Thursday 13 June 1991

Cross-border shopping

Afternoon sitting



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)

Clerk: Decker, Todd

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

The committee met at 1016 in committee room 1.


The Chair: We have a quorum. I would like to begin by thanking Mr Sutherland for sitting in the chair last Thursday morning. I would like to begin by picking up where we left off. If I understand correctly, we were in the midst of going through the document.

Mr Sutherland: We had gotten through the first eight pages and then we were coming to the point where the recommendations had been incorporated. Based on a suggestion by Mr Kwinter, it was felt that we should not go any farther until we saw whether we would have recommendations coming forward from the third party. Mr Sterling had indicated they would try and have those recommendations available for us this morning. So I believe that is where we left off and we were waiting for them to make their recommendations.

Mr Stockwell: The recommendations will be here in a very short period of time; minutes, we have been advised.

The Chair: Perhaps we should discuss the other order of business. I think we need to have a subcommittee meeting, and it has been suggested by the government party that it occur at 12:30. Is that possible or do we have another time that is more acceptable?


Mr Sutherland: If 12:30 is not acceptable, maybe we could adjourn 15 minutes early this morning.

Mr Stockwell: That is fine for me.

Mr Sutherland: Say about a quarter to 12?

The Chair: Then there will be a subcommittee meeting at a quarter to 12. How would the committee like to proceed pending the arrival of the third party's recommendations?

Mr Stockwell: How about if we adjourn for five minutes and I will make a call and see how long it is going to be?

The Chair: Is it acceptable to adjourn for five minutes? Okay. We will adjourn for five minutes.

The committee recessed at 1018.


The Chair: I call this meeting back to order. Are there any comments?

Mr Hansen: Comments on what?

Mr Sutherland: Maybe we could have an explanation of their rationale for the recommendations.

Mr Stockwell: From us?

Mr Sutherland: Yes.

Mr Stockwell: Sure, if you want. I think it is pretty self-explanatory.

I guess I do not need to explain recommendation 1. I think it is pretty self-explanatory. Maybe it is better, if you have any questions that you ask me. I do not really see the difficulty in comprehending these. The only one, recommendation 3, that may be somewhat difficult to see is that obviously with harmonization you are going to save yourself a considerable amount of money. We believe the money could be used to offset the losses the province would feel in the rollback of the taxes in recommendation 1.

Recommendation 4 I think is a protection clause, basically. It is a complicated issue, the harmonization and credit backs, etc. We believe it is important to have "an analysis of the effects of any relevant legislation or regulations it proposes to introduce or amend on the competitive position of the Ontario economy or, where appropriate, on specific sectors."

In the future, should there be any changes made in legislation or regulations, there should be a report done on the competitive position it leaves the Ontario economy in, under recommendations 1, 2 and 3 and whatever comes down the road in the future. There are four very simple and straightforward recommendations.

Mr B. Ward: A quick question: Are these four recommendations the third party is suggesting the committee adopt over and above the general recommendations we made in the report that is already concluded, or are you saying that --

Mr Stockwell: As we go through those --

Mr Sterling: We would comment on those. There are some we agree with. A lot of the stuff in there is sugar and makes it difficult --

Mr B. Ward: It is a separate issue than what we have already, more of less, agreed to. You may suggest that some of those are okay, but others are not.

Mr Stockwell: For instance, let me just say you are calling for a trilevel committee being struck --

Mr B. Ward: Task force and all that stuff.

Mr Stockwell: Yes, big deal. Let's strike another task force, what the hell.

Mr Hansen: Recommendation 3: "Currently it is estimated that harmonization would result in a net revenue gain of $500 million which should be used to finance a 4.2-cent-a-litre cut in the gasoline tax." The recommendation is a 4.2-cent cut in the gasoline tax, but was the $500 million figure picked out of the air or are there some figures there that would realize these savings? It is something that is there but I do not see any background or where this figure came from, if you do not mind explaining it a bit.

Mr Sterling: If there was complete harmonization, we have tried to make the best guess we can in terms of what effect it would have. There are a number of factors involved in the attraction we are now seeing of the NDP government towards harmonization. One is that if you had harmonization, there is a potential tax grab of, we estimate, somewhere around $2.5 billion a year.

Mr Stockwell: It is $2.2 billion.

Mr Sterling: It is $2.2 billion a year. If you permit businesses, as is the case with the GST, to obtain credits on their input, it takes the $2.2 billion down to $500 million a year. In other words, a lot of the retail sales tax that is paid now, if businesses use that in their operation, as is the case with the GST -- if you buy something that has GST on it, then when you sell the product or you sell the service after you take out the input, you get a credit for that GST. Our assumption is that businesses would get that credit. Therefore businesses would be advantaged to the tune of $1.7 billion because they would be getting a credit of RST which they are paying out on business inputs. We think that by allowing businesses to do that, as they can with the GST, the province would end up with $500 million more.

There is a downside to this suggestion, of course, because you are putting the provincial sales tax on services that are not taxed now. It is widening the tax base significantly. We think the move in harmonization should be revenue-neutral overall. We do not think it should be a tax grab by the government to increase taxes. Therefore, we say that the offset should be used to attack the cross-border shopping issue by specifically going after what we consider the most relevant factor in cross-border shopping, and that is the price of gasoline.

Mr Hansen: If I understand correctly, it is that when a retailer makes a purchase from a wholesaler he is paying the 7% and the 8% at one time. When that retailer is going out to borrow money to purchase stock, he needs a little bit of extra money in order to pay the tax up front before he sells that item. When that item is sitting on a shelf, let's say the item is wholesaled at $10 and he would be paying $11.50 out and maybe the product sells for $20, but he does not get that back until that item is sold, so that money is sitting on a shelf. He has more money sitting a shelf because he has paid the tax upfront. Is that correct?

Mr Stockwell: Yes, it is, except I do not know any retailer who buys a product and pays on delivery unless he is filing for bankruptcy a week or two later. Obviously he has terms to pay the bill. The bill is 30 or 60 days. Hopefully it is not sitting on a shelf for that length of time. So there is an obvious turnover, plus he gets his credit back under our scheme through --

Mr Hansen: It would be quite an upfront cost for a retailer to start out a new business. In other words, when he buys his stock in, it is all going to go off the shelf in 30 or 60 days. This is why I asked the question. It looks like the retail trade would wind up paying a lot more in startup costs.

Mr Sterling: Yes, but the upside, Ron, is that they only deal with one tax collector and they are not filling out twice as many forms. I was talking to the local grocer in my area, and if harmonization had taken place back when it should have taken place, then grocery stores would have had to pay half as much for the software and the hardware to implement a combined tax rather than two different taxes. In other words, if harmonization had taken place, I know a grocery store that had to pay $80,000 in order to implement the GST and have the PST remain as it was. If it had taken place all together, it would have cost them $40,000 to redo that. So there is some benefit to a start-up retailer, because in harmonization his initial outlay in terms of accounting and dealing with the two taxes will be much simpler. There are ups and downs to it.


Mr Hansen: I would say that the public out there would take a look at, if our government harmonized -- for instance, you are purchasing a new home and you need a lawyer for the transaction. As it is right now, there is a 7% GST on his fee. As it is right now, there is no Ontario sales tax on that particular purchase. But with the harmonization, we are talking about adding 8% on top of his bill on a purchase of a new home, or does harmonization mean, I am going to go the other way -- that we would revert and there would be no GST on a lawyer's bill? Which way would it go?

Mr Sterling: There would be tax on a lawyer's bill.

Mr Hansen: So it is a larger tax grab.

Mr Sterling: Not necessarily. When the lawyer bought his stationery or whatever else would be the inputs into the service, he would be able to get a credit for those off it, as he is with the GST. So there are some credit sides to it as well in terms of the inputs the lawyer has. But overall, the philosophy of the GST, the part of it I agree with -- I do not like the idea of taxes any more than you do -- is the idea that the burden of taxation should be less in the manufacturing area and more in the service area. If you want to add strength in terms of your overall economy, then in my view it makes sense to tax a service area as much as it does the other sector, probably even more.

Mr Stockwell: Otherwise, you could simply continue on the road you are on now and basically operate and watch the border towns and the stores and so on keep closing. You have to do something, and we are suggesting to you the three most important things you can do to help the border towns are to roll back gasoline, alcohol and tobacco.

There is a downside to that, and the downside is that you are down revenue. You are already $10 billion in debt this year alone. We could have just come forward and said: "Forget it. We're not going to offer you constructive criticism or a constructive report. Just roll back the taxes, period." If you are going to try to resolve this cross-border issue, you know full well you are going to have to deal with the gasoline, cigarette and alcohol taxes. If you are not going to address those issues, then do not bother addressing the cross-border issue.

Mr Hansen: What I am trying to say, Mr Sterling, is that you were talking about the lawyer upon his collection, but what I was talking about was the client who walks through the door who has to pay those taxes. I do not think the lawyer would be rolling back his rate. It would be the same as it would be without taxes. The main thing we have to take a look at is the client who is coming in, or the consumer who has to pay the tax. I think this is what it comes back to all the time, that people are going across the border on the amount of taxes they are paying. Mr Sterling is talking about the lawyer getting the credit on what he is purchasing with the GST and with the --

Mr Sterling: But of course we do not make the recommendation in here which this leads to, which would have the most effect of all in eliminating cross-border shopping; that is, with the harmonization, it would be collected at the border and therefore would be the greatest legitimate impediment to cross-border shopping that I can envisage.

