Thursday 6 June 1991

Cross-border shopping



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 (Halton Centre L)

Ward, Brad (Brantford NDP)

Ward, Margery (Don Mills NDP)


Harrington, Margaret H. (Niagara Falls NDP) for Ms M. Ward

Daigeler, Hans (Nepean L) for Mrs Sullivan

Clerk: Decker, Todd

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

The committee met at 1017 in committee room 1.


The Vice-Chair: I believe we are close to having a quorum here, so maybe we should get started since we are running a little late this morning. I call this meeting to order. I believe we had agreed at the end of the last meeting that we would wait and see if the Progressive Conservative members of the committee would be coming forward with recommendations. We have not received any and we do not have any of their members present.

We also agreed that we would just check with both caucuses and see whether they had received the second draft of the report in time and had had time to go over what had been submitted and were ready to discuss that.

Mr B. Ward: Just a clarification, Mr Chairman: I may have missed it. Have we contacted the third party to make it aware that the meeting --

The Vice-Chair: If you remember at the last meeting, Mr Cousens, who was here from Markham, was going to pass on the message to his fellow --

Mr B. Ward: So they are aware that we are meeting today?

The Vice-Chair: Yes, yes. Have both caucuses here had time to go over and review?

Mr Kwinter: Mr Chairman, we have not taken this to caucus, only because I wanted to wait until I knew what the final recommendations were going to be. I did not want to go to caucus with this and then find out that the Conservatives are coming in with some recommendations and then have to go back. I have gone through this and I have a couple of minor questions about positioning of some of these recommendations. There are three recommendations we will put in that have not been adopted, but we would put in as a minority report. Aside from that, I have no real problem.

The Vice-Chair: Okay. Has the NDP caucus had time, then?

Mr Christopherson: Yes, we are all prepared.

The Vice-Chair: Okay. Just before we get into that discussion, I should make you aware that Anne Anderson has passed out a couple more reports regarding provincial sales tax collection and the free trade agreement. We also have one from Dave Rampersad on a comparison of support for supply-managed commodities, USA and Canada, and then we have an article out of the Wall Street Journal about "The Challenge: Merchants Mobilize to Battle Wal-Mart."

Anne would like to make a few comments on the report on provincial sales tax collection. She was able to talk to some people late yesterday and some of that information was not put in the report or needs to be clarified.

Ms Anderson: I just wanted to mention to the committee that, of all the people I talked to, no one felt the question of collecting sales tax at the border by reviewing federal documents would be contrary to the FTA. At the same time, none of them seemed to have looked at that question in very great detail.

I have spoken with a trade lawyer in the Ministry of Industry, Trade and Technology who specializes in FTA issues. She got back to me late last night, saying that she did not see that there was a problem with the federal government's forwarding to the province the information about the customs documents that it receives at the border. She is going to submit a written response to that and I will forward that to the committee as soon as I get it. It should be early next week.

Ms M. Ward: Could I ask a question in semi-relation to that? There were some comments I heard on the radio claiming that such a practice could violate the Charter of Rights. Has any investigation been done into that aspect of it?

Ms Anderson: I have not looked at that, no.

Mrs Sullivan: I understand that perhaps the British Columbia Civil Liberties Association is challenging the British Columbia government on its decision to make the request of the federal government. We might want to look into that. It is certainly not clear-cut.

Ms S. Murdock: My understanding on the point Mrs Sullivan made is that it is under the freedom of information and protection of privacy and it could contravene that act, and that is how it is being challenged by civil libertarians.

The Vice-Chair: In terms of the federal government passing on information to the provincial?

Ms S. Murdock: Passing on the information on which the right has not been waived, yes.

The Vice-Chair: Okay. Any further discussion on that point?

Mr Kwinter: Not on that point but on the other document you referred to, and that is the Wall Street Journal story about Wal-Mart. This really highlights a problem that I identified very early in these hearings, in that right now we are facing the cross-border shopping problem, but there is another problem looming on the horizon and that is the advent of the food clubs, the companies like Wal-Mart.

What it is going to do is create concern among small retailers in our communities that once one of these companies establishes itself, we are going to have exactly the same problem except, instead of being cross-border, it is going to be cross-town. That is something that is there and I really do not know how you can really stop it unless you are going to really get into the point where you are interfering in the free enterprise system.

