentally and what the industry can actually tolerate and work under.

Another example I think I mentioned earlier where government could give a real shot in the arm to the rural community is with some rural development initiatives. This has been talked about in these buildings for the last 10 years, that I can remember, and we have seen precious little come out of this thing yet other than rhetoric.

It always seems to be, in my mind, one of these issues that kind of floats to the surface. You think there is going to be some sort of pilot project announced and we thought there might have been in this budget -- and then it gets slashed at the last minute because nobody exactly has a good grasp on it. This is where you need the vision. This is where politicians need the vision for rural Ontario, to take a chance, to get some of these things going, because that is where you are going to flush out some other money. There is going to be entrepreneurial money out there and this money is not going to come into agriculture, in my mind, until we get some degree of stability. Investors, entrepreneurs, farmers themselves, are not going to open up the savings account until they have some sense of security that the rural economy in agriculture is indeed on the up and up. Then I think you will see some of these initiatives going, but it needs some help from government to get them started.


Mr Sutherland: I am glad you are here today and thank you for your presentation. I guess the message you want to leave with us -- and it is a message that came home to me last Friday when I was in my constituency office. My brother, who is a cash crop farmer, actually called me. He had got one of the initial cheques back on that and it was substantially lower than it had been last year. So I am well aware of the impact hitting home in that degree.

Basically the message you are leaving with us is that we do not do enough, that there is still a lot more that has to be done. I was wondering if you could just give us a little more precise terms on what you think needs to be done, particularly in the short haul. How bad do you think the situation is going to be in the fall? I notice today in one of the papers it says that grain futures are up because there is a possible drought in the United States Midwest. What do you think it will take to carry us over into the GRIP and NISA programs?

Mr George: We have some requests in to the provincial government for some adjustments in the existing stabilization plan, just to get some of the money that has been promised flowing. Some of these things are just administrative bottlenecks. There is nothing more annoying for farmers now. We have been promised some of this money three times so far this year. Mr Wilson announced it in his budget of February; there was another announcement on April 18; the ministers announced it again; they were going to flow it when they met on July 1 in Alberta and there is still not one penny coming. So there is money being committed. If we even get that flowing, that would be very helpful in the short term.

Mr Kwinter: You referred to NISA. Under the net income stabilization account, the government decided it would not participate this year but it would participate next year. What impact has that had on agriculture?

Mr George: It cost Ontario cash crop producers approximately $20 million. It would have cost the provincial government maybe $12 million to get in there the first year and it could have triggered another $6 million in additional federal money. As it is now, the federal government is going to be putting approximately $35 million, $40 million, in this program. We could have been that much bigger had this province committed.

I think the other issue there is that the federal government actually gave all provincial governments a break on contributions on the GRIP program, 10% of their contributions, which in Ontario's case was $3.5 million to $4 million. So the provincial government has a windfall of $3.5 million from the federal government in this fiscal year. As far as we can make out, that money is going to go back to Treasury; it is not going to go to the farm community.

Mr Kwinter: So what you are really saying is that GRIP and NISA are replacing the farm stabilization program and they are paying those premiums now. Next year, they will not be paying those double premiums, but you will not be benefiting from the fact that the money is there.

Mr George: The farmers signed up for GRIP in the spring of this year. The final premiums are due on November 1, but the final payments on these programs, or at least on GRIP, cannot be made until the end of the crop year. That is a year away, so there is a great lag time.

I should point out to members of the committee that these programs are jointly funded by farmers and both levels of government. It is not just governments funding these; the farmers are in for 33%. That is the way it should be and this is the idea, to get away from ad hockery and have some sort of predictable prices, the point being that as we make this transition from the old world to the new, we have this period of 10 or 12 months where farmers are just left to the mercy of the markets, and the cash flow is not there.

Mr Kwinter: What about the farm interest assistance program? That is like a one-year project. What do you see in the future? How is that working?

Mr George: We do not know to what extent all the $50 million will be utilized. We were very concerned about some of the criteria there on the off-farm income. Whether all that $50 million will be utilized, I do not know. All I would say is, if it is not utilized on the first go-round, I would hope they would open up the applications again to make sure it is utilized. There is nothing worse than the government getting all the credit for a $50-million program and then finding we have only utilized $35 million and the rest goes back to the Treasurer.

We are working with the government and the Ministry of Agriculture to develop a more long-term and stable and predictable farm credit policy for Ontario, and that is the right way to go. We as farmers much prefer these types of new programs, as opposed to the old unpredictable ones where it relies on the timing of elections more than anything else in order to secure the funds. We want to get some predictability into this industry. We have so many things already that are unpredictable in agriculture. To the extent we can put some predictability in there, the better.

Mr Phillips: I wanted to ask a quick question on the tobacco issue. I note that the revenue from the tobacco tax has gone up almost 50%. It is over $1.5 billion, I think. Almost twice the Ministry of Agriculture's total budget, I think, is raised from taxes. My question really is, what sort of increase and support have the tobacco farmers gotten in the last year or so to help them through this period, and what is your recommendation? I know you have some general comments in here, but --

Mr George: As far as I know, they have not had any support at all on any transition programs. I believe they have some proposals in to both levels of government for support, and OFA will be supporting the tobacco board and the farmers on that issue. When we look at this we do not talk about the health implications of tobacco. We talk about the farmers and the farm families.

Mr Phillips: So there has been no increase in the last --

Mr George: To my knowledge, no, and they have collected goodness knows how many extra hundreds of millions of dollars out of the thing.

Mr Phillips: I think the revenue has gone from $770 million in 1989-90 to $1.5 billion and I think we all understand the reasons behind that, but I was just interested in what help has been available to the tobacco farmers.

Mr George: We are a forgotten industry, a forgotten people.

The Chair: Thank you for your presentation this afternoon.

Mr George: Thank you, Mr Chairman.



The Chair: Our next presentation is from the Fair Rental Policy Organization of Ontario -- Philip Dewan, president.

We have half an hour. The same rules apply from the previous presentation. Could you begin, please?

Mr Dewan: First of all, I would like to thank the committee for the opportunity to be here today. I think the fact that this committee is even sitting to hear comments on the budget is a very important step because it is a document that has stirred up a great deal of controversy around the province and it behooves everyone to have an opportunity for the various groups to come in and express their views.

I am here today, as some of you know, on behalf of the thousand landlords and property managers who are members of the Fair Rental Policy Organization and, I guess more indirectly, on behalf of the 150,000 or so landlords around the province, since FRPO is the largest group representing this sector.

I certainly have to say at the outset that, although we are delighted to have the opportunity to appear before the committee, there is a great deal of scepticism among our members about what may come out of this, given the experience we have just undergone with the public hearings on Bill 4 and the various deliberations on both rent control bills that have been undertaken and are still ongoing. Our members are not very convinced that the government really has any intention of listening to what these various groups have to say. I hope that is not the case with this committee, and I hope we will be very surprised by the results.

I do not intend to read the submission here. I will skim through some of the points I think are most important. I want to start out by indicating why I hope the committee will take what we have to say seriously. Our organization represents an industry which is perhaps underrated in many people's minds in terms of its importance in the province. There are, in fact, more jobs created in the supply and management of rental accommodation in the province than there are in the entire auto industry. It is a very, very substantial industry in the province. It is a very diverse industry. We provide accommodation for 3 million tenants and provide an essential product which certainly government could not afford to replace on its own.

We also -- and this speaks directly to the concerns of this committee -- make a very large contribution to the coffers of various levels of government. People are often surprised to find that the average apartment in the province contributes about 25% of the total rental stream directly to property taxes alone, not even counting all of the various other tax flow-throughs from sales tax and income tax and so on. That is about $2 billion a year that the municipalities would otherwise be turning to Queen's Park for. It is a very substantial amount of money, and it is in everyone's interest to make sure we still have the ability to continue.

The other reason I think it is important to hear from our members is that they are a very diverse group. Rental property tends to be one of the first forms of investment for a lot of new Canadians coming to the country because they understand real estate. It is often the form of investment of choice for people who do not have pensions and are looking for some retirement security, and so it is important to some of the smallest businesses in the province, as well as some of the largest, what happens to the state of this industry and what government does to the industry.

Given the diversity in the industry, there are a lot of different areas in the budget that some of our members are concerned about, but given the time we have and so on, I would like to focus just briefly on three particular concerns, some of them direct and some more indirect: the overall spending levels and the deficit forecast; the particularly large increases in spending in the Ministry of Housing in this budget and over the past years and its relationship to the various government policies out there; and, more generally, the climate for business that has been fostered and encouraged -- or not encouraged -- by this budget and by other actions and pronouncements of the government.

Let me start with the fiscal policy and the deficit. I guess landlords generally were as surprised and shocked as many people by the size of the deficit numbers in the April budget. I think everyone was expecting there would be a substantial increase, where there undoubtedly were recessionary costs that were going to be greater than forecast and revenues would be less, but the extent of it, the tripling of the budget in one shot, was I think a shock to all of us, and sent a very disturbing signal to the business community generally and to our sector in particular.

Quite aside from the understandable increase in the Ministry of Community and Social Services budget related to welfare assistance, if we look at the size of some of the other increases in comparison to the 5.4% limit that landlords are being asked to live within we get some very different numbers: anywhere from 10.6%, 10.9% for health and education, on very huge bases, obviously; up to 39%, or more than 39%, to the Ministry of Housing; 122% for the Ministry of Labour; 283% for native affairs; and 348% for Management Board, when you include the contingencies that were lumped in. Obviously the government is preaching a very different message to the private sector in terms of what they have to live within than it is practising itself, and that, in itself, is not a good signal.

Certainly a lot of these increases, we recognize, arose from decisions made before this government came into office. There are many spending programs that were coming on stream or were expanded to some extent by previous administrations or built on by this one, but that does not really make any difference to the view that people are going to take of what was in the budget. Faced with the recessionary times we are in, it was up to Mr Laughren and his colleagues to make the tough decisions and decide where the new economic reality dictated there would be some cutbacks, that there would be some reductions in the rate of growth, and there does not appear that there was any attempt to do this. That is one of the most disturbing aspects of the budget.

So we are looking at a situation where not only do we have a budget of almost $10 billion for the current forecast year, but four years from now we are still looking at getting that down to only $7.8 billion, and as you have heard many times, I know, the very fact that in four years you are going to be accumulating a greater total debt than in the entire previous history of the province is something that is absolutely disturbing to everyone. I say everyone -- everyone whom we have talked to whom we represent.

The severity of the problem, I think, is particularly reflected when you look at the figures in the operating account. All business people can understand that there are times when you have to borrow for capital works, and just as we amortize costs over a longer period it may make sense for government, with certain types of capital expenditures, to look at those costs and borrowing to pay those costs in a different way.

When you are taking ongoing daily expenses and borrowing year after year to fund them, it is something that business people generally find quite unacceptable. It is as if you are using your Visa to buy groceries every day, and that is not the way that anyone is going to get into a stable financial situation. Particularly after we have been through four years of operating surpluses and essentially a decade of the operating accounts being reasonably in balance, these sudden four years of massive deficits on the operating account with no remedy in sight are a very dangerous signal.

I guess there are a lot of questions that have to be raised about whether even these forecast targets, as scary as they are, can really be met, given the numbers that are in there. The budget refers to expenditure growth estimates of 6.3% next year and 7.5% in the subsequent two years, compared to 13.4% in the current fiscal year. There is no real explanation given as to how the government intends to achieve that reduction and there is no attempt to reconcile the vast range of obviously expensive promises that were made by the government when in opposition with this cutback in spending rates, which leaves a lot of people, ourselves included, with a real concern that if there is not going to be an attempt to really grapple with expenditure restraint and the deficit is going to continue to grow even beyond those, unfortunately, probably optimistic numbers in the budget, the only attempt to rescue us from this fiscal climate is going to be by tax increases.

There is a very disturbing line in the budget that notes that revenue moves may be required in the future to achieve these target growth rates. When you read into that and look at the budget as a whole, that is a pretty sure indication that there absolutely will have to be revenue moves, and given the state of competitiveness in the province, in our relative tax and regulatory situation vis-à-vis some of our competitors now, that is certainly something that is not going to help the province but it is going to cause a great deal of harm.

I want to spend a little bit of time just talking about the housing expenditures directly, because that is obviously of particular concern to us and our members. There is probably no clearer indication of the problems of housing policy in the province, both under this administration and previous governments, than the sort of numbers that are in the Ontario budget this year.