We are saying this is revenue-neutral. The Ontario public is not going to pay anything more, as a total body, in taxes. They are going to have to pay more tax over here, but they are going to get a break over there. But the bottom line of all of this is that there is not one cent more in taxes in this suggestion. You can collect at the border, and you are going to have lower gas taxes.

Mr Hansen: Okay. Then the tax comes up on this lawyer's bill, but the tax is coming off on gasoline. This is what you are saying. You are moving from one area to another.

Mr Sterling: Yes.

Mr Hansen: In other words, you have more here but less here.

Mr Sterling: Yes, and in terms of the cost of doing business, there should be some break for business. They will be more efficient in how they deal because they are dealing with one tax collector in terms of both PST and GST. There is a tremendous break for business in terms of administration, etc, so our retailers here will be able to compete better with the Americans as well. There are a number of positive benefits by taking this significant step.

Mr Christopherson: Could I suggest by way of process that we perhaps pick up where we left off, and I believe that was after page 8 or page 9, and start walking through it, giving all three parties an opportunity to comment on those recommendations. Then at the end we can consider any Liberal recommendations that were made but not included in the report and make a determination and do the same with the third party's recommendations.

Mr Sutherland: I guess I would concur with Mr Christopherson. I had one question on the Tory recommendations. In terms of harmonization, I also thought that in some of the calls you hear for harmonization the overall level would be lower. In other words, it would not be 15%. Were you recommending a specific amount?

Mr Sterling: Basically what we were saying was that whatever we were going to put in here was because of our party's position. We would not be taking any more taxes from the people. What we are talking about is a redefinition of whatever it is. We do not want tax on tax, and therefore the provincial rate may be 7.78% or whatever it is to come to the 15%. I am not sure what the exact figure is.

Mr Sutherland: Fine.

Mr Sterling: But that would be sort of the extension of when you got to the nitty-gritty in terms of what we were talking about. We are not saying we are going from 8% to 7% in taxes.

Mr Sutherland: My only question about that was what impact that would have on the figures you were suggesting here, the $2.2 billion and the $500 million, if it stayed at 15% or a different rate.

Mr Christopherson: Page 9 then, recommendation 1, is I guess where we are about to pick up. Just to get the ball rolling, we are fine on the wording of the recommendation and the following text up to the end of recommendation 1. We have a comment on recommendation 2 when you take us to that.

Mr Kwinter: If I may make a comment, it is my feeling that I am in a position to talk about those recommendations we agree with in principle and virtually agree with, but I want to reserve the right, because we have not taken this to caucus pending hearing what the third party was going to do; There is a possibility that I may come back and have another word or two to add in, only for whatever reason some caucus members may feel that should be done. I just want you to know that I am prepared to give a commitment in principle that yes, that recommendation is something we agree with, as long as it is understood that it will not get changed in principle, but there may be a word recommended that we can either accept or not.


Mr Christopherson: If I remember correctly, last week Mr Kwinter put out that same position, and I think on behalf of our caucus I suggested the same thing, to the extent that when the recommendations were tabled we would want to take a look at them and your changes obviously might have an impact on our position. So things are still fairly fluid and we are agreeing in principle.

The only thing I would suggest is that our subcommittee needs to be aware of what kind of time is available to work on this report. We are trying to get it concluded as soon as possible, both to get it in the hands of the government and also to clear the slate so we can begin the other work we are about to start. Let's just keep in mind that at some point we have to have that line, but up until then, I think all parties are still free to be fluid on some issues.

Mr Kwinter: I was just going to say that this is not going to be time-consuming. It is just that I have got to show it to them. Once I show it to them, it will be very quick.

Mr Christopherson: Fine.

Mr Sterling: Can I also just make one statement, sort of a preliminary part here, that as far as I am concerned, the words in between, as I indicated last week, are badly slanted in favour of blaming stuff on other levels of government, which we find distasteful and silly. It would be my view that we would probably be at the bottom line of putting forward a dissenting report saying that we agree with the recommendation, but in no way with adopting the language of the overall report, if you know what I mean.

We are not going to spend our time during this committee saying we do not agree with these words here; we do not agree with those words. Because of the way the report is slanted -- and I understand why it is slanted that way and why government members want to do that. Notwithstanding that, as we go through these recommendations, we will just tell you simply whether or not we agree with the recommendation, and we would include in our dissenting report probably that we agree with the recommendation or whatever else. Okay?

Mr Christopherson: No problem.

The Chair: Where would we like to begin then, on what page?

Mr Christopherson: The first change we would like to put out for discussion is on page 10, recommendation 2, unless somebody has something before then. What we would like to do is to end after the first sentence. To talk about the qualifications for the minister being "an effective negotiator on Ontario's behalf" just does not seem to be necessary or appropriate, since it is a strictly subjective opinion on whether someone is an effective negotiator or not. A lot might depend on what happens at the end of the day, as opposed to heading into the negotiations. Without changing the intent or the thrust of what was proposed, we would just like to stop it after the first sentence.

Mr Kwinter: I have no objection, as long as the paragraph preceding it stays in, because it says the same thing without including the recommendation.

Mr Christopherson: That is fine, and let the last sentence cover it, yes.

If I can then push us ahead, on page 11, second paragraph, middle of the paragraph, I believe it is the third sentence, I would just like to raise with the researcher the sentence, "John Winter testified that a price comparison of 250 goods between Fort Frances and International Falls showed Ontario prices to be on average at least 50% higher." I believe what may be meant is that 50% of the goods were higher, as opposed to the way it is worded here, but I would ask Anne for a little clarification.

Ms Anderson: It was 50% of those 250 goods he had surveyed, not necessarily of all goods.

Mr Christopherson: Maybe we could just get that wording cleaned up a little.

Ms Anderson: I could put in "on those goods" after the word "prices" perhaps.

Mr Christopherson: Yes. Thank you, Anne.

In the last paragraph, the last sentence, there was just some discussion in our caucus. Maybe Anne would just clarify that sentence exactly in so many words so it will be clear. There was just a little bit of uncertainty as to exactly what we were saying there.

Ms Anderson: I was trying to indicate that the high dollar at the moment in and of itself was not necessarily causing the increase that has happened in recent years, that there had been a high dollar in the early 1980s at the equivalent level without the increase there has been then.

One of the differences has been the difference in purchasing power that has resulted from differing inflation rates. When the exchange rate floats freely, it will adjust for those different inflation rates, but I do not believe it has been adjusting freely over the last few years, so there has been a difference in purchasing power between Canada and the US. I think that is one of the reasons for the difference between the early 1980s and the late 1980s.

Mr Kwinter: If I could comment on the same point, I do not agree with that paragraph in that, to my knowledge, there has been no restriction on the ability of the dollar to float. What has been controlled are the interest rates. I do not think the central bank has the resources or the power to determine the value of the Canadian dollar. The market dictates that. What the central bank has the authority to do is to set the interest rates, and the interest rates have a direct impact on the value of the dollar. As long as the interest rates are maintained artificially high, where they have been, it has meant that the dollar is high because people want to benefit from the interest rates and are pushing up the value of the dollar.

But if you want to talk about allowing things to find their own level, then it is the interest rates that have got to find their own level and not the value of the dollar, because the value of the dollar is set by the market. It is set by the the world financial community deciding on the value of that dollar vis-a-vis gross domestic product and the interest rates and the returns on it. I just make that comment.

Mr Stockwell: If you want to truly affect it, you should probably deal with the debt. That would have a far greater impact on the value of the dollar and interest rates. If you could retire a considerable amount of debt at the federal and provincial levels, I am certain you would be far more successful in having a better interest rate and a better Canadian dollar.

Mr Christopherson: We are okay up to page 23, Mr Chair. That would be our next --

The Chair: Any comments in between?

Mr Kwinter: How did we leave that?

Mr Christopherson: That is exactly what we did -- left it.

Mr Kwinter: Just left it?

The Chair: No, I understood there would be some clarification in that. What would the clarification be?

Ms Anderson: Maybe we could take out the end of the second half of that sentence, from "because."

Mr Kwinter: If you just substitute "interest rates" instead of "dollar," I think it is a valid statement. "Although the Canadian dollar in relation to the US was as high or higher in the early 1980s, its purchasing power has declined in recent years because the interest rates have not been able to float freely to adjust to, among other factors, the different rates of inflation between the two countries." There is absolutely a 5% spread in interest rates between Canada and the United States and that has really impacted on Canadian manufacturers, retailers and distributors, because their cost of capital is too high vis-a-vis their American competitors. If that interest rate was allowed to change, then we would be fine.

The Chair: Then I see a consensus on that wording.

Mr Christopherson: Interchange "interest rate" for "dollar."