But it is something that we should certainly be mindful of because it is going to be a problem and it is just going to compound the problem for the small retailer. He is going to be confronted and, I think, will continue to be confronted, with the problems of cross-border shopping. To add to his burden, he is then going to have to worry about cross-town shopping in these megastores which have very much cheaper distribution costs because of the their economies of scale. They will be able to sell products cheaper, and we are going to see some, I think, very serious dislocation in small-town Canada with the advent of these stores.

The Vice-Chair: Any further comments on the Wal-Mart article? If I just may add one thing, when one of the groups was here, either the retail council or one of the others, they had made some suggestions about how small-town people are going to have to do more boutiques and find that individual-level niche as a way of attempting to survive those types of things.

Mr Phillips: Just a point of information. I used to think Mr Hansen was the Vice-Chair on this committee. Has there been a quiet coup?

The Vice-Chair: No, there has been a change. Mr Hansen got promoted to Chair of the standing committee on regulations and private bills and I got demoted to Vice-Chair of this committee. I do not quite look at it that way: I look at Mr Hansen being promoted; I just look at mine as a lateral transfer.

Mr Phillips: These are the little things I watch all the time.

The Vice-Chair: It was done officially at the committee, okay?

Mr Phillips: It was done here.

The Vice-Chair: Yes, the change was officially done at one meeting.

Mr Phillips: Oh, strike that from Hansard.

The Vice-Chair: Some people may say I am ambitious, but I would not do that to Mr Hansen.

Are we ready to begin some further discussion on the draft report 2?

Mr Christopherson: Before you do that, can I just, so I understand fully and it is clear in the record, ask what the status is of the third party's involvement in this report? Have they sent any messages to anyone?

The Vice-Chair: I believe the clerk's staff is attempting to contact someone from their caucus now, as is normally done when there is no representation here from a caucus, to see about having them come forward. We would like them to come forward and we hope they would take up from Mr Cousens's remarks last week where he said he would inform them that we would be looking forward for recommendations. Since they are not here, I am suggesting we continue on with the discussion as is.

Mr Christopherson: That is fine. Thank you.

The Vice-Chair: Just as a possible starting point, I believe there were a few recommendations that had come forward from the Liberals last week and that the government caucus members had said they were going to come back and comment on. Is that how you would like to proceed, or go through the report as it is?

Mr Christopherson: Could I suggest that we do a page-by-page? That obviously will take in every concern as it comes up and we can start putting some of the stuff to bed.

Maybe I can ask a question through you to Mr Kwinter. Are we looking at a potential second session where we would go back to the first page, since you have not had a chance to run this by your caucus, or are you in a position where we can agree on certain wording and say, "That is done," and turn the page?

Mr Kwinter: I do not expect that we would go word-by-word with the caucus. I think we can go through this and come to an agreement in committee, but then before we finalize I would like to at least run it by the caucus. As I say, I do not think any people will get to the point where they are going to be nitpicking over words. They may have a question about some of the recommendations or some of the basic policies. Once we get to that stage, I would just want to show it to them. The only reason I have not done it is that I was expecting that the third party would be bringing forward some recommendations that might be incorporated and then we would have to change it again anyway. But if that is not going to be the case, we can go through it and then it is really just a matter of making sure the caucus is aware of what we are agreeing to.

Mr Christopherson: That is fine, because it also suits our purposes to the extent that there are a couple of things we are going to suggest and, depending on your response, we may need a second opportunity to go back and relook at it also, depending on how your caucus feels about it. So that process is fine with us.

The Vice-Chair: We shall start going through it. Page 1. Any concerns on page 1 in the first paragraph? We will just go through page-by-page then. Any concerns with page 1? Can we move on then to page 2, the introduction? Did anyone have any concerns there?


Mr Kwinter: On the third paragraph I have a little concern with the last statement, which says, "Since the problem is complex and involves all levels of government as well as many industrial sectors, cross-border shopping is a problem without a panacea, with no simple solution."

If you say it is without a panacea, you are saying there is no cure for it. To my mind that means, what are we talking about it for? Forget about it because all we are doing is commenting on it. It would seem to me that when you say there is "no simple solution," it implies that there is a solution. It is not a simple one; it is going to be a rather complex solution. It would just seem to me that if we take out the words "without a panacea," which indicate that there is no cure, and just say "without a simple solution," and leave it at that, is that --

Ms Anderson: I was wondering whether you agree with that. That is easy to do. Yes, I think I would agree with it.