You are looking at a 39% increase compared to last year and a 369% increase in spending for the Ministry of Housing over the last six years. They are extraordinarily large numbers. Even with these huge increases in spending, there has been essentially no dent in the waiting list for affordable housing, which is the problem that the various governments are ostensibly trying to address.

The 10,000 additional units of non-profit co-op housing that were committed to in the budget are certainly not going to do a great deal to meet this need. Even if you get these on stream in the next two or three years, which seems to be the time we are looking at, given the experience with the non-profit producers, only about half of those units generally go to the most needy tenants due to the necessity of income mixing in the projects. At that rate, you are looking at something in the order of up to 100 years to meet the total need for housing in the province, and that is assuming that you could somehow hit the taxpayers for the $6 billion that it would cost to subsidize that housing. It is something that simply cannot work in the end, and I think people are slowly coming to the realization that there has to be a more cost-effective, more reasonable way of addressing this need.


We have always said there is an alternative. The fair rental policy organization has long advocated a balanced partnership between the private sector and government to try and ensure both new housing supply and assist those who cannot afford rental accommodation on their own. That has to begin by a recognition that for the majority of low-income tenants the problem is not that there is no available, affordable rental housing, it is that their incomes are too low to afford even the most reasonable housing.

If you look at what we have stated over the years and elaborated on many times, we have talked about a gradual elimination of rent controls to stimulate new rental supply and allow for the conservation of the existing stock, which is particularly important given its age. We have called for a replacement of the current rent review system with a much simpler, non-bureaucratic protection against unconscionable rent increases. We are not saying everyone should be able to raise it 100% a year or anything like that, but there has to be a very simple system that allows for the market to function within normal bounds.

Most important, I think, there has to be the implementation of a universal shelter allowance program to provide direct financial assistance to the tenants who have affordability problems. I am not going to go into all the details of this today because it would take a lot longer than we have here, but I would be glad to sit down with any committee members who would like to explore this in more detail. We will be providing some additional documentation on this to the ministry in response to its Housing Framework green paper.

We estimate, based on looking at programs in other jurisdictions and the work we have done with outside economists, that a shelter allowance program could be instituted at a cost of well under $500 million per year, which is less than the existing budget in the Ministry of Housing and which would essentially address the income needs of those people encountering difficulties in paying a reasonable portion of their income on rent today.

I will briefly run through an example of why this differential is so great and why this sort of alternative is feasible. If you take a family of working poor who are making, say, $12,000 a year and paying $400 a month on rent, they are paying 40% of their income on rent compared to the guideline of 30% normally acceptable. The problem is not that they cannot find a roof to put over their heads; they are already living under one but simply paying too much for it, more than they can afford. The problem is not that the rent is too much in real terms -- I do not think anyone in this room would argue that $400 for an apartment in this province is an unreasonable rent today -- but simply that their income is too low.

The approach of the government -- and I do not mean just this government; the Ontario governments of the past number of years -- has been to put such a family on a waiting list, keep them there for several years while they somehow work their way up to the top and then wait until they can build a unit from scratch to house that family in.

Since this unit is coming on stream at a time of much higher land and operating regulatory costs, its total economic rent is far greater than the existing units on the market. We are looking at something in the order of $1,700 per month for the carrying costs for most of these units. If the tenant can afford $300 a month, that requires a subsidy from the taxpayer of $1,400 per month, about $17,000 per year.

In addition, because of the income mixing, you also have to add in the fact that there will be a market unit that will be rented out to someone who could easily afford to rent in the private sector. That will also have to go along with that, at least a portion of it, to preserve the income mix in the project. So in total you are looking at about $20,000 per year of costs to the taxpayer in subsidies to get one core needy family housed in a new social housing unit.

On the other hand, if you took the shelter allowance program, you already have this family living in accommodation with which they would often be quite happy, or could easily find alternatives for in the private sector at a cost in this case of $100, maybe $200, if you let the rent rise something closer to market.

So you are looking at a pretty stark contrast between the two alternatives; almost $1,700 per month, for the taxpayers on the one hand plus years of waiting for the tenant to get into this home, or about $200 in immediate assistance when you go the private sector route.

I think the numbers speak for themselves, and the fact that governments have gone with the former approach is a striking example of exactly how you get into problems with accumulating massive deficits without really improving the lot of the citizens they are attempting to help.

Finally, I want to talk briefly about the general climate for business, because this budget and the rental housing policies we are involved in, and a whole range of other things, are seen as a whole by business when it is looking at trying to understand where the government is coming from and what sort of attitude it is taking towards the private sector.

You cannot separate out all these programs individually because every one of them certainly has merits on its own, as any alternative does, but you have to look at the cumulative impact. In this case, when you take both the range of programs that have been announced or are being planned -- rent controls, changes to labour legislations, auto insurance, what have you -- and the attitudes displayed by some of the government ministers in their statements, it does not send a very encouraging signal to anyone in business.

I will give you three quick examples from our particular area of concern that illustrate what I mean.

When Bill 4 was introduced last November, the so-called interim rent control legislation, our industry was understandably concerned and outraged about this retroactive change. It came on the heels of a lot of statements by the Premier and the Treasurer about consultation and public participation and wanting to work in partnership with the private sector. So we figured maybe we could take that as it was stated and go in and try to have a dialogue with these ministers about what exactly this legislation meant and whether they understood the real impacts.

After numerous phone calls and letters, most of which were either ignored or quickly dismissed by staff, we finally received a letter from the Premier, many months later, saying, "No, we are not going to talk to you," despite the fact that we represent 150,000 individual business people out there who are very concerned about this proposal.

The story was much the same for the Treasurer, although I have to say his staff were a little more polite about it.

In the second case, we had a public rally in front of this building back in December where literally hundreds of concerned workers as well as landlords were voicing their anger at the arbitrary changes brought in by Bill 4, the rent freeze, that essentially had thrown these workers on to the unemployment rolls. There was no possible way any rational person could deny the link to Bill 4. These workers, the concrete workers, labourers, window manufacturers, plumbers and so on were saying they had full order books many months in advance on November 27 and two days later, after the minister made his announcement, it all went down the drain because the landlords would no longer be able to finance the work and the orders had to be cancelled.

Yet in front of this very audience, the Minister of Housing, Mr Cooke, made the statement that no jobs were being lost as a result of this legislation, that this was simply related to the recession. We had always understood, to some extent, that the government does not really believe what landlords have to say, but it was quite amazing to hear him tell the workers to their faces that this was in fact not the case.

The third example is something some people think has been blown out of proportion but when you think about it, it really has not. That is a comment Mr Cooke made at a press conference, albeit jokingly, where he referred to the fact that he was allergic to landlords. When this comment was reported and members of our community were understandably upset, he not only did not clarify anything or make any amends for it, he simply outright refused to apologize. He dismissed it as a joke.

It may well have been a joke, but I think it certainly underlines the attitude lying not very deeply beneath the surface towards this particular part of the business community. If you look at it from the point of view of who the government is here to represent, it should be disturbing to everyone. Clearly, if the Minister of Housing had made a comment saying he was allergic to tenants, a lot of people in this room would have reacted quite differently.

Some of you may think the latter part of this does not relate too directly to some of the concerns with the budget we are here to talk about today, but I would like to suggest that it does, because the budget is the single most concrete manifestation of the administration's approach to governing. When you combine what is in that budget, the abandonment of fiscal responsibility and the further handicapping of the private sector to provide the growth and prosperity needed to allow us to meet our social needs, with the sort of statements I have just talked about, you get a pretty clear indication of where the government's overall philosophical orientation to business is.


In short, it proves, at least to us, that a lot of those antibusiness statements and actions by various ministries, which we thought at first might just be the unfortunate results of some individuals new to their positions and new to such a prominent role in public life, are in fact founded on a common approach fundamentally antithetical to the business sector.

Given that reality, a lot of people might question whether there is much point in coming before a group like this or making any recommendations, but as I say, we are very optimistic and I hope that to a small extent our statements, and to a greater extent the collective views you will hear from the various groups appearing before the committee, might have some impact.

I have appended a few recommendations at the end here which essentially relate to the items we have just talked about. Again, I thank you for the opportunity to come here and I would be glad to try to answer any questions the committee members might have.

The Chair: We have approximately two and a half minutes per party which would probably be about one question with an answer, beginning with the New Democratic Party.

Mr Christopherson: Thank you for your submission. I appreciate it is very articulate. Obviously, you took a lot of time and it is appreciated.

It was interesting to note on the second page that you started your approach by talking about tenants as individuals and then talked about the tens and hundreds of thousands of jobs that are also in your industry. There seemed to be a desire on your part to focus at the outset on individuals, on people, as opposed to just a statistical document that analyses the budget and the economy, and I welcome that.

I would like to pose a question to you with as short a preamble as I can make it, although I am known for longer ones than I should. Look at the number of bankruptcies we have had, both business and private, in the province during the course of this recession the last couple of years, the number of plant closures -- just folded up; jobs that have left as a result of, arguably, free trade, rationalization, globalization of the economy -- the resulting job losses, literally hundreds of thousands of them, many of which we will not get back when the recession is over.

In light of that and in light of the fact of the course the federal government chose, to fight the deficit and fight inflation, which has led an awful lot of economists, some of whom were here yesterday, to say it is a made-in-Canada recession -- policies that arguably have nosedived particularly this province with the entire nation into recession. In conducting this fight against inflation and deficits they have cut back on transfer payments to provinces, which has had an impact on municipalities, which has affected you through property taxes. I spent five years on local council so I know what that impact, that domino cutback has been: There are now fewer people who can go on UI at a time when more and more of them are needing it. Also, in light of the fact that most people -- I have not heard a great deal of argument -- say a stand-pat budget is $8 billion, just to leave the programs in place in light of lost revenue and increased costs as a result of greater welfare costs, etc, and with the arguments coming forward by the chief economist of the Conference Board of Canada that this is indeed the right way to go, that there is good rationale for what we have done, in light of all of that --

Mr Jackson: I knew there was a question in there somewhere.

Mr Christopherson: -- what specifically would you have done differently if it were your call and how would those choices have helped those very individual people you begin talking about in your report? How would that help them cope with the worst recession since the 1930s?

Mr Dewan: First of all, you have to go back to the fact that you are not looking at the budget in isolation. I tried to stress in here that the budget has to be taken in consideration with the whole package of actions by the government over the last eight months.

If your concern is about job loss, about those hundreds of thousands of jobs that have been lost and the factories that have closed and so on, as you mentioned, I find it amazing that this would be a government supporting a policy like Bill 4, which in fact threw thousands of workers out on the street, which shut down manufacturing plants for windows and carpets and all sorts of various suppliers to the rental housing sector. They are completely contradictory statements, from our point of view. That is not necessarily something that comes out of the pure numbers in the budget, but it is very much a part of the policy of the government that is behind all this.

Certainly I am not in a position to go through each spending line of the budget today and tell you where you should or should not have cut. Those are some of the hard decisions that come with being a government. But there is an underlying responsibility, now that you are in office, to make sure that there is some attempt to come in with a total that is fiscally responsible in the end. I do not deny that the budget would have increased a great deal, as I mentioned earlier in the submission, just as a result of the recessionary climate, but I think it was the extent to which you went, and the fact that there did not appear to be any attempt to control the spending in a lot of these areas, which has upset our members.

Mr Kwinter: I would like to ask, given the fact that I only have one question, what do you see happening in your industry if these policies continue? How do you see the future for the accommodation industry?

Mr Dewan: The future is pretty gloomy right now in the sense that we have people who have incurred very substantial losses on work they had already done. They went out, as you know, prior to Bill 4 and made capital expenditures on their buildings which were then frozen and for which under the new legislation that has been brought in they are going to recover 20%, 30%, 40%, depending on the particular circumstances. So their ability to actually maintain those buildings and put in the capital expenditures that are required to preserve them and to keep them to the standard tenants deserve is going to be very much restricted.

There is a whole other range of things in Bill 121 which I could talk about that are not directly the concern of the committee here today, but again, it goes back to the jobs issue. If you really are concerned about people in the manufacturing sector, people in the construction trades, the concrete workers who were out standing on the steps at Queen's Park, then the approach that is being taken is certainly not particularly helpful, to put it mildly.

Mr Jackson: I could not agree with your report, although I always have to remind you that you are very threatening to one group of my constituents. Those are the people who maintain two and three residences. People who live in Florida seven months of the year are most supportive of the NDP policies and most angry that I do not support them, because they want to keep their part-time Canadian residence rent as cheap as possible.