The Chair: Are there any comments between pages 11 and 20 from the opposition? Can we move on? I believe Mr Christopherson indicated that the government was happy with pages 11 through 20. Is that correct?

Mr Christopherson: To page 23. Our next change is recommendation 7.

Mr Stockwell: Hold it. Is recommendation 3 on page 12 adopted?

Mr Christopherson: That was unanimous, was it not?

Mr Stockwell: No, totally not unanimous. It is shortsighted, naïve and schoolground thoughts.

Mr Christopherson: In your opinion.

Mr Stockwell: Yes. In my opinion, it is schoolyard thinking. This is so boldfacedly naïve it is not even worth debating, so I will just suggest that --

Mr Hansen: But Mr Kwinter just --

Mr Stockwell: I heard what Mr Kwinter said and I suggest to Mr Kwinter that it is naïve. There is no way you are going to have this statement stand on its own and have anyone take it seriously, "The provincial government should urge the federal government to allow the interest rate differential with the United States to be reduced so that the value of the Canadian dollar can decline to a competitive level." I want some background, a little bit of better background on that than what we have, and if not, fine, we will just simply not adopt that recommendation, or we will change it.


Mr Kwinter: I have to apologize. Actually, when I was reading the paragraph on page 11, I was just reacting to it from an economic point of view, without realizing it was tied into that resolution. In fact, I was right, because what I said here is what is reflected there, but I did not realize it was there.

The point that has to be made is that we are not talking about practicality; we are talking about recommendations that are the ideal. Ideally, the central bank is keeping up interest rates for one reason. They have decided in conjunction with the government -- and I am convinced they have to talk to the powers that be in Ottawa about it -- that inflation is the number one economic problem facing this country. In order to keep inflation down, they have to keep interest rates high. If they were to allow the interest rates to drop, then what would happen is that it would reduce the cost of capital for Canadian businessmen, which would make them more competitive.

From a political point of view, that may be a non-starter, because the federal government may say: "That's great. We're just not going to do it, because we're not prepared to tolerate the kind of inflation that would result from lowering those interest rates." Having said that, when you talk to businessmen, and when you listen even to ministers of this government, whenever they stand up to talk about the problems they talk about the high value of the dollar and the high interest rates that are creating a problem for Ontario business.

Again, I keep repeating, that one is the result of the other. The high dollar is the result of the high interest rates. If you can get the interest rates down, you will get the value of the dollar down, and you will become more competitive. It may not be practical and, as the members of the third party say, it is naïve. I agree it may not be practical, given the politics, given the fact that the government in power in Ottawa right now has said: "We're not going to do it. We're going to keep those interest rates artificially high because we think inflation is worse than the competitive problem." I do not agree with them, and that is where we have a difference, but I have no problem with that recommendation.

Mr Stockwell: We have a problem with that recommendation, as I suggested before.

The Chair: Other comments on this, or should we move on to page 23?

Mr Sterling: We object to recommendations 4 and 5. I do not understand 5. With regard to 4, I do not how you know who is a shopper or not a shopper. Do you say, "You can go in the fast-track lane if you are a shopper"? I do not understand that. I think 4 is not responsible. If the provincial government wants collection of taxes and more enforcement, then it is going to have to be involved in some kind of compensation for it.

Mr Sutherland: If I may, I think this committee is already having an impact, because I believe the Minister of National Revenue has already said he is going to hire more enforcement staff.

Mr Sterling: He did it because we said that?

Mr Sutherland: Yes, for sure, so we can tell our constituents we are having an impact already.

Mr Sterling: Are you naive.

Mr Sutherland: At any rate, with regard to recommendation 5, the reason that recommendation is in is that we have heard evidence of some of the Peace Arch Customs Entry projects that are going on in British Columbia, about how that is to help shoppers get back quickly. We were not happy with that process, but we are also familiar with the autopass thing that the United States has set up at the border at Niagara Falls, which allows Canadian tourists to go across much more quickly.

The purpose of this recommendation is to have a similar thing set up here to allow American tourists to come up. The twofold problem with cross-border shopping is not only Canadians going across there, but because of the long lineups it is also discouraging American tourists from coming here. The purpose of this recommendation is to provide the incentive and to make that process a little easier.

It baffles my mind that we are quite happy to set up a process --

Mr Sterling: Why is the Canadian a visitor when he is coming back to Canada?

Mr Kwinter: If I could just respond, I took this recommendation to mean what happens at Terminal 3, what happens at Heathrow Airport in London. When you arrive, there are green and yellow or red and yellow things, and if you are coming through with nothing to declare and you do not have to go through immigration, you go through that. They have spot checks where they will grab you, even though you say you have nothing to declare, just to do a spot check.

The big difference would be that right now, when you come across the Peace Bridge, everybody goes through the same thing, whether you have nothing to declare or something to declare, whether you are an immigrant, or a Canadian citizen. Whatever it is, everybody has to wait in line to get his chance to tell the guy, "I've got nothing to declare," whereas under this system there would be whole lanes where it would say, "Canadian citizens with nothing to declare, just go," and they have spot checks. As I say, it works.

Mr Stockwell: What happens if you get caught?

Mr Kwinter: You get penalized.

Mr Stockwell: What? You pay your tax on what you came over with?

Mr Kwinter: No, you get the same thing you get if you smuggle.

Mr Stockwell: Goods impounded?

Mr Kwinter: Whatever it is that happens to you. As I say, this is not radical. It is happening right now at Terminal 3 and it certainly happens in other airports around the world. There is no reason why it could not be implemented, as long as you can physically do it.

The Chair: I think there is a slight problem of a misplaced modifier there. It could be that this could be corrected by saying, "The provincial government should urge the federal government to establish fast-track lanes for use by American visitors and Canadians returning who are not shoppers with nothing to declare."

Mr Kwinter: It is the matter of shoppers with nothing to declare.

The Chair: Or you could just take that out and put "those coming into Canada with nothing to declare."

Mr Sutherland: If that would make it clearer, rather than the term "Canadian visitors," or "visitors" right after "Canadian," that might be good.

Mr Stockwell: Sure, fine.

The Chair: Are there any other comments? We are now moving to page 23.

Mr Christopherson: With regard to recommendation 7, we have a suggested wording change to clarify and strengthen the intent. It is the latter part of the sentence, but I will read the entire sentence as we would suggest it, "The provincial government should work with industry and local border communities to develop regional campaigns in support of more aggressive marketing by Ontario retailers." There is no great change; we just thought that clarifies and strengthens the intent of that recommendation.


The Chair: Are there any comments on that?

Mr Jamison: I would like to make a suggestion on recommendation 7. It seems to be a very defined group of people there. There are other groups that have shown interest in being involved in the cross-border shopping issue. One, for example, would be labour. Also, I think the whole thrust behind 7 is really joint participation where we can develop it. I think it is one that should not be narrowly explained by the committee. We should be talking about including many groups in that process.

The Chair: What wording would you suggest, Mr Jamison?

Mr Jamison: Just to expand and indicate that other interested groups --

Mr Christopherson: Maybe remove the word "and" if there is no problem with the suggestion, replace it with a comma, and then after "communities" "and other groups." For instance, I know the Ontario Teachers' Federation has been promoting the "Buy Canadian" and the cost to Ontarians of cross-border shopping with its membership. I think that is what Mr Jamison is suggesting, that we want to keep that net big enough to catch everyone who is involved and offer support to them.

The Chair: Would this be correct, "The provincial government should work with industry, local border communities and other interested groups," or "other groups"?

Mr Christopherson: "Other interested groups."

The Chair: "Other interested groups to develop regional campaigns in support of" --

Mr Christopherson: Yes, and then kick in with the new wording.

The Chair: Any other comments? Page 24 or should we just jump --

Mr Stockwell: Recommendation 8, that is a winner.

Interjection: It is unanimous.

Mr Stockwell: That will keep thousands of them in the country. Make sure the seal is red.

Mr Christopherson: Recommendation 9.

Mr Stockwell: There is another winner.

Mr Christopherson: Yes, unlike your in-depth analysis.

Mr Stockwell: Let's add training courses in seals. That will solve the problem.

Mr Christopherson: Listen, we were throwing fish the other way yesterday.

The Liberal recommendation 3 I believe is next on the order of discussion, after recommendation 9. I think we deferred and said we would have that recommendation come now for discussion.

Mr Kwinter: It is kind of redundant because introduction of the government's bill on Sunday shopping covers it. It allows a municipal option. It allows everybody to be open anyway, so it is not a problem. Mr Stockwell: I think they did that because you said that.

Mr Christopherson: We are listening. That is fine. I had it on my order paper, if you will, to deal with it.

Interjection: Another example of the impact this committee has.

Mr Christopherson: We do not want to be accused of steamrollering until we actually are.

Mr Kwinter: We were going to include it as a recommendation, but as I say I think the government has already responded to it.