Mr Christopherson: I am sorry. I apologize. I was consulting with my colleague.

Mr Kwinter: The point is that in the third paragraph on page 2 the last sentence says this "is a problem without a panacea, with no simple solution." I think it is a contradiction in terms. If there is no panacea, then there is no cure, there is no solution, complex or simple, and why are we even addressing it? I think we should take out the words "without a panacea," and just say that "cross-border shopping is a problem with no simple solution."

It just makes no sense to have the word no "panacea," because it means that there is no cure, there is nothing we can do about it.

Mr Christopherson: Just to respond -- I am not taking a hard position -- That word was used, if I remember correctly, by Mr Winter, and I think we have used it in response in the House to some questions that are raised where obviously it is the part of the opposition to try and make things as tight as possible. There is a difference between a simple solution and a panacea, I think. A panacea suggests that there is one solution that will solve everything, whereas to say there is no simple solution suggests that there may be a complex solution.

I may be nitpicking, but I think we like the word "panacea" and that direct reference since it is taken from Mr Winter, who made that statement directly in his report.

Mr Kwinter: I used to be the editorial director of a publishing company, and I am very concerned about words. When you say there is no panacea, you are saying there is no solution, there is no cure. That is what it says, "without a panacea." "Panacea" is the Greek work for "cure." There is no cure. So if there is no cure, then why are we trying to find a solution or find a cure? It seems to me that if we say that, then we are negating what we are doing here. We are trying to find some kind of a cure. It may not be a complete cure, but we are trying to find some sort of solution. That is the raison d'être of this committee. It seemed to me that if we leave that word in, and it may be nitpicking, but it really is a word that says there is no cure for this thing, so forget about it; it is just going to continue to happen and go on. Whereas if you say "there is no simple solution," it implies it is not an easy solution but there are things that we can do, and we have made 10 or 12 recommendations to try and do that. Why are you making a recommendation for something if there is no cure? You are spinning your wheels and wasting your time.

Mr Christopherson: I would beg to differ. Our position is that we agree with the statement by Mr Winter. Quite frankly, there is no panacea; there is no one cure that is going to solve the problem. What we are trying to do is mitigate it as best we can, to turn it around, but there is no one, absolute cure that is available. That seems to be part of the message that we received, and we think it is part of the message that we ought to be saying to Ontarians.

I do not think there is a suggestion that by using the word "panacea" we are saying to forget about it. Certainly Mr Winter did not take that approach. I believe he used the work "panacea" early in his report, and I am going straight from memory now, and then proceeded at the end of his document to make a series of recommendations.

Mr Kwinter: You are saying one thing and this is saying something else. Every time you mention the word "panacea," you say there is no single panacea, there is no simple panacea. I have no problem with that. But when you say there is no panacea, then you are saying there is no cure. It is a little different than saying there is no single cure or no simple cure. I would suggest, if you are so enamoured with the word "panacea" and you think it should stay in there, then modify it to the point of putting in "there is no single panacea" or any words to that effect.

Mr Christopherson: Okay, we can live with "single panacea."

The Vice-Chair: Any further comment regarding page 2? Seeing none, we will move on to page 3.

Mr Kwinter: Mr Chairman, on a point of order: Now that we have a member of the third party, it would be sort of a good idea to ask him if they have anything they want to contribute to this.

The Vice-Chair: I did ask Mr Sterling when he came up front and he said he would be willing to comment in a few minutes. Are you ready to comment at this time, Mr Sterling?

Mr Sterling: Unfortunately, I have been involved in so many other things in the Legislature I have not had an opportunity to review. I have been in and out of this committee on this thing, so I feel somewhat handicapped in commenting on it.

One of the things, though, that strikes me on this issue as I read about it and hear more about it is that whether or not we have free trade, whether we have whatever it is, it is obvious, I think, to most observers that in the world market, the competitive nature of various countries is that things are coming together so that various parts of the world are trading in blocs.

I will come to the conclusion. As a result of that, what is happening, or what appears to be happening in Europe and I believe here, and I think it is inevitable, is that, whether we like it or not, as this trend in trading and the economy takes place, countries are having to give up part of their sovereignty, the right to make all the decisions in isolation. They cannot say: "We want to have an income tax at this level. We want to have gas tax at this level, we want to have tobacco tax at that level, and the hell with the rest of the world." I think what is becoming painfully obvious is that you cannot make those decisions any more in isolation.