You are familiar with the several reports which support your thesis. First of all, George Thomson, who is now a provincial civil servant in the Ministry of Labour, I believe, wrote a report in which he indicated that rent controls in and of themselves will not work and cannot work and that a form of shelter subsidy has to be looked at, because, in spite of all the regulation, there are not the kinds of checks on the prices that people think there are in housing. It is still rising.

The Stuart Thom commission also, after spending $4 million or $5 million of taxpayers' money on a two-and-a-half-year study, came to the same conclusion, that rent controls were hurting the poor and benefiting middle and upper-middle income people in this province.

Why is it, do you think, the NDP government refuses, when even supporters of its own philosophy come to the conclusion that a pure rent control system that it is moving towards will not work, that a modified regulatory system that allows for private investment and a shelter subsidy program is the only way to increase access and affordability for the poor? That is who we are talking about here: people with disabilities, people who have limited life chances at increasing their income, and in our society, we ensure we can make sure they are accommodated with dignity and affordability -- we are not doing that.

Mr Dewan: I wish I knew the answer, because certainly from our point of view, we think the sort of shelter allowance approach you referred to is not only a lot more cost-efficient, which is why it is relevant here today, but is also a lot more humane in that it will directly address the needs of all of those people out there who are facing affordability problems now, whether it is because they are working poor or handicapped or whatever.

Mr Jackson: But it is not fair to my rich tenants who are in Florida.

The Chair: There is no chance for --

Mr Jackson: It was a clarification, not a rebuttal.

The Chair: That is fine, Mr Jackson, you have done very well.

Mr Jackson: You pick up more of these subtleties the longer you are Chairman.

The Chair: Yes, and the subtlety of expanding on a short amount of time and dragging it out.

Thank you for your presentation this afternoon.

Mr Dewan: Thank you.



The Chair: Our next presentation is from the Income Maintenance for the Handicapped Co-ordinating Group, John Southern and Harry Beatty.

Mr Southern: Good afternoon. Thank you for the opportunity to appear before you today. Just a little bit about the income maintenance co-ordinating group. We are a group of organizations of and for persons with disabilities, those being service providers and also advocacy organizations for the disabled. To my left is Harry Beatty, who is a lawyer with ARCH, the Advocacy Resource Centre for the Handicapped. Harry acts as a legal counsel to the group and ARCH has taken a prominent part in helping us keep together. My name is John Southern. I am with Persons United for Self-Help in Ontario, and PUSH is a cross-disability organization. We are a provincial organization and I guess we have close to 1,000 members.

I thought we would start by just reviewing our presentation to the financial committee in January. Harry is going to go ahead and do that and look at what we said and where we are at today.

Mr Beatty: When we appeared before this committee in January, as you might expect, we advocated strongly that a process of social assistance reform that began with the Transitions report -- John, of course, was a member of the committee, also chaired by George Thomson, coincidentally, which set out a very extensive agenda for social assistance reform. What we did first of all was to argue strongly that continued social assistance reform basically made economic sense.

First of all, one of the major goals of the reform of the system is to enable more disabled people to be employed. As advocates, either professional advocates or peer advocates, every day we see people with disabilities who have a lot of skills, may have good qualifications to work, but there is some impediment to their being employed. Perhaps by attempting a job they will jeopardize some of their benefits or the combinations they require or the supports they require are not available when the job becomes available or they may have not had a fair opportunity for education or training.

We proposed as a goal that competitive employment be aimed at for -- we picked an arbitrary number of 3,500 family benefits Gains-D recipients annually. That would be about half the increase in the annual case load. There are a little over 100,000 disabled people now on provincial family benefits. It is increasing by about 7% a year -- a steady increase, but not the dramatic increase that has occurred with some other groups.

Clearly the government has taken a good step this year in establishing, or beginning to establish, an employment equity commission, but more needs to be done.

Often we argue that people do not really understand the cost-effectiveness of providing effective rehabilitation and job accommodations to people with disabilities. What people receive on family benefits is quite modest. In December of 1990, the average cheque amount from family benefits to a disabled person was approximately $670. With the increases in 1991, it would be something over $700 now. Even so, if you include with that the cost of the extra benefits, such as the drug and dental card, you would have an average annual expenditure perhaps of around $10,000 for someone on family benefits.

From that perspective, a $20,000 expenditure for training, equipment and job orientation can be very cost-effective. Certainly both John and I know of examples where a person has been given the appropriate opportunity for training, education and rehabilitation and it has made all the difference, where the person has gone on to be competitively employed, renting in the private market rather than in public housing and so on for many years and perhaps the rest of his working life.

There are American studies, and I do not know if they have been duplicated here. If you look at all the implications for money spent on rehabilitation, and training of a disabled person, if it is spent effectively, savings are on the order of $10 for every $1 spent for the system over the person's lifetime.

The second perspective from which we argued that continued social assistance reforms are affordable had to do with some data we presented relating to the people on family benefits Gains-D in Ontario. Essentially we presented information produced by staff at the Ministry of Community and Social Services which showed, for example, that of the approximately 100,000 disabled people on family benefits, over 12,500 are Canada pension disability pensioners. For those of us who are in the area, that is a very significant connection and it is worth reflecting on.

First of all, these are people who have been in the workforce for some substantial period of time, enough to qualify for Canada pension disability, and they also have to be fairly significantly disabled. Yet their Canada pension and whatever other contributory plans they have had at work have not been sufficient to keep them off social assistance.

I think it emphasizes the importance of talking to the federal government, of Ontario making representations around the inadequacy and some of the problems with programs like Canada pension disability.

Second, Canada pension disability is known to be one of the plans that is most restrictive towards people who attempt a return to work. If you attempt rehabilitation or training or a return to work, you may lose your benefits altogether. There is in our minds a clear link between the fact that Canada pension is restrictive in that area and the fact that so many people wind up on social assistance. They do not attempt to return to work because they are afraid of losing the small amount of entitlement they do have.


So against that background we set out our priorities for social assistance reform by the provincial government in 1991. Perhaps at the top of the list was to make special needs that are necessities mandatory, as opposed to discretionary, benefits and to transfer responsibility for delivery and funding of the special needs system to the province from the municipalities. While some municipalities such as Toronto and Ottawa have fairly developed special needs programs, other smaller municipalities which do not have the same tax base may have very inadequate programs or, in some cases, no program at all. A disabled person who goes to the local municipality for supplementary aid for a special transportation need or to pay the 25% of assistive devices that the Ministry of Health does not cover is simply told: "We do not have that program. Our municipality cannot afford to pay its 20% share and basically you are out of luck, regardless of what your need is."

Other priorities were a further increase in rates, to raise the asset ceilings and asset rules. Those of you familiar with family benefits will know that the limit is still basically $3,000 for a single disabled person and slightly higher for families, the same level as in 1980. We asked that the so-called non-profit boarding rates for disabled people living with their families be raised to the level of the other boarding rates. We asked for increased funding to the vocational rehabilitation services program, for a deduction of disability-related expenses under the Ministry of Community and Social Services' support to employment program and for increased funding for the special services at home program that provides in-home support for children with disabilities.

Now I will turn it back to John. Clearly in the budget there was an allocation of $215 million for social assistance reform and, shortly thereafter, an announcement by the Honourable Zanana Akande as to which of these items would be implemented and which would not be.

Mr Southern: Obviously I was pleased that in this time of recession the government did not do what many people in the media would like, to slash welfare programs, which really bothered me. I think there is so much misinformation in the media, especially as I belong to a group that is one of the most oppressed groups in Canada. Not having the opportunity to right that information is so frustrating and it makes you so angry it is unbelievable. Anyway, I am glad the government did not slash social assistance, but on the other hand, in my opinion, it did not go far enough. After all, it was the NDP government that took the initiative and pushed the Liberal government into reviewing social assistance. They agreed and the Liberal government agreed that the program needed changing. It was inadequate and it was not meeting the needs of the people on it, and it still is not. In fact, since that review started, the disabled people on family benefits have risen by 30,000. You wonder what we did the review for. I was really concerned that it did not even go as far as the minimal changes that were suggested in the Back on Track report, the Allan Moscovitch report that was released earlier this year.

People ask me what it is like to be disabled, and talk about disability in general, but I think society has to stop penalizing disabled people for being disabled. For most people who are disabled, it is not their fault that they ended up there. We just remain the lowest of the low. People are starting to acknowledge that we exist and pay us some kind of lipservice, but I have not seen too much improvement in the lives of disabled people in the 15 years I have been involved in the disability movement, and I want to see more.

As I say, it is a time of restraint. I realize that fact and I know we have a deficit. But on the other hand, you cannot keep people living in these abject conditions. I know some disabled people who are living in utter misery, and there is no need for it in this day and age.

Also, I think this government must adopt a strong employment equity program -- I cannot stress it enough -- particularly for disabled people. Most disabled people of working age do not work, and they should, and a lot are capable, given the opportunity and training in this highly stressed area. We want to fulfil and take our rightful place in society and quite frankly I am getting a bit fed up with not being allowed to do that.

I am fortunate. At the moment I am working for the organization I represent. But on the other hand we struggle from week to week and from paycheque to paycheque. I could be unemployed next month, for all I know. Nevertheless, there should be better opportunities, and disabled people should be able to live better lives in this province.

As I say, there has been so much talk and people saying how wonderful it is to live on welfare. Believe me, I was there for a year, last year, and it was not one bit wonderful. I did not enjoy the experience one little bit, and anybody who thinks it is great to be on welfare is just crazy. There might be a few leeches at the bottom, but I do not think there are too many of them, either. Business people who criticize the government for spending on social programs -- I mean, they made a lot of money out of this province when times where good. Sometimes times are not so good and yet they want to abandon the ship, it seems to me. Anyway, thank you.

The Chair: We have approximately four minutes per party, beginning with the New Democratic Party.

Mr Jamison: I would just like to go over with you the impact of the recession on your particular group of people, if you could really describe what impact there has been and what needs to be done. Obviously you are saying you like the assistance in the $215-million form, but you are saying that more needs to be done, especially in this time. What impacts are there at this point?

Mr Southern: I think disabled people live in a permanent recession. I do not know if it is any worse, except maybe their friends are feeling the pinch or something and family and friends are not able to help them as much as they would when times were good. But for disabled people, we live in a permanent recession; times are always bad, and things have not been made any easier by the introduction of GST and whatever. I really think there has been no significant increase over the years in the actual benefits that disabled people receive on family benefits. There have been little leaps and jumps over the years but nothing significant, and people are just living in poverty.

Mr Sutherland: You talked about the impact and some of the real problems, and earlier this morning the Alliance for Employment Equity discussed some of the problems. Carol McGregor was here and outlined some of the concerns. You just got through telling Mr Jamison that you did not think things were that much better. Is this budget, the $215 million committed there, going to have some impact? Will it be of some benefit to your community?

Mr Southern: Of course. I think it will be of some benefit. It certainly does not go far enough. The improvements to the employment incentive program, STEP, where people will be allowed to retain a little more money and the levels of how you can get into the program have been changed a little bit, will help, and some of the other changes will definitely assist disabled people, there is no doubt about it, but not enough, I do not think.

Mr Sutherland: If we had brought in a balanced budget, which the leader of the third party has indicated we should have done, what type of impact do you think that would have had on the community agencies that serve people of your community?

Mr Southern: It is very political, but I will answer it anyway. I think it would have been devastating to us. There is no doubt about it. I do not know how the government would have brought in a balanced budget and done anything meaningful if it was in such a big recession. With the cutbacks from the federal government, you would have had to slash some social programs, and as I told you, we do not have enough now.

Mrs Sullivan: I was quite taken with your report to us today, having recalled the dramatic presentation you made to this committee in advance of the budget. You have indicated your disappointment that the social assistance reforms had not proceeded more quickly through this particular budget. I also was quite interested in hearing what you had to say, by example, about reform of long-term care, which clearly affects people who belong to and are served by your organization and where in fact what we have seen is the shelving of that program.


Mr Southern: Well, obviously I would like to see more action. I do not know whether you would say it is totally shelved. I think there is starting to be some movement in the area of long-term care, but obviously it needs to happen and as I tell you, we want to take part in society. There have been some advances over the years in people getting long-term care. People are starting to get it a little easier in some housing projects and whatever, but nevertheless there are still too many people housed in long-term care facilities who should not be there and want to be out of them and we should do everything to do that. As I say, there is no point in bringing people out of institutions if you are going to just institutionalize them in the community. We need a lot of assistance to participate fully in society.

Mr Phillips: Hi, John, Gerry Phillips. John used to be a constituent of mine.