Mr Christopherson: Fine. The next thing we have is on page 27. The recommendation, if there is nothing else from the other two parties, is that recommendation 10 would actually appear at the end -- or let me word it another way: The paragraph that comes after this would start up, "It should be noted, one alternative proposed by some retailers...." That paragraph would be completed and then recommendation 10 replaces 11. We are just suggesting to delete 11. We had quite a discussion on it last time when Mr Kwinter went on at great length and we thought his points were well taken. So we would propose deleting recommendation 11 and placing 10 in its place. As I said, start the paragraph now beginning, "One alternative proposed," with the words, "It should be noted."

Mr Stockwell: So you are dropping recommendation 11?

Mr Christopherson: Yes.

Mr Stockwell: Okay.

Mr Christopherson: We had some difficulty at first with the wording and the intent and then the actual merit of the recommendation itself.

Mr Stockwell: I agree that it is not meritorious.

Mr Christopherson: If that is not a problem, I would move us to page 29, which is the Liberal recommendation 5.

Mr Kwinter: Perhaps I could just speak to that for a minute. You notice there is a letter from the National Grocers that was on our desk today, and they have their recommendations. Recommendation 1 is supply management marketing boards. As I mentioned when we had the hearings, the mere mention of even tampering with supply management will draw the ire of every agricultural worker in Ontario and the tractors will be circling Queen's Park.

Having said that, I think one of the things that could be done is a method of trying to allocate the quotas more fairly. We have what is really an anomaly, in that we have supply management. The main purpose is to protect the economic viability of those people in the agricultural sector and yet, from time to time, because of the quota system, there is a provision whereby produce can be brought in from the United States. We have a situation where Ontario may be short of its quota and where there may be an abundance of quota in other parts of the country. The purpose of this recommendation is to just make sure the quota is set at a level that will keep the produce coming from Canada -- I am not just talking about Ontario because we bring it from all over -- and not be set in such a way that even though it is supposed to protect Canadian producers, there are many occasions when, because of the market -- I will give you an example. At Thanksgiving, because the quota is set in advance, there are turkeys required for the market, there is a shortage and they are brought in from the United States, whereas Canadian producers could have been producing those turkeys if the quota had been more realistically set. All we are calling for here is a recommendation that the quota system be examined to make sure it is kept in tune with the marketplace to the advantage of Canadian producers, as opposed to leaving a window of opportunity for Americans to fill that is created because of the inefficiency of the quota system. That is basically what it is about.

Mr Christopherson: We had a pretty good discussion about it in our caucus, and we can support the recommendation.

Mr B. Ward: Is that recommendation 5?

Mr Christopherson: Yes, Liberal recommendation 5.

Mr Kwinter: Liberal recommendation 5, and this would become new recommendation 11, I assume, and fit into where we are.

Mr Christopherson: In terms of structure, do we have a preamble for that?

Interjection: We have supply management.

Mr Christopherson: We are okay with that.

The Chair: Next section.

Mr Christopherson: Page 32, at the bottom of the draft report, talks about recommendations 2 and 10 of the Liberal proposals.

Mr Kwinter: Our recommendation 2 is basically the third party's recommendation 1.

Mr Christopherson: Yes, neither of which is acceptable, but I do not think that comes as any great surprise, and we talked about that earlier. On the issue of recommendation 10, we wanted to propose the following language --

Mr Kwinter: Just for clarification, our recommendation 10 encompasses pretty well what the third party has in its recommendation 4.

Mr Christopherson: Correct. I expect both will pop up in minority reports, loud and clear. I would like to move us to your recommendation 10. What we would like to offer is the following amended language, but in the interests of maintaining the spirit of what you have suggested. The wording would be: "All levels of government should consider the issue of cross-border shopping in all fields of policy-making. The government should continue, and where possible increase, the level of consultation with labour, business and consumer representatives around the problem of cross-border shopping."


Mr Kwinter: I suggest that would probably more suitably be presented if it were expanded into the NDP's recommendation 2.

Mr Christopherson: The draft report recommendation 2?

Mr Kwinter: We are talking about the whole idea of what the government should be doing, appointing a lead minister to work with all players at all levels of government, and then expand, take what you have just said and incorporate it into what that person should be doing.

Mr Christopherson: I hear the point and I do not think we want to split hairs. Perhaps I could suggest that it may be properly in its place if you think about the fact that we have two pages of discussion on taxation and your recommendation is slanted one way and ours presents it a different way. But the whole point, I think, is that government needs to consider the impact of policy decisions on cross-border shopping and we want to make that very clear and to ensure everything is being considered. There should be at least as much consultation as is going on now and we should increase it wherever possible. I suggest it is possibly in its right place. I would not want to water down the recommendation to the lead minister to be appointed. We have talked about that among ourselves only and we feel that is an excellent recommendation. We like where it is and we would really like to see it stand alone because we would like to see the Premier do that.

Mr Kwinter: Then I suggest that maybe what you have just said should be incorporated into your recommendation 1, where you talk about the task force. If you take a look at the material that goes on, it talks about all the things that should be happening. If you take a look at the bottom of page 8, "Many groups felt that the issue needed to be addressed at a broad, structural level with co-ordination and co-operation among all participants in the public and private sectors." There is a national task force with a high level of representation from all of these different people and it would seem to me that is where that particular recommendation should be incorporated.

Mr Christopherson: We should not spend a lot of time on this because it is a moot point about really where it goes, but I suggest to Mr Kwinter, that the difference might be that with recommendation 1, we are asking that this trilevel task force more or less deal with the issues in place now, and what it can do about existing regulations, laws, practices, etc. This is really meant to talk about from here forward and it is not meant to deal just with legislation that currently, obviously, impacts on cross-border shopping. When any legislation is being looked at, the effect and impact on cross-border shopping should be a consideration. I suggest it is a broader recommendation and is really meant for policies and laws which are being considered from here forward.

The Chair: Is it our understanding that what you have just said, Mr Christopherson, could go in as recommendation 15?

Mr Christopherson: Yes, that is correct. We were suggesting the Liberal recommendation 10, as numbered in its report, be amended in the way we have suggested, and you are correct that it would become recommendation 15.

Mr Kwinter: I have no problem with adding that recommendation 15. I do have a problem with amending our recommendation 10 because I do not think it is quite the same and we will be using our number 10 separately.

Interjection: Take it to caucus --

Mr Christopherson: That is fine.

Mr Phillips: Perhaps I could just speak on our recommendation 10, just to be on the record because I would like to have these things around a year from now when you reverse engines and have to make some fundamental changes. I think your budget is fundamentally wrong. I think you will come to that realization in a year.

Mr Sutherland: You are not using "180 degrees"?

Mr Phillips: Whatever. There is not a lot of sense in debating it right now because only time will tell, but I just say that in the end we will hold you accountable for it. I think you are going to see more jobs lost in the province. We feel very strongly about our recommendation 10, and I would just like to have the Hansards around a year from now; that is all.

Mr Sterling: Just before you leave 10, there has been an allegation that our recommendation 4 is the same as the Liberals' 10. I think ours is really quite a bit wider in scope in that it says we want a competitive test put not only to fiscal policy, but also to regulatory policy, legislation policy, etc. In other words, we think all governments should be bound -- as perhaps land is bound by an environmental assessment -- by a competitive assessment before they do things. That is basically the thrust of 4. I am not sure whether the Liberals are interpreting it that way or not, but that is the intent of our recommendation 4.

The Chair: Further discussion?

Mr Phillips: On what?

The Chair: On this issue, unless I get some indication that we are done with it.

Mr Phillips: Are we debating the third party's recommendation 4?

The Chair: Mr Sterling was just indicating that Mr Kwinter's comments suggested it was the same as yours and he wanted to expand and say that is not the case: that it is broader. Are there any other comments?

Mr Phillips: The one thing that everyone might to be able to agree on in recommendation 4, because I have a feeling, but the government may not -- what is your feeling on recommendation 4?

Mr Christopherson: We more or less considered it similar to your recommendation 2, I believe.

Mr Stockwell: Recommendation 10.

Mr Christopherson: Was it 10? It was 10 or 2.

Mr Phillips: You are not in favour of it or you --

Mr Christopherson: No. We offered up our own wording. Just give me one second to read this. There was a suggestion during the discussion that it was similar to your recommendation 10. We have offered amended language to that. We have heard back from Mr Kwinter and from Mr Sterling that this is unacceptable and they would be reflecting that in their minority report. We have acknowledged that you are going to do that.

Mr Phillips: Is there a compromise on the third party's recommendation 4, that it may still want to have it in the minority report, but that rather than "competitive position," any relevant legislation contain a "jobs analysis"?

Mr Stockwell: As opposed to "competitive position"?

Mr Phillips: I am just trying to see if there is something all parties can agree on. Maybe you would still have it in your minority report, but at least there would be the impact that regulations and legislation has on jobs.

Mr Christopherson: In most cases that I am aware of in the short time I have been here where there have been initiatives announced by cabinet, they have put a great deal of weight on the number of jobs created and are --

Mr Stockwell: I think we are talking about job loss.


Mr Phillips: I wonder if that might not be a useful recommendation for the committee, to ask that when legislation or regulation comes forward, it includes an analysis of the impact on job creation.

Mr Stockwell: And loss.

Mr Christopherson: Let me ask a question. We are going to be coming back at least once more on this matter, as I understand it, Mr Chair?