I would have thought in the preamble there would be something about the recognition that this trend is coming along and that governments in the future, and I believe present-day governments, are going to have to look at the competing jurisdictions in terms of making internal policy. I think that is a fact. I do not know whether that was discussed or not.

The Vice-Chair: In terms of incorporating that issue into the report, I do not believe that has been discussed. I think what the other members of the committee would like to know right now for the purposes of the committee proceeding is whether your caucus will be presenting some written recommendations on the issue or not, and possibly when we could expect them, as I think we are nearing the end of dealing with this issue and trying to write the final report.

Mr Sterling: I have reviewed the recommendations. I believe my caucus disagrees with some and would also make other recommendations as well. So I guess the answer is yes, we would be --

The Vice-Chair: Could we have some indication as to when we may have those written recommendations?

Mr Sterling: I think I am going to require some time.

The Vice-Chair: Would it be possible for next week? Next Thursday?

Mr Sterling: Let's say I can try.

The Vice-Chair: I would think if today proceeds in the fashion it seems to be going, we would be very close to finishing the report off. We are just kind of tentatively waiting until we get some recommendations from your caucus for the committee as a whole to discuss.

Mr Sterling: Has the Liberal Party put forward --

The Vice-Chair: Yes, they were put forward last week and have had some discussion. Basically, discussion occurred between the two parties and there was some compromise last week and some suggestions of incorporating recommendations that have come from the government caucus and from the Liberal caucus, and some that were not, and some of them were put in. The government caucus was also going to provide some feedback on some other recommendations that they needed some time to discuss. I guess that gives us a sense of where we are. Maybe we can continue with our discussions on the report, unless there are further concerns.

Mr Kwinter: We just heard from the representative of the third party that there are certain recommendations they do not agree with and there are other recommendations they are going to be bringing forward. We did that last week, and this second draft reflects a compilation of some of the things that we had agreed to and other things that we did not.

I am just concerned about us going through this whole exercise and then finding out that we now have to go through it again, because they may make some points that, even though we do not know what they are, we may agree with. We may find that either one of our parties has agreed, yes, that may be something. We may want to modify it again.

I am just wondering about the efficacy of going through this thing now and then having to go through it all over again once we get their recommendations.

The Vice-Chair: Do you have any suggestions in terms of procedure, what you feel we should do?

Mr Kwinter: It seemed to me the last time we met we sort of had an understanding that if we did get the recommendations from the third party, we would meet in the morning to consider them and then come back in the afternoon. If we did not get the recommendations, we would come back in the afternoon and we would then assume that there were no recommendations.

The problem we have is that we do not have the recommendations, but we have been told that there are going to be some recommendations. At 11:15 I am appearing before another committee on cross-border shopping. They are dealing with it and they would like me to be there. I do not mind going through this, but it just seems to me we are probably going to have to go through it again.

The Vice-Chair: The other problem is that Mr Sterling has indicated that those recommendations from his caucus will not be available this afternoon either. Do we have any suggestions as to how we should proceed, then?

Mr Christopherson: No, I do not. Maybe what we need to do is just kind of talk this thing through a little bit, because I share a lot of the concerns raised by Mr Kwinter. The last thing anybody wants is a suggestion of a gang-up or anything. If anybody wants to check the Hansards, I think they will find that we have tried to be as accommodating and fair as possible and give the third party and each other an opportunity, as we walk through this, to fully meet with their caucuses, talk things through and give it their best foot, because, quite frankly, this is one of those issues that is not a partisan win or lose for any of us. It really has to do with the future of a lot of people of Ontario.

Again, I would ask Mr Sterling just for some feedback so we can talk it through. The most important thing to us is to try to get this finished, and the only purpose in that, the only agenda on that, is that we need to get this in the hands of the Legislature and in the hands of the cabinet so that, hopefully, they can respond to some of these initiatives. I think there is some good stuff in here, and what I would not want to see is that either we drag this thing out longer than it needs to go, or, as Mr Kwinter has rightly pointed out, we can reinvent the wheel at every meeting and tend to go round and round. I think we have made some pretty good progress and I would like to see that momentum continued, but again, we want to be fair to the third party. Maybe if we could get just a little bit of a tighter commitment from Mr Sterling, it would sure help us.