The Agenda for People called for social assistance rates set at levels where no family any longer has to choose between paying the rent or eating. Just in terms of the impact to date of the changes in the social assistance, can you give us a hint of where that stands now and what your expectations are for the next year?

Mr Southern: I do not know what government is going to do in the next year, because there has been so much poor publicity around social assistance, and some of the major media stations in the market -- I will not mention them -- are just putting social assistance programs down. Maybe the government will want to regain some popularity or something and not do too much in this area but I hope things will happen. But as things stand now, I think there has been some improvement.

The STEP program, although it has not assisted too many disabled people, has helped some get into the workplace. I know it did me. I am off the program altogether right now, I am thankful to say, but it did help me and was useful to me to get back into the workplace. It has helped other people that I know of. It is a great improvement over the Win program, which was the previous work incentive program, and some of the other changes are having some effect on our constituents. But as I say, obviously we hope it will go a lot further.

Mr Sterling: I would just like to make it clear that Mr Sutherland is telling an outrageous lie when he says that the --

Mr Southern: I object to that. Who are you calling a liar, pal?

Mr Sterling: I am calling Mr Sutherland a liar.

The Chair: Mr Sterling, you cannot use that language in the committee and you know it.

Mr Phillips: It is not you, John. He said Mr Sutherland.

Mr Southern: I thought he said Mr Southern.

The Chair: Mr Sterling, I am going to have to ask you to withdraw that comment.

Mr Sterling: I will withdraw the comment of calling him a liar, but I will say that his information about what my leader, Mr Harris, has said with regard to a balanced budget for this year is totally inaccurate, without foundation. Mr Harris has never said that a balanced budget was possible this year. What Mr Harris and my party are concerned about is the lack of effort on this party's part to trim its expenses, particularly those people who have been doing quite well. We made some suggestions about the greater public service who are guaranteed jobs.

We object very strenuously that some of these people are getting 10% and 11% and 12% and 20% wage increases, while people like yourselves are being denied adequate funding for programs and for other things.

Our concern about deficit financing is that we see this provincial government going down the road to the same kind of fiscal position that the federal Liberals and the federal Conservatives have put us in with regard to our federal situation, where federal governments -- be it this one or the next one -- are going to be limited in what they can do for people who need help. So we are concerned that, particularly at this time, the Treasurer has, number one, shown no idea or taken no responsibility for constrained spending where we think it could be constrained. Also, projecting a deficit over the next four or five years is going to put governments, when we get into another recession, which usually happens every five, six, eight years, in an even more difficult position than this government is in at this time to help out groups that need to be helped out. That is basically where we differ very greatly with this government.

My concern is more with the deficit that this government has talked about going into next year and the year after and the year after. Do you have any concerns at all about deficit financing?

Mr Southern: I think anybody has to have a concern about it. Maybe the government or whatever should redefine where it spends money. But I know from my own constituents I do not think we can not spend money in this area. What do you do when people are living in poverty? Do you want to oppress them more? You cannot say, "We've got a recession this week; you don't get your family benefits cheque." In this day and age I do not think you can do that. If you help people off the social assistance programs, and I think disabled people have not got enough of that yet, then as I say you can turn them into valuable people who will pay taxes and pay their own way instead of relying all their lives on handouts.

Mr Sterling: I do not think the drive by any politician or any political party is much different from the other in terms of what they want. It is the means by which they get to that result. Our concern in our party, and my experience over the last five or six months, have been that the business community is not reinvesting in this province; they are voting with their feet at this time. Therefore the revenues we need in order to help people out will not only not be there this year but may not be there five years from now, so it will put any government in the position of being a more unkind and less generous government, regardless of who holds the reins of power at the time.

The problem we are facing at this time is one which seems to continue endlessly. What do you think about guaranteed annual incomes and that kind of approach rather than the whole number of different social programs we have?

Mr Southern: I think that maybe Harry would want to address that. He was going to mention that anyway, were you not?

Mr Beatty: Whenever people look at this area they always say, "There should be a comprehensive plan," and then as soon as anyone starts to look at how to do it, it looks like too much to do. Clearly our group does not have a model as to how this should be done. A guarantee or universal plan is not much help if it is inadequate. But I think people would say there does need to be a good comprehensive review, at least, of how these programs are actually working in Ontario, not just how they look on paper, particularly looking at things like: Is there encouragement of training and education? Are these programs efficient? What percentage of the dollars coming in from the payers -- whoever they are, government or employers or people paying premiums -- is coming out the other end in the form of actual support?

An area that is of great concern is the interactions between the programs. I could give some very sad examples. For a person who is clearly disabled and is waiting for benefits because of the circumstances in which he became disabled, there are three or four different plans that conceivably should or ought to pay him. The person sits there with no money while somebody tries to resolve whether he has a workers' compensation claim or a long-term disability claim or which of these various payers he should be going to. So I think certainly it is worth a serious look at this area. I find disabled people to be a bit sceptical about grand schemes as well.

Mr Southern: The point you made about adequacy -- if the payment is low and it is meaningless, what is the point in having an annual guaranteed income for disabled people if you cannot live on it?

The Chair: Unfortunately, our time is up for this presentation. I would like to thank you for coming and making it.

Mr Southern: Thank you for your time.



The Chair: Our next presentation is the Association of Day Care Operators, Judith Preston, president.

Mrs Preston: I would like to introduce Liz McPherson. She is a colleague of mine and also on our board of directors.

We appreciate the opportunity to speak with you and air our views on how child care has been handled within this budget and by this government.

The Association of Day Care Operators of Ontario directly represents more than 11,000 child care spaces in centres employing over 1,500 workers and providing service for approximately 11,000 Ontario families. Indirectly the numbers triple, as ours is the only association which addresses the concerns of over 700 independently operated child care centres. It is, in fact, the only association in Ontario which represents the directors and operators of licensed child care programs, regardless of auspice.

We have a unique view of the situation, as we immediately see the devastating results of government decisions on this sector.

Our members have led the fight for years for quality, affordable and accessible child care for the children of Ontario. We are working parents ourselves and we know and understand the challenges which face others in the same situation.

The immediate need is for more subsidy dollars, not more spaces. All child care funding must go in just two directions: subsidy funding and government monitoring.

At the present time no new government-funded child care spaces should be created. This association recommends that all funds currently allocated to capital financing be redirected to fund subsidy spaces.

While this budget made no specific announcements for child care, policy statements made by the Minister of Community and Social Services have indicated the manner in which the funds allocated to this ministry for child care will be spent.

In the NDP's An Agenda for People in August 1990, the stated policy on child care was:

"New Democrats understand and support the struggle of working parents to care for their children. We have fought hard for affordable, quality child care in Ontario. New Democrats believe that parents have the right to work at their jobs and have quality care for their children.

"New Democrats would provide funding for 10,000 new non-profit child care spaces and for subsidies on 10,000 spaces in each of the next two years. This would cost $240 million in total."

We have some difficulties costing this promise, as it is somewhat ambiguous. Do you mean 10,000 spaces this year and a further 10,000 new spaces next year, for a total of 20,000 new spaces and 20,000 new subsidy spaces, or a total of only 10,000 new spaces but a total of 20,000 subsidy spaces? What happens in year three?

The current cost to provide care for one child for one year is approximately $6,000 before pay equity. At this rate, the cost for the subsidies would be $60 million in the first year and $120 million in the second year and every year thereafter, plus, of course, the cost-of-living increase. The cost of establishing 10,000 new spaces could be as high as $20,000 per child space, a cost of $200 million per 10,000 child spaces. Depending on how these promises are interpreted, the cost could range from $260 million in the first year alone to $500 million, not $240 million as estimated. These more realistic cost estimates may explain why these specific promises have not been delivered yet. We can but hope that the costing in the recent budget has been done more accurately.

In our position we cannot hope to tell this or any other government the dollar amount which should be spent on any particular budget item. We would hesitate to approach this even from a percentage basis. However, as taxpayers, business people and parents, we feel it appropriate to comment on the strategies, policies and directions.

First, the concept of such a huge deficit: If the cost of this budget is accurate and the deficit stays at the promised level, it is bad enough. However, these is no guarantee that the deficit will stay at $10 billion. When we look at figures like $10 billion, it quite frankly stuns the average person, so we try to relate to our business or household budget. We know that during hard times, if we overspend, it takes that much longer to recover. We know that in order to balance our budgets in hard times, when emergencies come we must reduce spending somewhere else. This government has done neither. We do not want to see the people of Ontario paying for this deficit for years.

This government has some very specific ideologies and goals resulting from these ideologies. Both Mr Rae and Ms Akande, in letters to our members, have stated: "The child care system must provide high quality care that is affordable to working parents, is accountable to the parents and the community and pays fair wages to its workers. In our view, these goals can best be achieved through the nonprofit sector."

It is time that Mr Rae and his government colleagues step aside from their ideologies and look at economic facts and at what the people of Ontario want, not the demands of a small vocal minority.

Independent child care is accountable. In the Levy-Coughlin report, October 1989, it was found that the independent centres used the direct operating grant funding exactly as directed. In fact, 99.5% of the DOG money went into salaries and wages in independent centres, whereas in non-profit and municipal centres the range was 80% to 89%. This report, which was commissioned by the government of Ontario, stated that the private sector was accountable. Further, we have offered on numerous occasions to develop enhanced reporting procedures which would further satisfy the public's right to know how public money is being used. On a final note, any centre which receives money from the province directly or indirectly, ie, through the purchase of service agreement, must open their books if requested by the government.

Independent centres are established at no cost to the taxpayer while non-profit child care centres cost the taxpayers up to $20,000 per child space to create. In many cases, non-profit centres are also less affordable to the parent using the service. On a recent W5 program the nonprofit centre had a preschool fee of $125 per week as compared to the fee of $115 at the independent centre. In May 1989 a study done by York magazine found that 45% of the non-profit centres were in financial difficulties. Some even had to have loans guaranteed by individual parents.

This government may be interested to know that in Mississauga a recent survey was done of child care centre wages. It was found that when the DOG funding was removed the independent centres actually were paying their staff more than the local non-profit centres. The major difference in wages and benefits is the result of government discrimination. The staff who work in independent centres receive only 50% of the direct operating grant. The result is a difference of up to $3,300 per staff per year. If the pay equity initiative does go through, make that $5,300. This discrimination must stop.

The government is to be commended for its efforts to make high-quality child care available to working parents. To ensure the quality of care, courses in early childhood education are available at many community colleges. Child care centres must have specific numbers of trained staff. To ensure quality, regulations exist. All centres must comply. To ensure quality, all centres are monitored. Please note that the training, regulations and monitoring apply to all centres, not just those preferred by this government.

The one aspect which has not been discussed is availability. In the past few years we have seen many new non-profit child care centres open, then close. There have been insufficient funds to operate the spaces created. What is the point of creating spaces and not providing operating costs?

A survey done in April indicates that over 25% of centres had vacancy rates between 20% and 50%. The centres were experiencing financial hardship and were forced to lay off staff. The vacancies were not caused by the lack of children needing care but by the lack of subsidy dollars. At the time of the survey, the overall vacancy rate in the centres surveyed was over 24%.


Again quoting from An Agenda for People:

"Current high interest rates are having a devastating impact on small businesses. We propose to introduce a program of reduced-interest loans to small business for startup costs and to refinance existing high-interest loans."

Any new child care centre, regardless of auspice, should be eligible for funding through this type of program. Independent centres should qualify for startup funds under this program as they are small businesses and employ literally thousands of citizens in this province. If nonproprietary operations were forced to pay back their startup costs, it is guaranteed that funds would be used more wisely. This also can ensure a continuing source of funds for child care centre development.

In the NDP policy paper on child care, it is stated, "there is no room for profit-making in the care of children." Let us take a realistic look at this position. The Association of Day Care Operators believes there is no room for excessive profits in child care, but there is room for the director or owner/operator to make a reasonable return on his or her time, energy, expertise and investment.

In many regions, profits are controlled through the purchase-of-service budgeting process. In Hamilton-Wentworth, an independent operator is permitted a 10% profit line. However, 80% of capital costs of additions or renovations or major equipment, all computer costs, costs of loan repayment from startup, any deficit resulting from a larger than 5% vacancy rate and all business taxes must be deducted from this 10%. Hopefully, at the end of the year, the operator has been able to make a reasonable return.

Providing that the discrimination issues are addressed, independent child care centres can solve some of this government's financial problems. Any new spaces can be established by this sector at no cost to the taxpayer. All independent centres would meet or exceed the current government regulations. Due to the business practices of most independent business people, the centres would be established where there is an established need.