The Chair: That is up to the committee. If the committee does not feel it has completed its work on this report, then, yes, we will be coming back.

Mr Phillips: I think it might be interesting. I have a feeling that the word "competitive" -- not just because of what I saw in the paper this week -- may be tough for the government side to buy, but it may be able to buy "jobs."

Mr Christopherson: We will take a look at it, okay? Before we wrap up we will give you an indication whether we agree to go with that kind of recommendation in the main body.

Mr Phillips: I think it may be very useful.

Mr Christopherson: We will take a serious look at it.

Mr Phillips: I guess we are in the middle here.

Interjection: A mediator, Gerry.

The Chair: Are there any other comments on this section? Can we move along?

Mr Christopherson: We are done.

The Chair: Are there any other comments or recommendations? What is the will of the committee? Is it the will of this committee that we adjourn the discussion on this draft report and come back this afternoon with the final recommendations?

Mr Christopherson: I am sorry, Mr Chair, I was looking at the document.

The Chair: You said, "We are done," and I am trying to get a sense of where we go from here. Do we come back this afternoon to complete? Obviously the discussion on recommendation 4 of the third party has not been completed, but at the same time you said, "We are done." I am trying to get some handle on where we go from here.

Mr Christopherson: We would all still have to see the final document to give approval to it, would we not?

The Chair: I think before we can have a final document or give instructions to the writers for a final document, we may have to make some decision on recommendation 4 of the third party.

Mr Christopherson: Yes. The subcommittee is going to meet in about 13 minutes and I am wondering, if that is the only thing holding us up, whether maybe we can have a fast caucus and come back to the other two parties with a response on that recommendation. I do not know; I need to talk to my colleagues.

The Chair: Should we take an adjournment for five minutes and come back?

Mr Stockwell: Can they not do it and then write the final report subject to approval of that one recommendation?

Mr Christopherson: As I understand it, we have to come back this afternoon regardless, because we need an update on the subcommittee's discussions.

The Chair: Right.

Mr Christopherson: Let's assume that we come back with a response that is our hard and fast position one way or the other. What process would follow?

The Chair: If you come back with the wording of your response, there would be some discussion among the committee members about that and it would either go to a vote or it would be --

Mr Christopherson: I know that. I mean in terms of finalizing the report.

The Chair: I would ask at that point if there were any further discussion on the report as it stood. If there were no further discussion, I would take it that the report should go on to be drafted in its final version. That would then return to the committee, perhaps next week, for final recommendations.

Mr Christopherson: Okay, that is fine.

Mr Kwinter: Perhaps if I could suggest that if we could get a final draft prior to our caucus -- your caucus meets Tuesday?

Mr Christopherson: Yes.

Mr Kwinter: If we could get a --

The Chair: Sorry to interrupt, Mr Kwinter, but Ms Anderson has just indicated that she can give us a final draft version of all of these updates this afternoon, except for recommendation 15.

Mr Kwinter: That was the point I was going to make. If we could get a final draft, we could come back next Thursday and be in a position to proceed.

Mr Sutherland: I do not think we need an update this afternoon of what we have done this morning, but if that could be in everyone's office tomorrow or Monday, we would be in good shape for Thursday.

Mr Stockwell: What is the hurry?

Mr Christopherson: The hurry is that it is a pressing issue and we want to get it into the hands of the cabinet as quickly as possible. That is the only thing driving it, and clearing the deck for our other work.

If you want to make it a return at 4 o'clock, that would give us time and we will try and finalize this last item. If everything else can be done, I am still in favour of using one hour this afternoon to get it finished, because starting next Thursday, we are going to be very busy people. That is just a personal point.

The Chair: Should I recess the committee now until 4 o'clock this afternoon with the subcommittee meeting starting right now?

Mr Phillips: Could I just raise one issue? I was rather personally offended to see a big survey done and released on cross-border shopping that I had known nothing about. I found it rather insulting, actually. I wanted to raise that here, that the Kitchener-Waterloo Record got hold of this and this makes this committee seem, in the cabinet, irrelevant. I will just say I was terribly offended also when you moved that the committee adjourn when the Treasurer was here. I wanted to register with you people that both of those things offended me.

Mr Stockwell: I am not sure why we could not have been informed that this study was taking place and had some input into how they were doing the study. I was also somewhat offended to see the results in the Kitchener-Waterloo Record. I do not know if you people knew or not, but it really does make this committee -- as I say, what is the hurry? I cannot believe that after commissioning that study the cabinet really cares what the hell we have to say anyway, considering it is out commissioning expensive studies without any information going to the committee which is supposed to be looking into the matter.

The Chair: This committee stands recessed until 4, and the subcommittee will meet right now?

The committee recessed at 1138.


The committee resumed at 1610.

Mr Stockwell: One concern I had at the subcommittee meeting, and I would like to express it again today on the record, is the expert witnesses. We are going to have four. It would make more sense to me that if you are going to have one witness from both opposition parties, you would have one witness from the government. Thereby you could cut out an hour's worth of presentation or you could expand the presentations to an hour and 20 minutes each.

But it does not seem unreasonable to me to think that if the Liberals get a choice, we get a choice and the government gets a choice. I think you are are assuming a lot if you automatically think both opposition parties are going to bring in someone strongly opposed to the budget. I am talking about the Liberals more specifically. There is a lot of stuff they support in the budget. But if we are going to go this route we should allow one witness per party. It seems reasonable.

Mr Sutherland: As was stated at the subcommittee, this is a very fair process. The opposition as a whole gets two witnesses and the government as a whole gets two witnesses. That is very even in balance. If we really wanted to be concerned about it, we could apply that to questioning, 50% and 50%, but we do not want to do that. We want to be fair, so we have divided it equally three ways, rather than saying the government side will have 50% of the questioning and the opposition will have 50% of the questioning.

I do think it is fair that the opposition will have its opportunity to have its witnesses forward and we will have an opportunity to have ours and we will have adequate time for all parties to question all witnesses in a fair and equitable manner. It allows for some reasonable perspectives to be brought forward and some time for committee members to make their analyses and question the analyses put forward by the different experts.

Mr Stockwell: I will be curious to find that this is the same kind of approach we are using on the tour, when there are appearances and requests for appearances to be made. I think it was clear the government never wanted to take the process, and I hope that we are dealing with this in a fair third-third-third fashion. So I will leave it at that. It is just that I want to be recorded that I consider this to be unfair, and when we go out on tour I want to be very clear that it be a very equitable split of time.

The Chair: Could I have a clarification of what you mean by "equitable split of time"?

Mr Stockwell: I was on the Constitution tour briefly. I found it to be lopsided in the witnesses who were being requested to attend. In fact, a consultant was hired, I think for a couple of hundred thousand dollars, to seek out certain groups to appear. It tended to slant the view of the constitutional tour committee. I just want to make sure that if we are going to go on this tour, this kind of attitude does not prevail, that this person was in favour in the budget or this one is opposed and so on and so forth, and that if we are going to do this, we just do it in an evenhanded fashion.

Mr Christopherson: To ensure the record is fair, the difference here is that, quite frankly, it is going to come down to a pro or con on the budget in many ways. I doubt very much that either of you is going to be asking John Kenneth Galbraith to come in and be your expert witness. So there is very definitely a pro and a con position on the budget as a whole, although some experts may indeed say yea to some parts and nay to others.

The opposition parties would not be doing themselves any good if they brought in someone whom they were not sure of ahead of time to support the positions they have been taking in the House and outside the House. When you have a clear black-and-white issue like that, I think the distribution can be seen to be very fair. Otherwise what we are looking at is two con experts and one pro, which is unfair, particularly since we have the majority in the House. We asked for it to be divided this way for that reason. I would only suggest to Mr Stockwell that we cross the other bridge when we come to it, in terms of how we are going to arrange the groups that come in and the speakers and the questioning, etc. I think we will let fairness rule the day when those issues are in front of us.

Mr Stockwell: God bless you.

The Chair: Can we turn to the report of the subcommittee now? Sorry, Mr Ward. I apologize.

Mr B. Ward: Just as a brief comment, I would like to challenge Mr Stockwell's comments on the Constitution committee. I sat on that committee when it was in Brantford and I found the presentations to be very opinionated and balanced. They were not slanted one way or the other and were a good cross-section of the community in Brantford. So maybe where you sat --

Mr Kwinter: It is a contradiction in terms. They cannot be opinionated and balanced at the same time.

Mr B. Ward: Yes, but besides that --

Mr Stockwell: Overall balanced opinions.

Mr B. Ward: Yes. Perhaps something happened when you were on the committee, but when I was there it seemed to be a good cross-section of the community and everyone had a different opinion.

The Chair: Mr Stockwell's comments would assume a self-fulfilling prophesy from the Confederation committee, and I do not think that was the case.

Mr Stockwell: I do.

The Chair: Now can we turn to the subcommittee report? Would you like to walk us through it, Mr Sutherland?