The Vice-Chair: Before Mr Sterling comments, there is also the possibility we could simply go through the text this morning and then come back, or leave any of the recommendations. That is one option we can pursue. I will go to Mr Sterling, since he was asked, and then Mr Kwinter.

Mr Sterling: I would like to give you a tighter commitment or a more definite commitment, but I am just not in a position to be able to do that.

Mr Kwinter: I think in the first eight and a half pages of this report the only comments I will make, and I assume most people will make, are on semantics, which should take hardly no time at all. Once you get past that, you are into the recommendations.

It would seem to me that it would make more sense for us to know that if recommendation 1 is supported by all three parties, then that is done. It is finished. We may have to change a word or two, but that is the end of it. All we are going to be left with at the very end is where we are in disagreement. Then the third party and the official opposition will put in minority reports, and that is for us to decide to do.

I have no problem if you want to go through the first eight and a half pages, but I would just suggest to you that that will not take a great deal of time. Once you have done that, you are really stymied, because there is not much sense in addressing any of the recommendations until we have had the input from the third party.

Mr Christopherson: That is fine with us.

The Vice-Chair: So we have agreement that we will go through these first eight pages anyway to try to get the semantics figured out and then we will adjourn. Seeing that there will be no recommendations coming forward this afternoon, I take it, then, it is being proposed that the committee will not reconvene this afternoon.

Mr Christopherson: There is no sense doing it twice, but I think, in fairness -- and again, I am open to this; I am not taking a hard position -- we should make a decision that, come hell or high water, at the next meeting we start moving through the recommendations and we start locking this thing up. Then if at that time the third party feels we have not been fair, I would offer that it could certainly comment on that in its report. That would achieve both. It would give the third party a chance to at least get its opinion in there. There is time for them to comment on these recommendations. At the same time, all of us can move forward and get this report finished and in the hands of people who can do something with it.

Mr Kwinter: I would recommend that we do exactly what we thought we were going to do this week. We now have an indication that we will be getting some recommendations and comments from the third party. If we can get them and deal with them in the morning session next week so that we can have a discussion, and then in the afternoon session deal with the recommendations in light of the discussion that took place in the morning, that is what we thought we would do this week if those recommendations had come forward.

The Vice-Chair: There seems to be a consensus, so I guess the focus is put on the third party to try and have their recommendations for next Thursday morning when the committee meets.

Can we continue through these first eight and a half pages and see if there are any other concerns people had about any of the wording.

Mrs Sullivan: On page 3, the final sentence in the first paragraph, I think material has shown that the cross-border shopping issue is also of importance in provinces such as Quebec, Alberta and Nova Scotia. I am wondering if by particularly singling out British Columbia, New Brunswick and Ontario we are not limiting the appreciation of the national scope of the issue.

The Vice-Chair: I do not want to speculate too much. I think the reason those two were cited is because we had some studies or specific data on those ones.

Ms Anderson: They were the ones that were most affected. I think the others are, but to a lesser extent.

The Vice-Chair: Further comments on Mrs Sullivan's comments?


Mr Kwinter: The reason I would like to see Quebec added is that Quebec was mentioned several times during our hearings for its zoned approach to gasoline. If you are dealing with that issue and that is somewhere along a potential solution -- not the solution -- I think they should certainly be included, because as I say, they were referred to several times as having that zoned gasoline tax. It would seem to me that they should be included for that reason.

Mr Christopherson: Just a question to Anne. Would their results change the message that is coming through in that sentence, and would it be consistent with what we are saying here?

Ms Anderson: My intent in putting that sentence in was to indicate that it was a wider problem than Ontario's. I just put British Columbia and New Brunswick as being two of the other big ones. But you can easily, instead of saying "especially," say, "such as Quebec, New Brunswick and British Columbia," which would be perhaps more all-encompassing than the others.

Mr Christopherson: Fine. We do not have any problem with that suggestion.

Mr Sterling: I think the bogus part of the Quebec example of the staged gasoline taxes or the area is that you look at the border and you find out that the major metropolitan areas are not on the border and that it is a fair hike to the border. So you are dealing with an entirely different situation than you would be in Ontario. You would be dealing with major metropolitan areas that would be getting a tax break on gasoline, whereas in Quebec it just is not that way. You just have along the border very, very small towns. I do not find their experience helpful at all in dealing with that issue. We have difficulty in my caucus with that anyway. We would not recommend that staged approach.