The Association of Day Care Operators suggests the following be considered: that all funding be directed towards assisting the families in need to cover the cost of child care; that all funding be directed through the purchase-of-service system. The DOG funding and the pay equity funds should be rolled into the subsidy system. This will result in increased per diems. The end result would be seen in higher salaries and a more stable workforce.

That the eligibility criteria for subsidy assistance be adjusted to allow more families access to the system.

That for a period of at least two years, the municipalities be relieved of the requirement of 20% to cover the cost of subsidy spaces.

The policies which exist in Ontario today have forced the closure of many child care centres -- 18 independent centres in the last six months that we know about. These policies are also causing the government to consider converting independent operators. In a period of financial hardship, it will become increasingly difficult to justify spending millions of dollars to change the corporate status of existing centres when the need is for more subsidy spaces.

We are asking this government to remove its blinders. Non-profit status is not necessary for the children or wanted by the parents. What this province requires is immediate assistance for families in need.

It is time to stop the rhetoric. The private operators of quality licensed child care programs in this province stand ready to join forces with the people's government to build a partnership. Each of the partners has its own strengths which, when combined, will ensure for Ontario's children the highest-quality, affordable and accessible child care system, a system of which we can be proud.

Mr Phillips: I might kick it off. You have come at the wrong time, I think, in that "profit" is not a good word in the province right now. Hopefully, it will be in the future.

Mrs Sullivan: In four years.

Mr Phillips: Whenever. I very much sympathize with your dilemma. I know it is partially in here, but I think what interests parents is assurance on quality. They probably are not even quite aware of how the facility is financed and what not. It is just quality assurance. What help can you give the committee in terms of assurance that the private sector child care centres can provide the same quality as the non-profit centres do at the same cost?

Mrs Preston: You can start right at the top in that we meet the same regulations when we are licensed. The same Day Nurseries Act is what we have to follow. We have the same inspectors. We hire our staff from the same colleges. So the basis right there is the same.

Not enough credit is given to the parents. We have all had parents come and inspect our centre and other people's centres, a variety of centres in the community, and end up choosing an independent centre for a variety of reasons. The parents have access to the classrooms and to the programs. They see the program plans. They have access to come in the buildings any time they want to see what their children are doing. I think that is the assurance we can give the parents.

The poster that was introduced by the last government, which we all have to post in our centre, basically has two columns. It shows you exactly the regulations, where you have all your staffing, which staff are qualified, which are not, all the things that you meet. If you do not meet any of the regulations, you get the dot on the wrong side of the poster. It specifies at the bottom exactly where the centre is lacking.

I know there was a study done just in terms of that in London. There was an article in the London paper a couple of weeks ago. One of our operators called me up and said, "You know, Judy, all these centres were listed that had provisional licences, and 75% of them were non-profit," so I do not think the auspice is really an indicator of quality. It is the poster, the staffing, having the parents being able to come in and see the centre -- seeing that they have happy kids, too.

Mrs Sullivan: Certainly your brief really touches people from my community, where the majority of children are in fact placed in commercial centres. Particularly with the recent pay equity announcements, there has been substantial pressure placed on the privately operated centres in terms of their very existence. This becomes a problem in terms of delivery of child care at all in our community.

I am interested in following up on the direct funding proposals that you are putting forward. Has your organization worked with the ministry in terms of cost analyses of direct funding?

Mrs Preston: The short answer is no. We have had an extremely difficult time in the last 10 months doing any work with the ministry.

Mr Jackson: Getting an appointment.

Mrs Preston: We had one appointment.

Mrs Sullivan: With the ministry and with the minister? Have you been able to meet with the minister?

Mrs Preston: Once.

Mrs Sullivan: I see. So as a consequence you have not been able to move your argument forward in any way in terms of the direct funding.

Mrs Preston: Not at all.

Mrs Sullivan: Including the basic research that would be necessary in terms of a cost justification?

Mrs Preston: No, we have not been able to do anything.

Mr Phillips: I think An Agenda for People, just to clarify the numbers, called, in the first year, for $80 million, and in the second year, for another $160 million. I gather you are saying that the capital does not look like it was included in their --

Mrs Preston: No. I worked with the figures for awhile trying to figure out how they could have come up with that, with the cost estimates we had, unless they want to use commercial operators to open the new centres, because we do it somewhat more cost-effectively, and certainly at less cost.

Mr Phillips: There you are.

Mrs Preston: Our average is $10,000 to $12,000, so that might help.


Mr Jackson: Thank you for an excellent brief. I have some working, active knowledge of the issues you have raised for the committee, and I share with you a concern that we have the offensive practice in this province of using female workers and children as pawns in a political exercise.

I know your brief carries with it much self-restraint. The fact is that there are 8,000 women, almost exclusively, being discriminated against by a government policy. There are also potentially some 10,000 children, and by extension their families, who might benefit from a sensitive government policy that would allow for expansion and access rather than this offensive, and in some jurisdictions illegal, activity of putting out of business one sector which is not a drain to the taxpayer.

Is it true that about 80% of the owners of day care centres are women?

Mrs Preston: I would think that is fairly accurate.

Mr Jackson: So this is also a discriminatory practice against women and their activities in support of the social service sector and their support services.

Would you also say that these activities are putting small businesses out of business and laying off staff? I notice you indicated that, but do you have anything more specific that you can share with us? We are hearing from the NDP that it does not do this, and yet we have discriminatory practices by the minister, Ms Akande, directed specifically against women and children, and predominantly, as well, staff. I understand that in some cases even some CUPE members, who are unionized, are being put out of business because their commercial centre can no longer survive in this framework of the government's interference.

Mrs Preston: I cannot substantiate the union aspect.

Mr Jackson: I am aware of one case.

Mrs Preston: You are? I have not heard that. But certainly in terms of people being put out of work, I can get really personal. I just closed down my centre because I found that on the funds that were available through the parents through their subsidy program, with the restraints and some extremely unfair practices in our particular region, I could not operate the quality of program that I wanted to operate. This speaks to the quality of programs. I could have continued operating if I had been willing to cut corners and to operate at extremely minimum staff, but I was not willing to do that.

Mr Jackson: How many employees would you have laid off by the government having forced you out of business?

Mrs Preston: Four. I had a centre for only 25 children, so it was extremely small, which makes it that much more difficult because you certainly do not have the economy of scale that you would have with a larger operation. So it was smaller. Certainly in Hamilton we know of four, myself included, that have closed down in the last three or four months.

Mr Jackson: And those children would have been forced to go to another centre with new teachers, something we try to avoid in a school situation when it is unnecessary because it has adverse effects on the children to be ripped out of one learning, nurturing environment and thrown into a completely new one prematurely or inappropriately.

You have lost your business. You are closing your doors. You are no longer paying taxes to the city of Hamilton because you are not operating that business. You have laid off four people. What was the longest seniority of any of your employees?

Mrs Preston: One of my staff had been with me ever since I opened the centre.

Mr Jackson: Which is?

Mrs Preston: Five and a half years.

Mr Jackson: They have lost all their seniority rights in terms of job placement within this sector in this province.

Mrs Preston: One of the children had been with me for over three and a half years, so you have the same happening with the children as is happening with the staff. She had to go to a new centre and a new school.

Mr Jackson: I appreciate the fact that you have shared that with this committee as a living example of the damage this government is doing with its budget. In spite of the fact that we cannot get a clarified version of what the numbers really total, we are certainly getting a sense of the impact they are having: less access and clearly not as affordable because we are spending tax dollars to compete, when you are providing a service at no cost for your capital. You are contributing to the tax base and yet clearly the government is moving -- frankly, if there is any message, it is that if these policies did not work in Cuba, I do not see how they expect them to work in Ontario.

Mr Sutherland: I find it ironic that Mr Jackson wants to accuse our party of being discriminatory against women when his party was in power for 42 years and could not see fit to bring in a pay equity bill so that women could be treated the same way.

Mrs Preston, you stated that parents are content with a privately operated system. I am not as familiar with all the day care issues as probably I should be, but I have been following a bit. I noticed today you did not bring a teddy bear, and Cam did not bring one as well.

Mr Jackson: We did not know who the new minister is; that is why. I did not want to offend anybody.

Mr Sutherland: For those people who look at it and, let's say, draw an analogy with the education system, the provincial government does not fund private education. What would you say if people want to say day care should be treated in the same way education is? You do not fund private education, so why should you be continuing funding or providing equal funding in that way?

Mrs Preston: There are two things different about education and child care. One, everybody has to learn to read at some point in his life, and from what I understand there is a high number of children in Ontario who are not learning to read. Maybe we should be funding more private schools because I understand that they sometimes do a considerably better job. That is where people who are having trouble with the generally available education take their children, provided they can afford it.

Secondly, child care is not needed universally. We know that from surveys that have been done, both at the federal level and at municipal levels. At the most, at the very outside, everything being what it was a couple of years ago, we would need to double what we have. Right now we are servicing about 10% to 12% of the children in the province. From the surveys that have been done, at the most 20% of parents would like their children in licensed care.

Obviously 80% of the parents out there would like to see their children at home with mom or with dad. One works shifts at night and one works shifts in the day, so they are able to handle their child care needs and they feel that for their children that is best and that is their choice. They want to see children staying with their aunt or with their grandmother or whatever, and that is their choice.

We do not need universal child care in this province or in this country. Many taxpayers do not want to fund that even if we did.

Mr Sutherland: You are saying that if there are any concerns about difference in quality -- you said in your presentation today that you feel the quality is the same -- the government has other options of ensuring the quality, whether it is through new standards, new regulations, more inspectors, what have you, that those issues can be dealt with.

Mrs Preston: We would like to see more government inspections, more government consulting with the inspectors. They barely have time to visit us in time to get our licensing done, never mind providing any kind of assistance with programming or anything like that with the operators.

I would certainly recommend that there be some more, if you will, teeth put in the regulations so that if a consultant finds that a centre, regardless of auspice, is not meeting the regulations after it has been licensed, there would be a procedure that would stand up in court that could force that operator to comply, or, as there was a case in the north end of Toronto where there is an operator who is not licensed taking an inordinate number of kids from what we hear, that there be teeth in the regulations that can take care of those situations.

If we have money to spend, let's put it there and make sure that people opening up have what they should have in order to open up, or if they do not have it there are steps that can be taken. I do not see any point in wasting money closing down existing businesses.

Ms M. Ward: You are opposed to opening new centres. I can see that right at the moment. I know there is a high vacancy rate. I have been visiting a number of day care centres and am in frequent contact with people. The recession is one big factor there, the unemployment rate, people losing their jobs. Even if they have subsidy they cannot maintain that subsidy. Would you agree that has had an effect on the vacancy rate and the closings?

Mrs Preston: Yes.

Ms M. Ward: We talk about non-profit. There are really two types there, I think you can say. There are the government-run ones in government facilities where it is social service staff and so on. Then there are the independent community-run ones, which have a board made up of parents, and there is also the option of conversion from private to the community board type. Do you have any comments on that?

Mrs Preston: On converting?

Ms M. Ward: On converting, yes. Just one other point: You said in your brief there is no room for excessive profits. You said the operators should have a decent wage for their time and energy and so on. Given that, would there be that much difference, aside from your investment, in your role in it if you were an administrator with a community board and were being paid that salary for your time and effort?

Mrs Preston: How much time do I have, Mr Chairman?

The Chair: You have about a minute and a half. I do not think you can do it in that time.


Mrs Preston: All right; I will race. Another study of independent operators -- people who are opposed to our existence do not read these studies -- was done by the Kapelos-Edwards Group in 1987. Profit was way down on the list.

I have worked in government centres and I have worked for the board of education and I have worked for private non-profit with a community board. Quite frankly, the quality of my work has not changed, except that I have more experience. But believe me, I will never, ever work for a community board again. I spent 90% of my time educating people as to why it was inappropriate to run a five-year-old program -- what the children did at kindergarten -- with a three-year-old, etc, ad infinitum, for the whole year.

Ms M. Ward: Is that one experience, though, or would you say you think that applies to all community boards?

Mrs Preston: I have talked to a lot of people who have done it and I have worked for more than one board, where people come on the board who know absolutely nothing about day care, know absolutely nothing about making a budget and know absolutely nothing about doing a business plan or running a program. They come in and they think they are the boss, because it is status to be on a community board for a day care centre, but they do not know anything.