Mr Sutherland: I think it is pretty straightforward, as the clerk has outlined here. Next Thursday we will attempt to accommodate what was said earlier in terms of Mr Kwinter being able to take the final draft of the report to the caucus and then come back and wrap that up. At that time we may need to adjourn for a few minutes and have another subcommittee meeting and talk a little more about where we will be going in terms of committee hearings on the budget. Then at 11 the Treasurer has agreed to come back and will be allowed time for a statement of up to 15 minutes. He does not have to take that much. Whatever time is remaining will be divided among all three parties.

In the afternoon the Treasury staff will be coming in. They will be making a presentation of maybe 15 or 20 minutes, a technical presentation of the budget, and then time remaining will be divided three ways again for questioning.

The subsequent Thursday we will have four one-hour presentations from our so-called experts, with the government caucus providing two witnesses and the official opposition and the third party providing one witness each. Again, the same format as the Treasurer: Those people will be allowed up to 15 minutes for presentation and the rest of the time will be divided equally between the three parties for questioning. So that is where we are basically going to the end of the month.

The Chair: Are there any questions about this? At some point we have to decide the geographic locations for hearings as well.

Mr Sutherland: Yes, and that probably should be done at a subcommittee meeting first.

The Chair: If you notice the bottom, the clerk has indicated, "Other issues: Advertising for budget review hearings." We have to give him enough notice that he can put the advertisements in the local newspapers with sufficient time so that people can not only know we are coming but prepare briefs to present.

Mr Sutherland: If we are able to decide next Thursday in terms of where the communities are, I think that would give the clerk and people ample time to prepare. I am not sure what was officially decided today but I think it was that we would not be going out on tour for a few weeks anyway. I have not had a chance to confer with my people, but there was some indication that it may not be until late July that we reconvene.


Mr Kwinter: I have not had a chance to talk to our House leader, but at our last caucus meeting he indicated to me that the leaders would not approve any committees sitting until the second week of August. That is what was indicated last Tuesday, and that is when I was told there would be three weeks starting the second week of August for 12 days, no Fridays, just Monday, Tuesday, Wednesday and Thursday. Whether that has been confirmed, I do not know. I also saw a list of where we were going. There are three or four days in Toronto and Thunder Bay and Kingston and Ottawa, wherever it was. Whether that is official, I do not know.

Mr Sutherland: We should have time to confer with our House leaders and caucus and be able to come to some conclusions next week.

The Chair: Are there any other items we should be discussing with respect to planning the hearings on the budget? If not, then do you want to do the budget now?

Clerk of the Committee: Sure.

The Chair: Okay. We will hand out the budget for this committee and we can look at that. While we are handing this out, maybe we can move to the second issue, and that is the translation of the cross-border shopping into French and provision of copies to the Treasurer and other relevant ministers prior to translation, printing and tabling.

The suggestion here was that, as soon as the cross-border shopping brief is done, we send it along to cabinet and the Treasurer, and if it is the will of the committee to have it translated, that the translation come afterwards, as we did with the pre-budget consultation. What is the will of the committee? Where do we go with that one?

Mr Christopherson: Was there not some discussion somewhere about trying to put French and English into the same report because it saves paper and we do not have a lot of extra reports floating around? It is the time factor. How much time do we have?

The Chair: Yes. What happened with the pre-budget consultation, after the final draft was put together, that was sent immediately to the Treasurer and then the finished report was published in English and French and then bound and sent out.

Mr Christopherson: In the same report. I am talking back-to-back pages too. It was done that way?

The Chair: Yes. If you need copies of that report, I have some.

Mr Christopherson: I have a couple kicking around. Thank you, that is fine.

The Chair: What is the will of the committee with respect to translation? Is the scenario I outlined fine?

Mr Christopherson: Sounds fine.

The Chair: Now, if we could turn to the Legislative Assembly standing committee on finance and economic affairs' budget, 1991-92, I asked the clerk to put together a budget for this coming year and this is what we have before us. Maybe we should take a couple of minutes to look through it and then we can discuss it. Did you want to say anything?

Mr Sutherland: No, I will wait until you are ready to start discussion.

Mr Stockwell: May I ask a question? What are witness fees and expenses?

The Chair: I believe the committee picked up the expenses to bring in some of the expert witnesses whom we asked in for the pre-budget consultation. If the same situation arose for this committee to invite in experts, then there are funds available to pay for their expenses to come before the committee.

Mr Stockwell: Well, you can probably strike that; we are just having citizens.

Mr Hansen: These were agreed upon by the subcommittee.

Mr Stockwell: Oh, I am sorry. Were they?

The Chair: Just to continue along, I think I understand your concern about money and how it is going to be spent. For the pre-budget consultation period we had a budget of $74,000. We only spent about $34,000, so we did not spend a lot of money in order to do the pre-budget. What happens here is that these are the normal expenses that may or may not be incurred by a committee that has to travel. If they are not incurred, that is fine, but if you do not have it in the budget when we go before the Board of Internal Economy and we need it, then we have missed the boat.

Mr Sutherland and then Mr Christopherson.

Mr Sutherland: A lot of it has been based on the eight weeks and I do not know where the clerk got that figure. I had never heard that we would be doing it for eight. The maximum I have heard is six, and then I am not even sure whether it was going to be a full six. I suggest they can at least be brought down to there. By next week they may be brought down more, but that is the most that I have heard of.

Clerk of the Committee: When I prepared this budget at the Chairman's request, I basically pulled figures out of the air, because without knowing exactly what we are doing and to what extent we are going to travel, they are really very rough estimates.

The eight weeks are based on four weeks of meetings during the summer period, and because this budget carries us through to next year, I am making the assumption that we would have some meetings during the winter period, perhaps on pre-budget consultation. So this budget includes a budget for our activities next winter as well.

Mr Sutherland: Oh, sorry. So this is the budget for the full 1991-92 year, not the budget for the 1991-92 budget hearings.

Clerk of the Committee: Right.

Mr Christopherson: Could I have a quick thumbnail sketch of who the nine staff are?

Clerk of the Committee: Depending on where we travel in the province to hold hearings, the French Language Services Act requires us to provide interpretation services on site. If we are travelling to a community where we are required by law to do that, we require three staff from broadcast and recording, three staff to provide the interpretation services, a Hansard reporter, the clerk of the committee and the research officer, for a total of nine people who would be required in those communities. There are a few communities in Ontario that are not covered by the French Language Services Act, so the interpretation staff would not be required, but nine would be the basic minimum virtually everywhere in the province.

The Chair: How would we travel? By bus, by air, or both?

Clerk of the Committee: Depending on where we are going.

Mr Kwinter: You are not going to go by bus to Thunder Bay.

Clerk of the Committee: By plane mostly.

Mr Hansen: Well, you know, I was a little scared there when it said $1,000 for maps there.

The Chair: Mr Christopherson, have you completed your comment?

Mr Christopherson: My question was satisfactorily answered.

Mr Kwinter: I was just going to comment when Mr Sutherland made his comments that this is a budget that has to go to the Board of Internal Economy. It does not say you must spend it, but unless it is in there, you cannot spend it. So really it is sort of a ballpark figure that says this is what is potentially out there. I think all of us are mandated to be as economical and as careful as possible, but this is just the provision for it to be there. It does not mean you have to spend it.

The Chair: No, and in these times, I think it would look very good if we did not spend it all. Are there any other comments? Ms Ward.

Ms M. Ward: Why are there 56 days under meal allowances, as opposed to 30 days under meetings? Eight weeks, that would mean a seven-day week?

Clerk of the Committee: This budget makes provision for the maximum that could occur. Members are entitled to claim meal allowances and travel per diems on days other than when the committee meets. So assuming the committee were to meet Monday through Friday, members might travel to Toronto for the meetings on a Sunday and return home on a Saturday, so they would have a seven-week travel schedule and therefore would have seven days of meal expenses per week. It would be unlikely that that full amount would be spent.

The Chair: Before we go forward on that, the clerk has asked if the $2,000 would be enough for witness fees and expenses and whether we would be giving honorariums to expert witnesses who would come before this committee. I have absolutely no idea of what has been done in the past.


Mr Sutherland: As past practice, an honorarium has been given, and we have last year's expenditure figures.

Clerk of the Committee: I do not have them with me. I could bring them to the next meeting or send then to you in the meantime if you want to see them. As far as honorariums are paid, it is totally up to the committee, although the maximum the Legislative Assembly allows a committee to pay to an expert witness is $350 a day. After the subcommitee meeting this morning, I was aware that we were going to be inviting some expert witnesses. If we are going to be offering the honorariums or offering to pay travel expenses to and from the hearings, it struck me that the $2,000 might not be enough.

Mr Christopherson: Could somebody throw around a figure that might be more appropriate? Is it a global budget and the line items can be moved around by motion or by the Chair's direction?

Clerk of the Committee: Yes. All except for advertising and travel amounts, which require a change by the Board of Internal Economy. But on the other amount, if we overexpend in one line item and if we finish the year with a surplus, it moves from one item to the other. Considering that, perhaps you are right; we would have enough flexibility in other areas to cover it.