The Vice-Chair: Further comments on page 3? I see none. We will move over to page 4. Any concerns with what is on page 4? Okay, seeing none, page 5.

Mr Sterling: Just on page 4, I do not know whether the impact of some of our higher taxes, particularly on gasoline, is highlighted enough in terms of the decrease in Americans coming this way. Last week I was in Peterborough listening to some of the people who are in the tourist business in the Kawartha area. One operator was indicating that if he goes back 10 years 70% of his business was American-based, and now it is down to less than 3%. The dropoff has been unbelievably sharp in terms of American tourists coming this way over the last two or three years. I do not know whether that is highlighted well enough there.

The Vice-Chair: Any comments on Mr Sterling's comments?

Ms M. Ward: I have a question that perhaps the researcher can answer. Did we hear any evidence as to the reason for the decline in tourism which highlighted that particular cause?

Ms Anderson: I do not think so, here.

Mr Phillips: One can speculate, I think. Our group worked yesterday in Sault Ste Marie -- the Liberal task force on the budget. Not the Mike Harris task force, the Liberal task force.

Mr Christopherson: The Bob Nixon task force?

Mr Phillips: No, this is the Liberal one, all the future leadership. The number there was that 50% of the gasoline purchases for residents of Sault Ste Marie are now made in the US. So you speculate that if that is happening one way, it must be impacting the other way as well. I think it is like Mr Kwinter's earlier comment on the panacea. I suspect that tourism is impacted by a variety of things, but gasoline probably is one of the things that people have become increasingly aware of: "I used to go up to Canada, but when you drive around up there it is pretty expensive." I think there is enough kind of secondhand information that you can proceed. I guess it is also based on the tourist operators' knowledge.

The Vice-Chair: Okay. Any further comments? Then page 5?

Mrs Sullivan: I have a reservation about the kind of statistical data that have been included on this page. It is perhaps because I am suspicious of some of the work that Mr Winter has done in terms of the methodology that was used to come up with the figures he presented. As well, the projections he made were not based on any kind of econometric modelling. As a consequence, the emphasis on the billion-dollar loss in sales per year it seems to me is misleading.

If the committee is seen to be taking that as the loss-in-sales base, then I think we will not end up with the credibility relating to the problem. In fact, what people who have done larger economic studies than Mr Winter's are indicating is that the billion-dollar figure in fact refers not to the sales loss, but to the overall impact in terms of job loss and other economic effects that result from a loss in sales that are of a lower level.

I know the Retail Council of Canada used the billion-dollar figure. I believe that Mr Winter was its consultant on some of the work that was done. I do not know how to fix this, because certainly he did provide that testimony, but I do not think the committee should leave the impression that this is the figure we accept as the size of the problem in terms of lost sales.

The Vice-Chair: Maybe there are one or two ways you could approach that. Possibly research could attempt to contact Mr Winter and have some indication of the methodology, of how he got to that figure.

Mrs Sullivan: We asked him those questions when he appeared before us, and I was not satisfied with his response.

The Vice-Chair: Would you like to put in some type of qualifying statement, then?

Mrs Sullivan: I think that would be appropriate.

The Vice-Chair: It has been indicated that most of the stuff early on is on the basis of testimony that we have heard, and it might be possible to put that in some of the comments once we get past page 8 and we get into the comments section. That might be a place to put in such a statement, if you felt that was necessary. Would that be fine?

Mrs Sullivan: Sure.

The Vice-Chair: Okay. Any other comments here on page 5? Seeing none, are there any comments on page 6? Seeing none at this time, page 7? Page 8? I guess page 8 goes on until the end of the first paragraph on page 9, correct?


Mr Kwinter: Certainly any time any member of the government stands up and tries to defend economic policy, the first two things they talk about are the high value of the Canadian dollar and the high interest rates, and there is no mention of the interest rates in that list.

Mr Sterling: We are talking about what witnesses said, not what members of the government said.

Mr Kwinter: I still think some of them had to talk about high interest rates.

The Vice-Chair: There were comments made. Did you want that reflected in terms of --

Mr Kwinter: Just another bullet point in there, high interest rates.