The supervisor or director spends so much of her time -- if you want to check with some of the boards as to the amount of money they are spending educating their boards how to run a child care centre when in this province we have a wealth of individuals who have already got the experience --

Ms M. Ward: They are the parents, are they not?

The Chair: I am sorry. I have to interject. Our time is up and we have other presenters here today. Thank you for coming.


The Chair: Our next deputation is the Hamilton and District Apartment Association, Derek Lobo, director. You have half an hour. The amount of time for your presentation will be subtracted from that and that will leave time for questions at the end, divided by three.

Mr Lobo: My name is Derek Lobo and I am a director of the Hamilton and District Apartment Association.

I want to tell you a story. It is an Eastern European story. Ivan the Soviet peasant was working in the field when all of a sudden God appeared before him. God said: "Ivan, I'm going to grant you one wish, but there is a condition to that wish. Whatever you wish for, your neighbour gets double." So Ivan thought, "If I ask for a billion roubles, my neighbour will get two billion roubles." He thought and he thought. Finally God said, "Well, Ivan, what'll it be?" Ivan looked back at God and he said, "Gouge out one of my eyes."

That is the beggar-thy-neighbour attitude that this government has taken with our industry. It seems to be, make the rich, greedy landlord pay. Ontario's property owners were the first victims of the socialist experiment in this province. Punitive, retroactive legislation destroyed property owners, both large and small.

Here is a profile of the members of our association. We have 400 members. The majority of them are small landlords. We have a few small property managers and some contractors in our association. Our association bank balance is just under $4,000. Many of our members are first-generation Canadians. They are cautious people. In fact, they tend to be obsessed with security. That is why they invested in real estate. It was part of their Canadian dream. It was part of their retirement. They did not believe that Bob Rae or the state was going to take care of them, so they worked a little harder, they saved a little more and they invested in Ontario.

But the property owners were not the only victims of the rent control legislation. Let me show you a real life story, no ideology, no political theory. I brought a gentleman with me. His name is John Makuch. He is one of the owners of RAM Restoration Inc, a company that specializes in concrete restoration of apartment buildings. Here are some of his former employees: Steve Olmstead, Bill MacPhee, José Louie Sousa. All these men have gone to the wall for Bob Rae.

Prior to the NDP, John had 45 employees and he was in the process of hiring 15 more within the next three months. Now keep in mind, this was in the middle of the deepest recession, which you have talked about, Mr Christopherson. He was hiring people, 15 people. He had $1 million worth of work on the books and he was quoting on an additional $3.5 million, in a recession. The day after the election, most of his work was cancelled as landlords feared the NDP would live up to the election promises in the Agenda for People.

RAM Restoration Inc today faces bankruptcy. Today RAM Restoration Inc. has 10 employees where there should be 50. How many Ontarians have to go to the wall for this ideology? Tell John Makuch, tell Steve Olmstead, tell Bill MacPhee and tell José Louie Sousa about the social benefits of bankrupting their lives' dream.

In the budget, Bob Rae talks about creating 70,000 jobs. Well, here are 50 jobs for free, Premier. It will not cost the taxpayer a penny. These jobs were eliminated strictly because of Bill 4. These jobs were not lost because of free trade. They were not lost because of the recession. They were not lost because of Brian Mulroney and they were not lost because of high interest rates, but simply because of NDP housing ideology. Why are hardworking men and women, like the people behind me, going to the wall for the NDP?

John Makuch and his former employees are not alone. Bill 4 was really the job elimination program. After massive job losses in the apartment industry, the NDP made the following statement, and both David Cooke and the Minister of Labour made this statement: "Construction worker layoffs related to recession rather than new [rent control] legislation." That is just baloney. Ask the men behind me why they lost their jobs. It was not the recession.

Here is the ad they took out in the paper, a desperate move: "Thank you, Mr Rae. Your proposed rent control law may have saved me $25 per month on rent. Unfortunately, as a direct result of this act, I just lost my job. Signed: John Welsh, Pat O'Flaherty, Steve Olmstead, Bill MacPhee, Ernie Lancuso, Mike Shuster and José Louie Sousa, former employees of RAM Restoration Inc." They are behind you. What are you going to tell them?

Here is something else out of the paper shortly after Bill 4 came out: "Rent Control Legislation Crushes the Concrete Restoration Industry in Ontario." Four hundred and fourteen jobs are lost within seven days of Bill 4 coming out. That does not seem fair.

More job losses: Day Restoration Inc, 17 of 35 workers laid off; Oxford Window Manufacturing, 9 of 12 workers laid off; Regal Aluminum -- these people make replacement windows for apartment buildings -- their workforce was cut in half almost immediately, because all their contracts were cancelled.

If you were not reading the papers around that time, here is what the headlines said. It is pretty clear jobs were lost and these were not related to the recession. Contracts were cancelled.

This is what the Premier said in the Toronto Star about that same time. He said: "The Ontario government is not going to stand by and allow jobs to be lost during the recession." Well, there seems to be a communication problem between the Premier's office and the Minister of Housing. The Honourable David Cooke started slashing jobs left, right and centre, yet the Premier pontificates that saving jobs is top priority.

This province needs leadership, not ideology. A leader's job is to inspire and to instil confidence in those he leads. A leader must accept responsibility. The buck has to stop on the leader's desk.

When the CIA-engineered coup in Cuba failed, President John F. Kennedy did what a leader had to do. He accepted responsibility. He did not blame the Cuban freedom fighters. He did not blame the CIA. He accepted responsibility. The buck stops here.

The Premier of this province does not seem to accept responsibility. It is not his fault. He blames the recession, he blames the federal government, he blames the Bank of Canada and he blames bloated capitalists. The Premier seems to blame everyone but himself. In Ontario's time of need, we need leadership, not finger-pointing.


Now let's talk about the budget. The Ontario deficit of $10 billion is excessively high. The number, whether it be $8 billion, $10 billion or $12 billion, matters little. The funding to the Ministry of Housing has increased by 39% and at least $50 million of that money will go to maintaining the slothful rent review bureaucracy you people promised to eliminate.

Unprecedented funding for subsidized housing will compete against the private sector. The taxpayer will be burdened with subsidies of up to $1,200 a month for some projects, $1,200 per month per unit. It does not seem to make good business sense.

You cancelled the Red Hill Creek Expressway in Hamilton, which would have created thousands of jobs without competing against your constituents. Many items in the budget seem noble and just; preventing violence against women and equality for aboriginal people. I commend you on these efforts. They are noble indeed. They need to be addressed.

But on other issues, you have to remember that Ontario is not an island. To the east of us we have Quebec, where the entrepreneurial spirit seems to be flourishing. One hour south of here is really the bastion of free enterprise, the United States, and companies are moving there and expanding there. They are getting the jobs while our government is levelling the playing field of employee-employer relations. By the time you are finished levelling the playing field, we are afraid there will be no players left to play on it.

Increased corporate taxation, increased personal income tax, increased minimum wage; these must be done in concert or at similar rates to our neighbours. We cannot afford to be all things to all people. Creating the people's paradise oblivious to your neighbours is a recipe for disaster.

The $10 billion is a big amount but I really think the true deficit is in the spirit of the people of this province. More than bankrupting the provincial coffers, I think you are trying to bankrupt our spirits, maybe not intentionally, but that is what is happening. Tens of thousands of Ontario's men and women have faxed you, written you, marched against you and lost their jobs for you, but you just do not seem to be listening. Oh, we go through charades of public hearings but in the end, the ideology always seems to prevail. I sat before the Bill 4 committee. Ideology prevailed there.

How many Ontarians like John Makuch and his employees have to go to the wall for Bob Rae? Socialist regimes throughout the world are toppling. In this hemisphere, we have two socialists left who subscribe to deficit spending, Fidel Castro in Cuba and Bob Rae in Ontario. In Cuba, deficit spending works because Mother Russia bankrolls it. Now Mother Russia has pulled the plug and Cuba will go down the drain. In Ontario, Bob Rae's deficit spending will be bankrupt and we will be bankrolled by our children. You cannot do that. It is not fair and it is just plain bad business. My three daughters should not have to pay for your mistakes.

I want all of you here to ask yourselves the following and answer it honestly to yourselves: Will Ontario be a better place to live four years from now after the socialist experiment? How many more factories have to leave, and do multinationals really want a partnership with Bob Rae after all the things this government is proposing? How can the disabled get jobs when there are no jobs? How can the minorities you represent share the bounty when there is little bounty? Why are you burdening our children with this deficit? Just ask yourselves the question, will Ontario be a better place to live four years from now? Regrettably, we think the answer is no.

You could say maybe I am not objective. I am not a member of one of your special interest groups. I am not a member of a union. I am not a tenant. Unlike you, I believe this province is already fair, eminently fair. Ontario has been governed by Conservatives and Liberals and the truly needy of this province are cared for as well as or better than anyone in this hemisphere. This government does not have a monopoly on fairness, benevolence, social conscience or the environment. To think that you alone represent the needy in our society is sophomoric. Many of your goals and objectives are shared by all the people and all the politicians of this province.

Really, it is not your goals that our association is questioning. We have met with you. We have tried to work with you. We are not questioning your integrity; it just seems to be your competence. This government does not seem competent. But I am biased. I am a landlord. We have been attacked by retroactive rent control legislation. We are a little upset. But let's look at what others are saying.

European investors who invested in Ontario real estate were outraged by your government's attack on them. They are now channelling their funds to other provinces and American states. They now consider Ontario in the same investment category as the Third World. Is this your vision for Ontario?

I cut this newspaper article out of the Globe and Mail about two weeks ago. It says, "Quebec Replaces Ontario as US Investors' Choice." This troubled me. I think it should trouble you.

"A growing number of US investors are betting that Quebec separatism is less of a worry than Ontario's socialism."

Merrill Lynch of New York says, "Investors that would have normally looked to Ontario are now looking to Quebec."

Congratulations, Premier. It seems that American investors would rather trust their money with a government that is trying to destroy Canada than they would with your government.

This is out of the Financial Post: "Last Straw. NDP Final Blow as Ontario Faces Slow Flight of Investment Capital."

I think this government in some cases has a simplistic view of some very complicated matters. The NDP sees landlords as villains and tenants as oppressed. Such a simplistic vision of Ontario's housing industry is a recipe for disaster.

In 1989 Bob Rae was asked, "How would you get the current private rental stock out of the hands of the large owners and into the hands of the non-profit organizations?" You have seen this quote many times, but it is really the question that is never read out. The question says, "How would you get the current private rental stock out of the hands of the large owners?" I did not realize that was an objective.

Here is the Premier's response. He said: "You make it less profitable for people to own it" -- that is rental property -- "I would bring in a very rigid, tough system of rent review. Simple...there will be a huge squawk from the speculative community, and you say to them, `If you're unhappy, we'll buy you out.'"

In that same interview, the Premier said, "You can't talk about rent review till you talk about...ownership." He went on to say, "We need a government program of purchase."

Let's look at the Premier's statement, sentence by sentence. He says, "You make it less profitable for people to own it." Mission accomplished. Conservatively, rental property values have decreased by 25%. Is this what Bob Rae means when he says: "Work with me. I will help you be less profitable"?

And the next sentence, "I would bring in a very rigid, tough system of rent review." That is almost done. After the sham Bill 4 committee hearings, Bill 121 was introduced and I sincerely hope that these committee hearings do not resemble the farcical sideshow the taxpayer had to bankroll on the Bill 4 committee.

"There will be a huge squawk from the speculative community, and you say to them, `If you're unhappy, we'll buy you out.'" Well, Premier Rae, many of your so-called speculators were international investors, foreigners who came into Ontario and built rental accommodation. They are not squawking; they are just leaving Ontario and they are investing elsewhere.

In Bob Rae's recent article in the Financial Post he said, and I am quoting: "Wealth creation is crucial and we can't take it for granted. Attracting investment, encouraging the market to work, creating profits."

Are retroactive rent controls rewarding innovation, encouraging the markets to work and creating profit? The Premier seems confused. First, he wants to make it less profitable, as he said here. Now he is saying he wants to make it more profitable. Does this leader inspire confidence? No.

Just ask yourselves the following question: Will Ontario be a better place four years from now? How many factories have to leave? How will the disabled get jobs? How will the people you represent, the minorities, share the bounty if there is not any? Ask Bill MacPhee, Steve Olmstead and José Louie Sousa if Ontario will be a better place to live. Is it a better place for them to live now?

That concludes my presentation. I think you might want to ask these gentlemen some questions also. In one case, his unemployment runs out next week. He is going to have to go on welfare. I would encourage them to come and sit here with me and if there are any questions, or questions for them, we would be happy to answer them.