Mr Christopherson: I would hope so, but I am very conscious of what Mr Kwinter has pointed out. I think we saw that last time. I do not think we spent nearly what the entire budget was last time, but it was there if we needed it. Certainly the budget is one of the most important things we will deal with. My hunch is there is enough flexibility there even if you tripled it. I think if you take a look at some of the other dollar figures that have been allotted, we are not going to use the full amount. Unless somebody can make a good case -- I am open to it -- but I think it will probably be okay.

Mr Kwinter: If we run out, we will just go without lunch.

The Chair: Okay. When do we go before the Board of Internal Economy?

Interjection: I think it is the 20th.

The Chair: Are there any other items that we should deal with?

Mr Sutherland: On the cross-border shopping report, copies to the Treasurer, the relevant minister, before we table in the House -- I am just wondering too about the day we table it -- will we be sending copies to the Ontario Border Communities Task Force on Cross-Border Shopping and the Sunday shopping group or some of those other groups that we had before us?

The Chair: Yes. That was the same as the pre-budget consultation. We sent the pre-budget consultation report to every witness who appeared before the committee.

Mr Sutherland: Okay. Great.

Mr B. Ward: Mr Chair, is that after we table it? The Chair: Yes.

Mr B. Ward: When the House officially receives it, then we can distribute it, but not before.

The Chair: Yes. How many copies are we going to create? I think that is an important question. There is a cost factor there.

Clerk of the Committee: On the pre-budget consultation report, we printed 1,200 copies, which gave a leftover amount after all of the other amounts we were required to have of 30 copies for each member of the committee, which is what had been agreed to at the time that the report was adopted. Members may or may not want that many copies of this report or may feel there is a larger public interest and the demand might be high.

The Chair: I seem to still have a large number in my office.

Mr Christopherson: There was a fair demand, an interest in the budget document, if you took per member and then the number of people from the pre-budget who were interested. I suspect this could have more appeal to constituents than a pre-budget consultation, which is probably of more interest to interest groups, which are more aware of the process and care about the dynamics. I would not want to do too much less than what we did the last time, because I could see members wanting to have copies available to constituents who ask for copies along the way or, when they read about it, would like one, or just if the issue is raised. We all do get calls about it, so I do not know that shaving back a few hundred is really going to be saving anything at this point.

The Chair: So 1,200?

Mr Christopherson: What is the cost per copy? What does it work out to roughly?

Clerk of the Committee: We printed 1,200 copies of the report. The bill, I believe, was something around $6,000, so it is about $5 a copy.

Mr Christopherson: We all know in campaigns it is the initial cost that really bumps up the dollars. When you start adding 1,000 or 2,000 of the campaign literature at the end, it is relatively inexpensive. I would be comfortable going again with 1,200. I do not think that is way out of line.

The Chair: Fine. Are there any other items of business?

Mr Hansen: There is one thing on this. Maybe Mr Stockwell could give an idea, with the number of faxes that came in, of how many copies of the report would be required in the end.

Mr Stockwell: How many faxes I got?

Mr Hansen: Not so much, but all these requests for the budget.

Mr Stockwell: Oh, yes. Most of those did not want the budget, though.

Mr Hansen: No, but they want to see the end result of this task force going around the province on the budget.

The Chair: We are not talking about that budget. We are talking about the cross-border shopping document.

Mr Hansen: I am sorry. I got off that one. Okay.

The Chair: We have not even discussed that.

Clerk of the Committee: So 1,200 of the cross-border shopping?

Mr Stockwell: That is fine by me.

The Chair: Any other items of business? The way it was left, there is one item left on the report to consider. Has the government caucus caucused?

Mr Christopherson: Always working. We would like to respond to the recommendation of the third party, which we acknowledged was similar to that contained in recommendation 10 of the Liberal document. First, the point, we thought, was well taken and we could see this as an effective tool for all of us. What we would like to suggest is the following language that would amend the number 4 proposal:

"The Ontario government should produce and make publicly available an analysis of the impact on jobs of any relevant legislation or regulations it proposes to introduce or amend as it relates to cross-border shopping."

The Chair: Are there any comments?

Mr Stockwell: It is going to be a very difficult job to determine exactly the piece of legislation or regulation that affects cross-border shopping.

Mr Christopherson: If I could suggest, no more so than the subjective opinion of what will impact on competitiveness and what does not.

Mr Stockwell: Right, except you are looking at all legislation and regulation.

Mr Christopherson: Except the focus of this whole exercise is to talk about cross-border shopping, so we thought it was fair to target it to that issue. The way it is worded, we are not prepared to support that amendment, but something very close to it we are.


Mr Kwinter: I appreciate the intent and the attempt to accommodate the principle. The problem I have is that when you put in the words "cross-border shopping" -- and I am just giving you my perception; I do not know whether it is right or not -- there is a tendency to say, "What that does is it relates to the border communities," and to make sure that whatever we do does not sort of exacerbate that problem, whereas when you take a look at cross-border shopping, you have to take a look at the total context of why people are going across and shopping in the United States.

The problem I have is that somewhere along the line, if we adopt your words, someone is going to arbitrarily make the decision that by our increasing whatever it is, whether it be an employer tax or whatever else, it is not going to really impact on cross-border shopping so we do not have to worry about it, whereas this particular thing is going to relate to cross-border shopping so we should take that into consideration.

Who is going to decide what particular measure impacts on cross-border shopping and which one does not? There may be a difference of opinion, maybe a great difference of opinion. Let's say the minimum wage, a perfect example. You may not look upon that as a cross-border shopping issue, but it may be. I would suggest it certainly will be. But that may be looked at and it may be said: "What has that got to do with cross-border shopping? That has to do with our commitment to raise the minimum wage and as a result we don't have to really apply that particular test." That is my concern.

Mr Christopherson: I hear your point and it is well taken. I certainly respect it. If you take a look at the wording proposed even by the third party, the word "relevant" is about as subjective as you can possibly get. I think the issue you raised is important, but that is an argument that will always take place, particularly in this place, so it is a question of how focused we want to make it.

Mr Stockwell: "Relevant" is there. For instance, let's deal with today's agenda, Bill 36, to review the legislation on assessment and the collection of the information. We put "relevant" in there because we really do not think that has a lot to do with or would impact in any great detail or has anything to do with cross-border shopping or financing or costs of doing business.

Mr Christopherson: But would you agree someone else could say they do? I mean, they would have the right.

Mr Stockwell: I do not suggest that anyone does not have the right, but I think anyone in his right thinking would say --

Mr Christopherson: In your opinion.

Mr Stockwell: I guess the point I am making is, by defining it strictly to cross-border shopping, you have made a very narrow interpretation of what we were striving for here. I think Mr Kwinter makes an excellent point. The minimum wage is an example, and I can give you other ones that in the way they are dealt with in the House, very little comes up with respect to cross-border shopping but they do affect the cost of doing business at a border community.

So we did not want to just specifically say, "Okay, a cross-border shopping issue," because all kinds of decisions we make in the House affect cross-border communities and "cross-border" never comes up during the debate. Minimum wage is a very good example. Here is an example of where we are going to talk about increasing the minimum wage, which will then make those cross-border towns that much more uncompetitive. We will have no relevant study in which to make that point.

Mr Christopherson: I would disagree. I do not think it really takes away from your ability to make the obvious --

Mr Stockwell: Like minimum wage?

Mr Christopherson: I would think so. You would make the argument. I do not think this negates your ability to make that argument under this language. There may be something else extraneous that you might feel is lost in this focus, but then, to be frank, what we are trying to do is keep this document relative to the issue at hand and not see it used as a tool for other things. If you want that analysis for other things, there are other places and ways to do it.

Mr Stockwell: No disagreement, but even you will accept the fact that any impact on the tax point of view, any changes to the taxation level, are going to affect cross-border communities. Everyone will accept that. It is up to your government, if this is adopted, to say, "Fine, we should produce and make public an analysis of the effects of any relevant legislation or regulation." That means when they are doing it in concert, is there analysis? There is no point in bringing the legislation forward, having me stand up and say, "Gee, where's your analysis?" and you saying, "We didn't really think it was part of this," and then asking for it and by the time you end up getting the analysis, the legislation is through the House.

Mr Christopherson: But what I am arguing to you is that you could find yourself in that position regardless of which wording you use. You still have to make the case if the government decides that a job impact analysis is not necessary because it does not think it relates to competitiveness. That debate, that difference of opinion, may still occur.

Mr Stockwell: I agree, but the gap is significantly reduced.

Mr Christopherson: Right, and we make no bones about the fact that we are trying to narrow the gap and focus it, and we are substantiating that by saying, "This is a report on cross-border shopping." So all we have said is that the legislation we are talking about is things that impact on cross-border shopping. Bear in mind we have already said earlier in other recommendations that the impact overall on cross-border shopping should be a factor in all legislation that the government looks on henceforward. We have agreed to that with you.

Mr Stockwell: All right.

Mr Kwinter: I just wanted to illustrate a couple of practical examples. Believe me, I hope it will be interpreted as not being partisan. There are two situations that have happened within the last month in the Legislature that indicate to me the need to really bring to the attention of the government the need to take a look at this particular issue.