The Vice-Chair: Another bullet point? Okay, fair enough.

Mrs Sullivan: I agree with Mr Kwinter's point; it was certainly raised many times. The other issue that was raised on several occasions was the level of service and product knowledge.

Mr Christopherson: Is that a suggestion, or were you just throwing that out as an idea?

Mrs Sullivan: No, that was very much a part of our hearings.

Mr Kwinter: That was raised a couple of times.

The Vice-Chair: You want to add that as another bullet under underlying causes?

Mr Kwinter: As a matter of fact, I think one of your recommendations addresses it.

Mrs Sullivan: That is right.

Mr Christopherson: "Level of service and product knowledge." Okay.

The Vice-Chair: Any additional comments, then, finishing off that paragraph at 9 before we go any further?

Mr Sterling: I do not know whether to suggest the prices of gasoline taxes that we heard about.

Mr Kwinter: One of the points included it.

Mr Sterling: I know. I do not know whether I heard it here or somewhere else about tire taxes. A lot of people are buying tires over in the United States. You know the tire tax?

Mr B. Ward: -- Canadian tires as a regular sort of purchase?

Mr Sterling: No, we were talking about the specifics that witnesses had mentioned, I guess.

Mr Phillips: Did we not just sell some tires to the US, the bald ones?

Interjection: That was the used ones.

The Vice-Chair: I would make a comment, but I am in the chair, so I will pass.

Mrs Sullivan: The announcement was made but the contract is not signed.

The Vice-Chair: Okay, if there are no other comments for now up to that point, we shall leave it there. I believe we have a consensus that we will be looking forward to the Conservative recommendations for next Thursday morning to --

Mr Sterling: Did we not hear about higher labour costs on this side of the border? Was that not a significant --

The Vice-Chair: Do you want to add one other thing?

Mrs Sullivan: And overhead. That is not in there.

Mr Christopherson: Did we not hear it?

The Vice-Chair: Did you want to tie that in, higher overhead?

Mr Sterling: I think higher labour costs are -- I have heard that I do not know how many times from retailers.

Mr Christopherson: If we heard it, we have no problem including it.

Mrs Sullivan: It was part of the testimony.

Mr Christopherson: I am asking Anne.

Ms Anderson: I will check that out.

Mr Christopherson: If it is there, we have no problem acknowledging it.

The Vice-Chair: Okay, and did you want higher overhead put in as well?

Mr Kwinter: One of the issues that was raised by several of the retailers is the fact that real estate costs were significantly higher here, and that as a result of that either their capital costs or their rental costs were significantly higher.

The Vice-Chair: So higher overhead, then.

Mr Kwinter: Yes, but directly related to real estate.

Mr Sterling: The Canadian Federation of Independent Business, when it was here, talked specifically about municipal taxes and how they affected the manufacturer, the wholesaler and the retailer.

The Vice-Chair: I am just wondering if you would tie that into real estate or whether you think they should be retained as separate items.

Mr Sterling: I do not know how specific you want to be, but it seemed to be the focus of their brief.

The Vice-Chair: Maybe if people think of other underlying causes, we can return to that bit next Thursday as well.

Mr Christopherson: I think the idea here was to identify examples, not necessarily an all-inclusive list. We have some fairly broad categories here such as high Canadian taxes and regulatory burden. It covers an awful lot of ground, as it is meant to do. I would suggest that we do not want to end up with four pages of detailed bullets. We are just trying to show some of the causes we spent some time reflecting on.

Mr Phillips: I am on a completely different matter, Mr Chairman. Just before we break, I would like to talk about our hearings in the summer just to get my agenda straight.

The Vice-Chair: Okay. Mrs Sullivan, you had your hand up as well.

Mrs Sullivan: Yes. I wanted to go on to a different point because I think another paragraph should be added in here somewhere.

Mr Kwinter: I just want to clarify: I agree that taxes -- you know, the range, but I think that real estate cost is a separate issue.

When people say you can get land in Buffalo for $1,500 an acre, and you pay for land in Toronto at $1 million an acre, that has a significant impact on the cost of the retailer. I think it is important that that be singled out.

Mr Phillips: Before we bolt, I just want to make sure of our timing for this summer.

The Vice-Chair: Mrs Sullivan, you had a separate point regarding something you wanted done.