Mr Jackson: Mr Lobo, thank you for a very direct presentation and hitting the nail on the head with respect to several concerns. I guess rent control has been a theme today, because it has been raised by several groups, and affordability of accommodation. But I would like to hit on your concern with respect to the fact that governments have not realized that the failure of government-built housing -- there has been more government rental housing built in the last four years than there has been from the private sector. In fact, our current dilemma is an expression of the failure of government-built rental units, because they cannot build them fast enough. They certainly cannot build them cheaply enough. I have seen some figures that were nearly double the cost for which they could be done.

It seems the taxpayers are not fully aware of what a devastating effect this is going to have taxwise. Would you comment about why you believe this government refuses to understand the role of the private sector in terms of creating wealth, as evidenced by RAM Restoration?

Mr Lobo: It is a very complex question. It goes to this government's philosophy on rental housing. Does it believe in the private ownership of rental property? We have the Premier saying he wants to buy the speculators out. We have the Premier saying he wants to make it less profitable. The only answer seems to be, "Yes, we're going to build co-op housing." I think that is even a little bit of a misnomer -- it is subsidized housing. The taxpayer is taking money out of his pocket, sometimes to the tune of $1,700 per month, to build this subsidized co-op housing. It does not always go to needy people, either.

Why do you not let the private sector do what it does best? Most of this continent is reasonably well housed; most of this continent does not have rent controls. It was working before; it will work again. But for it to work, we need to trust the government again, and quite frankly we are a long way from doing that. After retroactive legislation coming out we are really a long way from trusting this government.

Mr Jamison: You touched on a number of points. You talked about finger-pointing. I find your presentation very one-sided. There are two sides in this issue, of course. In rent control --

Mr Jackson: That is why the workers are here.

Mr Jamison: -- there are two sides to the issue. There is the side of the landlord and the side of the tenant.

Mr Lobo: Yes.

Mr Jamison: Okay. What this government has obviously tried to do, beyond Bill 4 and with the new -- Bill 4 being an interim measure to catch control of some of the things that were going on out there in a major way. What this government has tried to do is strike a balance. I can equate to your approach as far as having European people come and invest their money wisely is concerned. My father did that, a 10-unit apartment, and under the Conservative government in 1970 there were rent controls in place.

Mr Jackson: In 1975.

Mr Jamison: In the 1970s. He was very successful in managing his property well and making sure the investment was there. The specific concern is where there were problems with rents increasing out of relationship to the actual economy itself. That showed the need for something that happened. If I might just put it into perspective, my understanding of the new legislation coming forward is one where CPI is taken into account and up to 3% over that. I would suggest to you that if the average person who goes back and forth to the factory was allowed that type of ability to increase an extraordinary cost, say when the GST came into play or whatever, over and above CPI, many would consider that to be fair. I think that is what this government is trying to do.

Let me make it clear that it was a promise of this government. Even through difficult times we recognize the need to implement rent control policies. That was made very clear during the election and to act like it is a big surprise today is certainly not the case and should not be the case. I have some difficulty, because I find your presentation very weighted. I would like a presentation that took into consideration tenants' views too, and I think our legislation in fact reflects a balance on that. I would just like you to comment.

Mr Lobo: Sure. I think you should ask these gentlemen here who are out of work about the balance of your legislation. But there are a couple of points you made. First, if your dad still owns the building he is going to be mad at you because it has gone down 25% in value and it did not need to go down 25% in value. Second, I do not think you understand the legislation. The interim measure: Let's say I was concerned about the air you breathe in this room. I am temporarily going to put a bag around your head and seal it so that you cannot breathe until I clean up the problem. As soon as I do that I am going to remove the bag from your head. That is what you have done to the property owners of this province. You said, "We don't like the current system, so we're going to freeze everything until we figure out what to do."

Mr Jamison: It was not a freeze.

Mr Lobo: Retroactive legislation, sir, for capital expenditures done as early as 1989 were disallowed.

Mr B. Ward: It was 5.4%.

Mr Jamison: It was not a freeze.

Mr Lobo: The 5.4% covered off -- okay, conceptually you know what I am talking about. Capital expenditures done in the past were disallowed. These men are now out of jobs. That interim measure, sir, was much too severe. There was nothing in the Agenda for People saying that you were going to come in and put the brakes on a system that, while it was messy and cumbersome, had a sense of balance to it. It had some sense of balance. It was slanted, for political reasons, towards the tenants, and really all three parties are to blame here. You guys brought it in, you guys made it worse and you guys killed us.

Mr Kwinter: Derek, you have just made me depressed listening to this because it really is sad. Yesterday we had an appearance by Mel Watkins. Because of the shortage of time I did not get a chance to talk to him, but I had a copy in front of me of the Waffle manifesto and the marshmallow manifesto and I wanted to throw back to him some of his quotations, for example, that the way we get socialism in this country is to get rid of capitalism. He made a great statement about this is the way we have to do it. I was curious to ask him if all of those lackeys he had on his list saying that this is the greatest budget ever going -- most of them were supporters of that particular policy.

I really want to talk to the man who has lost his business. What do you feel is happening? Where are you going to go from here? What is going to happen to you?

Mr Makuch: I do not know. We are just taking it day to day and we really cannot plan anything. All we know is that when the recession hit we did not take up the same ideology as the government. I did not give my partners credit cards and say: "Go out and spend. Let's spend our way our of the recession, boys." We cut back and tried to do things. Would I go home and give my wife a credit card and say, "Honey, we're going to spend our way out of the recession?" This is what the government is telling us to do. Does this make any sense to anyone? How can they do it?

Countries run the same way a business does or a household does. You have money going out and money coming in. After everyone is working for the government, who the hell is going to pay taxes? Where is the money going to come from? That obviously seems to me what they are trying to do. No one is going to invest in business in this province. I know if my company goes bankrupt, and there is a good chance of that, I am seriously going to take a look at whether or not I will ever start another business here and whether I will move my family south.

When your own government, the people you think are going to help you, put you out of business and put people out of work -- He has already been to the welfare office. Is that the plan? Is everybody going to be on welfare? This gentleman down at the end of the table does not know where his mortgage payment is coming from next week. He has had notices put in. What is he going to do? It is people like me who have to look them in the eyes and tell them that, while all these people sit behind their big office doors and shut out anything they do not want to hear.

We are going to have to wait four years to see how much damage this government does. We know right now that in four years they will not be here. All the polls have shown it. They are gone. They are history. I guess they are going to scramble and just see how much damage they can do in four years and then we will have to pick up the pieces. Everyone I have talked to recently realizes the mistake they made voting this government into office. They have told me they will never, ever vote for them again. If these committee hearings are shams and do not work, then that is the ultimate. We are going to wait four years -- out they go, never to return -- and we will try to build a new Ontario when it is finished.

Mr Lobo: The key point here is that these people did not need to lose their jobs. This was not about the recession. This company was expanding. At the height of the recession it was expanding and it was chopped down by Bill 4. That is the difference. There are lots of workers out there who are unemployed. They are heading towards welfare. They are worried about what is going to be on the dinner table tonight, but they are unemployed because of the global situation. These people are unemployed because of the NDP. That is the real tragedy here.

Mr Makuch: I was at the committee hearings too and I cannot tell you how many times I heard that, the guy hired some shoddy contractor and he did lousy work. Why do we not fix the solution, police the work better, take care of the landlords who are abusing the system, not discriminate, which is something they claim they do not want to do? They want equal rights for everyone and yet they slam people and discriminate. It is unbelievable.

The Chair: I am sorry, but your time is up and there are other deputations to be listened to this afternoon.



The Chair: Our next presentation is from Beverly Campbell, president of Equity Concepts. Thank you for coming. We have allocated 15 minutes for you. I think you were informed of that. Whatever time is left will be divided among the committee.

Ms Campbell: My name is Bev Campbell. I am a management consultant with a practice in downtown Toronto. While I provide general management advisory services, my main interest is in employment equity. By training and experience, I am a certified general accountant and a former professor of accounting and finance at George Brown College.

I would like at this time to say thank you for the opportunity to make this presentation today. The purpose of my presentation is, first, to speak in support of the government's plan, as expressed in the budget; to point out the inevitable portion of the deficit and the causative factors, and I want as well to applaud the government's decision to support the people and to invest in recovery and in future stability in Ontario.

Second, I wish to express support for the government's initiatives towards improved fiscal management by establishing the Fair Tax Commission, which will explore fairness in taxation; establishing the Treasury Board to manage budget expenditures and to implement multi-year budgeting, and separating the operating and capital budgets, which should provide some clarity of purpose.

Finally, I wish to express my views concerning management of the province's largest expenditure, which of course is health care.

At issue is the planned deficit of $9.7 billion for 1991-92 and, as a secondary matter, the planned continuation of annual deficits for an additional four years, although decreasing gradually in magnitude until break-even is achieved in the 1996-97 fiscal period.

Given the factors contributing to the current year's deficit, the managed, limited-term continuation of deficit budgeting is essential to the success of a managed economic recovery and the managed structural changes needed to provide the basis for sustained prosperity for all in Ontario and perhaps in Canada.

Speaking about the inevitability of a deficit, three major conditions or external actions account for a major portion of this deficit.

First is the recession. As you know, it is continent-wide in its scope. It is substantially worse than in 1981-82 when measured by job loss, and Ontario has been the hardest-hit region in all of Canada. The resulting budget effect is significant loss in tax revenues, both personal and corporate, estimated to be about $1 billion in the current year; significantly increased demand for welfare support, and pressure on Ontario to maintain its contribution to national economic stability, that is, in personal and corporate federal income taxes and consumption taxes, etc.

The second contributing factor to an inevitable deficit position is the federal government's actions and policies. The federal budget continues to shift budget strain to the provincial level by reductions in transfers for health, postsecondary education and social assistance. Since all three expenditure areas are critical, either because of recession-caused support demands or the need to develop competitiveness for long-term survival and prosperity, the provincial budget must pick up the slack.

Federal monetary policy, which keeps interest rates and the Canadian dollar artificially high by historical standards, is having a serious effect on the ability of Ontario manufacturers to raise capital and therefore to generate growth in jobs, as well as to compete in the export market.

The free trade agreement, while philosophically desirable in the long term, was implemented far too quickly for Canadian and, of course, Ontario firms to adjust and prepare for. This added pressure contributed substantially to the loss of Ontario jobs as firms moved south and to the bankruptcy rate as other firms knuckled under to southern competition. The future looks even bleaker as Mexico is added with its relatively cheap labour -- hence the importance of investing now in improving Ontario's ability to compete internationally.

Finally, pre-existing Ontario expenditure levels, combined with a pressing need for capital expenditures, provides an inevitable deficit starting point -- 1990-91, a $3-billion deficit, which of course was not predicted.

Taken together, these three areas account for the inevitable portion of the deficit, a measurable $5.6 billion, plus any additional costs which are not so easily identifiable.

The balance of the proposed deficit may be attributed to the government's decisions to: support and assist the people of the province who are suffering now from the recession, as well as those who continue to suffer a longstanding disadvantage economically; fight the recession with targeted expenditures for research, manufacturing, agriculture and northern Ontario development; invest in the future with capital expenditures to adjust and enhance the province's infrastructure and with a significant investment in structural reform of the social assistance system.

I believe that Ontario's fiscal plan designed to fight the recession and build for the future, rather than reducing the public debt, is the only responsible approach to take. The alternative would leave the province with an ongoing and growing social assistance account and a workforce not adequately prepared to fill the high value added jobs needed for this province to be competitive in the emerging economic environment.

The government's fiscal management initiatives should provide some assurance that fairness in taxation and cost-effectiveness in program administration are treated as priorities.


The Fair Tax Commission, established to advise the Treasurer on how to achieve a more equitable tax structure, has a diverse and intelligent membership and a mandate to consult broadly. The comprehensive review of our tax system is long overdue and I hope will contribute substantially not only to fairness in taxation, but also to improved understanding of the role of taxation.

The creation of separate capital and operating funds will highlight investment in the future, as distinguished from current maintenance expenditures.

Finally, establishing a Treasury Board to manage expenditures for cost-effectiveness and, importantly, to implement multi-year budgeting provides comfort that responsible planning and control mechanisms are being put in place.