Number one is the gas guzzler tax. The thing that disturbs me about that is that somewhere, 30 people, more or less, give or take one or two, sat around at a table and thought that was fine. They looked at it, someone had to approve it and said, "Yes, that's what we are going to do," without, obviously, any consideration as to the impact it was going to have on some jobs. Now that it has sort of been brought to the attention of these people, they are scrambling around to say, "Okay, let's see how we can address this."

My concern is, there has to be an awareness level before these people say it is all right. They have to say, "Hey, let's just think about this thing." I know you have an agenda out there for the environment, but is it going to be effective and what is it going to do to some jobs? Now there is going to have to be some retrenching. Exactly the same thing happened with Bill 70.

Again, without being derogatory, without being critical, you do not have to be a rocket scientist to have seen the provisions that were there. I can tell you, when I first saw it, I stood up in caucus and I said: "This is absurd. These guys are going to drive business out of this province. The business community is going to go wild. I have never seen such draconian legislation." I am not telling any tales out of school. Some of my caucus colleagues said: "It's not so bad. You're overreacting." I said: "Trust me. I am a businessman. I can tell you that it will drive them wild." I have not heard of one piece of proposed legislation that has so gotten the attention of the business community as Bill 70. What happened? The minister had to stand up and say, "Okay, we're going to take all that away." I am telling you, if you think we have a problem now in Ontario with the economy, that would have been the final nail in the coffin. The point is --

Mr Christopherson: The point is, we listened.

Mr Kwinter: It happened, but the point I am trying to make is, it would have been a lot better if someone had taken a look at that before it came out, because the genie is out of the bottle. Yes, it has been retracted, but there are hundreds of thousands of people out there who are saying, "You know about that law they are putting into Ontario?" and they have not heard that it is not going forward. All they are talking about is, "You know they're going to make directors responsible for severance or wages or pensions a year after they leave?" It just has a negative impact on jobs.

The point is that there has to be someone waving the flag before it happens, so they say: "Let's take a look at this thing. What is its impact going to be on jobs in Ontario? If it's going to be negative, let's look at it." If you just equate it and use the term "cross-border shopping," that is a problem, but it is a manifestation of another problem. That is competitiveness and everything else.

My concern is I do not want to see another gas guzzler tax or another Bill 70 provision that gets through, because we have said this and they do not equate it to cross-border shopping. They do not say: "What's that got to do with cross-border shopping? Forget about it," whereas our whole fiscal responsibility, our competitiveness and our job creation is something that I think every single piece of legislation should be measured against: What is this going to do to the job market? What is it going to do to our ability to keep the economy of this province viable? We have to weigh it in that perspective.

It is important and I just feel that if you restrict it to the terms of cross-border shopping, a lot more of those things are going to fall through the sieve. They are not going to get caught because people are not going to make the relationship. They are going to say, "This has nothing to do with cross-border shopping, so forget it."


Mr Christopherson: Listen, I have great respect for your position and what you have argued. I think it is just a question of you would like it as wide as possible and we would like to keep it as narrow as possible.

Mr Kwinter: Why though?

Mr Christopherson: Why not? There are other committees that are dealing with other issues. It is your job, of course, to try and get as many tools in your hands as possible, through whatever means possible, that help your job in opposition. It is our job, I think, to try to represent the government point of view, which is to ensure that we are dealing with the matters at hand and that we are addressing in a fair, equitable fashion the issues that you raise in opposition to what we propose on this committee as they relate to the issues that we have before us. The issue before us is cross-border shopping.

I think that really what it comes down to is that there is a partisan difference here, and there is a difference of opinion based on the fact that you have got government members and non-government members. I think the arguments you make are correct in their own right but go further than we are mandated to look at here. That is our position.

Mr Kwinter: Could I just respond to that for a minute? What I would suggest is that by making it less narrow, you do not necessarily make it broader. I am not saying that it should be an all-encompassing thing, that every single thing should be looked at, but what I am saying is that the minute you put in the words "cross-border shopping" you restrict it to the point where it is a very narrow focus. I am not in any way trying to be specific and say that every social service activity, everything -- I am just saying that you could just leave it non-specific but also non-broad. You can interpret it any way you want, but I just feel this is too restrictive.

Mr Christopherson: I hear you, but to pick up on the example you started to use, a social service, it would probably be a stretch to make that apply to the cross-border shopping, although one could stand up and argue to some degree. I mean, you could reach and find arguments. If you made it the issue of a competitive position, certainly our friends in the third party might begin to argue about the cost of social programs and how that impacts on competitiveness.

Mr Kwinter: Well --

Mr Christopherson: Just let me finish. The one thing this is not is to run away from the word "competitiveness," which seems to be a favourite point of discussion among our friends in the media these days. Contrary to that, we are not afraid of the word. In fact, I think and hope we are dealing with it head-on, because we need to. All we are trying to do here is keep this recommendation focused on the issue that is at hand.

Mr Stockwell: I guess my problem is I do not really understand --

The Chair: They liked you down the hall.

Mr Stockwell: That is because I -- no, they were not clapping because you introduced me.

My problem is, I hear your arguments, but what comes to mind is, so what? All we are looking for is information when you are making a decision. If the third-party members push this to the extreme and say, "According to social services, we need that benefit," I do not think it will happen, but so what? All you are getting is more information. I think that is what we are here to try and get, information.

If you are going to suggest that by including it the way it is phrased now we are going to have too much information or you are going to allow us the upper hand because we learned what really happens when you introduce certain pieces of legislation, that is really shortsighted. It is unreasonable.

I think the two examples cited are clear indicators to me why you as the government would be agreeing to it, because you can save face. Rather than backtracking some few weeks or months later, you can learn all this information up front, and if you are going to continue on with the legislation, you can line up your arguments beforehand. It just does not make sense to me why anyone would not want the information about what this legislation will do to affect jobs and competitiveness. Why anyone would not want that information is beyond me.

Mr Jamison: I do not know. I think the proposal of the government side here does not limit you from looking at anything. The report itself is a report that deals with cross-border shopping. That is what we are dealing with and trying to round out here. It is a cross-border shopping report from this committee. I do not know how that could cause anyone heartburn. That is what we are doing here today. Certainly the effects of different legislation, pending legislation, tax increases or decreases, can be weighed in and factored in.

In a non-partisan way, as you have already said, Monte, I really do not understand this debate that has been going on here for the last 15 minutes, because in my mind it is not restrictive. The wording that has been put forward really does not hem us in. I know that as a government member, I want to be able to scrutinize, just the same as the opposition and the third-party members, the effects of any legislation that would affect the particular issue we are dealing with in committee now, the cross-border shopping report from the finance and economics committee.

The whole situation on cross-border shopping is vast really. There are multitudes of things that could affect that particular issue. I do not understand why this has caused this committee such a long and strenuous kind of debate around particular wording when the wording we are in fact debating is "cross-border shopping." I just do not understand why we are allowing ourselves to get off the track on this thing.

The Chair: Ms Anderson has brought a question, and that is, are we dealing with the amendment to the third party's number 4 as a separate issue or are we dealing with it instead of what would be number 15 of the report?

Mr Christopherson: No. It was a separate point. We thought it was strong enough.

I will just make one point and then that is our position explained ad nauseam. The last thing is -- and I think Mr Kwinter twigged to it when he said that we tried to accommodate -- the fact of the matter is that if we were not interested in having information come out, then really, politically, internally within the government, the best thing for us to do would have been to just ignore number 4 and set it aside, because information is something that is not always desired by some individuals in some circumstances, but we thought the point was well taken, and I say that with all due respect. All we wanted to do was to make sure that indeed it was relevant to the issue before us and that it was not in any way a back door --

Mr Stockwell: I give up.

Mr Kwinter: Mr Chairman, just to reply to Mr Jamison, you have not seen me in a prolonged debate. You have not seen me in a strenuous debate. If you think my objection is prolonged and strenuous, it was really just a comment, just something that came up, and I was putting forward a point of view. It is certainly not something that, as I say, I had given any prolonged effort or any strain to. It was just a matter of pointing it out in the same way that the last time we met I raised the question about the word "panacea." I am just raising it. I am quite prepared to have it discussed, as we have, and to move on. That was it, no more, no less.

Mr Stockwell: Okay. Let's go with yours.

Mr Jamison: I look forward to the day when I can see you in a strenuous debate.

The Chair: I was just going to ask, is this a threat, a warning or a comment?

Mr Stockwell: He only gets to those in caucus.

The Chair: Are there further comments to the report?

Mr Christopherson: No, we are satisfied with the report as amended to this moment.

The Chair: Are there any further comments about any part of the report, or can we pass this along to the writing team to put together a final draft?

Mr Stockwell: We reserve the right to take it back to our respective caucuses. Okay.

Mr Christopherson: I just wrote that one now. I do not think there will be a problem.

Mr Stockwell: Water off a duck for you guys.

Mr Christopherson: Usually you would think the other way around, would you not?

The Chair: Are there any other items of business we should deal with now, or do we adjourn this committee?

Mr Stockwell: I move adjournment.

The Chair: All in favour? This committee is adjourned till 10 o'clock next Thursday.

The committee adjourned at 1700.