Mrs Sullivan: Yes. I think at some point in the introductory area we should discuss some of the points that were made relating to what people are buying in the US, in terms of where the difference is. For example, we talked about white goods, and also where the standards for safety and energy efficiency may be different from those available on the markets in Ontario, where the warranty standards are different and where warranties may not apply to products and so on. There is no place in the introductory section that discusses that. It seems to me it is an element in the cross-border shopping issue, and it has been raised by several of the intervenors. I am just suggesting that research add that in some areas there may be some differences in the products being purchased that are not reflected in decision-making about the price.

Mr Sterling: I support that. I think that by naming all these various factors, we have not prioritized what the view of the committee was on what the chief culprits are in this problem. I have my own opinion as to what they are from what I have heard. But focusing the government's attention on fixing which problem first is an important thing for the committee to do.

I am primarily concerned about the price of gasoline. I think that is probably the biggest come-on of all for people to go across the border. If I were a government, I would say, "Okay, what do we have to fix the price of gasoline or how can we help in that?"

The second one would relate to price of milk or something like that.

I also wanted to say something about the factors on page 9. I think they are unfairly written, in trying to focus blame on one level of our government rather than our taking our fair share at the provincial level. You talk about high Canadian taxes and regulatory burden but you do not talk about high provincial taxes and provincial regulatory burden.

The Vice-Chair: Okay. Under the bullets on page 8.

Mr Sterling: Yes. I think it is sort of silly, actually.

Mr Christopherson: Last comment first: Nobody is negating the fact that when you say "Canadian taxes," you are not including everything. It does not say "federal taxes"; it says "Canadian." I think it is meant to be all-inclusive. That is certainly the way I read it. Anything that pertains to a Canadian to me pertains to an Ontarian.

Mr Sterling: This is the provincial government. If we are going to try to deal with matters at the provincial level, we deal with matters at the provincial level. I think we are tired of this other stuff.

Mr Christopherson: I appreciate that, and we are getting back into the dueling we do in the House on how much the federal government is responsible. In a partisan fashion, we each have different agendas. We like the way this is phrased and the way it is worded. I think it is important that you hear that also.

On Mrs Sullivan's point of view and suggestion, we would be prepared to look at any language the researchers would like to present. I think the emphasis on white goods is probably well placed, since that was identified from the beginning of the free trade talks and before. That is something we would be glad to receive and review.

Mr Sterling: Can I ask a question on this preliminary part? I know the one suggestion about the cross-border people here in terms of remedies. I have heard various remedies. The collection of provincial sales tax at the border was one remedy. The other remedy I heard was the staging of gasoline prices on how far you are from the border. Did we do any research as to what other options there were or what other things have been tried in other jurisdictions?

The Vice-Chair: I do not believe so. I mean, we heard comments. We had a background report on the gas tax zone. We had a background report or some information on what they did in BC. Did we not get some more detailed information on what that one border community did with the banks? That must have been in one of the presentations that came forward and talked about the one or two things they had done there.

Mr Sterling: This problem is not new in this world. I just wondered what other tools had been tried in other areas that had met with success or were not practical. I think it would have been helpful if perhaps --

The Vice-Chair: There is a possibility we might be able to have research provide some more detail. I do not know whether we will be able to get that by then. I think we may have covered quite a bit of ground there. May I suggest that in the interests of time, we call it there for now. If there are other issues people want to address on page 8, we can possibly come back to them when we start next week and go from there.

Mr Phillips, you wanted to comment on another topic before we adjourned.

Mr Phillips: I would just like to organize my August. I think the memo that came out on our summer hearings indicated three weeks and in various places. Do we know which three weeks they are?

The Vice-Chair: My understanding is that this issue is still being negotiated between all the House leaders, so you are probably best to seek that advice from your own House leader. My understanding was that they were meeting this morning as well.

Mr Phillips: But we have determined these would be the communities we are going to, is that right?

The Vice-Chair: As far as I know, none of that information has been officially determined. It is all still open for negotiation. That is the only impression I am under. The House leaders are really handling this issue, and it has not come before the committee as of yet. Therefore, we will adjourn this committee until next Thursday morning at 10 o'clock. I hope someone will tell the Chair that he is not required to be here this afternoon, since he was not here this morning, and we will see everyone next Thursday morning at 10. Thank you.

The committee adjourned at 1112.