The last topic I wish to deal with concerns the health care expenditures. The province's largest expenditure function, health care, which consumes approximately one third of the budget dollar, is in desperate need of fiscal management. I applaud this government's initiatives towards gaining control through a landmark agreement with the Ontario Medical Association on doctors' earnings and stricter controls on drug prescription and on out-of-province health service payments. However, only a fundamental shift in focus from treatment of illness to prevention of illness will have any major impact on the health of both the people and the budgets of this province.

Bill 43, the Regulated Health Professions Act, and its companion bills broaden recognition of health care providers to include more of those who are engaged in preventive health and represents a move in the right direction. The recent joint venture of the Ministry of Community and Social Services, the Ministry of Health and the Office for Senior Citizens' Affairs dealing with long-term care reform is another.

As well, increased attention to poverty, wife and child abuse and the need for affordable housing will all contribute to shifting the focus from treatment towards prevention and help to bring down health care costs in the long run. Much more needs to be done, and it needs to be done soon.

In summary, the budget deficit is in part inevitable and in part the result of a purposeful approach to economic management that is sensitive to the legitimate current and future needs of citizens and recognizes Ontario's responsibilities to the rest of Canada, even during a most difficult period. Investment in Ontario's people and its infrastructure now will develop the productivity levels needed to compete effectively in the post-recession environment. It is then that we can direct our resources towards reducing the public debt.

I thank you for hearing my views.

The Chair: Thank you. We have time for one question from each of the parties, beginning with the New Democrats.

Mr Christopherson: I want to thank you, Ms Campbell, for your presentation. I would caution you to sit tight there. You are the second CGA that has been in today, and the first one, I would suggest, in my opinion, was insulted, grilled and cross-examined as to motivation as opposed to the particulars of what was presented. I can only hope you will not be subjected to that type of treatment also.

Let me ask a very direct question. Since you have supported the philosophy the government has adopted, without necessarily talking about all the details, what in your estimation would be the result on people and the performance of our economy if Ontario had not followed the course we did and had just followed lockstep with the Mulroney approach and the Tory approach to running the economy during the course of this recession?

Ms Campbell: My opinion is that Ontario would have likely suffered substantially in terms of its industry. Certainly jobs were being lost at a fairly rapid pace on the track we were on. I think at best we would have ended up with being able to simply maintain the people of the province without doing anything at all to build for the future, and that is at best. I think at worst we would be unable to finance the normal welfare, if you like, of the people of this province.

Mrs Sullivan: I am quite struck with your emphasis in your document on the importance you place on fiscal management and financial management. I am quite surprised at some of the things you applaud that have been included as part of the budget as examples of fiscal management that you see from this government.

I would like to give you three examples. You mentioned the OMA agreement. I wonder how you can justify that agreement as an example of fiscal management when binding arbitration is included, with no accountability to the taxpayer for ultimate decisions of the arbitrator, which I personally believe is a rampant example of fiscal irresponsibility.

Second, I would like to ask you if you would comment on the viability of operating deficits, ie, putting into short-term deficit and therefore long-term debt the day-to-day costs of government, which this budget does and which has not been the practice in the recent past, when indeed there has been fiscally responsible budgetary management.

I would also like to ask you, since this is partly your professional field as well, to expand on your support for separating operating and capital budgets and ask you how you would therefore clarify existing public sector capital stock, and in a fiscally responsible way, not only in terms of reporting, but rather than writing off new capital over a period of 20 years, how you would see public accountability and a reporting operation from the government that would not be puffed up in terms of the capital reporting that is included.

Ms Campbell: I will deal with your first question first. I think I have pointed out the deal with the OMA not so much as an example of good fiscal management but more as an example of the way in which the government was addressing the out-of-control health care costs.

Mrs Sullivan: I do not understand that conclusion.

The Chair: With the element of fairness in mind, one question was allocated and you have asked three. If every member were to do that, then staying on time would be an impossibility. I have had direct instructions from the subcommittee to try to move these hearings along on time. So if we can allow the presenter to give her answer and then go on.

Mrs Sullivan: The question was one question using three examples for her to comment on, a question directly related to fiscal management, which was the point of Ms Campbell's presentation.

Mr B. Ward: What is your ruling there?

Mr Chairman: My ruling is that if you could answer the question, please, and we could ask these questions in a briefer manner.

Mr B. Ward: She did answer.

The Chair: Mr Sterling?

Mr Sterling: I am not surprised. In fact, I think we met before when you were president of the Certified General Accountants Association of Canada, and I think you were one of the few NDP supporters in the CGA movement. I think you also indicated to me you had served as chief financial officer to some NDP candidates. Is that right?

Ms Campbell: That is correct.

Mr Sterling: So I am not surprised by the --

Mr B. Ward: That is your question, Norm.


Mr Sterling: I would like to ask you, I guess unrelated to this, how are the negotiations going with the Attorney General with regard to CGAs? I know you are an executive director of the CGAs with regard to the importance of CGAs having the right to do public audits. When are we expecting an answer? Is there anything coming along on that at all, or is there some movement expected on that?

The Chair: That question has nothing to do with the --

Mr Sterling: She does not have to answer it. That is fine.

The Chair: If that is the preference, I would then thank you for your presentation this afternoon.



The Chair: Our last presentation is from Barry W. Henaut. We have received a submission from him that was written in. If you would come forward, please.

Mr Henaut: I know in the face of $9.7 billion, a small statistic like this is going to seem petty, but that is what we devote ourselves to in scholarship at the universities.

I got back a letter from the Social Sciences and Humanities Research Council of Canada telling me:

"Dear Mr Henaut: We have reviewed your file for a post-doctoral fellowship. This year, for instance, the committee adjudicated more than 450 applications, but in the view of the limited funds available to the programs at the council, we were able to offer only awards to one third of the applicants."

Your chance of getting a post-doctoral SSHRCC in Canada at this point in time is one in three. Senior scholars review 450 files in order to send out a mere 1481/2 grants. The rejection letters come in at the rate of 297.

I read this and I get frightened. People are desperate, looking for any kind of post in the university system, and then when I call about a little budget hearing and ask about the budget, "Oh, we're just about average, not too much, not too little." "Well, could you give me a ballpark figure?" "Oh, it doesn't matter if we are having these hearings at all on this amount of a budget, because we'd just be doing something else instead."

When Mr Decker finally provides his statistics, it is $120,000. There are four positions right here, four letters that could go out for 30 years of faculty renewal. In order to drop a filibuster, you decide you are going to spend four faculty positions, and you have got the Treasurer on the front page of the Globe and Mail saying: "Hey, we've done a backroom deal with Bob White and the boys and we're just not going to change it any more." But in order to break the filibuster and get on with the nice daily reality of getting speeches and doing a little photo op here, we are going to spend the money on this rather than this. That frightens me. It terrifies me, because it says to me you guys just ain't in control.

I pick up the newspaper. I realize I am taking time out of my thesis. I tell you, I have so little time already, but I see this in the Globe. They have got money. They are organized. They are out saying: "This is the Canada we want. Immigration -- too little room. Get these people who want to come in here out. Keep them out." The only way you seem to come up with dealing with fundamental problems like this, which just will not go away -- $120,000

This is not learning. I tell you right now, if this was learning in the classroom at the university, I would rather be a janitor. I could respect being a janitor. I could respect being a janitor because my father worked as a miner before I was born, hoping that some day I would have a chance to do something a little bit more dignified. He felt no shame in going down into the mine. It was his deal with the future. I was not even born yet, but he was preparing for my future, going into the mine every single day, breaking his body, hoping that some day I might have something a little bit better.

There seems to be total apathy throughout the whole country. I send a letter off to Bob Rae. I know I am being a little bit unpleasant, cocksure. I cut out these nasty little ads and put them right there in his face, and I go, "No." The average dog in this country is more intelligent than the politicians, and that is a sad reality because we are spending too much money on this and we need to put a bit more in here. One in 10 positions in this country is shuffling paper in bureaucracies.

When Voltaire complained, "This country" -- England -- "is a nation of shopkeepers," that I could respect. There is at least a little decency in keeping a shop, but he thought maybe they should think: We can do a little bit better than being an entire nation devoted to nothing else but shops. If he were here today, I think he would say to you, "Canada has become a nation of bureaucrats," and the only way I can contact you and get your attention is to put a little PS, "Look out, trouble coming."

I know that I just have to go home and wait because I have already documented the paper trail that lawyers are so fond of, the letters that say: "Go away. You make me feel dirty just seeing a piece of paper from you. Why don't you go out and get a job?" I am trying. You are telling me I have got to compete against one in three chances and you already have a form letter on your little computer and you splice in my name and then you stamp it and you say: "That's the public service. You should be thankful that we have so many bureaucrats here devoting thousands of hours so that we can send out personalized little form letters from the computer." You send us graduate students trying to teach the youth and the people of tomorrow who are going to deal with the fundamental destinies of this country and you tell us that maybe we should try and be a little bit more competitive.

Maybe when you get a paper from your son or your daughter you say:

"Dear Student: We have gratefully received your recent submission in REL 241YB and we have read it with interest. We think you are showing progress in the course and we hope that you will continue to show confidence in our university systems. We look forward to your most recent and future submissions and we think you are on track to a good record by the end of the term. Yours sincerely" -- rubber stamp -- "Barry Wayne Henaut."

Any idiot can set up a computer file like that and run them off in record time. We have people trying to put a little bit more personality in the human dimension of learning in this country, and everyone seems to think, no, we should be spending $120,000 to drop a filibuster because Bob Rae just happens to think it is better than trying to figure out some way to embarrass Mike Harris out of doing it. He cannot find somebody in this vast bureaucracy who has got a little bit of political history or philosophy who can find some way for Bob Rae to go before the cameras and say: "Well, there he is. He's going to filibuster this, filibuster that, filibuster this." After a little while even Glenn Gould on a one-note piano is going to sound a little like a water torture test, and the only way Bob Rae can figure out how to deal with it is to urinate all this money down the toilet.

I happen to think the university system is delivering a far better product for the money than you guys are, and I do resent it. Every time I pick up the Globe and Mail and look at all those public service positions being announced, they just seem to appear out of nowhere. You decide you have a new crisis and run the numbers through. Let's create a few more positions here, and meanwhile take out 150 professors from the humanities so that they can work a little harder giving personalized service at the universities.

That is what this is about, and if you happen to think that the best way to run this country is to do this instead of this, you are failing the exam and the final is coming in four years and all of you are going to be out.

Mr Kwinter: Barry, I found your presentation interesting. I have a question for you. If you had been in the one third that had been accepted, would you be here?

Mr Henaut: Yes, I would, because I happen to think even a one-third ratio is not good enough. After I submit all of that material, do you think I do not think there is a number-crunch problem here? Is that what you are telling me? If somebody, after I signed a book, came back with that kind of poor reading comprehension, I would say: "You are not going to pass this course. You had better start to learn reading comprehension." I happen to think there are a lot of people in the university system who think a one-third ratio is not good enough and a lot of them are the one third that are up there high enough. Yes, I do. I would be here even if I was that one in three.

Mr Sterling: It is getting late in the day and I cannot think of a question which would be appropriate.

The Chair: Thank you for your presentation this afternoon. This committee stands adjourned until --

Mr Sutherland: Before we adjourn, I just want to know, in terms of the subcommittee possibly meeting tomorrow to discuss the presenters for the different cities and locations across the province we are going to, whether that would be possible tomorrow at noon.

Mr Sterling: Not at 12. I have to fly to Ottawa tomorrow afternoon at 1. So I am going to be leaving around noontime.

Mr Sutherland: Is it possible to do it in the morning?

Mr Sterling: Yes.

Mr Sutherland: Are we starting at 9?

The Chair: Yes.

Mr Sterling: I am amenable to meeting for breakfast at 8.

Mr Sutherland: Are you back on Thursday?

Mr Sterling: Yes.

The Chair: We could postpone it until Thursday.

Mr Sutherland: We could even do it Thursday, but it needs to be done so that we do not run into the problems that we have already run into for this week. Okay?

The Chair: Yes, Thursday at noon.

Mr Sutherland: Are we starting at 9 on Thursday as well?

The Chair: Why do we not do it right after the committees finish hearing their deputations at 12 on Thursday, and then we could do it right here? Is that agreeable?

Mr Sterling: It is going to take more than 10 minutes.

The Chair: We all have lists, correct? If you were to come in with the pre-designed or pre-conceived notion of whom you would like on those lists, then it is a matter of making the decision.

Mr Sutherland: It is still going to take more than 10 minutes.

The Chair: Should we come back at 12:30, go down and get our lunch, come back here and do it? Okay. Then the committee stands adjourned until 9 tomorrow morning.

The committee adjourned at 1643.